Importance of Business Process Reengineering in Open Innovation Projects

Importance of Business Process Reengineering in Open Innovation Projects

DOI: 10.4018/978-1-5225-5721-0.ch003


The essence of business reengineering is the fundamental rethinking and radical redesign of business process in organizations. Further, it emphasizes giving the decision-making power to employees and teams at the workplace. This concept is more apt for developing business models in an open innovation environment. This chapter gives an overview of business process reengineering. Three case illustrations relating to automobile, education, and business sectors are discussed in the context of business process reengineering.
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What Makes A Change Happen In Organizations?

Organizations tend to think seriously about the need for radical change only when there are significant external threats or pressure. Even then organizations which wait until the external threat is so great that they are forced to act may be too late. Perhaps organizations should be looking for ways in which to encourage executives to change during the “Good Times”.

There may also be a number of internal circumstances which need to be in place before business process re-engineering can be considered. Organizations need to know for converting their objectives to handle the external threats. This provides an opportunity to understand the internal circumstances for applying the business process re-engineering program. There is a link between these objectives for the success or failure of the business process re-engineering. Business process re-engineering is more likely to be successful if the objectives are related to improving service rather than cost reduction. Scholars on learning theory suggest that learning cannot take place without “Unlearning”. Many of the proposed methods for undertaking business process re-engineering suggest that an organization must first understand its current processes before attempting to redesign them (Herzog, 2011).

On the other hand, it could be argued that paying too much attention to the current way of doing things may constrain the likelihood of identifying radically different approaches. Having decided the level of understanding required, the organization must then address the question of how this understanding is to be elicited represented and communicated. One of the messages of business process re-engineering is that breakthrough cannot be achieved by the reduction of cost or automating the existing process. It will help them by challenging the old assumptions and shading old rules that made business under perform in the first place.

An organization's business strategy generally addresses the macro environmental concerns. It outlines how the firm will compete in the marketplace and competitive positions to be taken. This has traditionally been articulated in terms of products and markets. It is generally about the types of products to be sold and keeping the types of customers in mind. This means the firm has already chosen the competitive position and the products it sells. This approach would be useful only at a particular point of time. In a rapidly changing competitive environment products and services quickly become obsolete. Static competitive positions are also overtaken. Such dynamics make additional demands on firms. Firms need to prepare themselves to respond consistently to changing markets with new products /services and ever improving competitiveness.

Consequently, the roles of executives in organizations change from “Controlled” to “Empowered”. Business process re-engineering emphasizes on working procedures and moves the decision-making power to employees or teams. This means decisions need to be taken in real time at the work place.

As the management entrusts teams with the responsibility of completing the entire processes, it also needs to give them the authority for taking the appropriate decisions and commitment. This bypasses the traditional painstaking process of getting approval from the hierarchy for any slight change in the organization of work.

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