Reengineering the Business – Customer Process Saurabh Sardesai Consultant, Business IT Program GovernanceExecutive SummaryThe importance of the tools of Business Process Reengineering (BPR) and Customer Relationship Management(CRM) are very well documented. In this paper, I propose an amalgamation of these two tools into one ofreengineering the business – customer process. I commence by revisiting the BPR methodology, and propose aholistic systems approach to the same. Subsequently, we define the CRM paradigms in terms of processparameters. To supplement the synthesis of BPR and CRM, a case study should be presented. Using basic toolsof strategic management, competitive strategies for this initiative are formulated. The paper concludes by lookinga policy issues in implementing the strategies, and augmenting the conclusions with some basic lessons learnt.IntroductionSince its first appearance in 1990, Business Process Reengineering (BPR) has attractedconsiderable attention in management literature, and in management practice. It challengeslong-accepted models of the way in which enterprises should be structured, managed, andoperated. BPR is “the analysis and design of workflows and processes within and betweenorganizations” or “the critical analysis and radical redesign of existing business processes toachieve breakthrough improvements in performance measures”.A business process is a set of logically related tasks performed to achieve a defined businessoutcome. In general, a process is a “structured, measured set of activities designed to producea specified output for a particular customer or market. It implies a strong emphasis on howwork is done within an organization. Generally speaking, processes have two importantcharacteristics – one, that they have customers, and two, that they cross organizationalboundaries. One technique for identifying business processes in an organization is the “valuechain method”.1. Entities: Processes take place between organizational entities. These could be inter -organizational, inter –functional, or inter – personal.2. Objects: Processes result in manipulation of objects. These objects could be physical orinformational.3. Activities: Processes could involve two types of activities: managerial or operational.BPR is a process that contributes to organizational transformation (OT); however, it is notsynonymous with transformation. OT can be viewed as “profound, fundamental changes inthought and actions, which create an irreversible discontinuity in the experience of a system” Arelated development of the mid and late 90’s is the advancement of Customer RelationshipManagement ( CRM).Simply stated, relationship marketing is a game plan based on the realization that the cost ofretaining an old buyer is lower than that of getting a new one. CRM is based on the provenfact that loyalty programs create great customer satisfaction, and eventually start fundingthemselves.
In this research paper, a novel attempt has been made to synergize the concepts of BPR andCRM. This has been attempted both in a conceptual framework, as well as through areal-life case study of a training institute.The BPR MethodologyThe following are some of the basic tenets of the BPR methodology:1. Develop a clear statement of corporate goals and strategies. This seems obvious, but therehave been far too many BPR “failures” due to the simple fact that the corporate goals andstrategies have not been explicitly stated.2. Address business processes, and align processes and corporate goals. Very often, thecorporate strategies may be well defined, but the process goals may not be in synchronizationwith the business objectives.3. Make appropriate use of proven, available management techniques. This is also quite self-explanatory, and for the uninitiated we give a few selected references in BPR at the end of thispaper.4. Provide for the development of visions that represent radical change. Though we justmentioned that BPR is not the same as OT, nevertheless, we feel that one should be culturallyprepared to accept and accommodate fairly “large changes” in the way in which businessprocesses are to be redesigned5. Consider customer satisfaction as the driving force behind the goals. This is an obvious focusand strategic goal, but sometimes the technology seems to be the driving force or focus, whichit should not be.6. Identify value-added processes, along with the support processes. As a matter of fact, the entireBPR paradigm is built on the premise that each and every process must be justified in terms ofits value-addition.7. Analyze operations, and identify processes that are not value-added. To make theBPR exerciserelevant, one must eliminate such processes that do not add value.8. Consider solutions in which employee empowerment and technology drive change. This isto build in ownership and responsibility in the process design amongst employees. Also,though technology may not ( and should not be) the driving force behind the change(s), itshould certainly be a facilitator for change.The Rigors of Relationship ManagementMany enterprises think that Customer Relationship Management (CRM) is all abouttechnology, frequently because it is pushed by software vendors. Talking technology is easierthan discussing cultural changes and Business Process Reengineering (BPR) that willundoubtedly be needed as a result of the technology becoming “customer-centric”. Althoughit is doubtful that it would be possible without technology, CRM is not about putting in
systems to support current culture and business practices. CRM, for most enterprises, is a newdirection – a new strategy that will lead to greater profitability by creating customer loyalty anda customer base that is a company asset. In the Internet age, with economic power movingtowards the consumer, and with increasing competition, such a strategy is a necessity. If anenterprise does not look after its customers, chances are that someone else will.The rigors of relationship management are based on four simple premises:1. The cost of retaining an old buyer is lower than that getting a new one;2. Loyalty programs create considerable customer satisfaction;3. Such programs ultimately start funding themselves; and4. Relationship building enhances the brand equity of a company.The need for relationship building can be gauged from the following paradigm “Any businesswith the potential of repeat purchases – be it of a single product/ service, or of a range ofproducts/ services – has an opportunity for relationship building”. Examples of suchbusinesses include the hospitality industry (frequent flyer programs), entertainment -clubs,audio/ video/ computer libraries and clubs, education and training institutes/ academies, andweb marts/ exchange forums/ e-commerce centers. In order to recommend suitable strategiesto the study organization in this project, we defined the following basic paradigms:1. All BPR processes must be institutionalized and internalized. This is to build corporateownership, as well as corporate responsibility, for the business processes;2. There is almost always a need to upgrade product/ service quality;3. Success, especially in the white goods and services sectors, is ultimately market –driven4. The business must develop at least one core competence that will enable it to hold its ownagainst the competition.The Basic Beliefs and Values of restructuring• Innovations in value additions for the customers• Integrity, transparency, honesty, and commitment in all our endeavors;• Creating prosperity for, and sharing the same with, our employees;• Inculcating team spirit and involvement of all our staff, through best practices atthe work place; and• Long-term relationships with our customers, business associates, and employeesthrough continuous value addition in our services.Recommended Reengineering StrategiesThe following reengineering strategies are recommended, based on the strategic research andsolution developed by me as a Management Consultant for a top Fortune firm.• Reorganize the Company along customer-oriented Strategic Business Units• Create a lean organization by not employing too many consultants on therolls• Introduce Relationship Marketing, via Customer Relationship Management• Perform a thorough number-crunching exercise to develop promotiona lprograms, especially inarriving at affordable spends for acquiring and retaining customers
• Develop customer rewards programs, as the backbone of all relationships marketing exercises.Customers demand immediate gratification, constant attention, and perennial excitement;• Create strategic alliances with non-competing product- and service-providers as businesspartners• Get more and more partners to join the program, as they would it to be an effective andcost-saving way of accessing a large focused-segment of the targetgroup;Conclusions• Develop clear goals and objectives;• Keep a close pulse of the market, especially of the differentiated customer segments;• Develop new vision to keep pace with the technological advances• A strategic combination of BPR and CRM needs to be deployed, as outlined in this paper, inorder to revive and revitalize processes integrating with various stakeholders.