Business Process Reengineering (BPR): Definition, Steps, Methodology, Benefits, and Examples

Business Process Reengineering: Imagine a company is making great profits and achieving business success. It is reaching its goals quite easily, but the problem lies in the way these business goals are being met. Business processes play an integral part in lashing goals. But their inefficiency can cause great harm to your business in long run.

As the business expands, it becomes even more challenging to change and modify the processes to get the desired outcomes. This happens due to old habits and methods of investments. It is a fact that no process can’t be improved without making suitable amends and changes in it.

That’s when business process re-engineering comes into play! Processes need to be re-engineered thoroughly and carefully as the experiments and mistakes can cause a lot of perplexity in the system.

Just making a plan isn’t enough! Effective execution is needed. Proper Business Process Re-engineering (BPR) execution can prove to be a game-changer for any business. It has the potential to perform miracles on even a failing or deteriorating company, by escalating the profits and propelling business growth.

The concept of Business process re-engineering is not the simplest to understand and grasp. It comprises imposing changes within an organization – scrapping the old ways and making space for the new one.

And trust me, it isn’t an easy task at all. This is a thorough guide that will help you understand the A to Z of Business Process Re-engineering. Let us jump straight to what business process re-engineering is?

What is Business Process Re-engineering? | Definition

Business process re-engineering definition is fundamental rethinking and redesigning of business processes so as to attain vivid improvements in all the critical aspects like service quality, process outcome, cost, and process speed.

Business process reengineering (BPR) intents to cut down the enterprise costs and reduce the redundancies and repetitions within the process on a large scale. Business process reengineering gained popularity in the world of business in the 1990s. The concept was introduced inspired by an article called ‘Reengineering Work: Don’t Automate, obliterate’, published in the Harvard Business review by Michael Hammer.

He developed this concept because he observed that most business houses were integrating new technologies with the pre-existing fundamentally inefficient processes. Nobody even bothered to think of creating something new and different, based on the advanced new technologies.

They used technology just as a means to automate their existing systems and processes, rather than modifying anything in the process. This can be thought of as using technology in order to “upgrade” a horse with lighter horseshoes to make them run faster, instead of building a car.

The process of Business Process Reengineering (BPR) start just with a blank sheet of paper, where you rethink and observe everything about the existing processes to make it more value-aided and beneficial for customers.

This new system is primarily focused on increasing emphasis on the customer needs and values. organizations work to minimize the layers within an organization and cut down the unproductive activities in two major areas:

1. Redesign and redraft functional organizations into cross-functional teams.
2. Effectively use technology for the improvement in data distribution and decision-making.

And more and more technological advancements every day, BPR is gaining a lot more popularity and relevancy with each passing day.

To know about Business Process Redesign, read Blog: What is Business Process Redesign ? What are the steps Involved in it ?.

What is the Business Process Re-engineering Steps?

What is business process re-engineering is not an easy task to perform. BPR works to changing the complete course of the said processes at the core. This makes it extremely risky, laborious, costly and time-consuming process.

You need to be capable enough to manage and carry out each and every step carefully and successfully. You may face many failures in your attempts to make a reasonable and beneficial change in the processes.

Here are certain steps to follow for efficient Business Process Re-engineering:

• Step 1: Identify the Need for Change and Communicate

For small startups, this step is probably very easy. You can go for BPR when you realize that your product is receiving a huge user drop-off rate. Then, the next thing to do is informing the co-founder, suggest a direction to spindle and you are good to go for the further steps.

For a large business, the first step is the biggest hurdle itself. You will always find individuals who are satisfied and happy with the existing ways of working. These individuals can be both, from management side and the employees. The management will most probably be afraid of getting their investments sunk, and the employees might see it as a job security threat.

Before anything else, you will have to make up their minds and convince them why the change is required for the firm. This shouldn’t be difficult if your company isn’t doing well.

Perform a thorough research and try answering these questions in case of dilemma: Which of the processes might not be efficient? Where are you lagging behind of your competition? Are you even part of the competition or is the condition worse?

• Step 2: Build a Great Team of Experts

Business process re-engineering demands a team of highly motivated, and skilled team of individuals who has the potential to carry out all the needed steps involved.

The team of experts majorly consists of:

Senior Manager: For supervision and calling out the shots for taking major decisions. If your BPR team doesn’t have anybody onboard from the senior management, then they will have to get their approval for every little change.

Operational Manager: He is the one who is aware of the ins-and-outs of the process. Their process knowledge can prove to be a great asset to build a new, effective and more efficient process.

Reengineering Experts: They are the ones who expertise in the field from IT to manufacturing. They will discover where and how the right changes should be implemented to yield the best outcomes. The changes might be anything – software, workflows, hardware, etc.

• Step 3: Define Key Performance Indicators (KPI) for the Inefficient Processes

After the team is ready and you are all set to launch the initiative, there will be the need to define the correct Key Performance Indicators (KPIs). BPR is introduced to optimize your process. Formulate BPR strategies that can bend as per your business requirements and, not the other way around.

KPIs usually differ a lot depending on the type of process you’re optimizing. And the following are the most typical ones:

Manufacturing

• Cycle Time – The total time taken from initiating to concluding a process.

• Changeover Time – Time in between required to shift the line from making one product to the next.

• Rate of Defect – The total percentage of defective products manufactured.

• Inventory Turnover – The time taken in the manufacturing process to convert inventory into products.

Planned VS Emergency Maintenance – The proportion of the times when planned maintenance and emergency maintenance happened.

IT

• Mean Time to Repair – The average time spent to repair the app, software, or system after any emergency.

• Support Ticket Closure rate – The ratio of number of support tickets closed by the support team to the number opened.

• Application Development – The time spent on completely developing a new application from the scratch.

• Cycle Time – The time required to get the network back up after a security fissure.

Perform business process mapping to know exactly where the KPIs need to be defined in the individual processes. Use the step-by-step strategy to perform BPR effectively.

You can map out the processes using 2 ways:

1. Process Flowcharts – It is the most basic technique. Just grab a pen and a blank paper and jot down the processes stepwise.
2. Business Process Management (BPM) Software – Technology makes anything easy! Using a BPM software for process analysis makes everything clearer and easier to work with.

For example, you can use BPM software, process digitization, setting deadlines, etc. Such software will most probably lead you to optimize the said processes since it allows easier collaboration among the employees.

• Step 4: Reengineer and Compare KPIs of the Processes

After the all the above steps, it is important to perform A/B testing to check the working and efficiency of the new process. Start by implementing the modifications and solutions on a significantly small scale.

Now all you are left to do is – put up your theories into practice and see how the KPIs are holding up. Once you realize that the new solution works better, and start scaling the solution gradually. Eventually put it into action within other company processes as well.

If the new solution doesn’t prove to be that fruitful, then you need to start the process all over again. The cycle of finding loopholes and solutions to them repeats until you form a desirable, effective process.

To know about RPA Services, read Blog: Understanding RPA Services: A Beginner’s Guide to Automation

How the Business Process Reengineering works? | Methodology

Business Process Reengineering (BPR) is a sensational initiative for change. Its methodology is based on five core areas, which are laid as follows:

1. Refocus: Align company values with the customer needs and demands.
2. Redesign: Draft and design core processes to enable improvements using information technology (IT).

• Reorganize: Convert individual teams into cross-functional teams to hold up end-to-end responsibility of a process.

1. Rethink: Think about the basic organizational needs and issues people facing with the current system.
2. Improve: Keep in mind all the business processes across the organization and work to improve them.

What are the Advantages of Implementing BPR in your Business? | Benefits

There are many benefits of business process re-engineering to your business. Some of them are as follows:

1. Cost-cutting and reducing cycle times

Business Process Reengineering eliminates all the unproductive and futile activities within an organization. This drastically reduces the costs and cycle times for the employees performing them. With team reorganization the need for management layers is eradicated.

This also enhances the flow of information eliminating the errors and rework efforts required due to multiple handoffs.

2.  Improve work, product and service quality

Business Process Reengineering minimizes work fragmentation and establish clear responsibility and ownership of the processes. This impacts the overall process effectively. Performance measurement can be evaluated easily with a prompt feedback and this allows workers to gain insight on the output responsibility.

Let’s look at some of the tangible benefits of business process re-engineering:

• Integration within the organization.
• Empowered employees.
• Reduction in the process steps.
• Natural order of process steps followed.
• Process transparency increases.
• Drastic reduction in the manufacturing costs.

What are the Real-World Examples of BPR in your Business? | Examples

Example: Reengineering in Airbnb (Product Development Process)

We all know Airbnb as a cool brand. Earlier it has struggled a lot to find an internal unique identity in Silicon Valley for the creation of a sustainable, quick delivery product development process.

Problem Definition

There are three main functions that contribute to the Airbnb product development process, namely, designers, engineers, and researchers. They couldn’t achieve the end goal of delivering a great product on time.

Designers want to wait for engineers for writing code for a mock-up to be visualized on screen. While, engineers had to wait for researchers to validate the product ideas, and only to realize at the very end that assumptions of the whole project were off-base.

Solution: Centralize Geographically Dispersed Resources

The product development process needed to be reengineered. It needed fundamental re-design; no optimization or automation was required. They faced the need to create one digital environment where both designers and engineers could work together seamlessly.

BPR Learning

In the case of Airbnb, the process of centralizing the product development process was to align it with the internal development tool. Even if coworkers weren’t able to sit in the same room, they were looking at the same product in real time. This virtual centralization supports the team in quick back and forth product development.

Conclusion

The employee productivity definitely takes a hit during process reengineering. Changes are often very difficult to manage but it saves a lot of costs on analysis, reengineering, and documentation. Better managed processes during the runtime, hugely reduce the need for reengineering.

Business process re-engineering (BPR) is an important step in business process management (BPM). Implementing process re-engineering requires effective and clear business process management. Q3Edge BPM services enable you to unlock the correct strategies for process definition and re-engineering that makes you yield better results. Our organization works on the best industrial tools (aris).

What is Business Process Re-engineering ?

Business process re-engineering definition is fundamental rethinking and redesigning of business processes so as to attain vivid improvements in all the critical aspects like service quality, process outcome, cost, and process speed

What is the Business Process Reengineering Steps ?

Here are certain steps to follow for efficient Business Process Re-engineering:
Step #1: Identify the Need for Change and Communicate
Step #2: Build a Great Team of Experts
Step #3: Define Key Performance Indicators (KPI) for the Inefficient Processes
Step #4: Reengineer and Compare KPIs of the Processes.

How the Business Process Reengineering works ?

Business Process Reengineering (BPR) is a sensational initiative for change. Its methodology is based on five core areas, which are laid as follows:
I. Refocus: Align company values with the customer needs and demands.
II. Redesign: Draft and design core processes to enable improvements using information technology (IT).
III. Reorganize: Convert individual teams into cross-functional teams to hold up end-to-end responsibility of a process.
IV. Rethink: Think about the basic organizational needs and issues people facing with the current system.
V. Improve: Keep in mind all the business processes across the organization and work to improve them

Key Highlights

1. Business Process Management
2. Business Process Architecture
3. Business Process Mapping
4. Business Process Re-engineering