Business Process Reengineering (BPR)
Processes form the operational core of most organizations. Whether your business produces products or services, you need reliable ways to deliver value to your customers. However, most organizations develop processes over time that are not fully rationalized. They may be redundant, disorganized or otherwise inefficient. This can cause excessive costs and hold back revenue.
To resolve these issues, there are a few process improvement methodologies that you could apply at your business. When you need a major reworking of your operations, business process reengineering may be the solution for you. Understanding BPR and how to apply it will help you decide the best course of action for your business.
What Is Business Process Reengineering?
In many cases, BPR involves a relatively radical restructuring of organizations and processes. Although not necessary in all cases, rethinking the way that a business operates from the ground up can be a feature of BPR. Therefore, proponents strive to be unafraid of making drastic changes if those changes would benefit the strategic goals of the business.
Business process reengineering is an approach to business management that focuses on analyzing and reconstructing processes within an organization. The idea that processes tend to become inefficient and redundant over time is central to BPR. In executing this procedure, teams look for ways to simplify and streamline processes to improve efficiency and eliminate waste.
Compared to other process improvement methodologies, BPR takes a holistic approach and encourages full-scale recreation. Therefore, the term is most commonly associated with substantial changes to or complete replacement of processes rather than minor tweaking.
The Role of IT and Data in Reengineering
BPR rose to prominence in the early 1990s. It is likely that the increasing adoption of computers in business applications played a role in the development of the concept. Information technology and data analysis play central roles in BPR.
Data collection is a big element of the analysis component of BPR. Additionally, it is also used for the continued monitoring and evaluation of the restructured processes.
In many cases, increased automation and the use of dashboards and tools may be elements of the reengineered processes. Using the right tools can potentially eliminate waste and streamline business operations.
Differences and Similarities With Business Process Management
Business process reengineering has elements in common with business process management, another management strategy that may involve recreating processes. In some cases, the terms may even be used interchangeably. However, there are some significant connotative differences between the two.
In terms of similarities, both BPR and BPM deal with improving productivity by examining business processes. Their shared goal is to improve efficiency and outcomes while cutting costs. Additionally, they both involve thorough evaluations of existing processes.
However, BPR carries a connotation of a more radical redesign. In fact, BPM may not involve any redesigning of processes. It can be as simple as monitoring processes for issues and fixing them as necessary. In a sense, BPM is the long-term monitoring and evaluation strategy that leads to BPR being implemented to fix issues.
The Benefits of BPR
With processes being so central to business success, it is probably no surprise that reengineering processes can have substantial benefits. The idea is that you can improve your business outcomes by fixing your processes. The following are a few of the most significant advantages of this strategy.
Like most business methodologies, BPR is first and foremost concerned with achieving bottom-line results. The first way that this is achieved is by improving the effectiveness of business processes. Delivering better products to more customers can lead to increased revenue. Additionally, some processes may directly attract additional customers.
Eliminate Costs and Redundancy
Another element of BPR is reducing costs. Many processes cost more than they need to due to inefficiencies. They may include unnecessary activities or redundant functions. Cutting costs is a major element of BPR. By reducing costs and increasing revenue, the strategy has the potential to substantially improve profitability.
Rapidly Improve Processes
Many organizations get stuck doing things a certain way due to legacy. BPR seeks to resolve this by rapidly improving processes. The change mindset of BPR is relatively radical and focuses on total restructuring when necessary. Therefore, a business can apply this strategy to rapidly improve processes and achieve better results.
Coordinate Numerous Functions
Many business processes involve the intersection of several functions. Often these functions are brought together organically with little thought about the big picture. This can result in significant inefficiencies due to a lack of coordination. Through BPR, you can achieve a more rational collaboration between different functions with a big-picture organizational focus.
Take a Long-Term View of Processes
In a similar vein, reengineering gives you an opportunity to think more in the long-term about your processes. Again, many processes tend to grow organically. This means that most organizations’ current states are not planned with a view to the future. Instead, their processes evolved to meet specific needs as they arose. BPR can help you take a more forward-thinking approach to how your business is run.
Business Process Reengineering Steps
The basic BPR steps are simple in concept. Of course, like many process-focused techniques, success and failure tend to rest in the details. A data-driven approach helps to ensure that your BPR process achieves the desired results. The following are the major steps involved in reengineering your business processes:
- Map the Current Process State: Before you begin any analysis or changes, you need to understand what processes exist and what they do. Start by identifying all the major processes of the business and the secondary processes that support them. Additionally, collect data from stakeholders to understand current perceptions and performance. It is important to understand both the documented processes and the actual work being done on the ground (these are not always aligned).
- Analyze Processes and Find Problems and Gaps: Using the data you have collected, start to analyze the current processes and their efficacy. During this process, look for gaps in the current documented processes. Are there gaps being solved by ad hoc solutions? Are there unnecessary risks being taken? Additionally, look for redundancies and inefficiencies. You may find the same task being performed twice by different teams, for example.
- Search for Opportunities for Improvement: While reviewing, you should be looking for places to improve. BPR doesn’t have to focus just on fixing issues. When you take a radical approach to recreating your processes, you have an opportunity to leverage opportunities that would otherwise be missed. Make sure to validate these improvements through small-scale testing before trying to go wide.
- Design the New Process Map: Once you have analyzed the current state for problems, gaps and opportunities, you can begin to plan the new process map. In BPR, you should not be afraid to change things dramatically. If a complete restructure will help you to improve efficiency and profitability, then you should implement one.
- Implement Changes and Monitor: Finally, you need to implement the new process map. This should include working with all the relevant stakeholders. Everyone should be on board and educated about the new process before proceeding forward. You should also establish key performance indicators to help with continuous process monitoring.
As you are applying the above steps, it is helpful to keep the principles of BPR in mind. Doing so can help to ensure that the results are fair, efficient and transparent. While reengineering in your organization may look a little different from a similar effort by another team, if you apply the following principles, you can be confident about your chances for success.
- Cross-Functional Thinking: Functional and information silos can cause significant issues for business processes. As you implement BPR, try to think about the broader context at all times. This can help to significantly reduce redundancy because processes are cross-functional rather than insular.
- Fearless Questioning: At the heart of BPR are questions such as “why” and “what if.” By continuously asking these questions, teams can challenge many of the assumptions they are currently relying on. The goal is to challenge current boundaries.
- Outcome-Orientation: Processes should be developed with the desired outcome in mind. Work backward from this to determine which tasks need to be incorporated. Often, teams naturally are task-oriented. When applying BPR, you should challenge this natural tendency.
- Ground-Up Decision-Making: The final decision on processes should be made by the stakeholders who are actually implementing it. In other words, BPR emphasizes ground-up thinking. While the restructuring project may be initiated by executive-level management, the people closest to the work should be involved throughout and serve as key decision-makers.
- Collect Data From the Source: Data flows should be simplified in BPR. Rather than having redundancies with manual transference and resubmission of data, all data should be collected from the source. IT should then be made available to relevant stakeholders using a digital data management platform. Good data flows are essential to effective processes.
When Should You Apply BPR
There is no question that BPR can lead to radical changes. However, depending on your current circumstances, it may be a less valuable tool. Sometimes a more iterative approach is superior.
Typically, you should be thinking about BPR when you want to see significant change. For example, if you have tried other ideas that have failed to achieve results, reengineering may be the answer. Similarly, if your competitors seem to be pulling ahead at a pace that you can’t match, quickly rethinking how you operate could help.
Of course, reengineering is much less expensive if you are running a small startup than if you have a major enterprise. In fact, it is not uncommon for small companies to informally reengineer their processes as they grow and reinvent their business models.
If you are facing circumstances that you don’t believe your current state can address, it is time to seriously consider BPR. When other process improvements feel like changing the window dressing but you need to rebuild the whole house, BPR is the answer.
Business Process Reengineering Examples
BPR has been applied by a diverse range of organizations. This includes well-known businesses such as Ford, Airbnb, GTE and T-Mobile. The following are some examples of what BPR may look like in your organization.
Reimagined Product Development
Bringing new ideas and products to market is essential for many organizations. However, coming up with and developing new ideas for products is not a simple process. Often it involves multiple functions of the business, including analysts, engineers, product designers and others. If these groups are working in silos, the development process will be slow and inefficient.
By applying BPR, the organization could look at the steps each product took from the original idea to being market-ready. Analyzing the paths of several products may highlight that there are multiple redundant paths and that teams are working on their elements of product development almost independently.
A new process map could include cross-functional teams that undertake all the core functions of product development. Full integration would allow different divisions to come together to work on a new idea collaboratively. It would also help with the sharing of information and data from the start of product development through to the conclusion.
More Satisfying Customer Service
Many businesses struggle significantly with their customer service efforts. Balancing satisfying customers with the significant costs of providing service can be very challenging.
Several organizations have used BPR to improve their customer service. In a lot of organizations, there are multiple teams and departments that deal with different customer issues such as billing, technical support and complaints. Finding the right department often involves being on hold and may not often result in a satisfied customer.
This is the perfect set of circumstances for BPR. The model of customer service used by most organizations is fundamentally inadequate. Customers don’t want to have to bounce around between departments to find the right person.
The right arrangement for customer service processes depends on the business. However, BPR may result in empowering a single team of representatives to handle the majority of issues. This eliminates the need to pass off a caller and cuts down the number of holds necessary for a single call. Additionally, a customer can call with multiple issues and receive assistance. Many organizations are also leveraging AI-based technologies that make routing a service call easier.
Enhance Your Business Processes With Fluix
Building the right processes for your business sometimes requires radical redesigns. In some cases, however, simply finding the right tool can make all the difference. By simplifying information workflows and empower cross-functional collaboration, Fluix has helped many businesses enhance their processes and their outcomes. Get started today and see how Fluix can help your business.