Group 11 :
Management Accounting Seminar
1510534002 Ramadhani Sardiman
International Accounting
1510534013 Retno Ladyta
Andalas University
Reaction Paper of Accounting for Time : Reengineering Reengineering Business Process to Improve Responsiveness
Process reengineering is redesigning or reinventing how we perform our daily work, and it is a concept that is applicable to all industries regardless of size, type, and location. The first question in process reengineering is “Why are we doing this at all?” all?” Answering this question is the beginning of the immediate, dramatic change and the applicat ion of supporting technical and behavioral concepts and tools that are necessary to implement process reengineering. To accomplish this, organizations must foster an environment that encourages quantum leaps in improvement by throwing out existing systems and processes and inventing new ones. The intent of process reengineering is to make organizations significantly more flexible, responsive, efficient, and effective for their customers, employees and other stakeholder. Once you’ve learned about business process rere -engineering (BPR), it’s easy to wonder why you’d want to do it. After all, it can require some significant changes to your organizational structure. Are the payoffs worth it, or are you spending time and money on a process that will only bring a minimal amount amount of improvement? The business process is required to be reengineered because of the following reasons : The processes the company is using might have become outdated or holds no relevance in the current market scenario; Often, the sub-divisions in the organization aims at improving their respective division performance and overlook the resultant effects on the other departments. This might lead to the underperformance of the firm as a whole; Due to the departmentalization, each employee focuses on the performance of his respective department and may overlook the critical issues emerging in other areas of the firm, and therefore, the need for re-engineering arises so that the role of the employees could be broadened and shall be made more responsible towards the firm; The existing exist ing business process could be lengthy, time-consuming, costly, obsolete, therefore, is required to be redesigned to match it with the current business requirements; The technology keeps on updating and in order to catch up with it, reengineering is a must. Thus, the business process reengineering focuses on 1
obtaining the quantum gains in terms of cost, time, output, quality and responsiveness towards customers. Also, it emphasizes on simplifying and streamlining the business process by eliminating the unnecessary or time-consuming business activities and speeding up the workflow by making the use of high-tech systems. Process reengineering is a valuable concept for organizations that are willing to undergo dramatic change and radical process redesign. It can co-exist with ongoing gradual process improvement efforts because not all processes can be radically redesigned at once. In process reengineering, as in all improvement initiatives, as sessments should be made in terms of cost/benefit analysis, and risk analysis. However, even the assessments should be done with a sense of urgency since process reengineering requires speed as well as radical redesign. Documentation of results will serve as the baseline for future improvements.
Reference : Young, S. Mark (MY). 2001. Readings in Management Accounting, 3th Edition. Prentice Hall Inc. 2001.
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