What are the Steps in Business Process Reengineering?
What is Business Process Reengineering?
Business Process Reengineering is the fundamental re-thinking and radical re-design of business processes to achieve dramatic improvements in contemporary critical performance measures such as quality, cost, speed, and service.
Business Process Reengineering is aimed at streamlining operations and adapting them to existing market realities. BPR sees it as vital under modern conditions of customer needs and expectations and high competition to move away from the usual routine tasks and structures to focus on business processes. The typical methods are ordering, buying, product development, manufacturing, delivery, and invoicing.
Who Invented Business Process Re-Engineering
Business Process Re-Engineering was invented/founded in the early 1990s by Michael Hammer and James Champy. It’s a methodology to radically redesigned core business processes to achieve dramatic improvements in productivity cycle time and quality.
Companies start with a blank sheet of paper, removing whole processes that do not deliver customers value.
In recent decades, much attention has been focused on an approach to greater business efficiency known as Business Process Reengineering ,(BPR). Hammer and Champy first used the term, and they defined BPR as:
Re-engineering is the fundamental re-thinking and radical re-design of business processes to achieve dramatic improvements in contemporary critical performance measures such as quality, cost, speed, and service.
What are the Steps in Business Process Reengineering?
Here are Six Key Steps of Business Process Reengineering namely;
Defining the Business Processes.
This involves mapping out the current state of workflow, current work activities roles, organizational structure and business rules
Analyzing Business Processes.
The second step is identifying gaps, problem root causes, strategic gaps, and more with the main aim of improving. It is important to note that the step is to have better operational efficiency and effectiveness and achieve strategic objectives.
Identify and Analyze Improvement Opportunities.
The third process analyzes and validates opportunities and gaps, root causes identified during analysis that need to be addressed. It is often about brainstorming on the opportunities and mismatch with the current state process.
Designing the Future State Processes.
With the gaps and opportunities identified, designing the strategic future process is done. It is all about working on identified improvement opportunities that will dramatically impact organizational, operational efficiency, effectiveness, and that will achieve corporate strategic objectives.
Developing the Future State Changes.
New designed workflows, processes, and procedures need to be created and well communicated, and at the same time, new/enhanced functionality is developed and tested. This is a critical process that is often overlooked and can lead to failure in BPR initiatives.
Implement Future State Changes.
The last process is implementing work based on changes/opportunities, change management, project management, and performance monitoring. Some changes can be done incrementally to improve operational efficiency and “lean” the process like reduce time cycle, reduce errors, waste,
What Is the Primary Goal of Business Process Reengineering?
There are five Primary Goal of Business Process Reengineering namely;
- Increase productivity by having efficient processes
- Optimize value to all shareholders, including customers, investors, employees, and stockholders.
- Achieve quantum results in inventory reductions, productivity, cycle time improvements, indirect cost improvements, and resource redeployment
- Consolidate processes, functions and create a flatter, leaner, and faster organization
- Eliminate unnecessary levels of work i.e., non-value-added processes.
How to Use Business Process Reengineering?
Usually, when Business Process Reengineering is done, a manager leads a cross-functional team to examine processes and determine ways to improve them. Business Process Reengineering is about changing the way people think and behave. It means empowering employees with the power to make the decision and encouraging them to take risks.
Most people agree that Business Process Reengineering increases long-term competitiveness mainly because of thinking, organizing, and acting horizontally (in terms of cross-functional processes) other than vertically, for example, by department and specialist functions.
Business Process Reengineering and Total Quality Management
At the same time, Business Process Reengineering has been criticized for practicing process simplification and not process re-engineering. Compared to other change processes such as Total Quality Management (TQM), the critics say that Business Process Reengineering pushes employees to work harder rather than smarter.
BPR and TQM are neither identical nor in conflict; they are complementary. Both are radical change processes. They give a lot of focus to the customer. Total Quality Management aims to provide a quality product/service that satisfies customers ‘wants.
In BPR, performance and payment focus from activities to results (expressed in terms of value created for the customer).
Both BPR and TQM pay great attention to employees’ empowerment, and at the same time, a lot of room is given to communication, which is two way.
Criticism of Business Process Reengineering
The critics often perceive Business Process Reengineering as a form of downsizing or cover-up of the same in the organization and is expected to affect them negatively. Thus, employees become victims of BPR rather than benefiting from it. Critics note that Business Process Reengineering is aimed at pleasing the external customer and shareholders.
Champy and Hammer’s response to his criticism. They admit that ―BPR and TQM are neither identical nor in conflict but are complementary” and on the topic of downsizing, they say ―while some employees may lose their jobs, Business Process Reengineering is a strategic process of reorganizing processes and not for eliminating the employees.
As pioneers of the Business Process Reengineering process, they recognize that those organizations that have been successfully re-engineered their functions have to accept that there will be a need for recurring re-engineering in the future. They noted that ―our long-term goal must be to institutionalize a capacity for re-engineering in organizations, so that change is viewed as the norm rather than as an aberration”;
Despite the criticisms of the practice, Business Process Reengineering continues to be used by many organizations. Organizations continue to re-examine and fundamentally change the way their business processes and functions are. With increased competition and a sluggish economy, the impetus for continued efforts to deliver more with less ‘. BPR remains a useful tool for organizations striving to operate as effectively and efficiently as possible.
Business Process Reengineering Principles
The following main principles of Business Process Reengineering have been identified.
- Business Process Reengineering revolves around outcomes and results and not tasks.
- Business Process Reengineering ensures that those who use the output/results perform more of the process themselves rather than passing it on.
- Identify all the processes in an organization and prioritize them in order of redesign urgency.
- Business Process Reengineering links parallel activities rather than integrate products, that is, consolidation of tasks.
- Business Process Reengineering is integrated into decision-making channels where the work is performed – empower the people who do the job to decide.
- Capture information only once – ideally at its source.
Benefits of Business Process Re-Engineering
There are several benefits to employing namely;
- BP is decreased costs and cycle times by automating or removing manual activities.
- Increased productivity by using fewer resources is to complete the same amount of work.
- Improve quality and customer service via clear process ownership and customer focus.
- Improve competitive position.
Challenges of Business Process Re-Engineering
BPR implementation can be challenging to employ, namely because it requires large, immediate, and radical changes. People generally have a hard time with change. Challenges with BP are including
- Decreased Employee Morale,
- Reduced Staff or Layoffs,
- Incomplete Impact Analyses And
- All or Nothing Philosophy to Change.
Implementing BPR could be successful with some modifications to the methodology.
- Assess all impacts and create a plan for related people, processes, and systems
- communicate change impacts early often and in multiple mediums
- No initial designs are Perfect practice for continuous improvement.
Business Process Reengineering and Employees Behavior
- Likelihood of resistance to the radical changes requiring new work methods
- Incidents of go-slows and handing tools down as a result of some employees being relieved of their roles
- Formation of new social groups as a result of employee transfers and deployments
- Motivation because the decision point is where the work is performed. The people who do the job are empowered.
Business Process Reengineering Implementation
There are seven fundamental principles to implementing Business Process Reengineering;
- Start with a clear vision and measurable objectives of success.
- Analyze all processes identifying underperformers most impactful to the organization.
- Understand and measure underperforming processes to be redesigned.
- Established IT systems that will support reengineering efforts,
- design, build and test the re-engineering process.
- Resolve errors and testing before going live, and lastly,
- Prepared the organization for change and the newly designed process.
Business Process Reengineering Case Study / Example
Let’s look at a real-life application of BPR are using the telecommunications industry. American Tower Corporation is a leading owner and operator of cell towers. American Tower is performing well but still has archaic processes. Let’s evaluate their purchase order process and how they plan to improve.
Today in order to send a purchase order to a vendor, a requester must fill out an offline spreadsheet and email it to a centralized inbox.
Another team receives the request and manually transpose the information into Oracle. If any of the information on the request is incorrect, the person transposing only knows the data doesn’t match but doesn’t know why or how to fix it.
So they must send it back to the original requester to fix it, and the process starts all over again.
The requester gets back their work only, knowing it’s wrong, and has to repeat the process guessing how to fix the error, causing frustration.
Even in situations where the user gets all their information correct the first time, they still receive a request to validate the information they provided initially, a wasteful and equally frustrating event.
Using Business Process Re-Engineering
Using a re-engineering effort, American Tower is implementing processing system enhancements that allow requesters to enter Bio requests directly into Oracle.
If there are any errors, the requester knows why and can immediately correct them; if there are no errors, the request is processed with a system validation in no additional approvals needed.
The improvement eliminates the need for duplicative data entry.
Decreases cycle time and administrative efforts.
Relies on IT systems to ensure adherence to controls.
Another Example of Business Process Re-Engineering
How to Deal with Downsizing Workforce From BPR Process
- Motivation – A leaner workforce implies greater responsibilities. A management needs to motivate employees/staff, to work harder and better. Supervisors must examine look the factors that motivate the workforce like employee benefits and remuneration and provide these to the employees.
- Revise Job Descriptions through job analysis. Duties, responsibilities and roles will change with downsizing.
- The management needs to make sure that the remaining employees are not overworked and teams remains effective. It can done by outsourcing some secondary functions that have been initially done by full-time staff in for example Human Resources, work like executive recruitment duties.
- Improved technology is a key tool for managing a downsized workforce. for example using automated systems in managing task… etc. Reorganization should done to change the way and culture employees in adopting new technology.
- Management need to reassure workforce and make the sure they are assured or guaranteed of continued employment. Downsizing is a corporate ‘anorexia‘ that makes an organization thinner but not necessarily healthier. This can lead many uncertainties surrounding the remaining staff; together with the mistrust for management.
- Counselling services can be provided to the remaining employees because majority of them are usually greatly affected by the loss of their friends and colleagues job’s. T
- Management must offer further training opportunities to remaining staff to become competent in increased responsibilities and duties.
- Improved communication will go a long way in solving problems that may arise in the leaner workforce.
BPR is a great tool when companies need to make radical changes to decrease costs, improve customer satisfaction and stay relevant
When employing BPR, it’s essential to have a clear vision of your future state and run a thorough change management initiative to ensuring a company’s most valuable resource ( its people ) are taken care of.