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How to Ensure Business Growth through Business Process Reengineering for the Internet Business Process Reengineering

-- Vinny Alex

Introduction

Over the last 20 years, organizations, from the largest to the smallest, have been affected by two distinct waves - the move to a process based structure, and the emerging power of the Internet. Not many have been able to effectively reconcile both - the end result being that companies would either look at the opportunity of the Internet as a bonus ("all our competitors have online sales, let's have it too"), or at the other extreme, ignore it totally. Not surprising, since the web was considered, (till about 5 years ago) to be too immature for established organizations to design business processes around.

However, with the development of web services and secure transactions on the Internet, the prospect of looking at redesigning entire business process for the web is now not only possible, but is increasingly becoming a necessity for survival.

The reasons are not far to seek. Hyper competition, shrinking business cycles, commoditization of products and services, organizational complexity and the WTO has all played a part. These pressures have resulted in companies looking not just at identifying and reorganizing key processes for speed, but in fact doing away with (eliminating /outsourcing) entire processes/sub processes that don't add value. For example, the concept of software testing, commonly known as Beta Testing, was something that traditionally was always done in-house. That is, till the Internet came along and opened up the possibility of doing the beta testing on the web. Today it is seen not just as a testing method, but also a way to get people used to the software and build demand. The rise of Call Centers and Billing and invoicing centers are other areas where companies have found advantages in Outsourcing entire Business Processes, leaving it to focus on areas where it adds direct value.

But how do we ensure our survival and growth in these fast-changing times? The answer would lie in going back to the basics of Process management, and looking at all our key processes in the light of the potential that the web offers. No longer is the web only a medium for information dissemination. Today, it is seen to be a collaborative tool as well, enabling companies to transcend the limitations of geographic space and time. It is possible for an organization to have teams situated in different continents, working around the clock on the same project. How does this impact the way we do things? All aspects of our work now need to follow international, not local, standards, and would need to be more modularized than ever before. It's no wonder that one of the fastest growing business is International Certifications. Hurdles such as culture and language now add to the complexity of Project Management.

Another area that the web has changed dramatically is the role that customers play in the development of the product. Thanks to the cost transparency and the powerful search engines that the web offers, customer can now peer deep into the inner recesses of the organization. They know how much it costs (in terms of time and money) for each feature that gets incorporated into the solution. This has led to a level of mass customization not seen for a very long time. It started with Dell Computers, and it's philosophy of "made to order" PCs and has soon extended to cover almost every manufacturing industry. How long before we have interactive e-novels and e-movies, that vary the ending based on the choices at key decision points during course of the story!

Organizations that have survived and grown, have done so by embracing this change and redesigning their processes to suit the advantages and disadvantages that the web offers. They have gone back to strategy formulation and reevaluated business contexts and the process vision. Having done this, they have gone on to develop entirely new processes based on the new vision and put in place systems that implement, nurture and even improve on them.

An excellent example of a company that embraced such sweeping change was Schwab, a brokerage firm that saw, in 1998, the revolution that the web would bring to the brokerage business. Today, almost 70% of all of Schwab's business is online, up from just 17% two years ago. Another example is the computer manufacturer Dell Computers. Even the mighty General Electric has identified e-enabling as critical to its plan to remain the dominant player in its industry in the coming years.

Like any other discontinuity, not everyone will make the grade. Many of the current "dinosaurs" are doomed to die, condemned by their size and inertia, to be replaced by new, fleet footed organizations that leverage the Internet and make it the backbone of their business. These new corporations will be truly transnational, knowledge centric and process focused, looking to serve anyone anytime, anywhere in the world.



 
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