Business process reengineering (BPR) is a management approach to improve the efficiency and effectiveness of processes within and across the organization through evaluation.
The concept of BPR was introduced in 1990 and had become very popular immediately. The reason of this popularity was the immediate adoption of this concept by the firms who had lost their competitiveness due to the market entrance of foreign competitors at that time and were striving to regain it. There are many successful stories of implementing BPR like Proctor and Gamble Corporation and General Motor Corporation while many organizations failed on the other hand.
Although there are too many reasons of the failure of BPR projects but the main three are: (1) Lack of sustained management commitment and leadership, (2) Unrealistic scope and expectations, and (3) Resistance to change.
1 - Lack of sustained management commitment
BPR projects are very time consuming and takes years to complete, therefore it is very important for the management to have long-term commitment for their successful execution. One of the reasons of failure of BPR projects is lack of sustained management commitment, initially they are motivated and enthusiastic but as the time passes they lose their commitment which result in failure of the project. To tackle this problem management should align the objectives of BPR with organization’s objectives.
2 - Unrealistic scope and expectations
Unrealistic scope and expectations is another factor of failure of BPR because of it management and other people working on the project lose their interest and motivation when they cannot get the results that they expect. It is very important to set realistic and attainable goals using the SMART rule.
3 - Resistance to change
Resistance to change is another factor that causes failure of BPR. There are many reasons that employees resist any change e.g. lack of understanding around the vision and need for change, comfort with the status quo and fear of the unknown, corporate history and culture, opposition to the new technology, requirements, and processes introduced by the change, and fear of job loss. Change management is very important to tackle all these issues.
Other problems:
- The risk of another inefficient system
- Hidden agenda of top management
- Lack of communication
- Selection wrong IT solution
Reference:
http://en.wikipedia.org/wiki/Business_process_reengineering
http://www.kmbook.com/bpr.htm
http://www.mis.boun.edu.tr/erdem/mis517/projects-04/cagla-banu-ergin.ppt#292,28,BPR Project Problems
Friday, October 12, 2007
PM1 – Week 2 – Activity 5: Organizational structures
Organizations are the groups of people, with ideas and resources, working towards common goals. In order to make the best utilization of organization’s resources for achieving its goals, organizational structure plays a key role as it is the formal decision-making framework by which job tasks are divided, grouped, and coordinated and units of the organization are explicitly defined and its policies, procedures, and goals are clearly stated.
The organizational structure is conceived and built by the top management. It is very important to choose the right structure as it enables the organization to achieve its goals most effectively. Organizational structure is represented in the form of organization chart which shows job titles, lines of authority, and relationships between departments.
An organizational structure can also be expressed by its degree of complexity, formalization, and centralization. Complexity refers to the amount of differentiation in an organization. Formalization is the degree to which an organization relies on rules and procedures to direct the behavior of its employees while centralization refers to the degree of concentration of decision-making.
The level of these elements in an organizational structure of a firm depends on its size, strategy, technology, and environment. For example large organizations usually use a structure with high complexity and formalization and centralized decision-making where fixed duties are delegated to their employees and only top management participate in decision-making.
There are three most commonly used organizational structures i.e. functional, project, and matrix where as divisional and network/virtual are also currently in use.
In functional structure employees are grouped together based upon the functions of specific jobs within the organization. For example sales department where all employees performing sales functions are grouped together, accounting department, engineering department etc. In functional structure authorities reside with functional head or supervisor. It provides clearly marked career paths for hiring and promotion. Employees work alongside colleagues who share similar interests. Coordination of functional tasks is difficult because of little reward for cooperation with other groups.
Project structure consists of an autonomous project team, existing independently of the rest of the organization. The project team is assembled for a specific project and disperse when project complete. The project manager has the authority and control over the various discipline groups and is responsible for the coordination and monitoring of the effort of the team. Project structure is flexible, provides immediate response to project needs, responsibilities for success of project clearly identified.
In the matrix structure, the personnel and other resources that a project manager requires are not permanently assigned to the project, but are obtained from a pool controlled and monitored by a functional manager. Personnel required to perform specific functions in a particular project are engaged for the period necessary, and are then returned to the control of their functional manager. In matrix structure the main problem is a conflict between functional and project groups.
Divisional structure is almost similar to functional structure. The major difference is that in divisional structure the divisions have higher degree of authority as compared to functional units in functional structure. The divisional structure is broken down into three areas product, market, and geographic.
Product structure group employees together based upon specific products produced by the company. For example a company produces three distinct products “Product A”, “Product B”, and “Product C”. The company will have separate division for each product.
Market structure group employees together based upon specific market in which company sells. For example a company sells it product to individuals as well as to corporate. It will have separate divisions like retail division and corporate division.
Geographic structure group employees together based upon specific geographic location. This is often used by large companies that operate in different areas. For example a company may have its divisions in different cities or countries.
Under network or virtual structure, organizations outsource various functions. The common example of this structure is telecommunication and cellular organizations. In this structure project team members are drawn from various team organizations to share necessary skills. This structure allows the organizations more flexibility and less consumption of resources. It is difficult to have proper control over quality under this structure.
Finding the organizational structure that works best for a particular company is very important because using wrong structure can result poor communication, poor product development, and poor customer service and hence results in failure to achieve its objectives.
References:
http://www.sbea.mtu.edu/smgoltz/ba3700/OrgStructure.html
http://telecollege.dcccd.edu/mgmt1374/book_contents/3organizing/org_process/org_process.htm
http://www.soc.iastate.edu/soc420a/RuthNeilPaper1.pdf
The organizational structure is conceived and built by the top management. It is very important to choose the right structure as it enables the organization to achieve its goals most effectively. Organizational structure is represented in the form of organization chart which shows job titles, lines of authority, and relationships between departments.
An organizational structure can also be expressed by its degree of complexity, formalization, and centralization. Complexity refers to the amount of differentiation in an organization. Formalization is the degree to which an organization relies on rules and procedures to direct the behavior of its employees while centralization refers to the degree of concentration of decision-making.
The level of these elements in an organizational structure of a firm depends on its size, strategy, technology, and environment. For example large organizations usually use a structure with high complexity and formalization and centralized decision-making where fixed duties are delegated to their employees and only top management participate in decision-making.
There are three most commonly used organizational structures i.e. functional, project, and matrix where as divisional and network/virtual are also currently in use.
In functional structure employees are grouped together based upon the functions of specific jobs within the organization. For example sales department where all employees performing sales functions are grouped together, accounting department, engineering department etc. In functional structure authorities reside with functional head or supervisor. It provides clearly marked career paths for hiring and promotion. Employees work alongside colleagues who share similar interests. Coordination of functional tasks is difficult because of little reward for cooperation with other groups.
Project structure consists of an autonomous project team, existing independently of the rest of the organization. The project team is assembled for a specific project and disperse when project complete. The project manager has the authority and control over the various discipline groups and is responsible for the coordination and monitoring of the effort of the team. Project structure is flexible, provides immediate response to project needs, responsibilities for success of project clearly identified.
In the matrix structure, the personnel and other resources that a project manager requires are not permanently assigned to the project, but are obtained from a pool controlled and monitored by a functional manager. Personnel required to perform specific functions in a particular project are engaged for the period necessary, and are then returned to the control of their functional manager. In matrix structure the main problem is a conflict between functional and project groups.
Divisional structure is almost similar to functional structure. The major difference is that in divisional structure the divisions have higher degree of authority as compared to functional units in functional structure. The divisional structure is broken down into three areas product, market, and geographic.
Product structure group employees together based upon specific products produced by the company. For example a company produces three distinct products “Product A”, “Product B”, and “Product C”. The company will have separate division for each product.
Market structure group employees together based upon specific market in which company sells. For example a company sells it product to individuals as well as to corporate. It will have separate divisions like retail division and corporate division.
Geographic structure group employees together based upon specific geographic location. This is often used by large companies that operate in different areas. For example a company may have its divisions in different cities or countries.
Under network or virtual structure, organizations outsource various functions. The common example of this structure is telecommunication and cellular organizations. In this structure project team members are drawn from various team organizations to share necessary skills. This structure allows the organizations more flexibility and less consumption of resources. It is difficult to have proper control over quality under this structure.
Finding the organizational structure that works best for a particular company is very important because using wrong structure can result poor communication, poor product development, and poor customer service and hence results in failure to achieve its objectives.
References:
http://www.sbea.mtu.edu/smgoltz/ba3700/OrgStructure.html
http://telecollege.dcccd.edu/mgmt1374/book_contents/3organizing/org_process/org_process.htm
http://www.soc.iastate.edu/soc420a/RuthNeilPaper1.pdf
BP1 – Week 1 - Business Process Reengineering (BPR)
Business process reengineering (BPR) is a management approach to improve the efficiency and effectiveness of processes within and across the organization through evaluation.
In 1990 the market competition increased suddenly by the entrance of foreign competitors. To deal with this increased competition the business organizations started thinking to reduce their cost, increase productivity and to satisfy the needs of their customers promptly. For that reason they started using technology and specially the information technology to automate their work. At that time “Michael Hammer” who was the former professor to computer sciences at MIT gave a new concept. He said instead of using information technology to automat the existing work use it as a tool to improve business processes by evaluating and eliminating non-value adding work. This will improve the efficiency and effectiveness of the business processes and will help in minimizing the consumption of resources required for delivering the product or services. This concept (BPR) was rapidly adopted by a huge number of firm to remain in global competition by improving customer satisfaction and reducing cost of their product or service by using the BPR.
After few years the idea of BPR was criticized on the grounds that it is focused on the efficiency and technology and do not consider the human factor. Due to huge lay-off of employees BPR became a symbol of major work force reduction which really gave it a bad name. Other reasons include the criticism on over reliance on technology, under estimation of resistance of change, exaggerated expectations regarding the potential benefits from BPR and also the critique articles published by Hammer and Thomas Davenport who were the former supporter of BPR.
Although after the publication of critiques by some of its former supporters and misuse of its concept BPR has lost its popularity but it is still widely recognized for considering business processes as starting point for business analysis and redesign and is a standard part of change methodology portfolio but not as vital as it was before.
Recently Business Process Management (BPM) has taken the place of (BPR). It is a systematic approach for improving the business processes of an organization’s. BPM activities seek to make business process more effective, more efficient, and more capable of adapting to an ever-changing environment. BPM is a subset of infrastructure management, the administrative area of concern dealing with maintenance and optimization of an organization’s equipment and core operations.
BPM differs from BPR. Conceptually it is more flexible. Unlike BPR which focuses end-to-end process by radically redesigning it, BPM tools can be applied part by part to the whole enterprise at a time by adopting much more manageable and smaller changes in the process. This way the investment, risk and amount of change are minimized but at the same time the tangible impact is much more modest than what was possibility with BPR.
References:
http://en.wikipedia.org/wiki/Business_process_reengineering
http://www.alagse.com/pm/p14.php
In 1990 the market competition increased suddenly by the entrance of foreign competitors. To deal with this increased competition the business organizations started thinking to reduce their cost, increase productivity and to satisfy the needs of their customers promptly. For that reason they started using technology and specially the information technology to automate their work. At that time “Michael Hammer” who was the former professor to computer sciences at MIT gave a new concept. He said instead of using information technology to automat the existing work use it as a tool to improve business processes by evaluating and eliminating non-value adding work. This will improve the efficiency and effectiveness of the business processes and will help in minimizing the consumption of resources required for delivering the product or services. This concept (BPR) was rapidly adopted by a huge number of firm to remain in global competition by improving customer satisfaction and reducing cost of their product or service by using the BPR.
After few years the idea of BPR was criticized on the grounds that it is focused on the efficiency and technology and do not consider the human factor. Due to huge lay-off of employees BPR became a symbol of major work force reduction which really gave it a bad name. Other reasons include the criticism on over reliance on technology, under estimation of resistance of change, exaggerated expectations regarding the potential benefits from BPR and also the critique articles published by Hammer and Thomas Davenport who were the former supporter of BPR.
Although after the publication of critiques by some of its former supporters and misuse of its concept BPR has lost its popularity but it is still widely recognized for considering business processes as starting point for business analysis and redesign and is a standard part of change methodology portfolio but not as vital as it was before.
Recently Business Process Management (BPM) has taken the place of (BPR). It is a systematic approach for improving the business processes of an organization’s. BPM activities seek to make business process more effective, more efficient, and more capable of adapting to an ever-changing environment. BPM is a subset of infrastructure management, the administrative area of concern dealing with maintenance and optimization of an organization’s equipment and core operations.
BPM differs from BPR. Conceptually it is more flexible. Unlike BPR which focuses end-to-end process by radically redesigning it, BPM tools can be applied part by part to the whole enterprise at a time by adopting much more manageable and smaller changes in the process. This way the investment, risk and amount of change are minimized but at the same time the tangible impact is much more modest than what was possibility with BPR.
References:
http://en.wikipedia.org/wiki/Business_process_reengineering
http://www.alagse.com/pm/p14.php
PM1 – WEEK 1 – Do I want a career in Project Management?
I started my career six years ago as a project team member. At that time I did not think about becoming a project manager but ever since then, I was inspired from this role. After the first project management class, now I am seriously thinking for the career in this field.
In my first job I worked on an internal project of the company of designing, developing and implementing a cost accounting system. My role in that project was to design a cost accounting system and to coordinate with the team of software developers for its development and implementation. During that I got an opportunity to closely look at the work of our project manager. It really inspired me because it was very challenging and was similar to my ideal role.
It’s my nature that I love working with challenges and role of project manager is full of challenges e.g. to deliver the project within the specified time and budget. It’s also very dynamic because it requires variety of knowledge and skills e.g. time management, human resource management, financial management, analytical, interpersonal and communication skills along with update knowledge of information technology.
Today because of the revolution in information technology and hyper-competitive business world it is more important for the professionals to possess additional IT knowledge and skills than ever before. Like IT is now extensively used in every filed of life such as medical sciences, engineering, accounting etc. which made it necessary for the professionals whether they are medical doctors, engineers or accountants to possess sufficient knowledge of it to take the benefit of new technology. With the rapid changes in technology and emergence of new business concepts and strategies it is very important for the organizations to keep themselves update to remain in competition. It increases the demand for project managers.
A project is deemed to be successful only if it achieves all of its objectives within the specified time and specified budget. It means budgeting is one of the important areas in project management and an individual like me with accounting and information technology background can become more successful project manager. Today accounting has become more systematic because of the use of new technologies and concepts like ERP, CRM, SCM, and BI etc. Now organizations are rapidly switching towards these concepts and continuing updating their systems. For accountants now it is more important to have good knowledge of IT and project management skills to deal with these issues. It enables them to design and implement new systems in the organization to make it competitive. Also it diversifies their scope and provides them more areas of opportunities like they can work as consultants to provide ERP solutions etc. By looking at these features and future demand for this role I have no doubt in my mind to start my career as project manager.
Now project management has become more sophisticated and for project managers it is necessary to have following abilities.
Define and manage all the work required to complete the project successfully.
Estimate the time required to complete the work, develop project schedule (Gantt charts) and to ensure timely completion of the project.
Prepare and manage the budget for the project.
Ensure that the project will satisfy the stated or implied needs for which it was undertaken.
Make effective use of people involved with the project.
Generate, collect, and sort project information.
Identify, analyze, and respond to risk related to the project.
Acquire goods and services for the project from outside the performing organization.
Although all of the above mentioned abilities and skills are important for the project manager to successfully complete the projects but the most vital of these are his relevant education and work experience. Education improves his technical knowledge and skills while experience improves his ability to make good decision based on a similar situation existed in past. As the success or failure of the project depends on project manager therefore no one can take a risk to hire incompetent person on such a crucial position.
When I searched the following job titles from the website www.monster.ca to see the importance of education and experience, every position requires at least bachelor degree or diploma in relevant field and at least 3 to 5 years relevant work experience. It also shows the importance of education and experience for project manager.
Senior project manager
Project manager
Assistant project manager
Project coordinator
Project scheduler
Project management consultant
Business analyst
In my first job I worked on an internal project of the company of designing, developing and implementing a cost accounting system. My role in that project was to design a cost accounting system and to coordinate with the team of software developers for its development and implementation. During that I got an opportunity to closely look at the work of our project manager. It really inspired me because it was very challenging and was similar to my ideal role.
It’s my nature that I love working with challenges and role of project manager is full of challenges e.g. to deliver the project within the specified time and budget. It’s also very dynamic because it requires variety of knowledge and skills e.g. time management, human resource management, financial management, analytical, interpersonal and communication skills along with update knowledge of information technology.
Today because of the revolution in information technology and hyper-competitive business world it is more important for the professionals to possess additional IT knowledge and skills than ever before. Like IT is now extensively used in every filed of life such as medical sciences, engineering, accounting etc. which made it necessary for the professionals whether they are medical doctors, engineers or accountants to possess sufficient knowledge of it to take the benefit of new technology. With the rapid changes in technology and emergence of new business concepts and strategies it is very important for the organizations to keep themselves update to remain in competition. It increases the demand for project managers.
A project is deemed to be successful only if it achieves all of its objectives within the specified time and specified budget. It means budgeting is one of the important areas in project management and an individual like me with accounting and information technology background can become more successful project manager. Today accounting has become more systematic because of the use of new technologies and concepts like ERP, CRM, SCM, and BI etc. Now organizations are rapidly switching towards these concepts and continuing updating their systems. For accountants now it is more important to have good knowledge of IT and project management skills to deal with these issues. It enables them to design and implement new systems in the organization to make it competitive. Also it diversifies their scope and provides them more areas of opportunities like they can work as consultants to provide ERP solutions etc. By looking at these features and future demand for this role I have no doubt in my mind to start my career as project manager.
Now project management has become more sophisticated and for project managers it is necessary to have following abilities.
Define and manage all the work required to complete the project successfully.
Estimate the time required to complete the work, develop project schedule (Gantt charts) and to ensure timely completion of the project.
Prepare and manage the budget for the project.
Ensure that the project will satisfy the stated or implied needs for which it was undertaken.
Make effective use of people involved with the project.
Generate, collect, and sort project information.
Identify, analyze, and respond to risk related to the project.
Acquire goods and services for the project from outside the performing organization.
Although all of the above mentioned abilities and skills are important for the project manager to successfully complete the projects but the most vital of these are his relevant education and work experience. Education improves his technical knowledge and skills while experience improves his ability to make good decision based on a similar situation existed in past. As the success or failure of the project depends on project manager therefore no one can take a risk to hire incompetent person on such a crucial position.
When I searched the following job titles from the website www.monster.ca to see the importance of education and experience, every position requires at least bachelor degree or diploma in relevant field and at least 3 to 5 years relevant work experience. It also shows the importance of education and experience for project manager.
Senior project manager
Project manager
Assistant project manager
Project coordinator
Project scheduler
Project management consultant
Business analyst
Thursday, October 11, 2007
XBRL
XBRL is a business reporting language that allows financial information to be easily exchanged between organizations and on the Internet.
XBRL is growing quickly around the world with increasing participation form individual countries and international organizations. The reason of its popularity is the advantages it confers to its users. For example it can help in reducing cost, streamlining the processes for collecting and reporting financial information, and accelerating financial decision-making etc.
As we are the multinational company having subsidiaries in different countries so we can take lot of advantages by using XBRL.
It will enable us to quickly prepare, analyze and publish the financial statements for numerous subsidiaries in different countries, with different languages, on different computer systems.
It can provide instant reports to the internal management using intranet through which they can make timely decisions which will improve their efficiency and performance.
It will help us to obtain loans from banks on more quickly and timely basis e.g. if we apply for the loan and e-mail our financial information in XBRL. It will automatically be imported into the bank’s loan analysis software and will reduce the credit approval time.
It will enable us to transfer all required audit schedules to our auditors. This will reduce the length of audit time and will help to get audit reports in time.
Through XBRL we can provide robust platform to our shareholders through enhanced assessment, extraction, and query tools. It will improve our relations with them.
We can start using XBRL in our company by following these steps.
Contact the local XBRL organization or jurisdiction. These jurisdictions create and update their taxonomies to use for XBRL based financial statements to reflect their local accounting regulations. Taxonomies are the dictionaries which define the specific tags used for individual item of data.
Select a suitable software tool to create or use XBRL. A list of tools is available on http://www.xbrl.org/Tools/ website.
Setup the parameters required by the software tool.
Setup XBRL tags using the taxonomies and upload the tag document on our website.
Accountant can stay up to date on XBRL standards by visiting http://www.xbrl.org/RSS/ website. This website provides four separate RSS feeds on latest news. They can also copy the URL address of the feed(s) which they want and paste it into appropriate command box of their news reader to obtain automated feed.
XBRL is growing quickly around the world with increasing participation form individual countries and international organizations. The reason of its popularity is the advantages it confers to its users. For example it can help in reducing cost, streamlining the processes for collecting and reporting financial information, and accelerating financial decision-making etc.
As we are the multinational company having subsidiaries in different countries so we can take lot of advantages by using XBRL.
It will enable us to quickly prepare, analyze and publish the financial statements for numerous subsidiaries in different countries, with different languages, on different computer systems.
It can provide instant reports to the internal management using intranet through which they can make timely decisions which will improve their efficiency and performance.
It will help us to obtain loans from banks on more quickly and timely basis e.g. if we apply for the loan and e-mail our financial information in XBRL. It will automatically be imported into the bank’s loan analysis software and will reduce the credit approval time.
It will enable us to transfer all required audit schedules to our auditors. This will reduce the length of audit time and will help to get audit reports in time.
Through XBRL we can provide robust platform to our shareholders through enhanced assessment, extraction, and query tools. It will improve our relations with them.
We can start using XBRL in our company by following these steps.
Contact the local XBRL organization or jurisdiction. These jurisdictions create and update their taxonomies to use for XBRL based financial statements to reflect their local accounting regulations. Taxonomies are the dictionaries which define the specific tags used for individual item of data.
Select a suitable software tool to create or use XBRL. A list of tools is available on http://www.xbrl.org/Tools/ website.
Setup the parameters required by the software tool.
Setup XBRL tags using the taxonomies and upload the tag document on our website.
Accountant can stay up to date on XBRL standards by visiting http://www.xbrl.org/RSS/ website. This website provides four separate RSS feeds on latest news. They can also copy the URL address of the feed(s) which they want and paste it into appropriate command box of their news reader to obtain automated feed.
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