ERP and BPR

ERP and BPR

What is ERP enabled Business Process Reengineering (BPR)?
Business Process Reengineering (BPR) is the fundamental rethinking and radical redesign of business processes of an organization to achieve dramatic improvement in critical contemporary measures of performance such as cost, quality, service and speed. In simple terms, the process of examining current processes and redesigning those processes to increase the efficiency and effectiveness of an organization is called BPR. More precisely, BPR means the rapid and radical redesign of strategic, value-added business processes and system, policies and organizational structure that support them to optimize workflow and productivity in an organization. BPR concurrently pursued breakthrough improvements in quality, speed, service and cost by leveraging the potential of information technology while addressing the issues of organizational strategies and vision for change. Breakthrough improvement means quantum gains of 5 to 10 times compared to incremental improvements of 20-30 per cent. These improvements are generally characterized in terms of improvement of product and service quality at low cost and less time lag between product designs to marketing.

Business Process Reengineering (BPR)

Business process re-engineering is the analysis and design of workflows and processes within an organization. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, it has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management.

ERP and BPR

Business process re-engineering is also known as business process redesign, business transformation, or business process change management.

How BPR plays a critical role in ERP implementation?

Processes, organization, structure and information technologies are the key components of BPR, which automates business processes across the enterprise and provides an organization with a well-designed and well-managed information system. While implementing ERP, the organizations have two options to consider. Either the organization must reengineer business processes before implementing ERP or directly implement ERP and avoid reengineering. In the first option of reengineering business processes, before implementing ERP, the organization needs to analyze current processes, identify non-value adding activities and redesign the process to create value for the customer, and then develop in-house applications or modify an ERP system package to suit the organizations requirements. In this case, employees will develop a good sense of process orientation and ownership. This would also be a customized solution keeping with line of the organization's structure, culture, existing IT resources, employee needs and disruption to routine work during the change programmer likely to be the least. It could have a high probability of implementation. The drawback of this option is that the reengineered process may not be the best in the class, as the organization may not have access to world-class release and best practices. Moreover, this may be the only chance to radically improve in the near future and most attention should be paid while choosing the right ERP. Also, developing an in-house application or implementing a modified ERP is not advisable. The second option of implementing ERP package is to adopt ERP with minimum deviation from the standard settings. All the processes in a company should conform to the ERP model and the organization has to change its current work practices and switch over to what the ERP system offers. This approach of implementation offers a world-class efficient and effective process with built-in measures and controls, and is likely to be quickly installed. But if the employees do not have good understanding of their internal customer needs or current processes, or if these processes are not well defined and documented, then it is quite possible that while selecting the standard process from the ERP package, employees may not be able to perceive the difficulties likely to be encountered during the implementation stage. Employees would lack process ownership and orientation. Other than technical issues, issues like organization structure, culture, lack of involvement of people etc. can lead to major implementation difficulties, and full benefits of standard ERP package may not be achieved. It may lead to a situation where the organization may have to again reengineer its processes. This could be a very costly mistake. There is also a third option of reengineering business process during implementation of ERP. But it does not considered to be a practical option and is likely to cause
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ERP and BPR

maximum disruption to existing work. It should not be forgotten that during BPR and ERP initiatives, routine work is still to be carried out and customers need to be served.

ERP Vs BPR - Differences and Concept

ERP is Enterprise Resource Planning and BPR is Business Process Reengineering. EPR integrates the primary business applications and provides a customized solution. It covers areas such as human resources, sales and distribution, quality management, production management, accounting, project management and plant maintenance. Business Process Reengineering is redesigning of the business process for improvement of performance. It aids to eliminate wasteful tasks and reorganize procedures to prevent unnecessary expenses. The process involves defining the work order and restructuring of the redundant tasks. It helps to streamline the business process which enhances the performance of the company. One has to study the current business process for redesigning and reengineering. ERP vs BPR is different even though they bring in improvements in the business processes and information. A company can go with both the processes as it can reduce the time and effort for bringing in the changes. BPR is done prior to implementation of an ERP since the software to be designed according to the new changes is helped by BPR. The investment and the challenges needed for both the processes are similar so they should be implemented by proper planning . The features of ERP that support BPR is the configurability, the integrative feature and the scope. If you look for implementing BPR before ERP, the organization needs to study the existing processes and identify the non value adding activities. BPR is an important aspect in the implementation of Enterprise Resource Planning. The results of BPR will be the basis for the implementation of the ERP software. The study based on this will show whether ERP implementation is required or not. If it is, then ERP will be implemented to cover the gaps present in the BPR study. BPR is used to analyze the business process and thereby take the necessary steps to realize the potential growth of the organization. ERP on the other hand is an application used to meet the potential growth by integrating the various functional departments of the organization. The various functional departments are productions, accounting, sales, etc. BPR is used to identify the trouble areas of the process and ERP is used to handle these troubled areas in simple terms. ERP vs BPR is different but both the tools are important as each is different and has its own advantages. Both are actually interrelated and yet have their own roles. BPR is for analysis whereas ERP is for integration of the business process. BPR also aids in suggesting steps that have to be followed for enterprise resource planning to be implemented in the organization. The success of the implementation of the Enterprise Resource Planning depends on how the organization solves the Business Process Reengineering problems. Therefore it can be said that the BPR forms an important part of implementing the ERP in a company. BPR is not only essential for ERP implementation but also for any business process. It can be considered as the initial step to be taken in the process of the ERP implementation as BPR is done to perform feasibility study and restructuring.
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