Strategic Initiative Assignment
“A study of implementation Business Process
Reengineering in Indian companies”
Submitted To- Submitted By-
Prof. Kaushik Chakrabarty Prajyot Malve (61)
Business Process Reengineering
What is BPR?
Business Process Reengineering relies on a different school of thought. It believes
in continuous process improvement, re-engineering assumes that current process is
irrelevant and there is need to commence another one. Such a clean slate perspective
enables the designers of business process to focus on new process.
Business Process Re-engineering in the actual sense, have mixed successes
therefore, business process reengineering projects aimed at transforming inefficient
work process. Henceforth, organizations such as banks and other financial
institutions need to optimize results from this model in real business situations.
Why BPR is needed
The changing economic environment has led to an increasing interest in improving
organizational processes to enhance business performance. BPR has been
instrumental in success of various organizations. Business process reengineering has
become useful weapon for any corporate organization that is seeking for
improvement in their current organizational performance and intends achieve cost
leadership strategy in its operating industry and environment.
Objectives of BPR include:
Reduced transaction process time
Improved customer service
Increased volume of business
Reduced operating cost
Higher profitability
Improved Employee loyalty
Implementation of BPR in Indian companies
Mahindra & Mahindra
IRCTC
SBI
TVS
TATA Motors
ICICI
Company 1: Implementation of BPR at Mahindra & Mahindra
M&M was facing serious problems at its Maharashtra plant in 1990’s.
Problems faced were:
Manufacturing inefficiencies.
Poor productivity.
Long production cycle.
Sub-optimal output.
Strike by workers.
Reasons for same were:
Highly under-productive.
Militantly unionized.
Bloated workforces.
Unhealthy work culture.
Corruption in various departments.
Actions taken:
M&M tried to implement various voluntary retirement schemes (VRS), but
the unions refused to cooperate and the company was unable to reduce the
labor force.
M&M was in the process of considering the implementation of a Business
Process Reengineering (BPR) program throughout the organization.
M&M's workforce, resisted this attempt to reengineer the organization. Soon
after the senior staff began working on the shop floors, the first signs of the
benefits of BPR became evident.
Around a 100 officers produced 35 engines a day as compared to the 1200
employees producing 70 engines in the pre-BPR days.
After few months strike was ended & work began. BPR implementation
gained momentum.
M&M realized that it would have to focus on two issues when implementing
the BPR program:
o Reengineering the layout.
o Method of working.
o Productivity.
Company 2: Implementation of BPR at ICICI
In year 2000 and later when anytime, anywhere banking came to our country, ICICI
Bank had to move away from the branch-centric model and make its services available
nationwide. The solution was to centralize its applications.
Reasons:
The traditional systems at ICICI Bank were very centric to the branch.
For example a server at New Delhi was specific to the branch in that city; the ATMs were
standalone catering only to the city branch. The banking transactions were
thus limited to the respective branch offices as customer data was not
available in other branches. This made banking a limited service and very branch
specific. ICICI realized the importance of offering nationwide banking but this
would be possible only by having a centralized data repository.
Solutions are:
The basic network was set up for providing the e-mail facility, but none of the
applications were linked to the network.
Centralizing the operations was not the solution, but centralization of data
was.
ICICI Bank had already centralized some of the operations but still had some
branch applications running independently which were not centralized and
had ATMs which were stand-alone.
Two major criteria considered before designing were not only the network,
but also the infrastructure available in our country.
Methodology:
The most important aspect to setting up a network is to have a good relation
between the technology consultant (network integrator), the vendor and
the client.
The client plays the most important role as he has very low time to market,
and delivery is required at the earliest.
A series of products are available in the market. As the time to market is so
short, ICICI Infotech selects the products available in the market and
integrates them.
This takes care of 98 percent of the solution requirement and then ICICI
Infotech build the other two to three percent around it and deliver the perfect
solution to the client.
Finacle - a core banking and universal banking solution from Infosys.
UNIX is the preferred OS for most of the hardware while most of the
databases use Oracle with a few on Sybase and MS SQL.
Overall effect after implementing BPR:
By using the support of companies like Infosys, Oracle, SYBASE, SAS it
implemented such a system which centralized applications for 'anywhere' banking
