UK: HAS RE-ENGINEERING HAD ITS 15 MINUTES OF FAME? - Whatever it meant, the BPR tag looks to be on the way out.

Last Updated: 31 Aug 2010

Whatever it meant, the BPR tag looks to be on the way out.

Every other company these days seems to be wrestling with business process re-engineering (BPR), or just wondering whether it ought, perhaps, to reorganise along process - rather than functional - lines. So is BPR merely the latest flavour of the month (maybe that should read 'decade')? Or is it - being intrinsically concerned with both structure and operations - more fundamental than job evaluation and operational research and management-by-objectives and portfolio planning, and all those other universal remedies of days gone by, and therefore more durable?

The first difficulty in trying to answer this question is that there's very little agreement about what BPR means. The initials have been used, as independent consultant Rohit Talwar points out, to dignify every kind of reorganisation, but especially those which are designed to take out cost, and therefore, usually, people. 'Manufacturing companies in this country are really not doing (BPR) at all,' in his view: they are using the term to legitimise other objectives. 'They are still approaching it with a mindset that they want to see results within six months.' One or two British manufacturers might dispute that charge. Lucas Industries reckons to have been engaged in re-engineering since the late '80s - which was before the BPR concept was formulated. 'We learned, as we cellularised factories, that this created different needs in office areas,' says Dr Peter Johnson, head of the internal consultancy operation Lucas Engineering & Systems. 'The information flows were quite different, and groups formed naturally around these flows.' These days, it seems, some 200 projects and programmes, and the multidisciplinary teams which manage them, are what hold Lucas together. Johnson claims that 'We've seen productivity improvements of the order of 25-40%'.

Even a 40% improvement (not necessarily in productivity) is modest by the standards of BPR's apostles - who are often IT specialists contemplating a whole new market for software. But even in the US, where this market is growing by leaps and bounds and where most of BPR's outstanding success stories are being written, the failures are far more numerous. Some 68% of the 350 managers who responded to an Arthur D Little survey on BPR confessed that their projects had developed unfortunate side-effects. This is almost exactly in line with guru Michael Hammer's prediction that two-thirds of all reengineering projects are doomed to fail. One commonly attributed cause of failure is an inimical corporate culture. Newly-formed teams are unlikely to work effectively in environments where management and employees regard one another with uneasy suspicion. That is frequently the case in Britain where, Talwar observes, 'most businesses are founded on a total lack of trust'. But now comes The Boston Consulting Group maintaining that a horizontally-structured business can never be successful in the long term. This is because, explains Barry Jones, head of BCG's London office, it seeks to create what every general manager wants immediately: a fleet-footed organisation, wholly and instantly responsive to the customer. This cannot be accomplished by structural means, Jones argues. Moreover total preoccupation with the present is undesirable, since it leads to neglect of the future. If all the best engineers are working on incremental improvements for existing customers, who will design the next generation of products? Eventually the company will be left behind. What businesses need, according to BCG, is an 'infrastructure' which allows the horizontal and vertical dimensions to intertwine, and reinforce one another.

Baxi Partnership, the Preston-based heating equipment company, 'over-emphasises' customer service, according to its chief executive Bryan Gray: 'We can't really do enough for the customer'. But Baxi doesn't neglect the longer term. It recently adopted a novel aluminium casting technology that had been developed in-house, for example. Not long ago, Baxi reorganised itself into three divisions based on business areas, which put some manufacturing departments in direct contact with customers for the first time. This may not have been classic Hammer-style BPR: after all, Baxi is a fairly small business without the complexities of a giant corporation. On the other hand, the reorganisation obviously called for new operating procedures. And Baxi can point to the flat organisation structure, with full team-working, that are invariable concomitants of BPR.

In fact the Lancashire firm has been using teamwork (also profit-sharing, etc) for many years. It therefore has a culture which is conducive to BPR. In BCG terms, it probably possesses a suitable 'infrastructure'. But Baxi and its chief executive don't talk about BPR. Down in the Midlands, Johnson of Lucas observes that 'All three-letter acronyms have a limited shelf-life', and Gray emphatically shares this view. 'BPR is not a term I would use in public,' he says.

In the end, it doesn't matter what you call the solution. What matters is that it should match the problem.

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