Business Process Reengineering
The early 1990s saw the development of the business management technique known as “business process re-engineering,” or BPR, which focuses on the study and creation of organisational workflows and business processes. BPR sought to assist firms in fundamentally rethinking how they do business in order to enhance customer service, reduce operating expenses, and establish themselves as global rivals.
By concentrating on the from-the-ground-up design of their business processes, BPR aims to assist corporations in fundamentally restructuring their organisations. Thomas H. Davenport, a pioneer of BPR, said in 1990 that a business process is a collection of actions taken to accomplish a specified business objective. Re-engineering promoted whole process recreation rather than incremental process optimization of sub-processes, emphasising a holistic emphasis on corporate goals and how processes connected to them.
Business process redesign, business transformation, and business process change management are other names for business process reengineering.
Business Process Reengineering, or BPR for short, is a methodology and strategy that businesses may use to drastically alter existing business processes in order to make them more effective and up to date. The extensive actions that are done following a decision to restructure a process might result in significant changes in management style and business culture in addition to formal procedures or other existing processes.
Benefits of Business Process Reengineering
Organizations that take part in Business Process Reengineering are the first to examine the organization and its environment. Objectives play a leading role in shaping new processes or changing existing processes. Business Process Reengineering, invented by IT expert Michael Hammer, is mainly applied in information technology, but is a standardised model that can be used to optimise many processes or organizations. Benefits of using BPR are:
- Shorten lead times
In information technology, in particular, there is a lot of potential that is not yet being used. Outdated processes, such as the manual execution of administrative matters, can be fully automated with an investment. The investments are recouped by the lower wage costs.
The goal of BPR is to modernise outdated processes and that often yields time-saving results. For example, after performing BPR, the organization can discover that a certain process can be carried out by two employees instead of four. It’s important that the employees themselves provide input and come up with suggestions; after all, they know better than anyone else how the business processes work.
- Improve quality and customer focus
By changing task orientation to process orientation, the focus is put on the customer. This has the advantage that all irrelevant processes quickly come to the foreground, after which they can easily be removed or modified.
- Improve competitive position
Normally, changes that an organization makes are only gradually noticed. In order to keep up with the competition, and to satisfy customer needs, however, we must act appropriately. BPR is ideally suited for this because the radical changes are implemented in a relatively short period.
- Implement new technology
For example, an online webshop can choose to implement an extensive help centre with an interactive Q&A. The visitor can ask his or her question with the help of keywords and use the computer to look for a standardised answer. This way, the customer service employee won’t be occupied and can keep themselves busy with something else.
Business Process Re-engineering Steps:
- Create a vision
Before a process is reviewed or adjusted, there needs to be a clear picture of the reason for the change. It’s important that the customer is the focus of this vision. The objectives must then be clarified in qualitative and quantitative terms. If the objectives are clear, it’s important to convince the employees that the changes are necessary.
- Select a team
A skilled team needs to be formed to get started with the changes and to minimise the chance of failure. It’s valuable to set up a diverse team because creativity is essential in analysing current business processes and developing new ones. For example, the problem is looked at from different perspectives and an accurate diagnosis is formed in the following steps.
- Select and understand current process
The complete current process needs to be mapped out in order to optimise it. This can be done by using flowcharts and software. Key Performance Indicators (KPIs) can then be linked to the relevant process in order to be able to monitor whether the process has the desired effect. This way, all matters that add no value to the process can be identified. These KPIs are compared in the following phases with the same indicators, but then for the new process.
- Develop a new process
If the KPIs show that a current process is inefficient or ineffective, a new process must be drawn up. The customer-oriented vision from step 1 should be the guide here.
Once the development and planning of the new process is complete, a small scale test can be run. If necessary, adjustments can then be made. The results and effects must be closely monitored with the KPIs. If it turns out that the new process works better than the previous one, it can be implemented on a larger scale.
- Evaluate
In a highly dynamic environment, a lot changes, so sometimes the indicators can give a different picture over time. By running an evaluation, inconsistencies are noticed sooner and can be adequately anticipated.