Business Process Reengineering (BPR) – Definition, Steps, and Examples
What is Business Process Reengineering (BPR)?
Business Process Reengineering (BPR) aims at cutting down enterprise costs and process redundancies, but unlike other process management techniques, it does so on a much broader scale. Business Process Reengineering (BPR) - also known as process innovation and core process redesign - attempts to restructure or obliterate unproductive management layers, wipe out redundancies, and remodel processes differently.
So Business Process Reengineering (BPR) is Essentially BPI, Right?
On the surface, BPR sounds an awful like business process improvement (BPI). However, there are fundamental differences that distinguish the two. BPI might be about downsizing the current team size or tweaking a few rules here and there. But reengineering is an unconstrained approach to look beyond the defined boundaries and bring in seismic changes.
BPI is like upgrading the exhaust system on your project car. Business Process Reengineering, BPR is about rethinking the entire way the exhaust is handled.
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While BPI is an incremental setup that focuses on tinkering with the existing processes to improve them, BPR looks at the broader picture. BPI doesn’t go against the grain; it identifies the process bottlenecks and recommends changes in specific functionalities. The process framework principally remains the same when BPI is into play. BPR, on the other hand, rejects the existing rules and often takes an unconventional route to redo processes from a high-level management perspective.
Another good analogy can be seen in trying to live a healthy lifestyle. BPI might involve finding a way to get to the gym more often and eat less sugar. But BPR is an entire lifestyle change that starts with how you buy food, how you incorporate movement and exercise into your day, and how to reduce stress.
Business Process Re-engineering - Case Study
Of all the disciplines that guide the enterprise world and its management of processes, nothing comes close to a solution that is as radical - and controversial - as Business Process Reengineering (BPR).
BPR, Business Process Reengineering is radical because it often ignores the rules that apply to the current processes. And it is argued over because it usually demands heavy investment (read training and IT resources), budget cuts across department lines and many times results in employee layoffs.
Think of it as doing a full resto-modification on an old muscle car. That old Corvette worked fine back in the 1970s, but the rusty frame needs some work and a new automatic transmission would be great.
BPR takes a look at every system and tries to find ways to reengineer them to be faster, more efficient, and smoother.
While solutions like business process management and business process integration center around an enterprise’s profit and productivity, customer needs and the organization’s missions are at the heart of Business Process Reengineering (BPR). In BPR, the process always starts with companies putting down new ideas on a clean slate to rethink the existing processes from ground up.
Before a company decides to adopt BPR for their functional reshuffling, they usually answer the following questions:
- Who are our customers? What values are we offering them?
- Are the current processes delivering expected values?
- Do the processes need to be redefined or redesigned?
- Are the processes in sync with our long-term mission and goals?
- How would we handle the existing processes if we were a new company?
If a company concludes that it is, in fact, operating on complacent grounds, it has to identify the right kind of solution to address the problem or consider BPR for a total overhaul. Done well, BPR’s radical approach yields dramatic results for a company in terms of improved cycle times, product quality, productivity, and so on.
Business Process Reengineering (BPR) Examples
Many companies like Ford Motors, GTE, and Bell Atlantic tried out BPR during the 1990s to reshuffle their operations. The reengineering process they adopted made a substantial difference to them, dramatically cutting down their expenses and making them more effective against increasing competition.
Many of these companies were losing clout in their domain because customer expectation was growing while they were still stuck with the traditional ways of doing things.
An exemplary case of Business Process Reengineering, BPR rewiring processes happened in an American telecom company that had several departments to address customer support regarding technical snags, billing, new connection requests, service termination, etc. Every time a customer had an issue, they were required to call the respective department to get their complaints resolved. The company was doling out millions of dollars to ensure customer satisfaction, but smaller companies with minimal resources were threatening their business.
The telecom giant reviewed the situation and concluded that it needed drastic measures to simplify things – a one-stop solution for all customer queries. It decided to merge the various departments into one, let go of employees to minimize multiple handoffs and form a nerve center of customer support to handle all issues.
A few months later, it set up a customer care center in Atlanta and started training its repair clerks as ‘frontend technical experts’ to do the new, comprehensive job. The company equipped the team with new software that allowed the support team to instantly access the customer database and handle almost all kind of requests.
Now, if a customer called for billing query, they could also have that erratic dial tone fixed or have a new service request confirmed without having to call another number. While they were still on the phone, they could also make use of the push-button phone menu to connect directly with another department to make a query, or input a feedback about the call quality.
The redefined customer-contact process enabled the company to achieve new goals.
- It reorganized the teams and saved cost and cycle time.
- It accelerated the information flow, minimized errors, and prevented reworks.
- It improved the quality of service calls and enhanced the customer satisfaction.
- It defined clear ownership of processes within the now-restructured team.
- It allowed the team to evaluate their performance based on the instant feedback.
Who Is It For?
The problem with BPR (Business Process Reengineering) is that the larger you are, the more expensive it is to implement. A startup, five months after a launch, might undergo a pivot including business process reengineering that only has minimal costs to execute.
However, once an organization grows, it will have a harder and more expensive time to completely reengineer its processes. But they are also the ones who are forced to change due to competition and unexpected marketplace shifts.
Telecommunication companies in the late 90s, for example, had to toddle for a steady pace when they faced competition from new entrants equipped with better technologies. Over the years, multi-national banks, automobile manufacturers, aviation companies, and other big corporate institutions have benefitted by embracing BPR.
But more than being industry-specific, the call for BPR is always based on what an organization is aiming for. BPR is effective when companies need to break the mold and turn the tables in order to accomplish ambitious goals. For such measures, adopting any other process management options will only be rearranging the deck chairs on the Titanic.
Does It Always Work?
Contrary to what many enterprises believe, BPR is not always the panacea to solve all kinds of business process problems. BPR could be the right fit for an organization seeking to revamp its core processes, but it’s certainly not a tool for every situation.
Enterprises also seem to differ in their views about the success of BPR, because a significant number of organizations who applied BPR to their functions failed to achieve their goals. Due to its radical nature, BPR is an all-or-nothing approach that highly depends on how strategically was it applied to the processes. For example, a company implementing BPR to cut costs doesn’t really raise the value chain, which can badly maim the company.
However, BPR can eliminate process deficiencies when all other performance-boosting methods fail, essentially because the latter usually aims at speeding things up while keeping the traditional rules intact. Other process solutions rely on efficiency, control, and speed, whereas BPR’s mantra is based largely on innovation.
How Should We Approach Business Process Reengineering?
When it comes to identifying whether or not BPR fits your bill, the most important question to ask - do you really have to do it? Do you want to fix something that isn’t? Do you want to apply it on a process that isn’t even required at all?
BPR is not an experimental discipline because it requires heavy cost, dedicated resources, and a new start over. It doesn’t make sense to apply on processes just because they are wobbly. Instead, you should save process redesigning to big processes that really matter, like introducing new services or taking your customer service to new heights.
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For more concrete best practices in BPR, you can refer to the assessment guide by the United States General Accounting Office. It was released to help U.S. Federal Agencies test their “reengineering project, from initial strategic planning and goal-setting to post-implementation assessments.” But it helps any enterprise get valuable insights on how to actualize BPR for success.
Tie your Business Process Reengineering (BPR) goals to organizational goals instead of tasks to ensure high employee turnout and their consistency to the application. You should also combine top-down and bottom-up initiatives so that people who were at the forefront of the handling the BPR transition are able to take ownership even after the consultants walk away. Like any other initiatives, company culture plays a big role in applying BPR because eventually, it is about the people who reinforce the new work design and keep it going.
In short, business process reengineering is called for when there is a need. If you have a great car that just needs a few improvements, then business process improvement may be the answer. However, if you’ve got a real clunker that you need to get race-ready, then business process reengineering might be what you need.