A Guide to Business Process Re-engineering (BPR)

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

– Bill Gates

 

In 1990, a management author by the name Michael Hammer (a Professor in MIT) published an article on "Reengineering Work: Don't Automate, Obliterate". This article laid the foundation of Business Process Re-engineering.

 

According to him, the normal methods of improving the performance of business were unsuccessful. There were lots of errors in Product cycle, lead time, order fulfillment. In fact, the inventory management system lacked improvements.

 

Enterprises had to struggle a lot in the 1990s to cope up with the increasing technological advancements. Customer demands were increasing and the competition was also on the rise. Therefore, some sort of solution was needed to help the enterprises.

 

People’s last resort was IT. They thought that by automating the existing processes they could yield better results. But the main thing that was required was to reassess the situation and figure out if the existing processes were successful or not.

 

So, the main point was to rethink and redesign everything to come out of the ill-equipped situations. Rapid improvements, new processes and designs were needed for this. Business Process Re-engineering (BPR)  was the answer to all the problems. In this blog, you will learn more about Business Process Re-engineering.

 

What is Business Process Re-engineering?

 

Business Process Re-engineering i.e. BPR is redesigning business processes. In every business meeting short term and long term objectives are necessary. But simultaneously each and every business process is equally important for the success of an enterprise.

 

Sometimes these business processes are not as efficient as we want them to be irrespective of the fact that goals are achieved. Better efficiency always means better outcome in less time as well as cost-efficient. What can we do to make improvements?

 

Improvements can be done only by changing, revising and redesigning everything. This is when Business Process Re-engineering comes into picture. Obviously, it is like starting from scratch and it can be time-taking and costly at times, but the results you will get will be ultimate.

 

Through BPR you can improve the following things:

 

1. Quality

 

2. Output

 

3. Cost

 

4. Service

 

5. Speed

 

Even though the whole process of redesigning is costly, the results you get afterwards will help you save a lot of cost on a later stage by reducing the redundancies and errors. 

 

There are many popular companies that have used BPR in the 1990s like Ford Motors, GTE etc. After adoption of BPR they witnessed a huge improvement and a substantial difference in their overall business operations. They became more competitive in the market.

 

Before any company decides to implement Business Process Re-engineering, there are certain questions that you must ask yourself as an enterprise. Like:

 

• Who are your customers? What are you offering them?

 

• Are the current operations sufficient to deliver what you want?

 

• Is there a need to redesign or rethink any process?

 

• Are current processes sufficient to achieve the goals in the long term?

 

• In case of a new company, how should the existing processes be handled?

 

If you can answer these questions then the Business Process Re-engineering process can be easily done. But of the key factors because of which many organizations face issues is the size. It is often seen that large enterprises face difficulties because of the heavy cost investment required in the BPR process.

 

Whereas, a startup or a small enterprise can implement Business Process Re-engineering without incurring any heavy cost or effort. In minimal time and cost they can design and make radical changes in the overall settings.

 

Also Read | Business Process Management

 

Challenges in Business Process Re-engineering

 

As the small enterprises and start-ups start to grow they face multiple challenges. They need to make up their mind about adopting BPR. Then once they have started the BPR process, there are various challenges associated with it. 

 

Companies have to make some tough decisions in order to make the whole re-engineering process smooth and sound. It is not something that organizations do daily or weekly or in general. 

 

It is done after making a lot of investments. Companies need to have sufficient IT resources to make it work. It is a cumbersome process and needs supervision and complete attention from the top level management and the middle level managers.

 

Given below are some of the challenges that an enterprise can encounter while implementing BPR.

 

1. Inadequate Knowledge

 

Every team responsible for BPR implementation must know the reason for implementing and the need of BPR in the current scenario. The personnel should be knowledgeable about the techniques and steps of BPR. 

 

Proper BPR training must be imparted to the employees before implementing so that they understand what is going on and can take active part. If implementation is done on the wrong processes then everything will be wasted. 

 

So, if the employees are aware, skilled and knowledgeable they can counter every tough situation and see if the correct process is taken forward for implementation.

 

 

2. Wrong Direction and Irregular Implementation

 

BPR does not give immediate results, you cannot witness your organization beating market competition instantly after implementing BPR. It is a constant process done again and again to see the results.

 

Sometimes BPR does not work in every process as you thought. Re-engineering is unsuitable for some organizations. Therefore, instead of doing wrongful implementations, managers must forbid using BPR in such places.

 

If adopted irregularly, BPR will hinder the processes and it will impact the overall growth of the enterprise.

 

 

3. Unsuited Foundation

 

The team must be robust and look for all the upcoming and present updates about the process that is being re-engineered. There must be a balance between the knowledge of employees about BPR and choosing the right employees. 

 

Otherwise management, operations and finally growth will be impacted. There must be some seniors supervising the whole work along with a skillful team. From manufacturing to IT, relevant engineers of every field must be a part of the operation where the BPR process is being done.

 

 

4. Insufficient and irregular placement of resources

 

Having insufficient resources is the biggest hurdle in implementing BPR. You never know what you might need while implementation is going on. And not having the resources at the right time can be a breaking point between organization and BPR process.

 

While you carry out BPR in your entity then the following things must be available always:

 

• Skilled Human Resources
• Budget and Funds
• Right BPR tools
• Experience and Knowledgeable Team
• Timely approvals

 

 

5. Lack of Support and Inaccurate Analysis

 

Before initiating BPR, proper analyses must be done on all the processes and the data should be shared with all the employees. Team should prioritize accordingly and coordinate work based on the analysis.

 

The team should question “why” anything is done in a process, rather than accepting a particular task. In short, correct analysis and team support is important for implementing BPR.

Also Read | Resource Allocation

 

 

Key Principles of Business Process Re-engineering

 

“If you define the problem correctly, you almost have the solution.”

​–​ Steve Jobs

 

BPR is about doing everything again. It involves rethinking, restructuring, redesigning, downsizing and cost-cutting. In his manifesto, Michael Hammer gave 7 principles to achieve BPR successfully.

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Key Principles of BPR

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1. Shared Database

 

Shared Information is the first principle given by Hammer in the Business Revolution. In this the main aim is to achieve economies of scale and get fast responses from and to the customers. 

 

It will help to maintain good relations with the vendor as well as flexible arrangements. Companies have multiple departments and dispersed employees. By sharing information we can bring a sense of unity as well as open a pathway for direct communication among all.
 

 

2. Focuses on End Results

 

The 2nd principle is based on the results. Every process and task that we carry out must focus on the results. It must be result oriented. It also means that the ultimate and final customers must get some added value.

 

 

3. Technology Usage

 

The third principle focuses on reusable technology. Imagine if the customer has to work more because of the entity's fault, will he still be your customer? 

 

So, if there is some technical error then instead of making the customer work more by filling the data, it is the duty of the entity to fill in on the customer's behalf. This is why we need reusable technology.

 

 

4. Just In Time Management System

 

All the processes must be integrated with each other through networks, communication and databases. Integration helps to reduce the cost and time lag. Just in time approach is excellent to provide more value to the final users.

 

 

5. Benchmarking

 

The 5th Principle is about Industry Benchmarks. Through benchmarking we can figure out the potential targets that need improvements. Before re-engineering the process, it is important to benchmark to get more productive results.

 

 

6. Uniformity

 

Every enterprise must have standardized goods as well as standardized processes. In order to complete a big process, we can break it into multiple small projects and by standardizing the tasks we can achieve better results with efficiency.  

 

Moreover, high costs involved in big processes can be minimized by standardizing them into smaller processes. Therefore, scale disadvantages can be removed.

 

 

7. Non-core Processes can be Outsourced

 

There are two types of activities- core and non-core. Core activities are priority ones that cannot be outsourced because of confidentiality and other reasons. No company can compromise when it comes to core processes.

 

But the non-core ones can be outsourced to save cost and time. These activities aren’t the main focus areas of the company. So, outsourcing can be done for customer support services, accounting, generating leads, marketing campaigns etc.

 

Successful BPR implementation can offer a lot of advantages to the enterprise like customer satisfaction, cost advantage, competitiveness, value generation as well as it offers clarity in the overall business vision.