Business Process Reengineering (BPR)

Reengineering is a business process or set of processes that essentially dismantles existing processes into individual activities and reassembles them in a new set of business flows or sets of business flows[1]. BPR advocates that enterprises go back to the basics and re-examine their very roots. It doesn’t believe in small improvements. Rather it aims at total reinvention. As for results: BPR is clearly not for companies who want a 10% improvement. It is for the ones that need a ten-fold increase. BPR focuses on processes and not on tasks, jobs or people. It endeavours to redesign the strategic and value added processes that transcend organizational boundaries.

According to many in the BPR field reengineering should focus on processes and not be limited to thinking about the organizations, after all, the organization is only as effective as its processes. A business process is defined as “a set of logically related tasks performed to achieve a defined business outcome[2].” Processes are currently invisible and unnamed because people think about the individual departments more often than the process with which all of them are involved. So companies that are currently used to talking in terms of departments such as marketing and manufacturing must switch to giving names to the processes that they do such that they express the beginning and end states. These names should imply all the work that gets done between the start and finish. For example, order fulfilment can be called order to payment process.

When applying the BPR management technique to a business organization the implementation team effort is focused on the following objectives:

  • Customer focus. Customer service oriented processes aiming to eliminate customer complaints.
  • Speed. Dramatic compression of the time it takes to complete a task for key business processes. For instance, if process before BPR had an average cycle time 5 hours, after BPR the average cycle time should be cut down to half an hour.
  • CompressionCutting major tasks of cost and capital, throughout the value chain. Organizing the processes a company develops transparency throughout the operational level reducing cost. For instance the decision to buy a large amount of raw material at 50% discount is connected to eleven cross checkings in the organizational structure from cash flow, inventory, to production planning and marketing. These checkings become easily implemented within the cross-functional teams, optimizing the decision making and cutting operational cost.
  • Flexibility.  Adaptive processes and structures to changing conditions and competition. Being closer to the customer the company can develop the awareness mechanisms to rapidly spot the weak points and adapt to new requirements of the market.
  • Quality.  Obsession with the superior service and value to the customers. The level of quality is always the same controlled and monitored by the processes, and does not depend mainly on the person, who servicing the customer.
  • Innovation.  Leadership through imaginative change providing to organization competitive advantage.
  • Productivity. Improve drastically effectiveness and efficiency.

BPR within a single unit is difficult and requires efficient and effective change management. BPR with an ERP implementation will require crossing organizational boundaries and a much more extensive change management process. Resistance to change will be high and require a significant level of change management to succeed. The methodology of BPR is as follows:

  1. Preparation – set goals and vision, identify teams, and develop an inventory of processes that need to be evaluated.
  2. Define the “as is” process and evaluate cross-organizational issues.
  3. Map out “to be” processes based on best practices.
  4. Test and measure new processes based on meeting goals and vision.
  5. Re-evaluation – revise, adjust to improve processes.

BPR steps are pretty straightforward and seem benign on the surface. The complexity of BPR is in its implementation. Setting up of measurements to achieve the desired results and monitor new or modified processes are the more difficult sides of BPR. Measurements are the key to improvement as one cannot improve what is not measured.

The expected results for a company that implements business process reengineering are the following:

  • Reallocation of jobs and processes so as to be combined into fewer, to be executed in natural order, simultaneously and by the least possible number of employees.
  • Reorganization of the company’s structure (downsizing) and employee empowerment.
  •  Jobs and processes become flexible so as to be executed according to the needs of each case, company’s and customer’s need’s (hybrid centralized/decentralized operations)

The above changes will bring reductions of costs in the company, better quality (as far as price, promptness of delivery and offerings of related services) in the products and services provided to the customers. BPR enables a fresh view without ingrained prejudice affecting judgement. It can produce huge initial savings where a business is struggling and often has the effect of turning around an unprofitable operation. Also, it leaves the business with a fully documented model of the operation, which is invaluable if embarking on a quality programme.

BRP could by implemented to all firms (manufacturing firms, retailers, services, etc.) and public organizations that satisfy the following criteria:

  • Minimum Number of employees: 20 (at least 4 in management positions).
  • Strong management commitment to new ways of working and innovation.
  • Well-formed IT infrastructure.

Business Process Reengineering could be applied to companies that confront problems such as the following:

  • High operational costs
  • Low quality offered to customers
  • High level of ”bottleneck” processes at pick seasons
  • Poor performance of middle level managers
  • Inappropriate distribution of resources and jobs in order to achieve maximum performance, etc.

ERP systems are based on “best practices” and BPR processes are designed to meet company goals and vision. Even though it must be done, care should be taken to address combining ERP and BPR into a single process. Almost all ERP systems are very flexible and most of the time can be adjusted to meet organizational vision and goals; however, it is likely it will not “fit” all “to be” processes.

[1] Motiwalla, L., & Thompson, J. (2012). Enterprise Systems for Management (2nd ed.) Pearson Education

[2] Davenport, T.H., and Short, J.E. (Summer 1990). The New Industrial Engineering: Information Technology and Business Process Redesign. Sloan Management Review, 11-27


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