Business process re-engineering in the small firm: A case study

INFOR, Feb 1996 by Hale, Andrea J, Cragg, Paul B

3. SMALL FIRMS

In small firms, organizational structure is typically informal, but highly centralised, which provides strength in decision-making and rapid implementation of decisions (Blili & Raymond, 1993). This also enables more rapid implementation of change in the organization. Further, it has been empirically confirmed that small businesses differ from large organizations in other matters such as maturity and environmental uncertainty (Raymond 1992). This indicates that a different set of considerations may be important for BPR in smaller firms.

Hammer & Champy (1994) provide the only recommendations on attempting BPR specifically for the small business. They define the purpose of reengineering as organising the company so it can best create value for its customers. The emphasis is on the customer and results rather than tasks and procedures. Hammer claims any company can adhere to the principles of reengineering regardless of size, and a small firm merely needs to ensure that they do not fall into the same traps as larger companies as they expand. Rather than breaking the business up into functions as it grows, Hammer & Champy recommend keeping the focus on processes and continual improvement of those processes.

On the other hand, Barrier (1994) takes the simple meaning of BPR, (i.e. putting the business through radical change), and claims that it is applicable to small businesses as well. His discussion includes comments from both Hammer and Champy regarding the small organization. As larger businesses reengineer and become flexible enough to enter smaller markets, small companies may find that their niche becomes increasingly vulnerable, and need to become equally effective. Barrier suggests that small firms may not find re-engineering as far-reaching and traumatic as large firms because the bureaucracy and inefficiency is not as ingrained. Champy's guide-lines for small firms considering reengineering, as quoted by Barrier, are:

* Look at the company itself, and how it is operated;

* Look at the market, for impeding threats and also at competitors. Consider how the business could change the basis of competition and protect its niche;

* Don't focus on cost reduction alone, as capability can suffer. Focus on the customer instead and how the processes can be organised to best serve that customer;

* Use the small size of the company as an asset. Smaller organizations can change more quickly on a smaller scale.

These guide-lines, while explicitly targeted at the small firm, are very general in their recommendations and do not offer assistance to the same depth as that available to the larger organization. Furthermore, no kind of empirical basis or subsequent verification of the usefulness of these principles is given. It would appear to be more beneficial to empirically determine the applicability of existing principles and methods for implementation to the small firm, before 'reinventing the wheel' by developing new principles for the small organization.