Business Process Reengineering: The Modern Way to Boost Efficiency and Profits [Guide of 2024]
Making changes to internal operations and processes becomes more and more difficult as your enterprise grows in size because people get used to the old ways. However, CIOs need to remember that the only way to improve processes is by identifying bottlenecks and areas of improvement.
Business process engineering facilitates a continuous systemic analysis and reconstruction of the existing processes, helping enterprises improve efficiency and significantly decrease costs.
What is business process re-engineering (BPR)?
Business Process Reengineering (BPR) is a transformative strategy that revamps business operations completely. It targets significant improvements in productivity, cycle times, quality, and the satisfaction of employees and customers. BPR aims to restructure business processes for remarkable enhancements.
Reengineering, often referred to as reverse engineering or software reengineering, is a practice that involves the analysis, design, and modification of pre-existing software systems. The primary goal of this process is to enhance their quality, performance, and maintainability. Reengineering can lead to significant improvements in software efficiency and effectiveness, making it a valuable tool in the realm of software development and maintenance.
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Is business process reengineering (BPR) same as business process improvement (BPI)?
On the surface, BPR sounds a lot like business process improvement (BPI). However, there are fundamental differences that distinguish the two. BPI might be about tweaking a few rules here and there. But reengineering is an unconstrained approach to look beyond the defined boundaries and bring in seismic changes.
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 in 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.
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.
Five steps of Business Process Re-engineering (BPR)
To keep business process re-engineering fair, transparent, and efficient, stakeholders need to get a better understanding of the key steps involved in it. Although the process can differ from one organization to another, these steps listed below succinctly summarize the process:
Below are the 5 business process re-engineering steps:
1. Map the current state of your business processes
Gather data from all resources–both software tools and stakeholders. Understand how the process is performing currently.
2. Analyze them and find any process gaps or disconnects
Identify all the errors and delays that hold up a free flow of the process. Make sure if all details are available in the respective steps for the stakeholders to make quick decisions.
3. Look for improvement opportunities and validate them
Check if all the steps are absolutely necessary. If a step is there to solely inform the person, remove the step, and add an automated email trigger.
4. Design a cutting-edge future-state process map
Create a new process that solves all the problems you have identified. Don’t be afraid to design a totally new process that is sure to work well. Designate KPIs for every step of the process. Consider platforms for approvals and workflows to streamline processes.
5. Implement future state changes and be mindful of dependencies
Inform every stakeholder of the new process. Only proceed after everyone is on board and educated about how the new process works. Constantly monitor the KPIs.
A real-life example of BPR
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.
The story
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, they set up a customer care center in Atlanta and started training their 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 kinds 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 feedback about the call quality.
The redefined customer-contact process enabled the company to achieve new goals.
- Reorganized the teams and saved cost and cycle time
- Accelerated the information flow, minimized errors, and prevented reworks
- Improved the quality of service calls and enhanced customer satisfaction
- Defined clear ownership of processes within the now-restructured team
- Allowed the team to evaluate their performance based on instant feedback
When should you consider BPR
The problem with BPR is that the larger you are, the more expensive it is to implement. A startup, five months after 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.
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.
Core questions
Before you decide to adopt BPR for functional reshuffling, ask yourself 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.
Good BPM reduces the need for BPR
The productivity of employees definitely takes a hit during process reengineering. Changes are difficult to manage, and it saves a lot of costs on analysis, reengineering, and documentation. If processes are managed better during runtime, the need for reengineering is greatly reduced.
Kissflow is a low-code platform that allows you to create, streamline, and digitize processes with minimal coding. You can directly create new processes from scratch or improve new processes with the visual drag-and-drop editor.
The powerful reporting capabilities of Kissflow make it easier to monitor process performance, identify efficiency issues, and make data-driven decisions to reengineer processes for improved efficiency. With Kissflow BPM software, you get a lot more visibility into processes and their functions.
