This paper aims to explore the function of Business Process Reengineering (BPR) in reducing and directing costs amid a constantly and rapidly changing environment in terms of production cost, process of production, and after production phase cost. The study’s ultimate purpose is to evaluate the procedures of BPR in affiliation to cost cutback after being established; thus through reducing the cost, further benefits will be brought into light and the entire business process will be enhanced in service of the long-term cycle. In order to assess the required measurements, a questionnaire is conducted to collect the data. The research performed eventually advises all firms to integrate the BPR system into their business activities, for it yields tremendous advantages and benefits to the entire company, and especially within this world of invariable change and resistance to change. The descriptive analytical approach was conducted in order to explore the function of Business Process Reengineering (BPR) in reducing and directing costs of production, process of production, and after production phase.
A new movement has come into view, urging for the development of the change structure to comprise all segments of organization by implementing a business re-engineering method. This includes reassessing, appraising, and assessing all tasks and methods performed by the relevant unit via exploring, appraising, and essentially reforming them, namely, to totally throw out superseded work approaches and consider fresh practice able to help in coping with the drastic and unexpected changes impinging on the market, production states, rivalry, and the surging business costs (Wahab et al., 1998).
The importance of this study lies in:
The increase of rivalry that urges firms to reduce their costs
The replacement of previous conventional decision-making solutions that are still exploited by the majority of businesses, by BPR.
The clear explanation of how to improve competition status at an apt cost.
The affiliation between BPR and costs and the solutions brought about for the companies’ issues of rising costs.
The originality of the research, regarding the limited literature.
The core objective of this study is to identify the notion of BPR as a concept of change and its impact on production supplies, production costs, after production costs, and decisions costs.
The chief problem of this study is showcased in the inquiry of whether BPR has a substantial impact on production supplies, production costs, after production costs, and decisions costs.
The notion of re-engineering was mostly known in American management (Peppard and Fitzgerald, 1997). Ever since, BPR has caused an uprising in contemporary world management, introducing unusual initiatives and an open request to reassess all activities, processes and tactics that various global businesses and firms nowadays have depended on.
The application of BPR initiates with the examination of the cost of each process inside the value chain. This involves testing the supply of raw resources and elements, storage, research and development (R&D), plan, production, gathering, analysis and examination, storage of goods, advertising, sales, allocation, after sales service, the dealers service, and the recognition of higher cost procedures (Valere, 1989).
The Hypotheses drawn were as follows:
Ho1: Process reengineering has no influence on cutting back costs of production provisions.
Ho2: BPR has no impact on cutting back costs of production process.
Ho3: BPR has no influence on cutting back costs of after-production processes.
Ho4: Re-engineering processes have no impact on decision-related costs.
Reducing costs is the major element of competitive benefit (Kamal, 2007). BPR is certainly a way of attaining cost cutback to the extent that would generate further competent processes through redesign. This could be followed by the exploitation of up to date technology, or the employment of the current technology, and cutting back dissipation of operations via the examination of procedures and means to develop them.
As for the tables within this paper, Table 1 indicated that BPR leads to the exclusion of inefficient use of resources. Table 2 shows that the arithmetic means of the feedbacks associated to the assurance of steady process without failures in public utilities, substitution of equipment or techniques employed for production, enhancing method quality, enhancing of resource output, removing high cost echelons, enhancing performance devoid of causing an augmentation in cost, and attaining the incorporation of steps and the usual flow of process reformation for more effective performance range between (3.52-3.73). Table 3 shows that the arithmetic mean of the reactions to the entry noting that BPR might assist with the diffusion of information among departments and workers surged to (4.2). Table 4 shows that the arithmetic mean of the both entries that are linked to the hypothesis that BPR will enhance the profit and quality of the adjoining environment surged to (3.58) and (3.64), correspondingly. Table 5 demonstrates that BPR has an impact on manufacturing costs and the expansion of decision-related costs.
What I learned from the paper
After carefully and thoroughly reading through this paper, I learned that each and every firm in this contemporary digital world of rapid change, should expose its managerial activities to Business Process Re-engineering if ever wants to reduce the surging costs of its production, production process, post-production process, and even its decision and financial costs of managerial tasks. Because only when companies open themselves to change and new business processes and integrate them on all levels, will the business rise and last to benefit on all aspects, and mainly long-term. This paper made me look at BPR from an accounting viewpoint, thus enabling me to acknowledge the fact of its efficiency and success in coping with the fast change that we are living in day after day. BPR is a requisite for any business seeking to survive and regularly manage its costs on all terms.
Although the relevant literature of the study was scarce, it still managed to address BPR from all aspects and matters. The paper was good and rich with convincing points regarding the substantial positive impact of BPR on reducing costs of production, cost of the process itself, financial cost, and after process cost. However I couldn’t help myself but to realize the reason why the majority of current businesses, small and big, are still not incorporating BPR into their processes, with all the latter’s influential impact on cost reduction.
The execution of BPR leads to a development in the current business, consequently allowing the surfacing of novel businesses within the same company. Despite the effectiveness of BPR in directing and regulating cost and enhancing good organization, its realization is a bit complex. Employees nowadays are very defiant to such a change, hence, it is vital to acquire broad backup from senior managers. BPR is becoming an inevitable aspect in our globe today, substantially proving that it has an impact on reducing production cost, process of production, and after production phase cost in a market portrayed by rapid change and new technology. And if ever a business wants to prosper on a long-term basis, compete, and survive, BPR is the ultimate method to seek out.