Xavier Institute of Management,

Bhubaneswar

Case Analysis:
Framework for supporting ‘Business process
reengineering’-based business models

Group No:1
Amit Kumar Rungta- UM20136
K. Anirudh- UM20193
Diksha Nayak- UM20201
Jaswasi Jashowanta Sahoo- UM20205
Meghna- UM20210
Pratyush Kamal Nayak- UM20215
Siddhant Soni-UM20227
Siddharth Mishra- UM20229
 INTRODUCTION

• Organizations tend to evolve using • Inherent risk investigation of certain

BPR critical factors  relates to readiness
• BPR  Tools for survival & growth critical towards management of risk.
of an organization  cost, quality & • BPR Large scale radical redesign 
service. dramatic improvements
• External competitive pressures, • Should not try BPR before meticulous
reduction in internal cost & to examination of all phases and stages
improve productivity. of the project.
• An appropriate model is the need of the
hour.

• Only few have been successful in • Fail to identify factors affecting the
implementing BPR measurement of organization readiness
• Most of then FAILED  70% of the for process r-engineering.
3 threads of management thought have been used to form a
companies that went into re- • Increase in cost and time
readiness framework
engineering. • Proper identification of factors affecting
• The strategic positioning of a firm
• High risk process the success and failure of BPR
• BPR
• Organizational capabilities • Develop a framework for measuring the
organization readiness for BPR
 Objective & Methodology

Objective: To develop a readiness framework which would signal the firm to start the process of
BPR and ultimately reduce the risk associated with BPR.

Methodology: Necessary frameworks were studied through secondary survey methodology.

Integrated Porter’s five forces with Stakeholder analysis to prepare a map. This integrated view
gave rise to the BPR readiness framework which was then tested with several organizations.

Developing a framework:
• Framework enables the organization to be identify, track and manage risks associated with
dynamic business environment
• It will consider external/internal factors and indicators that will helps in reviewing and
analyzing the current processes
• Provides a holistic picture for monitoring
• Prioritizes all factors to avoid resources being dedicated to just one factor leaving the
organization blind-sided.
 Building up on the PORTER’s 5 FORCES MODEL
BUYERS
Competitiveness – many buyers and
suppliers, mutual dependence – few
buyers and suppliers, and monopoly power –
few suppliers and many buyers
ENTRANTS
Can disrupt established
players in a particular market, and directly
affect the competitive advantages
COMPLEMENTORS
Consists of the government & public &
other stakeholders.
Industry stakeholder Analysis &
Stakeholder Agenda Analysis.
SUBSTITUTES
Identifying substitutes is seeking for products
or services that can fulfil the same
purpose as products of the industry of the
considered industry
RIVALS
Price discounting,
introducing new products, advertising
campaigns and service improvements
SUPPLIERS
Can have a detrimental effect on profitability
in an industry. manipulated by the number
of suppliers, the size of the supplier, and the
availability of substitute customers
 • Analysis of each of the five forces by means of • Provides a dynamic snapshot of the industry
stakeholder agenda analysis provides us with and it’s constituents.
cumulative effect of each of the agendas on the • Building block for the readiness framework
industry dynamics. The list of interdependencies • Depends a lot on the concept of “industry”
• Concept of strategic agendas.
• Strategic agendas  broken down across different levels
 for differing impact & ease of analysis (industry
agendas, competitive agendas, business agendas,
organizational agendas.
• A more distinct picture of the industry emerges
• Position of each stakeholders changes with the changes
in the response to emerging situations
• Turn on /attractors and turn off/repellers.
• Grasp the complexity of the industry and predict the
trends
From – To Analysis of the porter’s five forces

Parameters From To Because of

Bargaining power of Medium High Buyers more discerning,

buyers experienced and price-sensitive

Rivalry Medium Very High Companies desperate to find

health club capacity –
producing discounting, etc
Substitutes ( Threat Medium Medium/High Buyers can find alternatives –
of new entrants) thus saving money

Entry barriers Low/Medium Medium Sites now so expensive – hard

to enter – but could change
again
Suppliers Low – Staff Low – Staff Variable
Medium – Sites Medium – Sites
 The drivers of BPR

EXTERNAL FACTORS INTERNAL FACTORS

– Macroenvironment, – consisting of
stakeholders & internal pressures in
dyanmics the organization

DEVELOPING A FRAMEWORK
The framework developed enables an organization to be aware of the scenario surrounding it. Helps
to identify, track and manage risks associated with the dynamic business environments.

4 CSFs for BPR Implementation

• Management commitment
• Customer focus
• Use of IT
• Communication of change
SAMPLE FRAMEWORKS
FINANCIAL INDICATORS

Liquidity and Liability

01 indicators

02 Profitability indicators
Liquidity and Liability Ratios

• Current ratio = Current assets/Current liabilities

• Working capital ratio = Net working capital/Total assets

• Financial autonomy ratio = Equity/Total assets.

Profitability Ratios

• Cash profit as percentage of income

• Return on assets = Profit after tax/Total assets

• Return on equity= Return on net worth.

Liquidity and Liability Ratios
Liquidity ratios are an important class of financial metrics used to determine a debtor's ability to pay off
current debt obligations without raising external capital

Current Ratio Working Capital Financial Autonomy Ratio

8
Ratio 0.97
7 0.96
6.00
6 0.95
5.00
5 0.94
4.00 0.93
4
3 3.00 0.92
2 2.00 0.91
1 1.00 0.90
0 0.00 0.89
2017 2018 2019 2017 2018 2019 2017 2018 2019
Cognizant Ratio IT Software - Industry Ratio Cognizant Ratio IT Software - Industry Ratio Cognizant Ratio IT Software - Industry Ratio
Profitability Ratios
Profitability ratios are metrics that assess a company's ability to generate income relative to its revenue,
operating costs, balance sheet assets, or shareholders' equity.

Profit Margin Return on Assets Return on Equity

35 25 30
30 25
20
25
20
20 15
15
15 10
10
10
5 5
5
0 0 0
2017 2018 2019 2017 2018 2019 2017 2018 2019
Cognizant Ratio IT Software - Industry Ratio Cognizant Ratios IT Software - Industry Ratio Cognizant Ratios IT Software - Industry Ratio
 Validating the framework on L&T
Industry : the infrastructure/construction industry in India
Company : Larsen & Toubro Limited.

Methodology

Porter’s five force Analysis Basic Characteristic of industry

Macro trends and

PESTEL analysis
the stakeholders involved

Stakeholder Agenda Analysis Map the competitive climate

Provided a trigger for changing the strategic
From – To Analysis positioning as well as initiating BPR projects.

Factor Analysis

Absorptive Capacity
PESTEL analysis (L&T)
Legal analysis
• India’s legal structure is conducive for investments
Political analysis
and doing business, but
• elections at central and state levels
Technological analysis judicial delays make legal recourse largely ineffective
• clarity on policy making: policy deadlock
• Lower expenditure on • the expansion of tax base has increased revenues for
• strong democratic setup
research and the central and state
• improved relations with Europe and North
development governments
America
• Dependence on foreign • the current overhaul in simplifying the VAT
• constant tension with neighbours
expertise registration system by authorities
• weak implementation of intellectual property laws

Environmental analysis
Social analysis • Land availability remains
• A large young population between (15–64) a concern
in India • Environmental clearance
• Rapid urbanization with urban areas and environmental
generating over two thirds of the country’s impact assessment
GDP remain grey areas
• Number of social welfare initiatives in • Regulatory norm lag
force in India at present behind developing
• Social and communal tensions countries
Economic analysis
• falling GDP growth rate
• second largest working age population pool in the
world
• highly favoured FDI destination
• high unemployment
• energy constraints and overdependence on oil
imports
• agricultural output fluctuates with monsoons
• high inflation
• expanding domestic market
• poor infrastructure
‘From-to’ analysis of L&T
Competitive force From To Because

Bargaining power of
buyers Medium High Re-structuring of PPP process,
Regulatory changes
Bargaining power of
Medium Medium
suppliers

Rivalry Medium High Entry of foreign players

Threat of substitutes Low Low Infrastructure/construction cannot be

substituted
Entry barriers High High Capital requirements to remain high
 FINANCIAL RATIO

• The working capital ratio has been steadily rising and crossed the
• L&T has been performing better than industry standards in some
industry average.
of the indictors.
• This indicates the need for re-look and BPR at the way the working
• Cash profit (% ) has shown a declining trend.
capital is managed.
CONCLUSION

• High failure rate of BPR is due to

failure in through assessment and
analyzation
• Assessment can address weak points
and risks involved
• Readiness guarantees the success of
BPR
BPR • Apart from the mentioned framework,
human factor must be deeply analyzed
• This should not apprehend the firm
from implementing the BPR as BPR
can be a source of competitive
advantage
THANK YOU