Business processes' reengineering in the context of increasing the firm's value

Abstract

This article is devoted to the study of practical combination of the business processes' reengineering concept and the concept of value creation to increase the performance of the company and the possibility of an objective quantitative assessment of management decisions' quality. The article compares the management evaluation tools within the framework of business process reengineering and determines that the use of the VBM (Value Based Management) model will improve the results. The concept of creating value provides an objectively evaluation of the company's management actions and efforts aimed at maximizing the value of the company. The authors revealed the functional links of business processes when the product of an auxiliary process transfers its value to the final product of the main business process and, as a result, considering of every single business process as an independent business line, analyzing its profitability, efficiency, and "narrow" places that are not visible in the company as a whole, becomes possible. Therefore, the author's vision results in the following: business processes' reengineering is a powerful effective tool for introducing the concepts of cost management into practice. Being implemented within the framework of the reengineering project, the transformations fundamentally affect the performance of the entire company's management including its main component - financial management. Thus, the effectiveness of financial management while implementing a reengineering project can be objectively evaluated through the application of methods and tools developed within the framework of the value concept.