THE EFFECT OF BUSINESS PROCESS REENGINEERING ON ORGANIZATIONAL OBJECTIVES IN UNION BANK PLC
ABSTRACT:
The study examined effect of business process re-engineering on the organizational objectives of First Bank Plc, Kaduna. A survey study was used to obtain empirical data from the field, through the use of 21 item questionnaire design in five likert scale. The population consisted of staff of First Bank Kaduna main branch Yakubu Gowon Way. Out of a total population of 125 staff 100 was selected using the simple random selection technique. The research findings indicate that business process re-engineering facilitates goal attainment through improvement in the workflow of an organization thereby increasing efficiency and enhancing customer satisfaction. The method of business process re-engineering in First Bank is basically continuous process improvement, value-stream reinvention and enterprise redesign. Inspite of the positive effect of re-engineering in an organization, it is confronted with the problem of change resistance by employees, cultural resistance, implementation risk as well as the problem of delegating re-engineering task to outsiders.
TABLE OF CONTENTS
Title Page - - - - - - - - - - i
Declaration - - - - - - - - - ii
Approval Page - - - - - - - - - iii
Dedication - - - - - - - - - - iv
Acknowledgement - - - - - - - - v
Abstract - - - - - - - - - - vi
Table of Contents - - - - - - - - vii
CHAPTER ONE – INTRODUCTION
1.1 Background of the study - - - - - - 1
1.2 Statement of the problem- - - - - - - 2
1.3 Objective of the study - - - - - - - 3
1.4 Significance of the study - - - - - - 4
1.5 Research questions - - - - - - - 4
1.6 Scope of the study - - - - - - - 5
1.7 Limitation of the study - - - - - - 5
1.8 Definition of terms - - - - - - - 6
CHAPTER TWO – LITERATURE REVIEW
2.1 Introduction - - - - - - - - 7
2.2 Concept of business process re-engineering - - - 7
2.3 The effect of business process re-engineering on organizational objectives - - - - - - - - - 14
2.4 Various method of business process re-engineering - 16
2.5 The challenges of business process re-engineering - - 26
2.6 Summary of the literature - - - - - - 32
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction - - - - - - - - 34
3.2 Research design - - - - - - - - 34
3.3 Area of Study - - - - - - - - 35
3.4 Population of study - - - - - - - 35
3.5 Sample size and sampling techniques - - - - 35
3.6 Instrument of data collection - - - - - 35
3.7 Validity - - - - - - - - - 36
3.8 Reliability - - - - - - - - - 36
3.9 Method of data collection - - - - - - 37
3.10 Method of data analysis - - - - - - 37
CHAPTER FOUR – DATA PRESENTATION AND ANALYSIS
4.1 Introduction - - - - - - - - 39
4.2 Respondent characteristics - - - - - - 39
4.3 Data analysis - - - - - - - - 40
4.4 Summary of finding - - - - - - - 48
4.5 Discussion of Finding- - - - - - - 49
CHAPTER FIVE – SUMMARY, CONCLUSION RECOMMENDATION
5.1 Summary - - - - - - - - - 52
5.2 Conclusion - - - - - - - - - 53
5.3 Recommendation - - - - - - - 53
Bibliography - - - - - - - - 54
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Business process re-engineering (BPR) is the analysis and design of workflow and process within an organization. According to Davenport (1990) a business process is a set of logically related task performed to achieve a defined business outcome. Re-engineering is the basis for many recent developments in management. The cross functional team, for example, has become popular because of the desire to re-engineer separate functional task into complete cross-functional processes. Many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management, groupware and collaborative system, human resource management systems and customer relationship management.
Business process re-engineering (BPR) began as a private sector technique to help organizations fundamentally rethink how their work in order to dramatically improve customer service, cut operation cost, and become world-class competitors. A key stimulus for re-engineering has been the constituting development and development of sophisticated information system and networks. Leading organizations are becoming bolder in using this technology to support innovative business processes, rather than refining current ways of doing work (Marshal, 2007).
Business process re-engineering is basically the fundamental re-thinking and radical re-design, made to an organization’s existing resources. It is more than just business improvising.
The importance of business process re-engineering cannot be overemphasized within the framework of assessment of organizational objective. Hence the need to study the subject matter of this research: the effect of business process re-engineering on the organizational objective in first Bank Plc Kaduna main Branch, becomes worthy of investigation.
1.2 Statement of Problem
Business process re-engineering has earned a bad reputation in several organization because such project have often resulted in massive layoffs (Roberts, 2004). This reputation is not altogether unwarranted, since companies have often downsized under the banner of re-engineering. Furthermore, re-engineering has not always live up to its expectation because re-engineering assumes that the factor limiting an organization’s performance is ineffectiveness of its process (which may or may not be true) and offer no means of validating that assumption. Hence the need to investigate business process re-engineering become the problem in which this research is triggered.
1.3 Objectives of the Study
The central objective of the study is to:
i. Examine the effect of business process re-engineering on the objective of First Bank. The specific objectives are to:
ii. To evaluate how workflow redesign can affect the operation of First Bank Plc Kaduna Main Branch
iii. To identify the methods of business process re-engineering used in redesigning the operations of First Bank Kaduna
iv. To find out issues and constraint hindering business process re-engineering projects in First Bank Plc Kaduna Main Branch
v. To proffer workable solutions to such constraint
1.4 Significance of the Study
The study will be beneficial to corporate organization and First Bank in particular especially as they use the findings of this research as a basis to re-design their workflow or process. The study will add to existing knowledge on business process re-engineering and would serve as a good reference materials to individual students, scholars and researcher who may wish to use this research work as a spring board to undertake similar research work.
1.5 Research Questions
i. To what effect is business process re-engineering towards achieving the organizational objective of First Bank
ii. How does workflow re-design affect the operations of First Bank Plc Kaduna?
iii. Which method of business process re-engineering did First Bank Plc use in re-designing their operation in recent time?
iv. What are the constraint hindering business process re-engineering projects in First Bank Plc Kaduna?
v. What are the possible solutions to this constraints
1.6 Scope of the Study
The study covers an examination of the effect of business process re-engineering on organizational objective of First Bank Plc Kaduna as well as the evaluation of workflow re-design and its effect on the operation of First Bank and the issues and constraints hindering business process re-engineering in First Bank. Collection of primary data will be restricted First Bank Plc Kaduna Main Branch. The study covers a period from 2011 to 2012 being the time allowed for this study.
1.7 Limitation of the Study
The limitation of this study arise from the shortcoming of the research design, the instrument of data collection and the non-challant attitude of respondents. For the fact that the survey study is used it is not certain whether other research design such as the descriptive design, historical design or ex-post design will yield the same result. It is not also certain if the same result would be obtained if other kind of instrument of data collection other than the questionnaire is used to obtain data. Besides, the non-challant attitude of the respondents and the over exaggeration or understatement of their responses when scoring the items in the questionnaire could affect the validity of their responses. These limitations should be taken cognizance of by other researchers conducting similar studies.
1.8 Definition of Terms
Re-engineering – re-design of work process
Workflow – work process or procedures
BPR – This is an acronym for business process re-engineering
BPM – This is an acronym for business process management
Process innovation – Introduction of new technique in work procedure
Process improvement – this is the incremental, gradual and constant change or innovation in workflow
TQM – This is an acronym for total quality management
Concept of Business Process Re-engineering
Business process re-engineering is an integrated set of disciplines for building or changing an enterprise, its processes, and systems. It integrates the most powerful change methods and makes them succeed. Business process re-engineering provides management with a tool box of change methods. It aims to select and integrates the most powerful methods so that management can plan and succeed with complex change while continuing to run the business (Nadler, 2006).
However, Kaizen (2009) opined that business process re-engineering is about the simplification of work to achieve higher quality, better results for customers, and lower costs. It is about replacing manual processes with automation, eliminating unnecessary bureaucracy, streaming and minimizing handoffs across departments providing the right information at the right time to the right people, eliminating unnecessary work, reducing unnecessary controls, empowering every employee and getting it right the first time.
However, Klein (2007) defines business process re-engineering as the rapid and radical redesign of strategic, value added business and the system policies and organizational structures that support them to optimize work flows and productivity within an organization. Johansson and Mchugh (2008) opined in their book “Business Process Reengineering: Breakpoint strategies for market Dominance,” defines business process reengineering as the means by which an organization can achieve radical change in performance, as measured by cost, cycle time, service and quality, by the application of a variety of tools and techniques that focus on the business as a set of related customer-oriented core business processes rather than a set of organizational functions.
Furthermore, Jacob (2009) defines (BPR) as an informed, participative process resulting in new ways of doing business that position an entire organization for success, now and into the future.
The above definitions emphasize dramatic, radical change, usually occurring in a short time frame that affect a core business process that cuts across functional lines and where the people, cumin empowerment element is crucial for success. In recent years a number of formal BPR case and other computer aided design tools have been employed to support the task of creating structure / process diagrams and modeling an organization’s data. Further, as companies achieve success and failure in this process, a number of stages in the BPR process have become clearly identified. Clearby B.PR is an on-going process critical to an organization’s success in a competitive market place.
BPR has being existing since 1900 but the history of business process reengineering in modern era. According to Darein (2009) came into limelight in 1990, when Michael Hammer, a former professor of Computer Science at the Massachusetts institute of technology (MIT), published an article in the Harvard Business Review, in which he claimed that the major challenge for managers is to obliterate non-value adding work, rather than using technology for automating it. This statement implicitly accused managers of having focused on the wrong issues, namely that technology in generally, and more specifically information technology, has been used primarily for automating existing processes rather them using it as an enabler for making non-value adding work obsolete.
Hammer’s claim was simple: most of the work being done does not add any value to customers, and this work should be removed, not accelerated through automation. Instead, companies should reconsider their processes in order to maximize customer value, while minimizing the consumption of resources for delivering their product or services. A similar idea was advocated by (Daverport, 1990). The concept of re-engineering traces its origins back to management theories developed as early as the nineteenth century. The purpose of re-engineering is to “make all your processes the best-in-class.” Frederick Taylor suggested in the 1880’s that managers could discover the best processes for performing work and reengineer them to optimize productivity. BPR echoes the classical belief that there is one best way to conduct tasks. In Taylor’s time, technology did not allow large companies to design processes in a cross functional or cross-departmental manner. Specialization was the state-of-the-art method to improve efficiency given the technology of the time.
In the early 1900’s, Henri Fayol originated the concept of re-engineering: “To conduct the undertaking towards its objectives by seeking to derive optimum advantage from all available resources.”
Although, the technological resources of our era have changed, the concept still holds. About the same time, another business engineer, Cyndallurinck stated, “it is not enough to hold people accountable for certain activities, it is also essential to delegate to them the necessary authority to discharge that responsibility.” This admonition foreshadows the idea of worker empowerment which is central to re-engineering.
Although Hammer and Champy (2007) declared that classical organization theory is obsolete, classical ideas such as division of labour have had an enduring power and applicability that reengineering has so far fail to demonstrate. BPR does not appear to qualify as a scientific theory, because, among other things, it is not duplicated and it has limited scope. The applicability of classical management theories, such as division of labor, were widely duplicable and portable. These ideas stimulated increases in productivity, output and income that led to the creation of the middle class.
If BPR is not a theory, but a technique, Hammer and Champy are surprisingly vague about the details. This paper attempts to fill in the blanks. Despite their vagueness, Hammer and Champy (2009) are clear about who to blame when re-engineering attempt to fail, it is the fault of the individual company. Cyert and March, among others, point out that conflict is often a driving forces in organizational behavior. BPR claims to stress framework, yet paradoxically, it must be “driven” by leader who is prepared to be ruthless. One executive with BPR experience warns not to assume.
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