BUSINESS PROCESS ‎REENGINEERING (BPR) in ‎PAKISTAN

Management Information system (5567)
BUSINESS PROCESS REENGINEERING
(BPR)
One of the most important implementations of competitive strategies is business process
reengineering (BPR), often simply called reengineering. Reengineering is a fundamental rethinking
and radical redesign of business processes to achieve dramatic improvements in cost, quality, speed,
and service. BPR combines a strategy of promoting business innovation with a strategy of making
major improvements to business processes so that a company can become a much stronger and more
successful competitor in the marketplace.
Figure 3.1 points out that although the potential payback of reengineering is high. Making radical
changes to business processes to dramatically improve efficiency and effectiveness. Many companies
have used cross-functional enterprise resource planning (ERP) software to reengineer, automate, and
integrate their manufacturing, distribution, finance, and human resource business processes. Although
many companies have reported impressive gains with such ERP reengineering projects, many others
either have experienced dramatic failures or did not achieve the improvements they sought.
Many companies have found that organizational redesign approaches are an important enabler of
reengineering, along with the use of information technology. For example, one common approach is
the use of self-directed cross-functional or multidisciplinary process teams. Employees from several
departments or specialties, including engineering, marketing, customer service, and manufacturing,
may work as a team on the product development process. Another example is the use of case
managers, who handle almost all tasks in a business process instead of splitting tasks among many
different specialists. (O'Brien & Marakas, 2011)
Figure 3.1 Some of the key
ways that business process
reengineering differs from
business improvement.
Information technology plays a major role in reengineering most business processes. The speed,
information-processing capabilities, and connectivity of computers and Internet technologies can
substantially increase the efficiency of business processes, as well as communications and
collaboration among the people responsible for their operation and management. For example, the
order management process illustrated in Figure 3.2 is vital to the success of most companies. Many of
them are reengineering this process with ERP software and Web-enabled e-business and e-commerce
systems, as outlined in Figure 3.3. (O'Brien & Marakas, 2011)

Figure 3.2 The order management process consists of several business processes
and crosses the boundaries of traditional business functions.
Figure 3.3 Examples of
information technologies
that support reengineering
the order management
processes.
OBJECTIVES & PRINCIPLES OF BPR
Hammer & Champy (1993) explains that
with BPR, businesses:
 Will add more value to
customers
 Accelerate their processes
 Focus only on what matters
So, with business process reengineering,
company will achieve the following:
 Customer focus: The ultimate
reason for BPR is the customer.
With it, company provides its
customers a better service.
 Speed: The speed at which a business operates quadruples. For instance, if the process before
BPR had an average cycle time of 10 hours, afterward, the average cycle time should be cut
down to less than three hours.
 Compression: company is able to cut major tasks of cost and capital throughout the value
chain.
 Flexibility: Company becomes closer to the customer. The company can develop a
mechanism that makes it aware, able to spot the weak points, and adapt to new market
requirements.

 Quality: Processes, not necessarily just individuals, affect quality levels. As BPR helps
improve the former, it also improves the latter.
 Innovation: The company innovates new processes.
 Productivity: BPR drastically improves your effectiveness and efficiency.
The SEVEN PRINCIPLES of reengineering proposed by Hammer & Champy (1993) are:
1. Organize around outcomes, not tasks.
2. Identify all the processes in an organization and prioritize them in order of redesign urgency.
3. Integrate information processing work into the real work that produces the information.
4. Treat geographically dispersed resources as though they were centralized.
5. Link parallel activities in the workflow instead of just integrating their results.
6. Put the decision point where the work is performed, and build control into the process.
7. Capture information once and at the source.
1. Organize around outcomes, not task
- One person perform all the steps in a process
- Design that person’s job around an objective or outcome instead of a single task
- Example- Electronics company
o Customer service representative of the five steps between sell and install the
equipment
2. Have those who use the output of the process perform the process
- Establish specialized department to handle specialized process
o Each department does only one type of work
o BUT it’s slow and bureaucratic
- Now that computer-based data are more readily available, departments, units, individuals
can do more for themselves
o Individuals who need the result of a process can do it themselves
o Greatly reduced the problem of capacity planning
o Example- Electronics equipment manufacturer’s service reengineering
• Customer make simple repairs themselves and only for complex problem
is a service technician dispatched

3. Subsume information-processing work into the real work that produces the information
- To maintain consistency and to reduce repetitive information process
- In the past, why didn’t an organization that produces information also process it?
o Not enough time to process the information
o Low trust to do both produce and process the information
o Belief that people at lower organizational levels are incapable
o Example- Ford’s redesigned accounts payable process
• Receiving department, receiving and processing the received information
from vendor instead of sending it to accounts payable

4. Treat geographically dispersed resources as though they were centralized
- Decentralizing a resource gives better service to those who use it, but at the cost
redundancy, bureaucracy, and missed economies of scale
- Using database, telecommunications networks, and standardized processing systems to
get the benefit of scale and coordination while maintaining the benefits of flexibility and
service
- Example- Hewlett-Packard- 50 manufacturing unit’s separated purchasing department
o Provided excellent responsiveness and service but prevented realizing the
benefits of its scale
o So each unit has access to a shared database on vendor and own purchase orders
o Separated department centralized by using database
5. Link parallel activities instead of integrating their results
- Communication networks, shared database can bring independent group together
- Usually, used in the product development
o Having people do development work simultaneously save time
o Example- Development of photo copier
• develop each subsystem (optics, paper handling, power and etc.) in a
separated unit
6. Put the decision point where the work is performed, and build control into the process
- Suggests that the people who do the work should make the decisions and can have built-
in controls
- Self-managing, self-controlling, disappearing hierarchy through IT or Expert system
o Example- Insurance companies

• Case manager provides end-to-end management of the process, reducing the
need for traditional manager
7. Capture information once and at the source
- In the past, information was difficult to transmit and information was collected repeatedly
- Today, company store it in on-line database for all who need it.
o Bar coding (POS: Point Of Sale), relational database, electronic data
interchange(EDI)
o Example- Metro Cash & Carry
• Computer system support and integrate, connect the different function.
• As a result, company is able to eliminate redundant data entry

BPR– PAKISTANI ENVIRONMENT
Business Process Reengineering and Information Technology
Rise of IT started in the early in 2000 and all businesses organizations started to learn at large scale to
understand the implementation of IT in their businesses or organizations. Initially, their system
automation took place to enable them to increase their work efficiency with effectiveness. Businesses
and organizations transformed their internal systems to IT based information systems by
implementing standard applications, custom built applications and ERP (Enterprise Resource
Planning) to enhanced their processes and procedures, practices that faster their work productions,
services, information sharing, and easy collaborations with other departments. Later, the internet
information systems and complex systems automation were implemented in the businesses or
organizations that raised the issues of quickly implementing new automated systems, time gaps in
providing trainings to users and other factors that brought the competency issues internally and
externally to compete in the market. Internet opened the vast marketplace of services, promotions,
marketing, online merchandising or trading that enable the businesses or organizations to re-structure
their systems in the competitive market.
Due to the rapidly changing IT infrastructure, approach of using information system within and
outside the organizations, coordinating internal and external stakeholders to effectively perform their
work became complex, and started taking time to deliver results rapidly in the competitive market.
Many businesses or organizations started reengineering their system to compete in the market by
enhanced services level, processes, reducing the cost, time efficiency, quality, and ease of customer
services at their centres, and web based services that reduced the time. PTCL, SNGPL, IESCO, State
Bank of Pakistan and many local industries and private organizations adopted the approach of BPR to
enhance their services. Different tools of BPR were used to understand their business or
organizational work, capacity, processes, procedures, structuring, target markets, customer services,
and others areas. Standard BPR tolls that are commonly used are below:
Business Process Reengineering and Tools
Based upon the business requirements, needs, level of reengineering, different techniques were used
by businesses organizations. Those techniques included followings: (Altaf & Khalil, 2016)
1. Visualization of Process
Visualization refers to the vision. End state should be kept in mind. The key for business
process reengineering is vision. Vision of the businesses or organizations evaluated to the
future of their services to users or customers.
2. Process Mapping
Process mapping includes the model of the reengineering. The process should be mapped in
stages. Based upon the vision, existing processes, procedures, desired level of quality services
to customers with the reduced time, internal systems enhancement, structuring, and
infrastructure improvements were mapped at different levels.
3. Change Management
Change management relates to the human side of reengineering. Employees skills, training
requirements, customer services delivery style, and behavioural aspects were considered to
improve for effective services.
4. Customer Focus/Process Focus
Business Process Reengineering means to re-construct the process and structure to improve

the performance. Importance of customer services, related processes and procedures, desired
improvements to provide esteem services in efficient manners were addressed to increase the
services quality level.
Implementation of Business Process Re-engineering in Organization
a) Customer Orientation
First the business process reengineering focuses the customers need and wants. The objective
should be creating value to the customers. The strategic goal of BPR should be providing
services by keeping in mind the customer orientation. Value the customers and handling all
complaints politely. Reducing the service delivery time, professionally quick response,
handling complaints and other related areas in an efficient manner were addressed to
reengineering.
b) Empowering Peoples
Empowering people means to facilitate them in their work by providing right tool,
information, space training and environment. Information system help employees and
customers to access information they need along with providing employee training. These
were addressed at high level to provide relevant information to customers. Employees were
provided trainings to enhance their skills, attitudes, professionally handling of customers with
certain level of authority in providing the required information.
c) Information and Tools
Provide right information to the people on work is the primary purpose of the information
system. Access of information at various levels was structured to increase the efficiency of
internal departments. If the plans are Information system equipped with tools allows
managers to calculate and analyze the plans easily with reliability.
d) Training
Information systems are designed to support the employees on workplace when information is
needed for desire work. Employees were provided trainings to build their skills and
competencies in utilizing the information system effectively at different levels of their
organizations.
e) Paper Work Reduction
Paper work contains lots of difficulties for employees like to handle bulky data in terms of
management, recording and analysis. On the other hand computerized data take less space as
compare to physical space, comparison are easy, data transmitting are easy and easy to
identify the patterns. Reduced the paper work by using the applications, scanned documents
and reengineered internal communications systems increased the work efficiency. Once all
documents are scanned, are available to the organization employees as desired at different
levels.
Approaches to Implement Virtual Organization
a) Telecommunication: Employees are working remotely not necessary to work at home but to
work at different places and the use of information technology they interact with each other’s.
b) Telecasters: The offices are located outside of major cities and provide facilities of offices
outside because the tools and equipment is not available at home.
c) Mobile Networking: Employees requires tools to work in remote areas like mobiles,
computers, internet pager and laptops.
d) Virtual Teams: Employees interact each other’s through e-mail, groupware, internet etc

EXAMPLES:
BPR is implemented to streamline the work process in many organizations in Pakistan. Some are
 Pakistan International Airlines
 Pakistan Petroleum Limited
 National Refinery Limited
 Sui Southern Gas Company
 Hinopak Motors Limited
 Attock Refinery Limited
 Banking systems, e.g. SBP, MCB, HBL, UBL, ABL, etc.
 E-government Directorate of Pakistan
 Telecom Industry, Ufone, Telenor, etc.
 Cash & Carry stores, e.g. Metro, Madina, Punjab Cash & Carry stores, etc.
 Hospitals & Labs, e.g. QIH, Shifa Int., Shaukat Khanum hospital, Excel lab, etc.
 Education sector, e.g. HEC degree attesting system, AIOU admissions & examination, etc.
 B. Braun Pakistan
 Indus Pharma
 Designer Wear Company, e.g. J. or Junaid Jamshed
 Karachi Port Trust (KPT)
 Textiles, e.g. Adamjee Enterprises
(Sidat Hyder…, 2010)
BRP IN STATE BANK OF PAKISTAN
Overview:
Since the inception of SBP BSC (Banking Service Corporation) in January 2002, its managers have
been analyzing and designing business processes in order to deliver quality services to internal and
external stakeholders. The Governor State Bank of Pakistan approved Business Process
Reengineering (BPR) for SBP and BSC which is being implemented in BSC. As envisaged in BPR,
payroll, expenditure and Internal Monitoring Units have been transferred to Accounts Department
from Administration Department. The course of BPR has been adopted to improve the existing work
procedures in various areas of operations to eliminate unnecessary stages for quick disposal of the
cases. The redesign of business processes, with the objective of performance gains, is mainly achieved
with the help of information technology. The implementation of payment controller function in BSC
has helped in achieving operational gains by centralizing the payment system. The automation
programme has inter-connected various processes to facilitate the end-users and supervisors. Business
processes have been modified to make them compatible with the recently implemented Oracle
Enterprise Resource Planning (ERP) Modules. The business processes linked with these modules have
been simplified. Data once entered automatically passes through various channels to relevant
accounts. The system generates error free final output / statements and periodical reports are
generated through the system. Duplication of work has been reduced or eliminated. In nutshell BPR
has changed the old routine practices in BSC.
Technological Improvements:
The SBP has designed IT based business solutions in Oracle ERP, Globus and other software to
increase operational efficiency. After their implementation in SBP, these solutions have been

replicated in BSC successfully. Globus an online state-of-the-art banking package is capturing all
banking transactions in 16 field offices spread all over the country. The system has been customized
to meet the Bank’s operational requirements. Every office, after close of business, transfers Oracle GL
summary of all transactions of the day in predefined Account Heads. To facilitate effective
monitoring of transactions being entered and authorized in Globus banking system, an hourly status
report is generated to identify delay in finalization of cases. Close of the business process is monitored
by the Head Office. A daily check list has also been introduced in each office to clean the entries
processed by the system. System hang up, delays and entries to Suspense Account have been
minimized with the assistance of Information Systems and Technology Department. Since May 2006,
BSC Head Office is in a position to generate Weekly Statement of Affairs from the system. In
addition to Oracle ERP and Globus, other in-house developed software like Medical Services system
and Fund Management system are running successfully in all offices of BSC. The areas which have
been fully automated included Public Accounts, Deposit Accounts, SSC/DSC, Prize Bonds and Cash
Tellers. The issuance of currency has also been automated. Oracle ERP has 6 modules namely
recruitment, Employee Information Management, Performance Evaluation Report, leave
management, compensation & benefits and work structure and training modules. The system provides
a better management environment. (SBP-BSC, 2006)
Currency Operations:
Due to automation of the currency operations, the manual work has been reduced to a large extent.
One of the laborious jobs was the manual counting of fresh notes of 20,000 pieces per employee per
day. Field offices have now been provided the Note Counting Machines which are counting fresh
currency notes received from the Pakistan Security Printing Corporation at the rate of 300,000 per
machine per day by deploying two persons on each machine. In order to provide better services to the
public various steps have been taken to simplify the procedures in connection with the currency
operations, some of which are as under:
1. The procedure for Claim Notes has been simplified by deleting various parameters in order to
accelerate the process of their payment at the Bank’s counter.
2. Note Shredding Machines have been installed in most of the offices for destruction of
Cancelled Notes.
3. Data is entered in the on-line system at Examination Halls, Vaults and Counters, and outputs
are automatically generated through system
4. Fresh notes up to Rs.100/- denomination are being issued unstapled.
Banking Department:
Following improvements are done in the operation of Banking Department (including Prize Bonds
Unit) on account of the implementation of automation programme. All the accounts operated in SBP
BSC are being maintained through Globus and Oracle systems. Trial Balance Report is generated
from Oracle System. The age old practice of writing the Scroll Abstracts manually has since been
dispensed with as authorizations are being done in the Globus and reports are being automatically
generated through the system. Compliance of requests for ‘Stop Payment’ against cheques and other
payment instruments is monitored through the system. The record of all payments and receipts is
maintained through the system. The preparation of Clean Cash Book, General Ledger and Trial
Balance manually has been discontinued as the desired reports are generated through the system as
and when required. Inventory records are available in the system and Monthly Consumption Vouchers
and Depreciation Vouchers are passed on the basis of system generated reports. Users are sending
system generated Purchase Orders for approval. CBR transactions are reported daily through system

provided by the FBR. Technological improvements are also made in respect of the payment of Prize
Money against prize winning National Prize Bonds and sale/ encashment of SSC/ DSC including
payment of profit on SSC/DSC which is now paid after processing the cases through the system.
(SBP-BSC, 2006)
Human Resource Management:
Personal data of all employees is being maintained in a systematic manner on Oracle Employees
Information Module (EIM) System, and the data regarding benefits allowed to them, e.g., salary,
pension, advances and extension of medical facilities is retrieved from Oracle EIM system. Main
benefits of the system are as under:- (SBP-BSC, 2006)
 Reliable information,
 Instant availability of information,
 Security control.
Administration / Salary / Advances: BPR entails modification in the existing rules and
procedures to attend higher operational efficiency, stronger human resource base and better
internal controls. Since implementation of Advances Modules, maintenance of registers for
keeping the record of Staff Loans has been abandoned. Scrutiny sheets once prepared manually
have been discontinued as now system itself generates the Scrutiny Sheets. Preparation of salary
had always been a laborious work. It was once a continuous process for the whole month. Making
of salary binders, various calculations related to salary, preparation of statements, salary advices
and above all calculation of income tax and then posting into relevant registers on monthly basis
normally took 10-12 days of succeeding month. Now all these jobs are done through the system
and manual work has been discontinued. In Leave Unit the system automatically calculates the
RLA / SLA balances of employees on feeding leave data of the employees. Necessary advices are
also generated automatically. Implementation of BPR in HR Module has facilitated the user in
generating the personal data of employees. This includes personal data such as date of birth / date
of retirement, qualification and dependents, as well as experience list showing date of
appointment, promotion, transfer etc.
Medical & Welfare: Automation of Medical & Welfare Unit has taken place with the
enforcement of Oracle (ERP) Module of Medical Services System. The information / data
pertaining to all services provided by this unit have been integrated. Any type of data, duly
updated and accurate, can now be viewed by the concerned authorities at their desktop monitors.
This facility helps in timely decisions and facilitates in rendering high value services to its
stakeholders as well as employees of the Bank. Automated system displays all the processes and
details of payments to employees / hospitals / laboratories / specialists / suppliers etc.
Consequently, the chances of pilferages / frauds have been reduced to a bare minimum level. The
redesigned processes are as under:
1. Reimbursement of medical expenses to employees is processed in MSS Module and
conveyed to Salary Unit on or before 20th of each month for payment through payroll.
2. In MSS Module reference slips are issued to employees for treatment / clinical tests etc. The
same are tallied with claims / bills of specialists / pathologists / radiologists / hospitals as and
when they lodged their claims for payment. MSS Module is integrated with AP and its data in
respect of above claims is imported in AP Module for onward payment to parties through
payment orders / bank drafts. All these payments / claims are processed and verified through

system efficiently. Further, the audit procedure has also been modified for quick disposal of
cases.
3. Payment to suppliers of medicines are made through AP Module by matching cost / quality of
each medicine with purchase orders on the basis of which medicines are received / inspected
and delivered in Store / Dispensary. Detail of consumption of medicines as well as stock in
hand is available in Inventory Module integrated with MSS Module.
4. Amendments in particulars of suppliers / rates of medicines etc. are carried out in system. As
such a smooth change takes place without lengthy manual process besides, accuracy in
calculation of rates is also ensured.
5. Withholding Tax deductions are calculated and made by the system on prescribed rates in
respect of every supplier of goods / services. Annual Performance Review of SBP BSC FY06
54
6. Detail of medical expenditure incurred on each employee, supplier and product is available in
system and it takes little time in preparation of statement of expenditure for submission to
concerned authorities.
7. Procedure for transfer of employees’ medical facilities has been simplified and now on the
request of an employee his medical facilities are transferred to other centre immediately.
8. Any change in personal record of employee (addition/deletion) is processed by Staff Unit and
the change incorporated thereof is imported in MSS Module.
9. Purchase orders in respect of suppliers of medicines are processed through system.
10. Various statements / reports are automatically generated through the system which helps in
quick disposal of cases.
Settlement of Medical Bills / Payment: In order to eliminate un-necessary processing and to
improve the efficiency level, a revised system of payments / settlements of employees,
dependents, hospitals, labs, consultants and venders / suppliers of medicines etc has been
implemented. Main features of the system are as under:
 Under the revised system, MSD, HOK and field offices have instituted a “Claim Submission
Desk” in the concerned unit for receipt of medical claims / bills so as to provide prompt and
effective service / response to the internal as well as external stakeholders.
 New Claim Forms have been introduced, and each Form contains a checklist of the
supporting documents to be submitted alongwith the claim and an option for payment through
Cheque or Bank Transfer.
 The officials manning the Claim Submission Desk preliminarily examine the case before
acceptance which is substantially reducing the claim processing time.
 The existing system of pre-auditing medical claims / bills by Internal Audit Unit (IMU) at
HOK has been eliminated.
 The “In-order” certificate has been bifurcated into “Technical In-order” and “Financial In-
order” certificates. These certificates are to be recorded by the Bank’s Medical Officers and
the concerned administration functionaries respectively.
Adoption of Public Procurement Rules:
SBP BSC has adopted the Public Procurement Rules of the Government of Pakistan in place of
Standard Rules and Regulations for procurement. These procurement rules are applicable to all
departments, units and Printing Press. Previously, Printing Press was arranging printing and other
consumable material required for distinctively special and unusual publication by adopting emergent
measures, which was sometimes causing delay in accomplishment of specified job. Under the newly

adopted rules, for printing of special and distinctive publications, orders with full specifications /
requirements are placed to Printing Press at least 25 days prior to the estimated commencement of
work on the relevant job. (SBP-BSC, 2006)
CONCLUSION
Rise of Information and Communication Technology has dramatically changed the way of functions
and services of an organization. Business process reengineering (BPR) is an approach to change
management in which the related tasks required to obtain a specific business outcome are radically
redesigned. An important goal of BPR is to analyze workflows within and between enterprises in
order to optimize end-to-end processes and eliminate tasks that do not provide the customer with
value.
Business Process Reengineering is the structural and process change in an organization. In business
process reengineering technological dimension, human dimension and the organizational dimensions
are changed. Due to globalization and liberalization in trade, the business environment totally
changed. Due to rapid change in business environment, competition increased dramatically.
Competition in quality, price, value and experiences is growing day by day. All the changes in
marketplace need transformation in organizations. So, BPR is the rethinking and redesign of the
processes of operations and structure to focus on core competencies to achieve performance. Business
Process Reengineering and information technology dramatically improve the performance of the
manufacturing firms by redesigning its internal system
REFERENCES
Altaf, M., & Khalil, M. (2016). Strategic information system: a source of competitive advantage. J. Inf. Knowl. Manage, 6(9), 24-34.
Hammer, M. and Champy, J. (1993). Reengineering the Corporation: A Manifesto for Business Revolution. New York: Harper Business.
O'Brien, J. A., & Marakas, G. M. (2011). Management information systems, 10th
ed. New York: McGraw-Hill Irwin.
SBP-BSC. (2006). Business Process Reengineering. State Bank of Pakistan Annual Performance Review 2005-06. Retrieved from
http://www.sbp.org.pk/sbp_bsc/apr/per-03/Chapter-8.pdf
Sidat Hyder Morshed Associates (Pvt) Ltd. (2010). Retrieved from http://www.sidathyder.com.pk/index.html

BUSINESS PROCESS ‎REENGINEERING (BPR) in ‎PAKISTAN

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