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Issue of October 2004 
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Technology in BPR

Scale the value chain with BPR

Indian enterprises should carry out Business Process Re-engineering (BPR) to move up the services value-chain. Hemant Krishan, Chief Technology Officer Sapient in India talks to Soutiman Das Gupta about its benefits and relevance of BPR to Indian companies

Business Process Re-engineering (BPR) is not a new concept. Why do we see renewed emphasis on it?

Since technology has become more of a 'commodity' in the enterprise and sheer technology-based differentiation between competitors has decreased, Indian companies have realized that the source of competitive advantage isn't necessarily technology. The advantage lies in the way the technology is used.

This is reflected in a renewed focus on business processes being the foundation for competitive advantage and the use of technology as an enabler for the same. So while it's not a new 'buzzword', it is seeing renewed interest and activity.

What is its relevance to Indian enterprises?

BPR is especially relevant in the Indian context because, besides a few exceptions, companies and personnel have to continuously tolerate bureaucratic delays in their projects.

To add to that, competitive pressure from other companies in the same field has increased, and there is a need to deliver value at less incremental costs and manpower.

BPR will help Indian organizations extract better performance from its existing systems and setup, and introduce significant improvements. For example, banks can strengthen their business processes and use BPR for loan approval and processing. Manufacturing companies can use BPR to get insights into their inventory management process.

What role does technology play to introduce BPR in Indian companies?

BPR is mainly a business-driven initiative, but it certainly will have a strong technology component.

The BPR strategy requires a business consulting approach coupled with technology expertise to realize the competitive advantage. It is not enough to just know technology. Enterprises must also cultivate industry and market knowledge to be effective in BPR. There may be a few process changes that can be enabled through change management.

Technologies like the Internet permit and promote 'self-service' transactions and provide ready access to all kinds of information needed to make informed choices. So tech savvyu enterprises that are able to leverage technology for bettering their business processes can benefit from BPR faster.

The technology for enabling this is no longer 'cutting edge'-it is quite mainstream.

What kind of companies can benefit from the use of BPR?

The concept of BPR is actually industry-neutral. Typically medium to large companies in any sector will benefit from BPR.

The organizations most likely to gain from BPR will usually be the kind that have business units spread across several global locations. This kind of a company will also have a number of business processes that cut across them. Each of these business processes will generate large amounts of vital information in the internal organizational units. And this will result in large information silos, which will create a fair amount of complications and inefficiencies.

At this stage, companies must step back and look at their business models to identify the key business processes in their value chains. They must look for any bottlenecks, devise means to improve processes, or do them differently.

They must also look out for any organizational and procedural hurdles, which stop them from maximizing efficiency and value-focus.

Can you give an example of an Indian organization that has used technology to achieve BPR?

In the recent past, Bank of Baroda (BOB) has adopted BPR. It conducted a number of activities like system integration, and upgradation of business processes in line with technological developments.

The bank is also in the process of establishing a unique lending automation process as part of the BPR implementation. No other bank has implemented it as yet. This new project will enable the bank to process retail loans in a quick and efficient manner.

What are the steps an organization should take in order to begin the process of BPR with the help of technology?

An organization should take five steps in order to conduct BPR. The business sponsor's first step should be to identify the key business process in the value chain that have some 'pain points' and need to be streamlined.

The second step will be to re-engineer the processes and set measurable goals. The goals may be to increase case-load productivity by 15 percent, decrease loan processing time by 20 percent. These processes can be performed by an internal team, or in partnership with a business consultancy organization. The use of a consultant provides a broad industry perspective.

The third step will be to map the new processes against the existing applications and identify new areas of systems integration and functionality. As a fourth step the company should devise a change management plan, and an IT plan to implement the changes.

The final step will be to execute the plans and measure achievement against the goals. It may sound easy but many companies can flounder on simple things like agreeing on the processes that need to be re-engineered, and deciding on the measurable goals to be achieved at the end of the BPR exercise.

Generally, strong executive sponsorship, a clear vision of the desired end-state, the ability to execute change management, and the efficiency of handling IT infrastructure deployments are the essential ingredients of successful BPR strategy.

Enabling better business processes typically requires good skills in technology integration. However, the key is that companies should not let the tail wag the dog. BPR initiatives must be business-driven initiative.

Soutiman Das Gupta can be reached at soutimand@networkmagazineindia.com

 
     
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