What is Business Process Reengineering (BPR)?
Business Process Reengineering (BPR) is the practice of reengineering your core business processes to achieve dramatic improvements in productivity, quality and cost efficiency.
Business Process Reengineering is synonymous with business process redesign, business transformation, or business process change management.
Business Process Reengineering Principles
The prime focus of Business Process Reengineering is reflected in two key areas:
- using modern technology to foster the implementation of data dissemination and decision-making, and,
- changing from a functional organizational structure into a cross-functional team.
Business Process Reengineering commences with a high-level assessment of the organization’s mission, strategic goals, and customer needs.
According to Thomas Davenport, 1990, a BPR proponent, “a business process is a set of logically related tasks accomplished to achieve a determined business outcome.” Reengineering emphasizes a holistic focus on business objectives and how processes relate to them, to contribute to the overall organizational goals.
Within the organization, business processes can be broken down into sub-processes that are carried out by various specialized functional areas. Optimizing the performance of these sub-processes will bring some benefits. However, dramatic improvements cannot be realized when the focus is on sub-processes, while the original process is inefficient and ineffective.
( Footnote: Business Process Re-engineering Assessment Guide, United States General Accounting Office, May 1997.)
Business Process Reengineering Steps:
1. Identify Business Processes
This step involves identifying your current processes, workflows, business rules and business technology in order to map your business activities. Furthermore, recognizing key stakeholders will enable you to communicate more effectively the need for change.
2. Review and Analyze Identified Processes
Review and analysis of business processes allow you to choose those requiring improvements by identifying gaps and root causes. The analysis should be performed in the context of enhancing operational efficiency and organizational effectiveness toward your strategic business goals and objectives.
3. Design the Required Changes and Enhancements
To support your organizational goals effectively and efficiently and become leaner, this step will assist you to design any required changes and enhancements for those identified business processes that have the most impact on your strategic goals.
4. Test and Implement
Finally, implement the identified reengineering processes, monitor performance and modify accordingly to performance improvements.
Success Factors of Business Process Reengineering
Support from multiple parties, a broad spectrum of experts and functional areas within the organization is essential when it comes to implementing the reengineering.
Organization-wide commitment is a top-down endeavor and involves support from senior leadership, buy-in from the involved stakeholders, a dedicated Business Process Reengineering team and resource allocation. (Footnote: Covert, 1997)
A Dedicated Team
Once an organization-wide commitment is achieved, it is essential to designate a Business Process Reengineering team responsible for overall communication. Choosing team members who share complementary skills and knowledge depends on their demonstrated motivation, competency and credibility within the organization
A vital factor in successful Business Process Reengineering implementation is performing a thorough business needs analysis. Evaluation by the dedicated team, of current business processes to determine those requiring reengineering, avoids the trap to overlook priorities that will lead to improvement.
Suitable IT Structure and Supporting Technology
Another important factor in the success of any Business Process Reengineering effort is a reassessment of adequate IT infrastructure and supporting technology platforms. Factors related to IT infrastructure have been increasingly considered by many researchers and practitioners as a vital component of successful the r
In another well-known example, the Ford motor company was able to decrease its headcount in the procurement department by 75 percent by using IT in conjunction with process r
Effective Change Management
One of the most overlooked barriers to successful Business Process Reengineering project implementation is resistance to the changes provided by the Reengineering effort. Most projects underestimate the cultural effect of major process and structural change and as a result, do not achieve the full potential of their change effort. Many people fail to understand that change is not an event, but rather a management technique.
Successful Process Reengineering involves managing the changes in people behavior and culture, processes, and technology to adapt to the improvements yielded by Business Process Reengineering.
Ongoing Continuous Improvements:
Business process reengineering is an ongoing process and should be considered as an improvement strategy that enables an organization to adapt to strategic business processes rather than traditional functional directions.