April 1999
IM218: INFORMATION MANAGEMENT

QUESTION 5

Total Marks: 20 Marks

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GRADE A
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(a) Explain what is meant by the term business process re-engineering (BPR). Give an example of BPR. [3]
It is the fundamental rethinking and the radical redesign of business processes to achieve dramatic improvements by combining steps to reduce waste, eliminate repetitive task, improve quality, service and maximise the benefits of Information Technology.
For an airline system, changing the manual check-in system into a computised and online system.

 
(b) Identify and briefly explain the three phenomena motivating organizations into BPR. [6]
Three phenomena motivating organizations into BPR:
  • Customer
    They have become more knowledgeable about their needs, more sophiscated thus more demanding.
    Also there is a greater range of alternatives available.
  • Competition
    Trend of globalisation through the use of information networks, eg. internet have led to a quantum increase in competition across national borders.
    A great change in pace, geopolitical reactions, technology, and customer preferences have also contributed to the competitiveness.
    Besides, what was impossible yesterday has become routine today.
  • Changes
    In a rapidly changing world, organisation must change their properties of traditional focus on planning, control, management, and growth to emphasise speed, innovation, flexibility, and cost.
    Also to retrofit the organisation into this reality is difficult. Re-engineering is the only solution.

 
(c) A critic of BPR might describe it as 'just another management fad', a mere repacking of earlier business philosophies such as [4]
(i) Just-In-Time (JIT) product, which is about producing the right amount of a product at the time that it is required, aiming to reduce the size of inventories;
(ii) Total Quality Management (TQM), which is about installing mechanisms to measure quality, thereby aiming to improve it;
(iii) Fast Cycle Response (FCR), which is about responding quickly to customers, aiming to improve customer satisfaction; and
(iv) Simultaneous Engineering (SE), which is about making marketing, research and development and product work together and in parallel, aiming to reduce time from concept to mark for a new product.

Answer such a criticism, by showing how BPR differs from each of these philosophies.
(i) BPR is not superficial changes in hope to achieve, in this case, smaller sized inventories. It is done on core business processes and more thorough and in-depth, as compared.

(ii) In BPR, mechanisms are also determined to measure and can be used as benchmark, however, it goes further than just measuring, it applies Information Technology whenever possible and build prototypes which are tested and implements.

(iii) FCR touches only one area that is accomplished by BPR. BPR not only strives to improve service but it also maximises benefits of Information Technology, reduces cost and make processes more efficient.

(iv) BPR focuses on redesign core business process that will achieve high potential payback. It works on individual processes instead of everything at once, in parallel. And the goals it achieves are across the board.

 
(d) Outline five main steps for BPR. [5]
Five main steps for BPR:
  1. Develop Business Vision and Process objectives.Senior management must develop a strategic business vision that will lead to the redesign of processes.
  2. Identify processes that are to be redesigned. Identify core business process and focus on those that has the greatest potential payback.
  3. Understand and measure the existing processes. To determine the metric for performance which can be used as a benchmark.
  4. Identify any opportunities to apply Information Technology.
    Information Technology can create new design options for various processes and be used as a challenge for long standing practices.
  5. Build prototype of new processes. A model is created for the basis of experiment; anticipating a series of modifications and improvements until redesigned process is approved.

 
(e) Explain what is meant by the terms software re-engineering. What distinguishes software re-engineering from business process re-engineering? [2]
Software re-engineering refers to the modification and improvement made to software programs to enhance it. Business process re-engineering is looking at the whole business process, not only part of it and identifying core processes to be redesigned to achieve dramatic improvements to the running of the business and to reap the highest possible potential payback.