Welcome to our BPR (Business Process Reengineering) ultimate guide! Business Process Reengineering (BPR) is a powerful management approach that helps organizations streamline their business processes and increase efficiencies. This guide will provide you with the tools and information needed to get started with BPR and fully use its process automation capabilities. Here are three reasons why BPR is beneficial for your organization:
- BPR analyzes workflows across business functions and eliminates non-value-adding tasks, ultimately optimizing end-to-end processes
- It enhances efficiency without sacrificing quality by automating routine activities by improving the way work is done.
- BPR allows businesses to save on costs while improving customer satisfaction levels.
By following this guide, you will be well-equipped to make BPR work for your organization. Read on to get started!
What is business process reengineering (BPR)?
Business Process Reengineering (BPR) is a management approach that involves redesigning processes and tasks radically. It is also known as business transformation, business process change management, or business process redesign. It is different from business process improvement. In 1990, Michael Hammer introduced the concept of BPR in a Harvard Business Review article, “Reengineering Work: Don’t Automate, Obliterate.” In this article, Michael Hammer argued that existing PROCESSES for improving performance were inadequate. Companies must re-evaluate their processes and utilize technology to create new processes supporting business strategy. Business Process Reengineering involves techniques like process mining, process mapping, process simulation, and process automation to identify and improve processes. It also involves rethinking third-party roles or outsourcing to optimize the end-to-end process.
How does business process reengineering work?
Business Process Reengineering aims to significantly enhance quality, productivity, organization culture, and customer satisfaction. And the process begins with assessing the work required to deliver customer value. Michael Hammer and James Champy proposed seven principles for business process reengineering in their bestseller “Reengineering the Corporation: A Manifesto for Business Revolution.” The principles include:
- organizing around outcomes rather than tasks
- identifying all processes and prioritizing them based on redesign urgency
- integrating information processing into real work
- treating geographically dispersed resources as centralized
- linking parallel activities in the workflow
- putting the decision point where work is performed
- capturing information once and at the source.
How Is Business Process Reengineering Implemented?
Business process redesign or reengineering is a significant change initiative. It has been popular in the business community since the 1990s. Companies often consider BPR for a total overhaul. Different experts have offered their approaches to implementing radical change. Thomas Davenport, a professor at Babson College, collaborated with Hammer before developing his approach to BPR. He has used the term “business process redesign” and emphasized the value of prototypes, simulations, and tests. In his book, “The New Industrial Engineering: Information Technology and Business Process Redesign,” co-written with James Short, Davenport laid out a five-step approach to radically changing workflow. The steps are as follows:
- Formulate the business vision and process goals.
- Determine the processes that require redesigning.
- Evaluate and quantify current processes.
- Identify IT tools and techniques to enhance the process.
- Develop and construct a prototype of the new approach.
Another business process management expert Bhudeb Chakravarti developed a seven-step framework called INSPIRE. The INSPIRE framework is a modified version of the five-step process that includes the following seven steps:
- Launching the BPR project and establishing the business case.
- Obtaining approval from top management to commence the project.
- Choosing the processes that require reengineering.
- Planning the project’s activities and kpis.
- Analyzing the techniques to identify potential issues.
- Redesigning the selected methodology to enhance performance.
- Ensuring success by closely monitoring progress.
BPR is not just about improving individual processes but rather involves a comprehensive analysis and redesign of the entire business operations, from end to end, intending to achieve significant improvements in efficiency, productivity, and competitiveness. Therefore, companies may need to rethink the current state of their entire business model and customer needs when embarking on BPR. Before driving business transformation and dramatic improvement initiatives like automation or standardization, the stakeholders must know the purpose of undertaking bpm. The goal of these principles is to achieve significant improvements in quality, time management, speed, and profitability. Furthermore, to keep bpr initiatives fair, transparent, and efficient, stakeholders need to have a good understanding of the critical steps involved in it.
BPR team member roles
Business Process Reengineering (BPR) involves designing a comprehensive process model for the organization. And so, BPR implementation requires a significant commitment from top executives, and it typically uses a team approach that reflects a top-down management philosophy. The team consists of a team leader, a process owner, a reengineering team, a steering committee, and a reengineering czar. The team leader role in BPR is a senior executive responsible for authorizing and overseeing the reengineering effort. The process owner is a senior-level manager responsible for managing a specific business process and assembling a team to re-engineer it. A reengineering team consists of insiders and outsiders who analyze and redesign the process. A steering committee is a group of senior managers who support restructuring and streamlining activities. They settle conflicts and assist process owners in prioritizing decisions and enhancing performance. The reengineering czar coordinates ongoing activities and develops techniques and tools to reengineer workflow. By having these team roles in place, BPR implementation can be successful. And it will lead to improvements in core business processes and competitive advantage.
What Are the Common Uses for Business Process Reengineering?
Various companies have adopted the idea of leveraging technology to achieve radical change. The media highlighted success stories of BPR in multiple companies like Union Carbide, Ford Motor Co., Taco Bell, GTE, and Bell Atlantic. As a result, consulting firms and software vendors, including SAP, Oracle, and PeopleSoft, among others, also embraced the trend. Businesses employ Business Process Reengineering to enhance the effectiveness of critical processes that impact customers. The following are the most common reasons for approaching Business Process Reengineering:
- Enhancing efficiency and productivity: Reengineering efforts help a company remove unproductive tasks, minimize cycle times, and position work in the most optimal and efficient environment.
- Streamlining teams: BPR implementation decreases the requirement for multiple management layers, expedites information flow, and prevents errors and redundancies due to multiple handoffs.
- Improving quality: Business process improvement involves standardizing and automating work processes, reducing errors, and enabling employees to focus on higher-value tasks. Which, in turn, reduces the fragmentation of work and establishes clear ownership of the processes.
Examples of business process reengineering
Many companies use business process reengineering (BPR) to improve their processes and achieve high cost and time savings. They identify inefficiencies and use technology and process improvements to streamline and optimize their operations. Additionally, they focus on improving customer service and reducing turnaround times, which results in increased efficiency and productivity. The following companies have used BPR to improve processes and save costs and time. Ford Motor Company significantly transformed its accounts payable (AP) process by shifting towards digital invoicing. It introduced an online database that monitored the entire procedure from purchase order placement to delivery and then executed payment automatically. With this shift, the company no longer required its employees to devote time to matching paper purchase orders with invoices and receiving documents. Thus, by leveraging technology to rethink its purchase process, the automotive giant reduced its AP department’s workforce by 75%. Duke Power Co. underwent business process reengineering in the 1990s to prepare for power deregulation. The reengineering process involved discovering inefficiencies and inconsistencies across Duke’s 13 geographic areas.
- Process owners were designated,
- standard measurements were developed, and
- “scorecards” were introduced
Which enabled employees to monitor their contributions towards Duke’s improved earnings and service quality business objectives. The result was reduced costs and enhanced customer service. IBM Credit Corp. used BPR to reduce the turnaround time for issuing credit from a week or more to a matter of hours. The process involved analyzing their credit issuance process from application to approval. The new turnaround time was only 90 minutes. Earlier, passing forms from one specialist department to another took time. To address this inefficiency, IBM Credit Corp. replaced specialists with generalists known as “deal structurers,” who used expert systems to manage the entire process from start to finish. Sanira Engineering, a medium-sized design engineering company, approached Leadership Tribe to help them with their business process reengineering efforts. Sanira’s leadership team struggled to meet their operational and business outcomes, and they knew they needed to make changes to prepare for business agility. Leadership Tribe thoroughly analyzed Sanira’s operations, revealing several key issues holding the company back. Some of the problems identified include:
- Poor communication between departments, which led to delays and rework
- Inefficient workflows, which caused bottlenecks and wasted time
- Inadequate training and development for staff, which resulted in low productivity and quality issues
To address these issues, Leadership Tribe developed a comprehensive plan for business process reengineering, which included the following steps:
- Mapping current processes: Leadership Tribe worked with Sanira’s team to map out their existing business processes, from order intake to delivery, to identify inefficiencies and areas for improvement.
- Defining new processes: Based on the analysis of the current operations, Leadership Tribe developed new, streamlined, more efficient, and effective processes.
- Implementing changes: Leadership Tribe worked with Sanira’s team to implement the new processes, including providing training and support to staff.
- Monitoring and measuring performance: Leadership Tribe helped Sanira to monitor and measure their performance, including developing metrics and KPIs to track progress.
The results of the business process reengineering efforts were significant for Sanira. By improving their processes, they were able to:
- Increase their production capacity by 20%
- Improve their quality control, resulting in fewer defects and customer complaints
- Reduce their lead time by 30%
- Increase their revenue by 15%
- Improve employee morale and engagement
Sanira’s leadership team was delighted with the results and praised Leadership Tribe for their expertise and support. The business process reengineering efforts helped Sanira to achieve its goals and position them for future growth and success.
BPR and digital transformation
BPR’s focus on radical change complements process improvement approaches emphasizing incremental change, continuous improvement, and total quality management by building business agility. The advances in new technologies, such as the internet of things, cloud, and AI, have led to BPR’s popularity as a framework for digital transformation.
The business Process Reengineering process can enhance critical operations that impact customers. It supports increasing efficiency and productivity, streamlining teams, and improving quality. This leads to benefits such as removing unproductive tasks, minimizing cycle times, positioning work optimally, decreasing management layers, expediting information flow, reducing errors, and improving customer satisfaction and business performance. While BPR involves a comprehensive analysis and redesign of the entire business model, it is important to note that there are several approaches to implementing BPR, each with its own benefits and limitations. At Leadership Tribe, we offer a range of services that can help businesses improve their operations and achieve their goals. If you’re interested in reengineering your business processes and embracing agile methodologies, our Agile Transformation service may be the best fit for your needs. Contact us today or visit our Agile Transformation Services page to learn more about how we can help your business achieve its full potential.