USEFULNESS OF BUSINESS RE-ENGINEERING AS A STRATEGIC TOOL FOR THE SURVIVAL OF CORPORATE ORGANIZATION, A RESEARCH PROJECT TOPIC ON BUSINESS ADMINISTRATION
CHAPTER ONE
- Background to the Study
The going concern, survival and continuous existence of an organization have been described as a function of the processes, human capital and relevance of such business in the environment in which it operates. However, business failure has occurred over the years despite the fact that the business is relevant in its environment, the existence of efficient and effective human capital and a successful systematic process.
According to the Harvard Business School research on business and organization failure, over 82% of new businesses do not survive the first 2 years while 75% of the remainder donot survive the next 5 years. Business failure in recent times have been attributed to systematic failure of the business process as aresult of volatility and dynamism of the business environments which makes future occurrence significantly unpredictable.
Also, Business Process Re-engineering is neither simple nor intuitive. As many managers are discovering re-engineering usually brings with it major problems and, often, failure. A recent survey of Chief Information Officers showed that re-engineering projects consistently fall short of their expected benefits (BELMONTE93, MOAD93). It is estimated thatbetween 50% and 70% of the re-engineering efforts fail to achieve the goals set for them and figures from evaluations of TQM indicate the same results (STEWART93).
Even though impressing results have been achieved, the high rate of failure leads to an immense waste of resources in many organizations. This waste might be avoided, if change agents would gain genuine knowledge about the concept they are struggling with.
To mitigate the continuous and helpless business failures, strategic business managers, professionals and business scholars have developed various turn around management models and tools to help organizations weather the storm of hard business periods. Some of these modern turn around strategic include SWOT analysis that is used to analyzeorganization’s strengths, weaknesses, opportunities and threats, Quick Environmental Scanning technique (QEST) to understand the volatility of business environments, Total Quality Management (TQM), Just In Time Approach (JIT), Mergers, Acquisition and business combinations to consolidate strength and dominate market, Learning Curve Theory, System and sub-system model, Synergies, Employee motivation, Competitors and customers wheel Analysis and other mathematical model to forecast, predict and prevent business failures. Some of these models are also used to improve organization performance and global competitiveness. Experience has shown in recent times that the use of a single model to predict and prevent business failure may be ineffective and not failure proof, hence the development of a more strategic model encompassing all tools that may be used to prevent failure. This modern tool is what is named Business Process Re-engineering. It is a holistic approach that identifies, analyses, and redesigns an organization’s core business processes, human capital,and technology and information management.
