CHAPTER ONE: INTRODUCTION

1.1       Background of the Study
BPR could be described as a process that contributes to each company’s transformation in a bid to achieve a radical and dramatic improvement .BPR would continue to remain constant in our business activities as a means to restructure our aging processes to achieve the strategic objectives of increased efficiency, reduced costs, improved quality, and greater customer satisfaction (Hammer and Stanton, l995:32)
As a result of improved technology and customer awareness, companies worldwide have become conscious of the need to constantly change their processes in other to serve their customers better and at the same time remain efficient and cost effective.
According to Davenport and Short (1995:11-27) BPR is ‘a set of logically related tasks performed to achieve a defined business outcome’. A business process in this case is a structured and measured set of activities designed to produce a specified output for a customer or a particular market. In the views of these authors, a business process has two very important characteristics; internal or external customers and ability to cross organizational boundaries.
Hammer & Champy (1993:35) on the other hand defined BPR as ‘the fundamental rethinking and radical redesign of business process to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, services and speed’. A number of other literature have been published on process reengineering which covered the processes, myths and its relations with other restructuring tools e.g. Grover & Kettinger in Reengineering concepts, methods and Technologies, Michael Hammer in Beyong Reengineering.
In recent times, the focus on customers, competition and change have become the new watchword for businesses around the world and the old rigid structure has proved inadequate to cope with the flexibility and quick turnaround being demanded by customers around the world presently (Hammer & Champy.l995:73).
In our opinion, between 1970 and a decade after, the structure of businesses in Nigeria hardly changed with importation of raw materials and cheap finished goods being the other of the day. The revenue generated from the oil export did not help matters as the successive governments embarked on ill-conceived projects and few ‘white elephants’ that led to drain on the foreign exchange reserves.
Although, this period created a level of economic growth with many factories springing up in most urban centers of the country, it also served as a neglect of our agricultural sector and an exodus from the rural areas to urban centers. By the mid 1980’s our dwindling foreign imports and the issuance of import licenses could not be utilized as our international trade partners could no longer guarantee our imports (Michael Stevens and Associates, 1994:19).
In 1986, it was evident that efforts had to be made to be address the economic recession and discontinue the false perception of life shared by all and sundry. This led to the introduction of the SAP which major steps include:
Stringent economic measures,
Trade liberalization
Guided deregulation
And currency devaluation (Agusto & Co, 1994:15)
A number of financial reforms were implemented which resulted in increased activities in the financial sector. These activities included liberalization of imports of goods and services, interest rate and foreign exchange reforms.
With hindsight, the consequent effects of this was a strange hold on the manufacturing sector, breakdown of shaky infrastructure and the collapse of the banking sector which had witnessed a growth in the number of participants as a result of these reforms earlier mentioned.
Majority of the corporations operated well below optimal level due to lack of foreign exchange and credit squeeze. The financial sector’s problem was caused by illiquidity and insolvency as many banks began to fail to meet with their customers’ demand for funds.
The manufacturing sector took the brunt of these economic measures as their sales took a downward turn. Although, the sector was classified as a preferred sector, together with agricultural and housing but with no credit facilities to secure foreign exchange for raw materials nor enough sales to generate adequate revenue to repay outstanding loans, the predicament of this sector soon became evident.(CBN Briefs,1998).
A number of these companies employed numerous tactics to redress the situation; some employed a three day working week, few rationalized while some closed down all together. Some of these companies that survived the downturn in the economy at this period were those that changed their old structures and their old processes with the customers as their focus.
The process steps are considered activities that transform a set of inputs into a set of output (goods and services) for another individual. Improving business processes is paramount for businesses to stay competitive in today’s market place. Over the past few years, businesses have been forced to improve their processes because the consumers are demanding better and better products and services. Coupled with this is the competitive issue facing businesses, the opportunities available to each customers to seek service/goods from other outlets if not satisfied with that provided by a particular company.
Inevitably, with the opening of world markets and increased free trade, many businesses started business process improvement as competition became more intense and coupled with the reality that change was the only hope of survival.
The process of reengineering centers on understanding the current process and build in performance improvements into the process accordingly. Having said this, it is important to note that there are a few different schools of thought in BPR. Extreme school assumes that the current process is irrelevant and should be dismantled and rebuilt while another is of the opinion that you only need to bridge the gap between the current process, technologies and structures (Hammer, 1995: lO4).

1.2       Statement of the Problem
The issue of process redesign has become a matter of survival for most companies and as a result they wanted breakthrough performance changes immediately, faster than what TQM could achieve. Total quality managers focused on incremental change and gradual improvement of business processes while proponents of BPR often seek for radical redesign and drastic improvement of process.
In as much as we are familiar with earlier thrust of BPR, in reality BPR needs to take into consideration the human factors necessary for such successful implementation. Companies in wide range of business sectors have demonstrated that BPR is all about the broader framework of value-added systems as a whole and not simply the issue of radicalism and quantum leaps.
Most companies were negligent in the area of knowledge acquisition, interpretation and subsequent decision-making in actualizing the market intelligence, customer’s needs, and technological, financial and regulatory developments.
At UBA PLC, the successful takeover bid in 1994 heralded a change from a semi- automated environment in the urban branches and basic manual book keeping in the rural branches. The bank had a staff strength of 8450 with an annual operations loss of N0.5b and loan losses of 4% of total loan portfolio (UBA Company Profile,1995)
UBA PLC, at this time was not customer focused and the counter services turnaround time was not comparable to the quick and efficient service rendered by competition. The bank was merely a mirror image of the civil service structure with no clear recruitment policy and appraisal system in place. Staff accounts were frequently overdrawn and branch managers granted overdraft facilities to their friends and relations with reckless disregard for the ethics of the banking profession.
Promotions and other benefits were based on the personal ‘connection’ of staff with the executives and the board of directors. Obviously, the set up of the bank at this time made the task of the new owners somewhat difficult, especially the activities of the unionized staff negated against the efforts towards effective change.
As for Guinness PLC, there was lack of focus and inability to respond to process change of its production plants in consonant with what obtains in the industry. Also, there were conflicts in its exploits into other areas outside its core competences. The structure of the company was based on the archaic hierarchical and task oriented structure, which left the staff demotivated and less focused on their goals. The company was forced to adopt restructuring and process reengineering because it suffered low productivity, revenue and profitability.

1.3       Objective of the Study
For the two companies under review, the only hope for moving away from their ineffective and outdated ways of conducting their businesses that could otherwise destroy them was to adopt process reengineering. Although BPR has been around us for some time, businesses especially companies under review soon realized that with the hardship brought by the downturn in the economy and the introduction of SAP demanded urgent need of survival.
The traditional assumptions upon which businesses are built are changing fast, power is shifting as markets become more competitive, knowledge is becoming more and more of a commodity and technology pervades almost all areas of our business, social and individual lives.
Hence, BPR is considered as the medicine, which allows organizations to put in place, the much-needed changes. BPR represents a new way of thinking, for almost any business with a purpose to excel.
Kettinger & Grover (1995:9-30) outlined some propositions to guide future inquiry into the phenomenon of process reengineering. Their propositions centered around the concepts of knowledge management, employee empowerment, adoption of new technologies, and a shared vision within the organization.
The objectives of this study include the following:
a) Review the historical background, myths about BPR and its methodology as a tool for business process redesign.
Relate this to the methods adopted in both the banking and manufacturing sectors with particular reference to UBA PLC and Guinness PLC.
b) Identify the success or otherwise of BPR in the two companies under review with particular emphasis on enhancing financial health, the effect on their staff and the companies abilities to overcome resistance to change, the key enabling factors of BPR etc.

1.4       Research Questions
This research wok will attempt to find answers to the following questions:

1. What were the reasons for change in the two organizations under review? How were their financial positions, labour relationships and market performances perceived prior to reengineering and after.
2. Was a vision or a mission statement created by each of the companies under review prior to redesign work?
3. Was the reengineering process successful or otherwise because of the methodology adopted by each company under review? List summary of success factors.
4. How effective were the champions of the redesign exercise in relation to the total buy-out by each organization?
5. What is the level of external consultant’s involvement in the redesign exercise?
6. What are the comparisons carried out by the two companies under review?

1.5       Research Hypothesis
Hypotheses A
Null Hypothesis Ho: Process redesign and restructuring do not contribute to financial survival and growth of the organization.
Alternative Hypothesis H 1: Process redesign and restructuring contribute to financial survival and growth of the organization.
Hypotheses B
Null Hypothesis Ho: That productivity and efficiency do not depend on BPR in two companies under review.
Alternative Hypothesis Hi: That there is dependency on BPR for productivity and efficiency in the two companies under revie
Hypotheses C
Null Hypothesis Ho: Service delivery, cost reduction and asset deployment do not depend on BPR in the two companies under review.
Alternative Hypothesis Hi: There is dependency on BPR for service delivery, cost reduction and asset deployment in the two companies under review.

1.6       Scope and Limitations of Study
In this study we shall review the activities of the two companies (UBA PLC and Guinness PLC) prior to the introduction of BPR and after its implementation.
We shall also compare the expectations of the customers of the two different sectors. The manufacturing sector is product focused while the banking sector is service oriented.
Service is less tangible than products as we are aware while much of service quality is in the delivery and the how of service delivery is as important as what is delivered.
Due to the nature of BPR as a strategic tool, there were difficulties in obtaining information from the companies for review. This was more evident in the researchers effort to secure information at Guinness PLC and in conducting an objective survey of their management staff.
Also the lack of documented documents or literature on implementation of BPR locally led to reliance on foreign documented literature in the course of this research work.

1.7       Significance of the Study
This study is justified by the extent to which BPR has contributed in the restructuring of business worldwide. A number of reasons compel organizations to restructure, but what is important is for business management to identify the need to do so before the ills of the business affect their market share or their internal structure.
Also, companies in a wide range of sectors have demonstrated that reengineering is very effective if undertaken within a broader framework of the value added system as a whole.
Davenport (1993:25-26) considered value added system to include the following: engineers cooperating with the industry to produce leapfrogging technologies, raw material supplies, manufacturers, capital equipment and expert service suppliers, distributors, customers, legislators and regulators playing their part in the process chain.
Our findings and recommendations will:

1. Ensure better understanding of BPR methodology adopted by companies worldwide, with emphasis on the Nigerian Banking and Manufacturing sector.
2. Highlight the success factors of BPR implementations in the two companies under review and provide basis for further research in the implementation of BPR.
3. Highlight the difficulties experienced by UBA PLC and Guinness PLC in implementing process reengineering.
4. After Business Process Redesign, what next? This study will attempt to offer post BPR activities and evaluate other areas of BPR methodology requiring more research work.

1.8       Definition of Terms
I. Business process: A set of logically related tasks performed to achieved a defined business outcome.
2. Re-Engineering: The detailed examination of every process to see how costs are built up and hence where costs can be saved.
3. BPR ‘Business Process Reengineering: A process of using modern computer technology to simplify radically the organization’s handling of administrative tasks.
4. TQM ‘Total Quality Management: This is modern approach to the management of organization that emphasizes the role of quality in meeting the needs and expectations of its customers.