Business Process Reengineering is the radical reorganization of essential business processes with the goal of significantly increasing productivity, cycle time, and quality.
Businesses that engage in Business Process Reengineering (BPR) begin with a blank piece of paper and reevaluate existing processes in order to provide value to the client. They frequently build a better value system that places a higher premium on client demands.
The main objective of BPR is to achieve business process improvement. In two critical areas, businesses decrease organizational levels and remove ineffective operations. They begin by reorganizing functional organizations into cross-functional teams. Second, they leverage technology to enhance the distribution of data and decision-making.
What is business process reengineering?
Business process reengineering is the process of fundamentally redesigning business processes in order to produce substantial improvements in important areas such as quality, production, cost, service, and speed. Business process reengineering (BPR) attempts to significantly reduce business expenses and process redundancies.
Business process reengineering is a critical component of the agendas of several big and small businesses in a variety of industries. Manufacturing and banking/finance industries are being the most prominent ones. It enables businesses to evaluate their business processes objectively in order to determine how they might be redesigned to increase their efficiency.
Importance of business process reengineering
Reengineering business processes is a strategy for improving an organization’s performance by improving the productivity and efficiency of current processes. It entails not just rethinking business processes, but also accompanying systems and organizational structures.
Typically, new market possibilities, increased competition, subpar financial performance, and declining market share all contribute to the need for business process redesign.
BPR entails the examination and change of numerous critical business components. These include the following: Organizational structure, processes, technology, company culture and general business process management.
Principles of business process reengineering
Now, let’s check the seven business process reengineering principles presented by Michael Hammer and James Champy. You can see those principles in many different business process reengineering examples.
- Organize your efforts around results rather than chores.
- Identify all of the organization’s processes ( business process mapping) and rank them according to the degree of urgency with which they should be redesigned.
- Integrate information processing tasks with the actual job that generates the data.
- Assume that geographically scattered resources are concentrated.
- Link parallel operations inside the pipeline, rather than simply combining their outcomes.
- Place the decision point in the work area, and include control into the process.
- Data should be captured just once and at the source.
Five steps of business process reengineering (BPR)
To maintain a fair, transparent, and effective business process reengineering process, stakeholders must get a better knowledge of the critical processes involved. Although the procedure varies each organization, the following phases briefly outline the process:
Reengineering focuses on rebuilding the entire business process model, which includes fundamentally rethinking how organizational work should be performed in order to achieve substantial improvement. That is what distinguishes BPR from process improvement, which is primarily concerned with functional or incremental enhancements.
BPR is not always suitable, particularly if your processes merely require improvement and your business is not seeking radical change. In this scenario, you may choose to implement a process improvement approach.
The following are the business process reengineering steps:
Step 1: Define the vision and objectives of the ideal business process
This is the stage at which senior management must assess the company environment, including consumer expectations, competitors, and prospects. They should do this evaluation to accomplish a successful business process redesign. This assessment makes it easier to comprehend the need for change and establishes a clear vision for the company’s future direction. Then, in both qualitative and quantitative terms, define the objectives.
Step 2: Assemble a capable staff
The business process management team you choose must be cross-functional, since knowledge and perspectives from all levels of the company are required to reduce the likelihood of failure.
It should be the senior management’s job to have a clear vision of the tasks that must be completed and to give strategic direction to the referenced business process. Additionally, you must have an operational manager that is familiar with the ins and outs of the procedures. It is also critical to have the proper engineers with diverse knowledge from a variety of disciplines to round out the team.
At this point, it is critical to have clearly defined goals and tactics for a successful business process modification. Additionally, you may conduct surveys and competitor analysis to ascertain client requirements and evaluate the competition. You should convey the business case for change and the project’s objectives to the remaining staff at this stage. This will also encourage their comments and assist them in preparing for what is to come.
Step 3: Acquaint yourself for the redesign
This phase requires you to identify the business process applications that will be redesigned. Prioritizing such processes as those that are broken, cross-functional, value-adding, have bottlenecks, or have a large influence on the company, etc.
Once you’ve chosen them, draw them out using flowcharts or process maps and conduct a comprehensive analysis to find gaps, inefficiencies, and roadblocks.Then, after implementing the procedures, develop the appropriate KPIs to ensure that you achieved an improved process efficiency.
Step 4: Revise the core business processes
Redesign a new process that successfully overcomes the inefficiencies of the existing one while keeping your vision in mind. Business process redesign section will help you construct a future-state map that emphasizes the solutions you found for the current state process’s difficulties.
Step 5: Reengineer the business process approach
Once the business process model has been rebuilt, you may conduct a short test to see how well it performs by monitoring the key performance indicators (KPIs) you set previously. This enables you to make any required modifications to the procedure prior to rolling it out to the entire organization. If the new process (after implementation of business process reengineering) performs better than the present one, you may scale it up.
Benefits of business process re-engineering
BPR process is critical in enhancing organizational performance in terms of cost, quality, delivery, and staff productivity, among other metrics. Additionally, it assists process improvement efforts such as:
- Improve the overall efficiency of operations and procedures.
- Businesses are nimble in adapting to changing conditions and reducing operational expenditures.
- Increase the profitability of your business and maintain your competitive edge.
- Increase employee output.
- Enhance client happiness by continuously enhancing the quality of products and services.
Companies use BPR:
Total costs and cycle times are reduced
By removing inefficient tasks and the workers who do them, business process reengineering saves costs and cycle times. Team-based reorganization reduces managerial levels, speeds information flows, and eliminates mistakes and rework caused by numerous handoffs.
Enhanced the quality
By minimizing task fragmentation and creating clear ownership of processes, business process reengineering enhances quality. Workers take ownership of their production and acquire the ability to evaluate their performance based on timely feedback.
When should you consider business process redesign?
The issue with BPR is that it becomes more expensive to adopt as your organization grows larger. Five months after launch, a startup may perform a pivot that includes business process reengineering at a low cost.
However, as a company expands, totally reengineering its processes becomes more difficult and expensive. However, they are also the ones compelled to alter as a result of competition and unforeseen market developments.
Rather than being industry-specific, the demand for BPR is always motivated by the organization’s objectives. BPR is effective when organizations are forced to break the pattern and flip the script in order to accomplish high goals. Adopting any other process management solution would be tantamount to shifting the Titanic’s deck chairs.
Core questions before the BPR process
Before deciding to use business process reengineering for functional reshuffling, consider the following:
- Who are our clients? What are the values we are adding them?
- Are the existing methods producing the desired results?
- Are your business process applications in need of redefining or redesigning?
- Are the procedures aligned with the organization’s long-term mission and goals?
- How would we manage our current procedures if we were a new business?
If a business determines that it is functioning on complacent grounds, it must either find the appropriate remedy to solve the issue or explore BPR process for a complete makeover.
In conclusion, when implemented properly, business process reengineering’s unconventional approach leads to substantial improvements in cycle times, product quality, and productivity for a business.