Effect of Business Process Reengineering on Performance of Juhudi Kilimo Limited Kenya

Abstract

Juhudi Kilimo Limited is one of the non-deposit taking microfinance companies operating in Kenya. The company reported consistent decline in performance from 2009 to 2014. It is on this account that the Board in 2015 decided to terminate the services of the then Chief Executive Officer and Chief Operations Officer and hire a new Chief Executive Officer with a mandate to initiate business process reengineering and transform the organization to profitability. The study was directed by one objective that is identifying business process reengineering strategies at Juhudi Kilimo and establishing the effect of business process reengineering on performance in the organization. The study was anchored on Resource Based View Theory and McKinsey’s 7 Forces Model. This study used descriptive research design to identify and describe the effects of business process reengineering on performance. The study collected primary data using interview guide from six departmental heads and three regional managers at the branch networks who were critical during business process reengineering. Secondary data however was collected from the company financial reporting’s each year from the time it began operations. Primary data was analyzed using content analysis and similar themes were grouped together to obtain some commonalities for reporting purposes. The key findings established that prior to implementation of the changes several factors contributed to performance decline. These factors included staff inefficiency, poor business strategy, weak internal controls and lack of accountability and responsibility due to lack of proper alignment of duties in the organization structure. After implementation of BPR, the findings established that customer perception of the company changed, they began giving referrals and coming for repeat business. Productivity of staffs increased and jobs were properly aligned with the microfinance objectives of Growth, Sustainability and Impact. Positive feedback necessitated the development of new products and sales increased which boosted Return on Assets and Return on Equity. The study concludes that performance of an organization depends on the type and kind of top leadership in the organization who are willing to drive change initiatives to improve on performance. Most employees are ready to go the extra mile so long as a leader is able to direct them towards the envisaged destiny. The study recommends that BPR however expensive, the process is necessary for underperforming firms though careful consideration is required to avoid instances where staffs are discouraged during the change process. Effective change requires proper channels of communication to be established by the top management since this would ensure fears and worries of employees are reduced during BPR implementation.