BUSINESS PROCESS REENGINEERING

Business Process Re-engineering (BPR) is a management strategy aimed at improving

organizational performance by re-designing and optimizing business processes. BPR is a
systematic and radical approach to change, focused on transforming and streamlining core
business processes to achieve dramatic improvements in quality, efficiency, and customer
satisfaction (Michael Hammer).
BPR involves a comprehensive analysis of existing business processes, identifying
inefficiencies, bottlenecks, and waste, and then developing new and improved processes that
align with the organization’s strategic objectives.
Its objective to eliminate unnecessary steps, reduce cycle time, and improve overall efficiency,
while maximizing the value delivered to customers.
It requires a fundamental shift in the way an organization thinks about its business processes,
emphasizing a customer-centric approach to process design and management. It involves a
collaborative and cross-functional approach, involving stakeholders from across the
organization to ensure that process improvements are aligned with the organization’s strategic
objectives.
Benefits accrued may be reduced costs, increased productivity, improved quality, faster time-
to-market, and greater customer satisfaction.
However, implementing BPR can also be a complex and challenging process, requiring
significant investment in resources, time, and expertise.
Business process re-engineering is not just a change, but actually it is a dramatic change and
dramatic improvements. This is only achieved through overhaul the organization structures,
job descriptions, performance management, training and the most importantly, the use of IT
i.e. Information Technology.
BPR projects have failed sometimes to meet high expectations. Many unsuccessful BPR
attempts are due to the confusion surrounding BPR and how it should be performed. It becomes
the process of trial and error.
Phases of BPR:
According to Peter F. Drucker,” Re-engineering is new, and it has to be done.” There are 7
different phases for BPR. All the projects for BPR begin with the most critical requirement i.e.,
communication throughout the organization.
1. Begin organizational change.
2. Build the re-engineering organization.
3. Identify BPR opportunities.
4. Understand the existing process.
5. Reengineer the process
6. Blueprint the new business system.
7. Perform the transformation.
Objectives of BPR:
1. To dramatically reduce cost.
2. To reduce time requirements.
3. To improve customer services dramatically.
4. To reinvent the basic rules of the business.
5. Customer satisfaction.
6. Organizational learning.

Challenges faced by BPR process:

1. Resistance
2. Tradition
3. Time requirements
4. Cost
5. Job losses

Advantages of BPR:

• Total customer satisfaction

Customer needs are a priority that gives a clear vision to the organization. The customers when
provided with a better service that matches their expectations, thus building loyalty in them.

The design and delivery of the business process are redone to match the performance with the
expectation of the customer.

• Cost Advantage
As the whole process is remodelled, unnecessary costs are eliminated through the value chain.
It reduces the cost and cycle time by eliminating the unproductive activities and organizing the
teams. It has radically improved the effectiveness and efficiency of operations.

• Competitive Advantage

Business process re-engineering helps an organization to focus on its core competencies, which
gives it a competitive advantage. These core values are difficult for the competitors to copy as
it becomes the firm’s signature trait. Gaining a competitive advantage gives firm excellence in
the broader business process.

• Creates value for customers

In the re-engineering process, a company strategically puts relevant activities to design,
produce, market, and support its product to provide customer value. The firm analyses value-
creating activity and compares it with the competitors to find ways to improve it.

• Clear Business Vision

Business process re-engineering gives a firm an explicit vision that aligns its goals and
objectives with that of customer’s needs, wants, and interests.

This way an organization acquires some brand identity and an ideal structure to target the
customer.

Disadvantages of BPR

• It depends on various factors like size and availability of resources. So, it will not fit
for every business.
• It is not capable of providing an immediate resolution.
• While Business Process Re-engineering (BPR) can have many potential benefits,
there are also several disadvantages that organizations should consider before
embarking on a BPR initiative. Some of the key disadvantages of BPR include:
• High costs: Implementing BPR can be a costly and time-consuming process, requiring
significant investment in resources, including technology, training, and consulting
fees. This can be a significant barrier for small or cash-strapped organizations.
• Resistance to change: Implementing BPR can be a difficult and complex process that
requires significant changes to an organization’s culture, processes, and people.
Employees may resist the changes, especially if they feel their job security is at risk,
leading to decreased morale and increased turnover.
• Risk of failure: BPR is a high-risk strategy that can fail if not implemented properly.
The failure to gain employee support, lack of a clear strategy, or poor planning can
all lead to a BPR initiative’s failure.
• Disruption to operations: Implementing BPR can disrupt the day-to-day operations of
the organization, leading to decreased productivity, customer dissatisfaction, and
revenue loss.

Principles of BPR
• Work should be designed such that it is result-oriented and not process-oriented
The first principle states that the tasks performed by different people can be combined into
one specialized task. Taking an example, the redesign of a manufacturing company with
separate divisions performing different functions in a sequence.
One determines the customer requirement the other passes in the information, and the third
convey this to various plants and warehouses.
These sequential based activities led to errors, rework, and delays. When a company re-
engineers, it eliminates the assembly line approach.

• Involve those people in the process who face the output

This principle states that the work should be done by the individual getting the output, i.e.,
the consumer. Today, this can be observed as the “self-service”.
For example, if a customer is facing any problem, he has to fill in the data himself instead of
any office doing it for him. It pushes the work to the consumer.

• Merging data collection and processing units

This principle has matured and is visible in the concept, division of labour. This means the
data handling must be done by the same person who is collecting the data. This reduces the
number of errors by eliminating external contact for a process.
For example, a company has a structure wherein one department collects the information
while the other records it. Here, the shared database will have many errors while translating
the information from one department to another.

• Shared databases to interconnect dispersed departments

The advances in information technology allow the company to connect separate units that are
geographically dispersed by using a shared database.
Centralized databases provide economies of scale in addition to providing flexibility and
quick responses to the customers as there are better agreements between the vendors.

• Bridging the processes which are running on similar lines

According to Hammer, the processes of the activities must be integrated rather than the end
results. The parallel functions must be coordinated using communication networks, shared
databases.
These parallel activities must be linked continuously and coordinated at the process
execution. This will eliminate the high costs and delays in the outcome of the process.

• Decision making should also be a part of the work performed

There must be decision aiding-technology to cut unnecessary controls and to keep a check in
the process. Hammer states the decision should be made by the person who is doing the work.
The processes can be improved by empowering the authority of the resource with the
responsibility to make the decision and improve the workflow.
This is possible with an educated and knowledgeable workforce

• Capture data at its point of origins

This approach saves costs by avoiding costly re-entries and invalid data entries. It is the
principle of capturing information only once at the source where it was created.
This eliminates the difficulty of transmitting the information, and it doesn’t have to be
recorded at different locations at various times.

Steps of Business Process Re-engineering (BPR)

The 4 main phases of a business process re-engineering initiative are Diagnosis, Analysis and
evaluation, re-engineering, and Evaluation. This is a virtuous cycle that should restart over and
over.

• Diagnosis of problems and opportunities

In this phase, the current business processes are analysed to identify areas that need
improvement. This involves gathering data on current processes (being they manual or
automated in a BPM Suite), understanding how they work, and identifying areas of
inefficiency, redundancy, or waste.
• Analysis and evaluation of the existing process
Once the diagnosis phase is complete, the analysis phase begins. During this phase, the data
collected in the diagnosis phase is analysed to identify the root causes of the problems in the
current processes. The analysis phase involves breaking down the current processes into their
component parts, identifying process bottlenecks, and analysing the flow of work through the
organization. If the process performance is being measured using KPIs, then they are a key
input to detect where the problems are.
• Process reengineering and redesign
The re-engineering phase involves redesigning the business processes to eliminate
inefficiencies, streamline workflows, and reduce costs. This may involve reorganizing work
activities, introducing new technology, changing job responsibilities, and modifying business
rules and policies.
No-code technologies play a key role here, allowing processes to be quickly modeled, tested,
and deployed in production. Avoiding coding and complex configurations in the software to
automate processes significantly reduces the time consumed, and the associated costs and
motivates the team by showing tangible results quickly.
To redesign the process, you will need a graphical and formal representation. It will be useful
to discuss the process with your team and share it with stakeholders. Whether you use the
worldwide standard, or another, a clear map of the new process will be available, to understand
and discuss it.
Finally, you may send the model to a process engine to run it. This is the implementation step
of the new redesigned and automated process.
BPR Methodologies
There are few BPR methodologies that have been developed over the years. The main reasons
why there are many methodologies for reengineering business process are:
• BPR is a complex and multifaceted discipline that involves the redesign of business
processes that can be very complex. Moreover, these processes can involve multiple
departments, business units, customers, suppliers, machines, and IT systems. Therefore,
there are different approaches, each with its own tools, techniques, and strategies.
• Different industries have different needs. For example, a BPR methodology that works
well in the manufacturing industry may not be suitable for a public hospital. Therefore,
different industries have developed their own BPR methodologies tailored to their
specific needs.
• BPR has evolved over time, with new methodologies and approaches emerging as
practitioners have gained more experience and expertise. As a result, there are many
different BPR methodologies that reflect this evolution and incorporate new tools and
techniques.
• Different experts have different points of view: BPR has been studied and practiced by
a variety of experts, including management consultants, academics, and business
leaders. Each of these groups may have their own view on how best to approach BPR,
leading to the development of different methodologies.
The following is a description of some of the main and most widespread process
reengineering methodologies.
• Hammer and Champy’s methodology
This methodology was introduced by James Champy and Michael Hammer in their 1993 book,
“Reengineering the Corporation.” It involves a radical redesign of business processes that is
driven by a focus on customer needs and supported by new technology.
• The Davenport Methodology
This methodology was developed by Thomas Davenport in his 1993 book, “Process
Innovation.” It emphasizes the need for a thorough understanding of the current processes, as
well as the use of analytical tools to identify areas for improvement.
• Manganelli and Klein’s methodology
This methodology was introduced by Ron Manganelli and Michael Klein in their 1994 book,
“The Reengineering Handbook.” It emphasizes the importance of involving employees in the
reengineering business processes, as well as the need for strong leadership and a clear vision
for the organization’s future.
• Kodak’s methodology
This methodology was developed by Eastman Kodak Company in the 1990s as part of its
successful reengineering efforts. It involves a structured approach to process redesign that
includes identifying customer needs, benchmarking against competitors, and using cross-
functional teams to redesign processes.
• Other methodologies
BPR methodologies include the Six Sigma approach, the Lean methodology, and Total Quality
Management (TQM). Each of these methodologies has its own unique approach and tools for
achieving process improvement and organizational transformation.