Process Benchmarking and Process Reengineering

Keywords: benchmarking and reengineering

Introduction

Both process benchmarking and process reengineering are the popular methods for producing requirements and setting up goals. Both these methods were developed to bring about changes for the advancements in procedures of the organisations. Benchmarking includes comparison of 1 firm's processes with that of other organization while reengineering can be involved with redesign of operational functions, Feldmann Clarence. G, (1998). Benchmarking consists of thorough research into the best practices accompanied by other organisations on the market where in fact the company functions and it helps in breaking down the organisations' activities down to process operations and modifies these to the best-in-class for a specific operation.

For those who find themselves not expert these process benchmarking and process reengineering are very different things but for experts they may have something in common. Even benchmarking is used in one of the steps of process reengineering.

Process reengineering Benchmarking is a favorite method for expanding requirements and setting goals. Generally, Benchmarking can be considered as calculating one firm's performance against that of businesses which are leaders in their respective industries, it can help in focusing on how the industry head firms achieve quality in their functions, and then using that information as a reference point for functions in one's own company's mission, long term and short term strategies, and implementation. Benchmarking involves detailed research into the best practices accompanied by the organisations on the market where the fir operates. It helps in breaking down the organisation's activities down to process operations and modifies them to the best-in-class for a particular operation.

Business process reengineering is mainly utilized by the firms that are on the brink of disaster, mainly to cut costs and move back onto the tabs on profitability.

Reengineering and Benchmarking jobs are like any other major project. They need to have applied flexibly and should accommodate new technologies and solutions to obtain necessary data. Reengineering and Benchmarking derive from iterations, it is nearly impossible to apply these processes in one shot.

The driving push behind all the changes which are taking place in the all the firm of the world are two Cs: customers, competition. The needs of the clients are changing day by day and this change popular of customers present new packages of problems to the firms once in a while and hence organizations have to change or change their offering to customers consequently. Firms who can get it done in less time and less cost grow to be the industry leaders.

Firms set their quest and vision assertions based on their short term and permanent strategy and attain those goals businesses need to adjust themselves with the constantly changing environment. We have seen dominance of Japanese organizations in car and electronic digital components, the explanation for this dominance of Japanese firms over other firms round the world is their techniques. They change things fast and their people allow the changes fast.

Some people examine these techniques are worthless but there are companies who have successfully implemented these techniques and have shown to the world that these techniques are valid and are implementable.

History

The idea of reengineering were only available in nineteen nineties when the Massachusetts Institute of Technology (MIT) conducted research entitled "Management in 1990". The only real purpose of that research was to know the role performed by it organisations during that time. Since that time a lot of research has been done on reengineering and various authors have different views on reengineering because which it has increased a whole lot of controversy and disagreement among authors. There are a few like Druker who believed that inputs from new and innovative concepts should be used to optimise the production of all the operations while there are some who thought that reengineering is a misconception and can soon disappear.

In the 1880's Frederick Taylor suggested that process reengineering is used by managers to discover the best process (way) to perform the work in doing so increasing the productivity of whole procedure. In the first 1900's Henri Fayol originated the idea of reengineering and explained it as a concept to derive most effective gain from all the available resources by finding the best process to execute the task.

During the time of Taylor and Fayol, technology was somewhat of constraint and it really was difficult for the top companies to create the process in cross-functional or cross-departmental manner.

The expression benchmarking has been derived from the group of activities utilized by cobblers to recognise the size of the foot with their customers. For measuring how big is the ft. they used to ask the client to place their foot on the "bench" in order to "mark" the foot utilizing a pen. In Benchmarking procedures of one company are weighed against the operations of the industry innovator to start to see the routines and the ways in which these industry market leaders operate also to enhance their own functions.

Although the technology has made a huge success in our era however the concepts given by experts like Taylor and Fayol still holds and are used by all the big organisations for optimising the output of functions.

Definitions:

Both Benchmarking and Reengineering are generally popular and are practised throughout the world. For people who aren't expert, both of these terms appears to be different but actually both techniques have much in keeping, and reengineering can greatly reap the benefits of integration with benchmarking.

Different creators define reengineering and benchmarking in a different way because of the different views on the process and organisational change and competition. They included their idea of process change in their explanations and included terms like rethinking, restructuring and streamlining of operations to obtain maximum output by reducing enough time for procedures, costs in doing so increasing the quality and client satisfaction.

Benchmarking is the procedure of contrasting business processes of 1 company to the best business procedures of the industry leader. Benchmarking generally includes comparing functions on time, costs and quality to do things better, faster and cheaper.

The most popular of the meanings of reengineering is" the fundamental rethinking and radical redesign of business operations to achieve dramatic improvements in critical, modern-day steps of performance, such as cost, quality, service, and rate, " Hammer, M. , Champy. J. , (1993)

Both the techniques i. e. benchmarking and reengineering have a whole lot in keeping. The benefits of using these methodologies come mainly in two areas

1. Selecting techniques which must be reengineered is performed by benchmarking studies rather than by arbitrarily looking for website experts.

2. Reengineering is often done in that fashion so the overall process should be customer centred. Inputs from inside and external factors are taken because of this. Benchmarking can enhance this process by bringing in the experiences of the main firms.

This classification of reengineering includes four essential tips which can be summarised the following

Fundamental Rethinking:

While doing reengineering, business officials must ask them the essential questions about their business like "what is their business"? "What are their do they would like to do in their business"? And "what they want to change?"

Asking these questions bring quality about the business operations and makes the visitors to look at the tactic rules which their organisation follow for conducting business.

Reengineering works in two steps. First, it decides what the business must do for the improvement and second, how they need to undertake it. Reengineering accepts nothing at all as it is, it ignores what is it like and concentrates on what it ought to be like.

Radical Redesign:

Radical redesign means to get into the facts of the things and not to make superficial plans for the items which already are in the place but to get into the roots of the items and looking for new progressive and effective ways to do a similar thing more productively.

Dramatic advancements:

It is often said that business reengineering is about the business enterprise reinvention rather than about business advancement, business improvement or business changes.

Hence, Reengineering is not about making small improvements but about making big, effective and notable changes to accomplish quantum leaps in the performance.

Marginal advancements are required for the fine tuning of the procedures but reengineering should only be bought in when you can find dependence on big changes for the remarkable improvements Reengineering should be bought in only when there's a need for major improvements which includes changing the old things with the new things.

Processes:

This word "process" is central to reengineering and it gives hard time to the majority of the managers of the organisations because the majority of the professionals are job focused rather than process oriented. Job oriented managers focus mainly face to face (task) accessible as opposed to the process involved for the work. Business processes are the collection of activities which consumes inputs of different kinds and creates the productivity which is of value for the client or the customer of the organisation. Reengineering not only targets the several departments of the company but also the company in a complete because which reengineering see the full picture of the task moving in one section of the company to the another with keeping an eye on the operational hindrances on the way.

Let's distinguish between the traditional method of procurement of goods and reengineered process with the aid of information 1 and figure 2

Figure 1- Traditional Process for procurement of goods and services

Figure 2- Reengineered Process for procurement of goods and services

Steps involved in Process Benchmarking

Process benchmarking technique mainly includes the next steps,

Identifying problem areas

Process benchmarking requires inputs by means of information for contrast. The sort of information required by benchmarking process depends on the process which must be compared. A range of research techniques are being used for the processing of the info, so that contrast can be made quickly and effectively. It includes getting information on all the required options. Customers are essential for just about any business and are the best source of information for the firm and therefore their inputs should be included and processes should be designed with techniques which include their ideas and functions should manage their issues related to the procedures. Exploratory researches based on someone to one interviews and group interview will often prove to be very useful in this exercise.

2. Identifying market sectors with similar processes

In this step we look for sectors which have similar functions. Sometimes different sectors use some similar processes, if so one can selected companies from others to compare particular procedures. Say for example boiler can be used in cement industry as well as sugars companies. Hence, a sugars company may compare its boiler prepared steam operation your of cement industries' boiler processed steam.

3. Figuring out industry leaders in these areas

In this task we look for organizations with whom you have to compare its techniques. Normally industry leaders are chosen for the comparison and it's because of their superior procedures which play vital role in the overall performance of any company. For this one has to do through research, customers of the business, its personnel and internet can be used to understand this information.

4. Involving domain experts for steps and practices

Domain experts and survey companies are very useful in selection of equivalent companies and processes because they are expert in getting information and masking the confidential information of the client organization which provide data theft security to the client.

Figure 3- Steps involved in process benchmarking

5. Visit companies to find their "best practices"

In this step one needs to visit different companies, those who find themselves considered as good companies for the reason that industry. During the visit he should notice all the guidelines followed by the company and think logically whether they can apply those procedures in his company or not since every organisation is different in its character. Generally companies readily exchange those details and information that are helpful to all customers in the benchmarking group.

6. Put into action new and improved upon business practices

After knowing all the business enterprise processes of one's company and best practices of other leading companies, you can compare the procedure processes of his company to the leading company.

Steps involved with Reengineering

Planning for reengineering

Planning and preparation play essential role for just about any process or event to be successful and the same pertains to reengineering. Before making use of business process reengineering you need to ask him that is reengineering necessary?, Grover, Varun. , Malhotra, Manoj. K. , (1995), Since reengineering consists of major changes and is also not for small advancements and also it can include heavy costs, there should be a dire need for reengineering. This step starts off with the consensus of executives of the company for the procedure reengineering. During reengineering the processes are reengineered so that they operates work in tandem with the objective & vision statements of the organization. Understanding customer prospects is most important, because the procedures needs to be reengineered in the way that will lead to maximisation of client satisfaction.

Mapping and Analysing As-Is Process:

Before reengineering any process, reengineering team should know the existing process. The underline facet of business process reengineering is to bring the changes dramatically. Process reengineering is not for small and sluggish changes. Many people advocate that it ought to be "To-Be" Analysis instead of "As-If" Evaluation.

The usefulness of the step is identifying anything that prevents the process from

achieving desired results and in particular information transfer between organizations or people and value adding techniques and is put in place by using different models used for creation and paperwork of Activity and process models. Then by using activity established costing amount of time and amount of cost consumed by each activity is calculated.

Figure 4- Steps involved with process reengineering

Designing To-Be process:

This phase begins with looking for alternatives in the current situation which moulds well with the proper goals of the organisation. The first part of the phase begins with benchmarking which is comparison of the organization with the other firms in the same industry. It's a general practise to select industry leaders for the contrast so the firm can use its guidelines. This isn't necessary to select the firm for comparison from the same industry, once can decided any organization from any industry with similar procedures. For example, both textile mills and food handling industries use Opposite Osmosis technology (process) for the intended purpose of normal water purification; hence they can be compared for normal water treatment process. Next we do activity based costing examination for analysing time and costs engaged for different techniques. Once ABC examination is done To-Be models are prepared using different modelling techniques. That is important to learn that this modelling is iterative process and different To-Be models are prepared for the examination. At last we make trade-off matrix to choose the best To-Be circumstance.

Implementing Reengineered Process:

The implementation period is that stage where reengineering face maximum resistance. It is because the surroundings is not conveniently changeable and therefore, it is most difficult phase of all the stages in reengineering. As the firm invest a lot of time and incur heavy expenditures for the look phase it is justifiable to purchase training programmes for the employees of the company for the ethnical change. Being successful the hearts of all employees and motivating them is essential for process reengineering.

Next step is to make a transition plan to move from As-Is to the redesign process. The program should be chosen in a fashion so it runs well with the long term strategy of the company. Implementation of it which support reengineering is must for the process. The total amount of work which needs to be done for the reengineering is divided into different components using work breakdown composition techniques and them these specific components are did the trick upon.

Improve Process Continuously:

The last but most important phase of any reengineering process is constant monitoring of processes and the results that can come from revised/improved procedures. If there are deviations from the expected to actual then they should be taken health care immediately. The performance of reengineering is measured by the competitive gain the organization gain by reengineering, the quantity of satisfaction of the employees, and the amount of determination management shows.

Criticism

As with any new principle there are those who find themselves in favour of the idea and those who oppose or criticize it and benchmarking and process reengineering are no exception. These techniques should not be used to set goals for the firm and the ones who are in charge of causing the change in the organization should comprehend the processes of the company well.

One of the criticisms attracted by process benchmarking and process reengineering is that they stimulate firms to spy on the competitor firms and power firms to replicate other organizations (Boxwell, 1994). But this statement is not true as these methods are of help for organizations for gaining competitive advantage and they assists with informing firms about what other companies are doing.

Some organizations do not utilize process reengineering and process benchmarking for their convinced that if something is not busted then it do not need to to be fixed. It's because when the financial performance of the firm is good, people withstand the change and stop evaluating themselves with opponents ( Harper, 1996).

When the financial performance of the business is good, they tend to resist change and not worry about competition.

In Japan, benchmarking is a part of their manager's job explanations (Boxwell, 1994). This is one way Japanese are able to gain competitive advantages in car and electronic establishments all round the earth.

Conclusion:

Superior processes, customer satisfaction and strong management leadership are essential for just about any business firm to reach your goals.

Reengineering and benchmarking will be the techniques which all organisations may use, when required to attain success. None of them of these techniques are magic nor are they magic pill for the problems which companies face. One needs to invest time and money to apply them. But only time and money don't ensure successful implementation of the techniques. For each and every business client satisfaction is the main element, both these techniques are centred around customers, both internal and exterior. Until and unless individuals don't recognize the change no business can improvise using any strategy and hence change in behaviour of the people is key. "50 to 70 percent of reengineering work fail to deliver the supposed dramatic results, Hammer, M. , Champy. J. , (1993), and those who have successfully integrated it are reaping the benefits.

Planning has essential role to try out in any approach execution. Sometimes people set very high requirements and after implementation they don't achieve them. This failing to achieve recently set targets should not be called as unsuccessful execution but inefficient planning.

These days and nights not only the private businesses, who are considered to be very competitive but also the general public companies are employing these techniques. Japanese automobile and electronic element organizations dominate all marketplaces of this world; the reason behind their dominance is that they change fast plus they change with change quickly. In an environment of rapid flux, group must change their priorities from a normal concentrate on planning, control, and monitored growth, to emphasize speed, innovation, flexibility, quality, service, and cost. It really is nearly impossible to retrofit organizations into this new truth. Reengineering and benchmarking will be the only solution available with companies. For every company customers and competition are the most important. Because the demands of the clients change with the speedily changing environment, businesses have to change themselves to gratify the needs of the customers. If indeed they don't change their competition changes and gratify the needs of the clients.

"Wisdom is neither in fixity nor in change, but in the dialectic between your two", Octavio Paz 1914-1998. Hence one should ask himself before using these techniques that what needs to be changed and just why it requires to be evolved.

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