What is Business Process Reengineering (BPR)?
BPR stands for Business Process Re-engineering. It’s a way of gradually recreating the operations and organizational systems within the business. The aim is to increase business effectiveness by increasing agility, productivity and efficiency through your everyday workflow.
BPR includes the analysis and development of a variety of main market components. These include: Strategy – Organization – Process – Technology – Culture.
Think of it like rebuilding an old car and how you’ll have to replace many parts to get it running effectively again.
BPR includes three phases; analysis phase, design phase, and implementation phase.
When Can You use BPR?
Typically, reasons such as new market opportunities, growing rivalry, poor financial results and diminishing market share create the need for a redesign of the company process. It is a key element on the agenda of both big and small businesses in many markets, with manufacturing and banking/finance among the leading sectors.
Business Process Re-engineering is not a simple process and can be expensive, time intensive and risky.
What are the principles of BPR?
The seven re-engineering principles suggested by Michael Hammer and James Champy are as follows:
- Organize around the outcome, not the specific task.
- Identify and prioritize all processes of the company in order to overhaul the urgency
- Implement the data processing work into the actual work that generates the information
- Treat geographically distributed resources as if they were centralized
- Connect parallel workflow operations instead of only combining their results
- Place the decision point where work is being carried out and build control into the process.
- Transmit information once and at the source
Key steps involved in Business Process Reengineering
- Step 1: Define Objectives and Framework:
First, the senior management defines the business situation; expectations of customers, competitiveness, opportunities, workflows, etc. It would make it easy to realize the need for change and to build a strong view of where the business wants to be in the future.
Then the objectives should be clarified in both qualitative and quantitative terms. Remember, the effectiveness of BPR relies on the ability of workers to embrace the change.
- Step 2: Establish a Competent Team
It is better for an organization to have internal personnel as well as a consultant on the reengineering team to execute the reengineering process.
The BPR team will normally consist of senior management, operational managers and re-engineering experts.
- Step 3: Analyze The Business Processes
Following the selection of the team, the next move implies a complete study of the organization itself as to what mechanism the company is actually undertaking.
The current process provides the basis for the new process, and so the “what” and why” of the new system can be well planned by observing the right and wrong elements of the original business model.
Key Performance Indicators (KPIs) assess the effectiveness of the business process re-engineering program and help you better understand how the BPR is going the right way by analyzing main figures for old and redesigned systems.
- Step 4: Redesign The Process
Keeping your vision in mind, redesign a new process that can successfully solve the inefficiencies of the previous process. Here you can build a future-state map that outlines the strategies and improvements you have found for the problems in the current state process.
- Step 5: Implement the Improvements and New Process
Once the system has been revamped, you can run a small test to see if it functions by checking the KPIs you identified earlier. It will help you make the appropriate changes to the process before implementing it company-wide. If the new process performs better than the existing one, it can be applied on a wider scale.
Why should you use Business Process Reengineering?
BPR plays a critical role in enhancing corporate efficiency in terms of cost, efficiency, delivery, employee engagement, etc. It helps also,
- Streamline corporate processes and systems;
- Companies quickly adjust to changing times and reduce running costs and cycle times
- Boost the performance of the business and retain a competitive edge
- Improve employee productivity
- Increase customer loyalty by improving the quality of goods and services