Administrative Restructuring

Administrative restructuring is an effective step to improve the performance of your company/organization. Administrative restructuring helps to define internal processes and better define employee responsibilities within the institutional framework. This step can lead to increased productivity, reduced costs, and improved quality. One of the main reasons for administrative restructuring is changes occurring in the market or regulatory environment. If your company faces new challenges, administrative restructuring can help you adapt. Administrative restructuring can effectively improve employees’ communication and relationships between different departments in the company/organization. The process of administrative restructuring requires good planning, organization, and implementation. Your company situation must be studied, and weaknesses and task

 overlaps must be identified. Then the main tasks needed from each department must be set the administrative structure of the departments must be determined and vacancies must be identified. You must also ensure that the officials support this restructuring process. Administrative restructuring helps to improve the organization’s performance and achieve the desired goals better. In general, administrative restructuring helps to enhance the organization’s performance and achieve success and continuity in work.

One of the main reasons for administrative restructuring is changes in the market or the regulatory environment. If your company faces new challenges, administrative restructuring can help you adapt. It can also effectively improve communication between employees and relationships between different departments in the company.

The importance of administrative restructuring

Administrative restructuring is one of the basic steps organizations must take to achieve success and continuity in business. When you restructure the organization/company, you analyze all current processes and determine what is best to achieve the desired goals more effectively and efficiently. Administrative restructuring can increase profits and improve employee relationships, management, and customers. In addition, it helps improve the work environment and define roles and responsibilities, improve performance and productivity, and achieve the goals of the organization/company, which leads to improving internal processes and the quality of products or services provided. Administrative restructuring also helps identify the main priorities and goals of the organization/company, so the organization/company can focus its efforts on achieving these goals better. In general, administrative restructuring helps improve the institution’s performance and achieve the desired goals better, thus achieving success and work continuity.

The concept of reengineering and restructuring

Reengineering and restructuring are among the most important tools for organizations, companies, and institutions to improve and develop performance. They are similar in some aspects but differ in concept, mechanisms, and results.

Reengineering focuses on:

• Re-engineering and improving administrative processes.
• Improving efficiency and quality and reducing costs.
• Requires changes in processes, activities, and functions.
• Generally, it is used in institutions that are performing well and want to improve their performance.

Restructuring focuses on:

• Focuses on changing the structure of the institution and its administrative organization.
• Used to improve efficiency and quality, reduce costs, and overcome excess parts in the administrative structure.
• Requires changes in the administrative and organizational structure and functions.
• Usually, it is used in institutions that suffer from problems in their performance and need comprehensive restructuring.

Reengineering revolves around re-engineering and improving the administrative and organizational processes while restructuring focuses on changing the institution’s structure and administrative organization.

Types of Restructuring

The types vary according to the goal that the organization wants to achieve:

1. Operational Restructuring

This process aims to improve the organization’s operations and make them more efficient and effective, and this is done by redesigning operations, defining responsibilities, and training on new practices.

2. Human Resources Restructuring

This process aims to improve human resources management and make it more efficient and effective, and this is done by redesigning the organizational structure, defining responsibilities, and training on new practices.

3. Debt Restructuring

This process aims to improve the organization’s financial position and reduce debt by rescheduling, setting priorities, and reducing excess expenses.

4. Asset Restructuring

This process aims to improve the organization’s financial position and make it more efficient and effective, and this is done by reevaluating assets, disposing of excess assets, and setting priorities.

5. Corporate Restructuring

This process is carried out in a merger or acquisition and aims to improve the company’s financial position, define responsibilities, and improve operations.

6. Management Restructuring

This process aims to improve the organizational structure and make it more efficient and effective by redesigning, defining responsibilities, and training employees on new practices.

Administrative Restructuring Steps

• Analysis of the current situation (assessing financial, administrative, and organizational performance and identifying strengths and weaknesses in the current administrative structure).
• Defining goals and vision (determining the new goals and vision for the organization, company, or institution, such as increasing productivity, improving the quality of products or services, reducing costs, increasing market share, improving employee-customer relations, and other goals related to success and continuous development).
• Defining the new structure and functions (determining the number of departments and sections, and identifying the jobs required for each department).
• Defining new procedures and policies (recruitment, training, evaluation procedures, work policies, occupational safety and health, and quality and productivity policies).
• Implementing the plan (implementing the new plan for the administrative structure, whether by appointing the appropriate people for each job and clearly defining their tasks and responsibilities or training employees on new policies and procedures and providing them with the necessary support to carry out tasks efficiently and effectively, then preparing a system to monitor and evaluate performance to ensure that the new administrative structure is working properly and achieving the specified goals).

Challenges that may face the administrative restructuring process

• Resistance to change: Employees and leaders within the organization may face difficulty adapting to the new changes brought by the project, and leaders must communicate effectively with employees and clarify the objectives and expected benefits of the administrative restructuring process.
• Implementation challenges: Project leaders and supervisors must ensure that plans are implemented correctly and effectively, as they must clearly define tasks and responsibilities and prepare specific timetables for implementing each step in the project.
• Communication challenges: Leaders must clarify the objectives and expected benefits of the administrative restructuring process to all members of the organization and show the positive impact that the restructuring will have on the organization and employees.
• Resource challenges: The administrative restructuring process may require large financial and human resources, so leaders must ensure that these resources are available and allocated correctly to implement the project effectively.
• Time challenges: Leaders must set specific timetables for implementing each step in the process and ensure that plans are implemented quickly and effectively to achieve the best results in the shortest possible time.

What are the restructuring committees and their specializations?

A committee of experts, listed in the bankruptcy experts’ table in the economic courts will manage the restructuring process.

The restructuring committee will be empowered to reevaluate the company’s assets and restructure its debts (including debts owed to the government), increase its capital, increase internal cash flow, reduce expenses; and implement administrative restructuring.

The Restructuring Committee shall prepare a report to the competent judge within 3 months with its opinion on the reasons for the financial and company administrative turmoil and the effectiveness of entering into the restructuring and the proposed plan.

In all, the plan implementation shall not take more than 5 years.

For the restructuring plan to be binding, it must be signed by the stakeholders and ratified by the competent judge. The judge has the authority to appoint an assistant from the listed bankruptcy expert to assist the company in implementing the plan negotiating with the creditor and providing technical and advisory support.

The debtor may not submit a request for restructuring if the court has already deemed the debtor bankrupt or initiated preventive reconciliation procedures. Submitting a request for restructuring automatically leads to the retention of other requests until the restructuring request is decided. In addition, in the event of rejection, the debtor must wait at least three months from the ruling to submit another request.

The restructuring project in light of the requirements of digital transformation can be divided into four main areas, namely organizational structure, work process engineering, human resources, and technical capabilities, as follows:

First: Organizational structure

The following steps identify the most important proposed procedures for the restructuring project for administrative bodies, taking into account the differences in implementation methods according to the size and orientation of the facility:

1- Preparing a study of the existing organizational structure and determining how much its tasks, duties, and outputs align with the facility’s digital transformation goals.

2- Determining the digital gap between the efficiency of the current administrative apparatus in terms of performance and comparing it with the required performance.

3- Setting the interim goals for the organizational structure’s digital transformation plan, as long as the goals are connected and derived from the main objective of digital transformation.

4- Identifying weaknesses and overlaps in tasks between departments and sections, and exploring the possibility of creating new departments or merging departments with similar tasks and duties.

5- Studying the job descriptions for all current jobs in the facility (including vacant positions) and determining the possibility of developing or modifying them to align with digital transformation goals. Note that modifying the job description or changing jobs must be done based on achieving the objectives in the first place, considering the capabilities and skills of current employees.

6- Defining the tasks and duties for each newly created position to perform its specific mission in the job description associated with the digital goal.

7- After the new organizational structure is prepared, it must be implemented in stages to parallel the existing organization for a transitional period.

8- Set a plan to assess and analyze the new arrangement to measure performance against expectations and adjust it if needed.

Second: Business Process Engineering

The goal of business process engineering (or operations) is to reduce costs and raise the efficiency and quality of the processes to manage business within the facility. Given the importance of digital transformation, the facility must study the development of these procedures in a way that achieves its goals for digital transformation. The main focus of these procedures must be to focus on customer needs and beneficiary satisfaction and provide access to information for decision-makers with the required speed and quality (this may result in canceling some overlapping processes and focusing on processes that add qualitative value). To visualize the mechanism of this development, it is possible to liken these procedures to working on production lines, whereby the outputs of a specific function (such as reports, tasks, or procedures) are determined, which are inputs for the next function until the final product is completed, and the ultimate goal is to increase profits and reduce costs. Accordingly, detailed procedures are put in place that regulate the flow of work procedures and functional relationships based on the limits of the powers and tasks of each function, which will result in a complete documentary cycle dedicated to each function in the department or section and generally linked to the documentary cycles of other departments. It should be noted that re-engineering procedures may result in new changes in functional requirements or administrative systems at all administrative levels. These changes should be feedback and input in the administrative reorganization and structure update project.

Third: Human Resources

Human resources are the main element in managing change and enhancing the chances of the facility’s administrative restructuring project to keep pace with the requirements of the accelerating pace of digital transformation. When starting to plan for restructuring to keep pace with digital transformation, the first step that must be taken is to conduct a comprehensive assessment of current employees that includes the qualifications, experiences, skills, and work performed by each employee. A development plan is then prepared for the current human cadres as much as possible and the extent to which the experiences and qualifications of current employees are appropriate for the newly created organizational structure jobs related to digital transformation goals is determined. It should not be understood that the purpose of this assessment is to dispense with their services, but rather to determine employees’ capabilities and redistribute them, if necessary, in line with their qualifications and the new job requirements. If employees lack the needed qualifications or skills, this issue is resolved by organizing intensive courses and training programs that equip them for the newly established positions. This represents a great incentive for all employees to ensure work and cooperation within the organization to make the restructuring process successful and reduce resistance to this change. Maintaining human resources as much as possible is vital for the continuation of the facility’s activity with the required efficiency, given that attracting qualified personnel is a process that takes a lot of effort and time.

Fourth: Technical Capabilities

The success of the digital transformation project is mainly linked to an integrated technical system establishment that enables electronic dealing via technical means to complete procedures and work through various technical channels with high speed and quality. Since the goal here is to automate and complete all procedures and transactions electronically, whether, for customers or facility employees, this requires preparing and implementing programs, projects, and initiatives through which this technical system is established that serves customers and facility employees alike, and must achieve the following minimum general requirements:

1. Ensure that the technologies used are based on virtual systems and cloud computing technologies (private or public) to reduce operating costs and ensure the provision of service and technical support with the required speed and quality.

2. Providing access to all services around the clock and through any computer connected to the Internet and unifying the procedures for entering the facility’s electronic services to ensure that the service is provided at the required speed.

3. Providing electronic services through smart mobile device applications such as mobile phones and tablets.

4. Ensuring that systems are designed to facilitate electronic services for beneficiaries from the beginning of registration and account creation through navigation on the site to the end of the procedures and receipt of the required product.

5. Simplifying electronic services for beneficiaries from the beginning of registration and account creation through navigation on the site to the end of the procedures and receipt of the required product.

6. Unifying the procedures for registration and entry to the facility’s electronic services.

7. Preparing appropriate and high-quality digital content on the electronic portal and all related websites to be updated continuously.

8. Establishing a clean environment by promoting “paperless electronic services” so that the beneficiary does not have to print forms or requests, such as sending him a text message or email that is considered a reliable reference for review and communication later.

9. Implementing Enterprise Resource Planning to manage operations and organize the facility’s resources.

10. Ensuring the implementation of all information security standards and procedures (such as ISO 27001) to ensure data safety from threats and maintain the confidentiality of information.

11. Implementing comprehensive quality standards like the International Standard for IT Services Management (ISO 20000) to ensure effective management of technical services.

12. Finding a service that enables the facility to survey customer satisfaction with electronic services to improve the quality of services.

Reasons that prompt organizations to restructure

The problem of surplus labor results from previous policies, technological development, advanced technology replacement, and recessionary conditions.

Privatization: when the organization fails to achieve its goals despite having a distinct ability.

When the organization is considered a weak competitor in an industry.

When the organization suffers from inefficiency, low profitability, deteriorating employee morale, and pressure from shareholders to improve performance.

When the organization fails to take advantage of external opportunities minimize external threats, take advantage of internal strengths, and overcome internal weaknesses over time.

When an organization grows very rapidly, organization internal restructuring is needed.

Guidance for Consulting and Training

We have the knowledge and experience to help institutions and individuals comply with the requirements of the Saudi Standards and Quality Organization, the Food and Drug Authority, and other entities that impose legal and mandatory requirements in the Saudi market.

To develop and update organizational structures to achieve administrative development