Business Process Re-Engineering

Chapter 1

INTRODUCTION

Rationale of the Study

In this globally competitive society, businesses are gradually deploying technologies to strengthen and modify the transaction flow. One of the elevated business innovation is the implementation of business process re-engineering (BPR). This enables the business to access more productivity which lessens the utilization of man power and reduces cost. BPRis a strategic tool that would supply the need of an organization to cope up in the modern business to be able to compete in the competitive business world todayto achieve profitability.

The ground for enticing the study of business process re-engineering is to know whether there is any effect or relationship between business process re-engineering and the profitability of the SME's. According to Sentanin, Santos, and Jabbour (2008) the concept of BPR was originated in 1990s to enhance the productivity and relationship of companies with its customers. This kind of business strategy enables the company to reduce the time in launching new products and services in the market in terms of cost quality customer satisfaction and shareholder’s value in link with the strategy by identifying the most important processes of the company. It also seeks to acquire new strategies to improve the quality of services of SME’s to better serve its client and for them to be successful in achieving their profitability. Through implementing BPR, firms can project and can expect to have extensive and measurable effect on the performance of SME's.and more likely, unproductive activities will be eliminated to substantially reduce the related cost as well as the cost of employees who perform them. In addition, improving the quality of output isn’t in risk. Lessening the disintegration of work and founding clear ownership of processes may lead to improved quality (Ozcelik 2013).

Due to the development of technology and tight competition in the market. Business process re-engineering is one of the tool that would affect the profitability of SME’s. There has been number of valuable studies regarding business process re-engineering (Serban, 2015) where studyisconfined on the efficiency and effectiveness of BPR in SME's, (Habib, 2013) which is focused on the success and failure of BPR. Lastly, Ringim, Razalli and Hasnan (2011) devoted their time to study the effect of BPR on the organization performance. Goksoy, Ozsoy, and Vayvay in 2012, recommended that appropriate attention should be given to know the effect of BPR on the profitability of SME’s. Thus, the reason for this study is to determine the impact of business process re-engineering on the profitability of SME’s in Davao City.

Objective of The Study

The purpose of this study is to determine the impact of business process reengineering on the profitability of SME’s in Davao City.

Specifically, this study seeks to achieve the following objectives:

1. To determine the extent of implementation of Business Process Reengineering activities of SME’s in Davao City in terms of:

1. Organizational Structure
2. Information Technology
3. Business Processes

1. To determine the Profitability of SME’s in Davao City in terms of:

1.  Net Income
2.  Return on Investment

1. To determine the relationship of Business Process Reengineering and Profitability of SME’s in Davao City.

Statement of Hypothesis

H0:Business Process Reengineering does not have significant relationship on the Profitability of SME’s in Davao City.

Significance of the Study

        This study will provide benefits to the following parties:

Customers.The result of this will impart knowledge to the customers about the changes happening in business processes and design in SME’s.