Business Process Reengineering Case Study

The concepts of Business Process Reengineering (BPR) was introduced by Professor Michael Hammer (Grover and Markus, 2008, Gunasekaran and Kobu, 2002, O’Neill and Sohal,1999), in the early to mid-1980s. There were many other authors who have subsequently published their own variant of BPR, authors such as Davenport/Short published their work shortly after Hammer.
The Harvard Business Review in their Aug-Jul 1990 issue published an article written by Hammer called Re-engineering work: Don’t automate, obliterate. Hammer believes many U.S. companies operating in the 1990s are unable to adapt to rapidly changing technologies and increasing shorter product cycles. Inefficient or ineffectual business processes led to high error rates in customer

Unfortunately, using Information Technology to speed up existing inefficient business processes usually provided disappointing results. Hammer proposed
Instead of embedding outdated processes in silicon and software, we should obliterate them and start over. We should “reengineer” our businesses: use the power of modern information technology to radically redesign our business processes in order to achieve dramatic improvements in their performance” (Hammer, 1990).
The principles of BPR would find a willing audience in 1990s Corporate America where companies suffering from declining profits wanted to try something different. In 1993, Bain and Company, a management consulting company, started to survey firms globally and discovered roughly 66% of the respondents used some form of BPR. By 1995, the survey indicated 78% of respondents used BPR (Grover and Markus,

Ford analyzed the existing business process and discovered Ford’s purchasing department wrote a purchase order and sent a copy to account payable. Later, when the goods were received by material control, a copy of the receiving document was sent to account payable and lastly the vendor would send an invoice to account payable (Hammer, 1).
In the account payable department, the clerk would have to match all three invoices to issue payment. As the matching process was manual, the account payable department spent much of their time resolving mismatches which delayed payment.
Ford’s solution was to replace the existing system with an invoiceless one. The new process had the purchasing department entering the purchase order into a database. When the goods arrived, the receiver checked for a corresponding purchase order. If present, the transaction was entered; otherwise, the goods were returned. The matching between the online purchase order and the online transaction of the goods received is completed automatically; and thus, the computer system prepares a cheque to be sent to the