1. Assistant Professor, Department of Management and Accounting, Shahid Beheshti University, Tehran, Iran ([email protected])
2. MSc. Student of Information Technology Management, Shahid Beheshti University, Tehran, Iran ([email protected])
3. MSc. Student of Information Technology Management, Shahid Beheshti University, Tehran, Iran ([email protected])
4. MSc. Student of Information Technology Management, Shahid Beheshti University, Tehran, Iran ([email protected])
5. MSc. Student of Information Technology Management, Shahid Beheshti University, Tehran, Iran ([email protected])
Organizations need to re-design or reengineer their business processes in order to provide services with the lowest cost and shortest response time while increasing quality. Business Process Reengineering (BPR) can be applied using Best Practices (BP). However the selection of appropriate BPs is one issue that needs to be investigated. In this paper we studied the effects of application of BPs on business processes in The Hamrahan System Gohar Company. Business processes in the marketing, product sales, and contracts departments are chosen for reengineering. We examined different solutions of best practices and applied them based on the Sharp and McDermott methodology. Candidate best practices were contact reduction, control relocation, integral technology, re-sequencing, triage, task elimination and outsourcing. The effects of these techniques on business time, cost and quality were determined.
Keywords: Business Process Reengineering, Best Practices, Marketing, Sharp and
McDermott Method.
INTRODUCTION
Reengineering strives to break the old rules of organizing and conducting business processes (McFarland, 2014). To do so, current business processes should be analyzed, modified and sometimes eliminated. However, organizations must investigate to find a way for applying new
techniques and rules that might improve organizational performance (Sharma, 2014). Business Process Reengineering (BPR) is defined as fundamental re-thinking and radical re-design of business processes in order to access critical and measurable performance criteria such as cost,
quality and service time (Hammer, 1990; Hammer and Champy, 1993).
There exists several methodologies for applying BPR, however it consists of three main steps in general which include describing the as-is situation, analyzing the as-is situation and finally constructing the to-be processes(Sharma, 2014). Many methods and techniques are proposed in order to describe the as-is situation and analyzing the current situation. However, there is a lack of work in constructing the to-be processes and finalizing BPR projects as most of the projects result in failure (Grover et al., 1995). In this way, applying Best Practices (BPs) is an effective approach for the creation of to-be processes. A best practice is a technique or solution that has been applied in an organization and resulted in success in business processes(Kuhil, 2014). Therefore it might be useful for a similar business process in another situation (Reijers and Limam-Mansar, 2005; Limam-Mansar and Reijers, 2007).
Best practice is defined as an effective and efficient way to perform tasks that are repetitive nature and involve many individuals. A best practice might be appeared a successful way to solve a specific problem which needs to inspire from a solution responsive to the dominated conditions(Sanda, 2013). In the past 30-40 years, best practices have been well-classified and utilized in various areas, including health care business planning and software development processes (Limam-Mansar and Reijers, 2005). It should be noted that any best practice is proposed to make certain changes in the existing process to be effective on current operations (Martin, 1978; Butler, 1996; Golovin, 1997).
In this paper, the best practices were used to reengineer sales and marketing processes of the Hamrahan System Gohar Company which is based in Tehran, Iran. The company has been founded in 2006 as a provider of integrated financial and management accounting solutions. It established a reliable and strong customer base by complying with the principle of customer satisfaction, providing products and services which meet the customer’s needs, as well as the best after-sales service for all its customers. It is noteworthy that its integrated applications have been applied by many commercial enterprises, including
industrial-manufacturing plants, construction contractors and etc. Furthermore, features added to the applications and the customized changes required by these enterprises have brought the company’s applications into the category of the most efficient and applied financial solutions that they are periodically upgraded by a specialized expert team of analysis and development. In addition to the development, testing, updating and upgrading the applications, the company also provides the after-sales and consultation services to respond the customer’s needs in the areas of financial, taxation, and insurance solutions, as its high priority to achieve customer satisfaction.
However, the reduced sales of products and services during the second half of 2013, which caused a drop in the finance of the company, followed by a crisis in the company. With a deep investigation of various areas and actions in the company, as well as the existing processes, it was identified that major problems originated from the sales and marketing processes. The problems ware including time consuming sales process, numerous complaints by customers due to the delays of various process stages, costs and duplication of the process segments.
The paper is aimed to apply best practices for business process reengineering in the Hamrahan Company. Many best practices were studied in literature review and candidate best practices were selected initially through various interviews with experts. We modeled existing business processes and afterwards applied best practices to model new business processes. The effects of each candidate best practices on service time, cost and quality were examined.
LITERATURE REVIEW
Today's environment is characterized by increasing levels of competition. Enterprises want to increase their market share and obtain profits must adapt their business processes with changes in the environment. Consequently, many changes in business processes occur and one way to deal with the changes is BPR.
Here we present some definitions, challenges and techniques for BPR and afterward classify the
techniques as best practices that are reported in the literature.
BPR is defined as the rapid and radical redesign of strategic, value added business processes and the systems, policies and organizational structures that support them to optimize the workflows and productivity in an organization (Klein, 1993). Davenport and Short of MIT Sloan School of Management (Davenport and Short, 1990) evolved a five-step approach to redesigning of processes which are demonstrated as (i) develop business vision and process objectives, (ii) identify processes to be redesigned, (iii) understand and measure existing processes, (iv) identify IT levers and (v) design and build a prototype of the process. To explore the principles and assumptions behind reengineering, one should look for common factors behind its successes or failures (Lloyd, 1994). Managers use process reengineering methods to discover the best processes for performing work, and that these processes must be reengineered to optimize productivity (Caldwell, 1994). Moreover, businesses will need to apply technology to add customers, suppliers, and other partners to the process redesign. Companies such as Cisco, Dell, Intel and Solectron are examples of successful reengineering implementations (Champy, 2002). Lewin (1951) posted that change has three phases including unfreezing, moving, and refreezing, but are the phases equal in importance for predicting success? (Lewin, 1951). Zand and Sorenson (1975) found that implementation, or refreezing, are more strongly associated with the success than the other two phases (Zand and Sorenson, 1975). However, it is also reported that change management issues are critically important for success in BPR (Grover et al., 1995).
Working together, BPR and IT have the potential to create more flexible, team-oriented, coordinative, and communication-based work capability (Whitman, 1996). IT is more than a collection of tools for automating or mechanizing processes. It can fundamentally reshape the way business is done and enable the process design (Grover, 1998). IT capabilities involve improving information access and coordination across organizational units. It supports business processes and is the most powerful tool for
reducing the costs of coordination (Davenport and Short, 1990; Davenport, 1993).
Process modeling is one of the most commonly used techniques in many system analysis and design, and BPR projects because it is well appropriate to understand, measure, and document business processes (Curtis et al., 1992). Building redesigned processes typically includes attempts to transform a current “AS-IS” process model (i.e., pre redesigned model) into a redesigned “TO-BE” process model. A number of studies report that while the analysis of an AS-IS model is relatively scientific, objective, and easy to proceed, the design of a TO-BE model and implementation require much more efforts (Davenport, 1993; Ku et al., 1996; Grover et al., 1995). Furthermore, the immature BPR-specific tools and methods in process analysis and implementation resulted in the failure in many BPR efforts.
BPR is a methodology by which important improvements are obtained, although it requires big changes in organization and work style. This involves the need to change or even increase working styles, job functions, needed knowledge, and organization values. In this way, reengineering requires long-time dedication, resources, and effort. These are made easier by using elements called enablers. The role of IT is crucial because it allows a company to alter processes in two ways: collaboration grade increase and mediation grade decrease through the implementation of shared databases and communication technologies (Oladiran, PEZZOTTA, Uziak, & Gizejowski, 2013). So, IT may help companies to obtain important improvements on variables such as costs, quality, and delivery time. Although these are not the only important elements, one should bear in mind structural changes, company culture, and human resources. There is no “one best way” to design a process(Huang, Lee, Chiu, & Yen, 2014). Various factors such as business strategies, objectives(s), technology and the degree of its deployment, customers' demands, the intensity of competition, policies and available resources affect the design. BPR experts more or less recognize the importance of these fac¬tors in designing new processes. For instance all of them agree that process design
should be conducted align with business strategies(Li, Feng, & Ma, 2013).
Best Practices
As conclusion, many BPR challenges as well as methodologies and techniques for business process reengineering are addressed (Kettinger et al., 1997). However, one limitation of these works is the identification and description of challenges without actual technical direction for redesigning business processes (Reijers and Liman-Mansar, 2005).
The BPR techniques are reported as best practices in the literature. These techniques have been cited in many studies (Hammer, 1990; Buzacott, 1996; Klein, 1995; Aalst & Van Hee, 2002). For example (Hammer, 1990) discussed about the elimination of unnecessary tasks from a business process that can result a competitive advantage for the organizations.
As a result many best practices have proposed by researches (Siadat and Hemati, 2014). Reijers and Liman-Mansar summarized 29 best practices suggested by others and proposed an integrated framework for best practices (Reijers nad Loman-mansar, 2005). Some of them are including task elimination, parallelism, automation, extra resources, case-based work and task composition.
METHODOLOGY
In this research, Sharp and McDermott methodology is taken for applying BPR. Initially, business processes of the organization are identified using the APQC model. Business processes in the marketing, product sales, and contracts departments are chosen for reengineering. The Company’s goals are identified by key performance indicators (KPI) in terms of time, cost and quality. The As-Is process is described and modeled by Business Process Modelling Notation (BPMN). SWOT analysis is perfomed to identify stength and weaknesses of the processes. In order to remove the problems and improve business processes, we apply various best practices. Candidate best practices are initially selected by interviews with the experts. Afterwards, we use a questionnaire based on Likert scale to identify the effects of candidate best
practices on process time, cost and quality. Having applied the candidate best practices, we finally model the To-Be process.
THE WORKFLOW PROCESS MODELLING (AS-IS)
In the Hamrahan System Gohar Co., at first the marketing staffs advertise their services in various ways and then they receive the orders from the customer. Afterwards, the Company’s sales department asks the customer’s specifications regarding their advertised software packages. If the customer’s specifications are matched with the specifications of existing software packages and solutions, then a catalogue with application specification pack will be sent. In case of customers’ negative opinion related to the service specification pack, they are asked whether they tend to have a joint product Demo meeting (as most customers usually want to check in person the applications performance even before receiving the product introduction pack).
Two or three days after sending the product introduction pack, the sales department contact with customers to hold a joint meeting. If they accept, a meeting will be held in order to enquiry concerning the product and customer’s needs. However, if they reject the meeting, they will be proposed for the implementation of pilot or test project. Sometimes, the customers tend to test the applications in their systems even before the meeting; thus, a trial or pilot project is implemented for them. In any case, the process will enter into the contracting stage.
In the contracting stage, at first, the customer is asked whether he/she tends to receive a proforma invoice; if yes, a proforma invoice will be sent. Then, it is asked if he/she wants to have a contract form. However, if he/she tends not to receive proforma invoice, he might be asked to receive a contract form at the beginning. Therefore, if requested, the invoice will be sent in accordance with the customer’s specification and provided product, and then a contract would be concluded.
After the contract is set up, the installation, deployment and training orders are given immediately to the corresponding departments, followed by necessary follow-up complying with
the provisions under the contract. If the installation, deployment, or training fails to be completed, the follow-up process will be continued until the successful accomplishment of each phase. However, in case of successful project completion, the payment stage will be initiated.
In the payment stage, the sales process will be ended when the payment is received. At this time, customers are passed to the after-sales service department. However, if the payment is not received, the underlying issues will be investigated. To do so, it will be asked why the customer has not paid. If the reasons are not convincing, it will be pursued in accordance with the contract’s provisions. However, if justified, the sales director will put a course of action into effect, and follow-up to completely eliminate the problem. At this point, the payment process will be done, thus the sale process ends. Afterwards, the after-sales service begins its work. The existing As-Is process is illustrated in Figure 1.
FIGURE 1 & 2 HERE
DESIGNING NEW PROCESS MODEL
In this section, we briefly introduced the best practices used in this paper.
Contact Reduction:reduce the number of contacts with customers and third parties.
Control Relocation:move controls towards the customer.
Integral Technology: try to elevate physical constraints in a process by applying new technology.
Resequencing: move tasks to more appropriate places.
Triage: consider the division of a general task into alternative tasks.
Task Elimination: delete tasks that do not add value from a client’s viewpoint.
Outsourcing:relocate work to a third party that is more efficient.
Finally, the To-Be process model, shown in Figure 2, was obtained according to the selected best practices. Note that each best practice is chosen
concerning the problems in different units which are described in the following.
Marketing Process
In the marketing department, it was applied the outsourcing due to the specialized nature and time consuming of the work, as well as unnecessary expenditures, which makes possible to save in time and labor costs, while benefiting from the expertise and experience of the marketing companies. Furthermore, it concentrates on the external environment of the organization. The marketing process is shown in Figure 3.
FIGURE 3 HERE
New product and service introduction process
In the product introduction unit, we witnessed a mass of repeated contacts with the customer which caused the customer’s complaint, and reduced the customer satisfaction. Moreover, the staff spent a lot of time on unnecessary works which had been led to loss of motivation to work. Therefore, our selection is the Contact Reduction (Reduction of customer contact), by providing a full product introduction pack at the first call. Additionally, Integra Technology is used to present an online production introduction based on the latest technology attractive for the customer, and also reduce the workforce in the product introduction unit. With this, several effective changes are applied into the process, and now the customer is able to see optionally either the product introduction or demo version; then, requests holding a joint meeting. In the other word, it is utilized the Re-sequencing. With the Triage best practice, the actions, after being rejected by the customer, are broken into smaller components, followed by analyzing the issue to identify and solve the problems, and re-attract the customer (Shown in Figure 4). It should be noted that it is true in all aspects of troubleshooting to avoid repetition.
FIGURE 4 HERE
Contract Process
As above mentioned, it is possible to apply Task Elimination best practice to remove the unnecessary invoicing action, and provide a
contract form immediately after sending the proforma invoice and its acceptance. Then, if rejected, the customer usually leaves the process without any feedback; however, with the Triage best practice, it is negotiated with the customer to reach a win-win solution. It is sometimes the case that, after concluding the contract, the customer delays the proforma invoice payments; therefore, it is re-placed immediately after the contracting stage, by re-sequencing. The new contract process is illustrated in Figure 5.
FIGURE 5 HERE
The Installation And Payment Processes
At this point, the Control Relocation is applied to transfer the control of installing application to the customer, which eliminates the needs of repeated contacts to follow-up the installation, as a reliable strategy for the Company. Finally, the Triage best practice is used to break payment follow-up with addition of lack-of-payment follow-up action to solve the possible existing problem and at time payment by the customer. The installation and payment processes are shown in Figure 6.
FIGURE 6 HERE
FINDINGS AND DISCUSSIONS
Here we discuss the development of various use case scenarios using best practices in each business process.
Promotion Sub-process: The Outsourcing is utilized to improve the quality, despite of lower quality resulting in lower costs.
Product and service introduction processes: In this section, Contact Reduction best practice is used to avoid unnecessary contacts which lead to the time loss and the customer’s complaint. It enhances the quality and decreases the time loss. Further, the Integral Technology best practice is applied to present the demo version for the customer, so that the trial applications are provided online by the Company, and a user and password is given the customer to download and install the trial applications, as a demo version. It also increases the quality and reduces the time loss and costs. Next, the Re-sequencing best practice is brought into the service for fact and uninterrupted actions
since the first contact with the customer, which also results in the time loss both associated with the Company and the customer, as well as a considerable costs reduction. For troubleshooting of the processes, the Triage best practice is also brought into the play.
Contracts Sub-process: At this point, the Triage best practice is deployed to troubleshoot and analyze ending the process, which improve the costs and time. As some of the actions which have no added values both for the customer and the Company might lead the customer to be exhausted of the purchase process, the Task Elimination best practice is utilized to accelerate the actions, and remove the unnecessary ones. To do so, after the proforma invoice being sent, if requested, the invoice and a contract form will be immediately forwarded which reduce remarkably the costs and time. Furthermore, the Re-sequencing best practice is exploited to improve the costs and time, through receiving an immediate advance to give the Company sufficient motive, and the customer enough seriousness to pursue the process.
Product Coordination, installation, Deployment and Training Sub-processes: The Control Relocation best practice is indeed brought into play, because the As-Is process implies the sales department to pursue the installation, deployment and training the product in the purchaser’s unit, which is time consuming and costly. However, this best practice transfers the control process to the customer leading the quality promotion.
Contract Payments Sub-Process: Further, the Triage best practice is used to replace the time consuming and unnecessary negotiations and communications between the Company and customer with the various critical tasks, including troubleshooting. In this case, it is less likely to be faced with the lack of payment due to the possible problems, and also enhances the customer relationship; otherwise, it will be pursued the provisions under the contract. In summary, the Triage best practice results at this point in the reducing the time and costs. The Table 1 summarized all candidate best practices in each business unit.
In this paper, we applied a sort of best practices for reengineering of a marketing process. Sharp and McDermott methodology is used and the process analysis performed based on the chosen performance indicators. A survey is performed to select candidate best practices suitable for marketing process reengineering. The candidate best practices were taken to re-design the the marketing process. Furthermore, the impacts of best practices on time, cost and quality were investigated. We found that it is possible to improve the marketing process conditions and also eliminate the existing problems by implementing the best practices in the process using reengineering techniques.
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Dr. Seyed Hossein Siadat is working as an assistant professor at the department of Management and Accounting in Shahid Beheshti University (SBU) in Iran since January 2013. Previously he was a research scientist at the School of Technology Management at Ulsan National Institute of Science and Technology in South Korea. He received his PhD in Information Technology from Politecnico di Milano in Italy. He holds a M.Sc. in Information Technology – Management from University Technology Malaysia and B.Sc. in Software Engineering from Amirkabir University of Technology (AUT) in Iran. He has published about 40 papers in journals and main international conferences on SOA and information systems such as ICSOC, ICWS and CAiSE. His research interests include Service Oriented Computing, Quality of Service, Business Process Management, Business Process Reengineering, Process Mining and Soft Computing.
Azadeh Karimisefat is M.Sc. Student of Information Technology Management at Shahid Beheshti University, Tehran, Iran.
Banafsheh Ataafarin is M.Sc. Student of Information Technology Management at Shahid Beheshti University, Tehran, Iran.
Zahra Mahmoudi is M.Sc. Student of Information Technology Management at Shahid Beheshti University, Tehran, Iran.
Samira Nasimvariani is M.Sc. Student of Information Technology Management at Shahid Beheshti University, Tehran, Iran.
