Batanova T. V.

Odessa National Economic University, Ukraine

THE CONCEPT OF THE INTEGRATION OF REENGINEERING AND BALANCED SCORECARD OF ENTERPRISE ACTIVITY

The complicated socio-economic situation, which has prevailed in Ukraine recently due to the crisis in all spheres of economic activity, creates necessity of introduction new methods of national enterprises management and the evaluation of the efficiency of their strategies’ implementation.

Primarily, it was caused by the fact, that the largest specific weight of enterprises did not evaluate the possibility of such a risk and, thus, the enterprises were unable to efficiently respond to the situation, which happened. There is no doubt, that every risk, which may exist for an enterprise, should be considered; the consequences of its impact on the financial state of enterprise should be assessed; and effective measures to quickly respond to the threat should be developed.

The works of famous Ukrainian and foreign researchers deal with the problems of improving business management, including such scholars as: D. Aaker, L. Abalkin, R. Anderson, O. Amosha, M. Afanasiev, M. Badau, S. Binder, P.  Bunich, A. Galchynskiy, V. Geyets, M. Zveryakov, B. Kvasnyuk, A. Kovalev, V. Lanovyy, V. Osipov, G. Osovskf, V. Nemtsov, A. Thompson, S. Usyk, M. Chumachenko and others. Methodological and practical aspects of the development and implementation of a balanced scorecard of enterprise activity are investigated and deepened in the works of foreign and national scientists: A. Gershun, Yu. Nefedyeva, I. Ivakina, R. Kaplan, D. Norton, P. Niven, S. Obukhivskyy, P. Horvath, H. Fridag, V. Schmidt and others.

Modern approaches to the theoretical background of scientific aspects and methodological approaches to practical implementation of the business process reengineering are researched and developed by famous foreign scientists: M. Hammer, J. Champy, T. Davenport, M. Robson, F. Ullah, E. Frese, F. Hill and J. Harrington, G. Smith, P. Finger and other researchers.

 From the whole scope of problems, which could be discussed in this context in the scientific research, a group of problems can be highlighted, which reflects a process of enterprises’ search for optimal forms with the aim of creating and preserving industrial potential during the difficult period of overcoming the crisis. We believe that the solution to the problem of restructuring national enterprises and the formation of new economic institutions on the basis of strategic planning and management can be found through the revolutionary transformation of organizational structure of enterprises with the help of such tools as reengineering and a balanced scorecard of enterprise activity, which, reasonably, belongs to the up-to-date methods of enterprises’ strategic management.

Since the beginning of 1980s in the USA and other developed countries there has happened a regrouping in the relationship between the seller and the buyer: now consumers inform the suppliers about their desires, methods, and terms of products delivery. They expect the products, which completely meet their needs and they want to receive these products according to the delivery schedule. The combination of the factors, which operate separately and all together, has led to the transition of the influence on the market from the producer to the consumer. Another reason for this market transformation was the access to information through the new technologies of communication, which became much easier.

Thus, consumer needs, high competition and drastic changes of communication technologies have created the innovative conditions for enterprises activity. Enterprises, which are outdated or working with outdated approaches to the management and organization of production, are forced to move from functional-vertical structures to the modern organization of production on the basis of process structures, to new methods of management and building a management system based on more advanced methods of implementing strategic management, that is based on a balanced scorecard (BSC) and reengineering.

The first direction foresees the use of BSC as a strategic management and assessment system that transforms the mission and strategy of an organization in a balanced complex of integrated operational indicators. BSC methodology is a mechanism of consecutive informing the staff about company’s strategic objectives and monitoring their achievement through the so-called key performance indicators (KRI), that could essentially measure the achievement of objectives, and also characterize the efficiency of business processes and the work of each individual employee [1, p. 27].

The use of BSC allows managers to run such processes as translating the vision of the strategy, bringing it to all levels of the management system, business planning and resource allocation, feedback, training and current monitoring the implementation of the strategy. The essence of balanced scorecard consists in the fact that an enterprise, which has implemented this technology, obtains, as a result, «a coordinate system» of actions in accordance with the strategy at all levels of management [2, p. 19]. The Balanced Scorecard (BSC) complements a system of financial parameters of the past that has already occurred, with the system, which estimates prospects. The objectives and indicators of this system are formed according to the outlook and strategies of each particular enterprise. Enterprise activity is considered according to four criteria: financial, customer relationship, internal business processes, and also staff learning and development. All resources and also staff through a motivation system, closely linked to KPI, are oriented on a company strategy; and they aim at its achievement through a system of clearly-set goals and objectives within four main projections: finance, marketing, internal business processes, learning and growth.

The second direction, which is a method of the revolutionary transformation of enterprise activity, a radical restructuring of its business, was named a business process reengineering (Business Process Reengineering – BPR). BPR provides for the creation of a cardinally new and more efficient business processes without considering the background that was before. The cardinal changes that occur in the enterprise through reengineering, allows to achieve spasmodic growth of efficiency and to provide for the change of the old system of management and the production of a new system.

BPR implements a large number of tools and methods inside a conventional structure, but its focus is primarily directed at combining functions at macro organizational level. BPR takes advantage of not only computer technologies, but also technologies of changes and employees management to enable faster and more efficiently manage enterprises than before. BPR is a tool, which is specially designed to help under circumstances, which require wide scale changes, which cannot be achieved with the help of the traditional scheme. It is a tool that can be used by managers for a quick and radical growth in the efficiency of their enterprises [3, p. 53].

R. Manhanelli and M. Klein determine the interrelation of business processes with the strategic objectives of a company and offer to consider the reengineering as a strategy of improving competitiveness through the introduction of new information technologies [4, p. 14].

M. Robson and F. Ullah mention that reengineering of business processes is a tool, which a specially designed to help under circumstances, that require wide scale changes, which cannot be achieved with the help of the traditional scheme.

The combination and integration of reengineering and balanced scorecard will allow to drastically change the structure and enterprise management, to increase its competitiveness and reduce the probability of bankruptcy.

To sum up, the following conclusions can be made:

1) the proposals concerning changes in the management of enterprises should be based on theoretical background of their expediency and necessity;

2) one of these directions of scientific background is a macroeconomic analysis of the tendencies of enterprises development, that, with such an approach, is an essential precondition for practical measures to improving the management system of specific enterprises;

3) the terminology and the essence of process management, to which I. O. Kuznetsova draws attention, require further investigations [6, p. 219-220].

4) a perspective direction of the implementation of structural transformation in the management of national enterprises is an integration of reengineering and balanced scorecard.

List of references:

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