Pageno.12610.BusinessProcessReengineeringand

OrganizationalStructure–ACaseStudyofIndianCommercialBanksDr.NaveedaSeher*

AbstractBusinessProcessReengineeringisaninnovativetechniquewhichisusedtoinducetheradicalchangeintheorganizationsetup.Thegoalofthetechniqueistoachieveanoptimumlevelofeffectivenessandefficiency.Thepaperstrivestostudythe relationshipbetweenBPRandOrganizationalStructurewith special referencetoStateBankofIndia.Forthesaidpurposeasampleof250employeeswaschosenrandomly fromvariousbranchesofSBIwith J&KState.Aselfdesigned instrumentwas used to collect data from the respondents. The data was analyzed by usingCorrelation, t-test and regression analysis. The results reveal that there exists asignificant relationship between BPR and OS. Also, the modified OS afterimplementingBPRismoreeffectiveandcompetitive.Keywords:BusinessProcessReengineering,organizationalStructure,Effectiveness,competitive.

Pageno.127FullText:

1.IntroductionBusinessorganizationsthroughouttheworldareexperiencingahighlevelofcompetition and uncertainty in all the affairs of business. As a result,most of theorganizationsaredesperately feelingthe immediateanddrasticneedofchange intheirstructure,processes,strategies,peopleetcso,thattheyremainrelevantinthehighlycompactmarket.BankingindustryisoneofthehighlycompetitiveandfastestgrowingindustriesinIndiaandallovertheworldaswell.ToupgradethestandardoftheiroperationsandthedemandsofmarketmanybanksthroughoutworldandinIndiahaveimplementedacontemporarytransformationtechniquethatisBusinessProcess Reengineering in their organizations. Business Process Reengineering(BPR) is apotentmanagement tool tobringradical changes inbusiness.BPRwasdiscovered by the Michael Hammer in 1990. Concept of Business ProcessReengineering (BPR): BPR is the fundamental rethinking and radical redesign ofbusiness processes to achieve dramatic improvements in critical contemporarymeasures of performance, such as cost, quality, services, and speed (Hammer &Champy, 1993). Reorganizing the company or according to its processesconsequently requires to rethink them.One needs a good sense of processes thatallows BPR through the following four steps (Frias, 2002): Getting back to thebasics: It isnecessary toask the fundamentalquestion regarding theneedsof thecompany,theessentialinformationitshoulddispose,thefundamentalrelationsforoptimized planning, taking into account different actors: All actors that areconcernedbytheprocessreorganizationhavetobeconcentratedon,integrationofall hierarchical levels: In order to redesign processes, the managers but also the

Pageno.128lower level hierarchical levels have to be involved in the BPR effort, having thesense of responsibility: BPR is not only done for a better control of the companyprocesses but also to establish a structure to locate the diverse responsibilitieswithintheprocesses.Business process reengineering ideas are based on the premise that everyorganization needs a sense of direction. Without that direction in the form ofstrategicplansandbusinessplans,theorganizationhasnofoundationuponwhichto build process improvements. BPR is amethod of improving the operation andtherefore the outputs of organizations. Generally the topic of BPR involvesdiscovering how business processes currently operate, how to redesign theseprocessestoeliminatethewastedorredundanteffort,improveefficiency,andhowtoimplementtheprocesschangesinordertogaincompetitiveness.ThepurposeofBPR is to find newways to organize tasks, organize people and use informationtechnology so that the processes support the organization’s goals. It meansanalyzingandalteringthebusinessprocessesoftheorganizationasawhole.Forathorough and effective reengineering project, organizations should first meetcertain conditionsbefore starting suchaproject. Initially, themanagement shouldabandon all the rules and procedures that have been used up to that time. Inaddition they should abandon other inadequate organizational and productionprinciples. At this point, the design of a renovated and redesigned organizationshould begin. According to Hammer and Champy (1993), “Reengineering is thefundamental rethinking and radical redesign of business processes to achievedramaticimprovementsincritical,contemporarymeasuresofperformance,suchascost, quality, service and speed”. Vidgen (1994) defines the central key points of

Pageno.129BPR as:: radical change and assumption challenge, process and goal orientation,organizationalrestructuring, theexploitationofenablingtechnologies,particularlyinformation technology, Which means that by focusing on business objectives,processesareanalyzedintheorganization,non-essentialorredundantproceduresare eliminated, and then IT is used to redesign and streamline organizationalprocesses. BPR is a radical change rather than an incremental change.Davenport(1993) advocates radical change as:Objectivesof 5%or 10% improvement in allbusiness processes each yearmust giveway to efforts to achieve 50%, 100%, orevenhigherimprovementlevelsinafewkeyprocesses.Radicalchangeistheonlymeans of obtaining the order of magnitude improvements necessary in today’sglobal marketplace. Existing approaches to meeting customer needs are sofunctionally based that incremental change will never yield the requisiteinterdependence. These properties of Business Process Reengineering can befollowedtomanagethecriseswhichhaveusuallyfollowingfeatures. Thesituationmaterialises unexpectedly, decisions are required urgently, time is short, specificthreatsareidentified,urgentdemandsforinformationarereceived,thereissenseofloss of control, treasures build over time, routine business become increasinglydifficult, demands are made to identify someone to blame,ooutsiders’ take anunaccustomed interest, rreputation suffers, communications are increasinglydifficult to manage. BPR is a transformation technique which aims to revive theorganizations that are mal functioning due to change in external and internalenvironment. These crises may have their origin in processes, people, strategies,structure, and technology.Theseare exactly theareasoverwhichBPRworksandtriestoremovetheinefficiencies.

Pageno.130Thepapergivesabrief about thepositionofBPRmodel indifferentbanksoperatingindifferentregions.ThestudycomparesandanalysesthepositionofBPRpractices inSBIand Jammu&KashmirBank. Thisstudywasbaseduponthenullhypothesis, “There exists no significantdifference betweenBPRmodel in SBI andJammururalbanks”.Theresearchobjectiveswere,tounderstandtheBPRmodelinSBI,tounderstandtheBPRmodelinJammuRuralBanks,tocomparetheBPRmodelinSBIandJammuRuralBanks,tosuggestimprovementmeasuresforJammuRuralBanks.1.1BusinessProcessReengineeringintheBackDropofHistoryBusiness Process Re State of the Art, is theconstitutionof setting theworkandwaste concept ineach step in anyprocess inanyentity,that’sitasaGenericConcept.Andtheobjectiveofprocessreis to eliminate the waste components/elements and try enriching the workcomponents/elements (Ragab, E.A., 2009). Value-creation for the customer is theleading factor for BPR and information technology often plays an importantenabling role. BPR benefits customers through significantly reduced transactiontime,flexibilityinservicingandimprovedvaluechainofservice(Sharma,M.,2006).Business process reengineering has become useful weapon for any corporateorganizations that is seeking for improvement in their current organizationalperformance and intends to achieve cost leadership strategy in its operatingindustry and environment. Reengineering process remains effective tools fororganizations striving to operate as effectively and efficiently as possible andorganizations are required to reengineer their business processes in order toachieve breakthrough performance and long term strategy for organizational

Pageno.131growthandperformance(Adeyemi,et.al,2008).OrganizationsachievecompetitiveadvantagebyimplementingBusinessProcessReengineering(BPR).ItwasobservedthatBPRmakesorganizationmorecompetitivebysignificantlymodifyingthecostsincurred,customerservices,qualityandproductivity.(Magutu,P.Oetal,2010).Reengineeringofbusinessprocessesdirectlyaffectsthesatisfactionlevelofcustomers.The researchers have supported thatmore use of IT,wide network of ATMS,Re-Skilledstaff,helpnationalizedbankstogaincompetitiveadvantageintheindustry(Datta,S.K.,Gupta,A.,2009).BusinessProcessRe StateoftheArt, is the constitutionof setting thework andwaste concept in each step in anyprocess inanyentity, that’s itasaGenericConcept.Theresearchermaintainsthatincrease in work efficiency and decrease waste is the goal of BPR. (Ragab, E.A.,2009).Organizationsmay have to restructure their processes, only then they canreap up thebenefits of new information technologies (Rock,N.L., 2003). BPR is amoderntooltomanagethechangesthathappenedduetoITrevolutioninbusinessworld. In order to survive in highly dynamic conditions, organizations have torestructureandredefinetheirbusinessstrategies.BPRhelpsincostreductionwhilespeed,qualityandservicearedramaticallyimproved.TherearegreaterchancesofBPR success if it is viewed as a tool leading to growth and value creation(Thyagarajan, V., Khatibi A., 2004). CRM should be reengineered even if it is inpractice since years. The researcher concludes that successful implementation ofBPRforCRMwillresultinreducedcosts,shortercycletime,improvedqualityandmost important happier customers (Pruit, C. 2009). There are certain criticalsuccessfactors(CSFs)whichareresponsibleforsuccessorfailureofaBPRproject.Interpretive Structural Modeling (ISM) to indentify critical success factors. The

Pageno.132researchershaveidentified9CSFsthroughtheuseofISMApproachalongwiththeirrelativesignificance.(Salimifard,K.,2010).2.OverviewofIndianBankingIndustryIndianbankingindustryhastransformedinrecentyearsduetoglobalizationintheworld market, which has resulted in fierce competition. This new competitiveenvironmenthasresultedinnewchallengesforthebankingindustrytobenchmarkworkcultureonparameterswhichareglobally standardized.Thenewgenerationbanks have infused intense competition into the industry requiring higherutilizationoftechnology,improvedcustomerserviceandinnovativeproducts.CoreBanking Solutions (CBS) now emphasizes on the technological applicationswhichwouldfacilitatetheintergradationsofallcustomerchannelsseamlessly.Branchesarebecomingdeliverychannelsandemployeessalesmen.Banks aregoingbeyondconventionalbankingandofferingalotmorethanvanilladepositsandloans.Thus,thereisaparadigmshiftfromtheseller’smarkettobuyer’smarketintheindustryand finally it is affected at the bankers’ level to change their approach from“conventional banking to convenience banking” and “mass banking to classbanking”.Thishasresultedinincreasedthedegreeofaccessibilityofacommonmantobankforcateringtohisorhervarietyofneedsandrequirements.Thisthereforehas enfoldedanewagendaforthebankingorganizationsforhoningofskillsandcapabilitieswhichwouldenhancethecorecompetenciesofthehumancapital foradapting to changedrequirementsandaswell align corporate strategywith the market opportunities and challenges besides retaining employees. Newwork culture has significantly impacted the employees and as well as theorganizations,assuchattentionoftheresearchers,especiallyinlastthreedecadeshas been to investigate organic relationship between culture and workeffectiveness.Despitetheacknowledgedimportanceofthequalityofworkculture,extensiveresearchhasyettobecarriedoutinthebankingsectoroperatinginthestateofJammuandKashmir.

Pageno.1332.1ResearchHypothesesH1: There exists positive relationship between Business Process ReengineeringPracticesandOrganizationalStructureinthebanksunderstudy.3.ResearchObjectives1. TostudytheimpactofBusinessProcessReengineeringPracticesonorganizationalstructure.2. TocomparetheeffectivenessofBPRProcessamongthebanksunderstudy.4.StudyAreaWithaview toachieve theobjectivesand test thehypothesis laid, thedatahasbeencollectedthroughbothprimaryandsecondarysources.Primarydatawascollectedthrough astructuredquestionnaireadministeredtotheemployeesservingin the Jammu&KashmirBankandStateBankof India foranalyzingworkcultureexperiencesandresultantperformanceeffectiveness. TheabovementionedbankswerepurposivelyselectedastheyrepresentedtwobiggestserviceorganizationsinJammu& Kashmir state. An attempt has beenmade to analyzework culture andserviceefficiencyanditimpactonemployeeeffectivenessamongdifferentstrata’s.The technique of stratified sampling has been used to select the sampleemployees on the basis of the levels ofmanager’s i.e. top level,middle level andlower level managers. The present study has been undertaken on the bankingindustryinthestateofJammuandKashmir.Asampleof100employees wastakenforthestudy.

Pageno.1345.AnalysisandFindingsThe data so collected was subjected to correlation analysis, regressionanalysisandindependentt-test.5.1HypothesisTestingCorrelationAnalysiswasusedtotestthehypothesistheresultsofwhichareshownintheTable-5.1.1.

Table-5.1.1,Correlations

CorrelationsBPRPRACRICES StructureBPRPRACRICES PearsonCorrelation 1 .770**Sig. (2-tailed) .000N 200 200Structure PearsonCorrelation .770** 1Sig.(2-tailed) .000N 200 200**.Correlationissignificantatthe0.01level(2-tailed).AsshowninTable-5.1.1thataPearsonCorrelationcoefficientof.770depictsastrongcorrelationbetweentheBPRPracticesandOrganizationalStructure.

Pageno.135TofindoutdifferenceinBPRPracticeamongbanksunderstudyanindependentsamplet-testwasused.Theresultsoft-testareshownintheTable-5.1.2.Table-5.1.2,OrganisationalStructureinSBIandJKBANK

Pooled&

Welcht- test

Results

Levene's

Testfor

Equalityof

Variances

t-testforEquality ofMeans

F Sig. T df

Sig.

(2-

taile

d)

Mean

Differ

ence

Std.

Error

Differen

ce

95%Confidence

Intervalofthe

Difference

Lowe

rUpper

Equal

variances

assumed

13.780 .000 -5.703 200 .000 -.17917 .03142 -.24082 -.11751Equal

variancesnot

assumed

-5.703 200 .000 -.17917 .03142 -.24082 -.11751In theTable-5.1.2 the significance (p-therefore equalvariancesareassumed.Heretgives theobservedorcalculated tvalue.Byassuming equal variances the t value is 5.703with 958 degrees of freedom. The columnlabeled“Sig.(2-tailed)givesthetwo–tailedpvalueequalto.00whichisnotgreaterthanorequal to .05 (ie; pOrganizational Structure in StateBankof Indiawith (M=1.49, s=.513) and in JammuandKashmirBankwith(M=1.67,s=.458).

Pageno.1366.SummaryandConclusionBusinessProcessReengineeringhastotallyoverhauledStateBankIndiaandit Organizational structure has become much effective and customer friendlycomparedtotheJammuandKashmirBankwhichhasnotformallyimplementedtheBusinessProcessReengineering.Business Reengineering Process will only be successful if the activities inwhichtheprocessesarebasedaredirectlyrelatedtotheneedsandobjectivesofthebusiness.TheimpactBusinessReengineeringProcesstothebankingorganizationscannotbeover-emphasizedbecause ithelps inmeetingthedomesticand industryneeds or pursuance of better and high performance. Business ReengineeringProcess has helped in the achievement of the organization over-all objectives.Reengineeringwhich is a situationwhen a business organization is transformingprocesses that together form a component of a larger system aimed at enablingorganization to empower themselves with contemporary technologies businesssolution and innovations. In the context of changing customer expectations,technological discontinuities, increasing environmental uncertainties, businessmanagershaveabigchallengeofmakingtherightstrategicchoiceandsettingtheirstrategicpriorities inorder toallocate their resources todifferent functions inanefficientmannerforbusinesssuccess.Mostof theaimofreengineeringabusinessperformance is toredesigntheexistenceofabusinesspracticesinordertoachieveimprovementinperformance.Bankingorganizationsmustdevelopnewtools,newconcepts,neworganizationandthenewmindsets to copewith theturbulentandchaoticenvironments leading tocontinuous change. This can only be achieved through effective and efficientreengineering of their business. The paper revealed that throughout the periodunderconsideration,FirstBankPlchasconsideredreengineeringitsbusinessasanimportant issue as a result of adopting newly technology equipment that canenhance performance of a business. For example, the Automatic Teller Machine(ATM)thatwasintroducedbythebankmakeswithdrawalofmoneyeasierforthecustomers.From theanalysis, it isdiscovered that reengineeringabusinesshas asignificantpositiveeffect.Onegeneralconclusionthatcanbedrawnfromthispaperis that many findings from literature which hold the general conception that

Pageno.137BusinessProcessreengineeringentails thecriticalanalysisandradicalredesignofexisting process to achieve breakthrough improvements in organizationalperformance cannot be doubted. Interestingly, the paper shows that businessprocessreengineeringrequires innovationsandorganizationalchange, inordertobe successful.Alsoasamatterof fact, BusinessProcessReengineeringas foundedfromthepapertypicallyaffectsvariousvariablesintheorganizationsuchaspeople,employees, business, technology etc. The results show that SBI has effectivelyimplemented BPR and has subsequently reaped up its benefits but, on the otherhandJammuandKashmirBankisyettoimplementthesameasaresultofwhichitisnotabletograbmanyoftheavailableopportunities.Finally,BusinessProcessReengineeringhasbecomeusefulweapon foranycorporate organizations that is seeking for improvement in their currentorganizational performance and intends to achieve cost leadership strategy in itsoperating industry and environment. Reengineering process remains an effectivetoolfororganizationsstrivingtooperateinthecompetitiveworld;organizationsarerequired to re-engineering their business processes in order to achievebreakthroughperformanceandlong-termstrategyfororganizationalgrowth.REFERENCES1. AL-MASHARI, MAJED., & ZAIRI, MOHAMED. 1999. BPR IMPLEMENTATIONPROCESS: ANANALYSISOFKEY SUCCESS FACTORS AND FAILURE FACTORS. BUSINESSPROCESSMANAGEMENT JOURNAL, VOL. 5,NO. 1, PP87-112.2. CHAMPY, J. (1995), “REENGINEERING MANAGEMENT-THE MANDATE FOR NEW LEADERSHIP”,HARPERBUSINESS, LONDON.3. CRAIG, J., & YETTON, P.(1992), “BUSINESS PROCESS REDESIGN: A CRITIQUE OF PROCESSINNOVATION”, AUSTRALIANJOURNALOFMANAGEMENT, VOL.17 NO.2.4. DAVENPORT, T. H. (1993), “NEED RADICAL INNOVATION AND CONTINUOUS IMPROVEMENT?INTEGRATE PROCESS REENGINEERING AND TOTAL QUALITY MANAGEMENT (TQM); PLANNINGREVIEW, VOL.21 ISSUE3.5. JOHNSON, L. & STERGIOU, M. 1997. THELINKBETWEENBPR, EVOLUTIONARYDELIVERYAND6. EVOLUTIONARYDEVELOPMENT. SCI'97 PROCEEDINGS - WORLDMULTICONFERENCEONSYSTEMICS,CYBERNETICSANDINFORMATICS, VOL. 2, PP. 61-67.7. MAGUTU, P.O., NYAMWANGE, S.O. & KAPTONGEG.K.(2010), “BUSINESSPROCESSREENGINEERINGFORCOMPETITIVEADVANTAGE” AFRICANJOURNALOFBUSINESSANDMANAGEMENT, VOL.1, PP.16.

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*Dr. Naveeda Seher is Assistant Professor of Management at the IslamicUniversityofScienceandTechnologyAwantipora,JammuandKashmirIndia.