Business Process Reengineering (BPR) (unit 3rd)

Business Process Reengineering (BPR) – Definition, Steps, and Examples

What is Business Process Reengineering (BPR)?

Business process reengineering is the act of recreating a core business
process with the goal of improving product output, quality, or reducing costs.

Typically, it involves the analysis of company workflows, finding processes

that are sub-par or inefficient, and figuring out ways to get rid of them or
change them.Business process reengineering became popular in the business
world in the 1990s, inspired by an article called Reengineering Work: Don’t
Automate, Obliterate which was published in the Harvard Business review by
Michael Hammer.

His position was that too many businesses were using new technologies
to automate fundamentally ineffective processes, as opposed to
creating something different, something that is built on new technologies.

Business process reengineering (BPR) is the practice of rethinking and

redesigning the way work is done to better support an
organization's mission and reduce costs. Organizations reengineer two key areas
of their businesses. First, they use modern technology to enhance data
dissemination and decision-making processes. 
 Business process reengineering is also known as business process
redesign, business transformation, or business process change management.

Business Process Reengineering Steps:--

Step #1: Identity and Communicating the Need for Change

If you’re a small start up, this can be a piece of cake. You realize that your
product has a high user drop-off rate, send off a text to your co-founder, and
suggest a direction to pivot.

For a corporation, however, it can be a lot harder. There will always be

individuals who are happy with things as they are, both from the side of
management and employees. The first might be afraid that it might be a sunk
investment, the later for their job security

Step #2: Put Together a Team of Experts

As with any other project, business process reengineering needs a team of

highly skilled, motivated people who will carry out the needed steps.

In most cases, the team consists of:

 Senior Manager. When it comes to making a major change, you need the

supervision of someone who can call the shots. If a BPR team doesn’t have
someone from the senior management, they’ll have to get in touch with them for
every minor change.
 Operational Manager. As a given, you’ll need someone who knows the
ins-and-outs of the process – and that’s where the operational manager comes
in. They’ve worked with the process(es) and can contribute with their vast
knowledge.
 Reengineering Experts.  Finally, you’ll need the right engineers.
Reengineering processes might need expertise from a number of different fields,
anything from IT to manufacturing. While it usually varies case by case, the
right change might be anything – hardware, software, workflows, etc
 Step#4 Define Key Performance Indicators (KPI)

Once you have the team ready and about to kick-off the initiative, you’ll need to
define the right KPIs. You don’t want to adapt to a new process and THEN
realize that you didn’t keep some expenses in mind – the idea of BPR is to
optimize, not the other way around.

NOTE: Usually, there are 2 ways to map out processes:

 Process Flowcharts – the most basic way to work with processes is

through flowcharts. Grab a pen and paper and write down the processes step by
step.
 Business Process Management Software – if you’re more tech-savvy,
using software for process analysis can make everything a lot easier. You can
use Tallyfy,
 for example, to digitize your processes, set deadlines, etc. Simply using
such software might end up optimizing the said processes as it allows for easier
collaboration between the employees.
 Step #4: Reengineer the processes and Compare KPIs
 Finally, once you’re done with all the analysis and planning, you can start
implementing the solutions and changes on a small scale.Once you get to this
point, there’s not much to add – what you have to do now is keep putting your
theories into practice and seeing how the KPIs hold up.
If the KPIs show that the new solution works better, you can start slowly
scaling the solution, putting it into action within more and more company
processes.

Business process reengineering methodology – steps and tips

With BPR, it is important to:

 Organize around outcomes, not tasks.

 Integrate information processing work into the real work that produces
the information.
 Link parallel activities in the workflow instead of just integrating their
results.
 Put the decision point where the work is performed, and build control
into the process.
 Capture information once and at the source.
There is also, as always, some steps to follow.

1. Prepare for reengineering. Planning and preparation are vital to any

change, especially in a radical one like what BPR brings

2. Analyze and map the AS-IS processes. Check out this tool for process

modeling and create your free account: HEFLO BPMN Modeling Tool.
3. Identify the unnecessary tasks and processes, cutting then.
4. Design from scratch and validate the TO-BE processes.
5. Implement the reengineering process, adapting your organization to them.

So, should I use business process reengineering methodology when optimizing

my company’s processes? This question can only be answered within each
organization. BPR and BPM are different and many times complementary to
each other.

Although BPR can seem hard to implement, the key is in how you do it.
Choosing a reliable and effective software or professional in the project is what
will define its success or failure.

Methodology

In the ensuing section, we deal with the details of our methodology.

 
Activity #1: Prepare for Reengineering
“If you fail to plan, you plan to fail”.
Planning and Preparation are vital factors for any activity or event to
be successful, and reengineering is no exception.

step #2: Map and Analyze As-Is Process:

Before the reengineering team can proceed to redesign the process, they should
understand the existing process. Although some BPR proponents (in particular
Hammer and Champy) argue against analyzing the currententerprise, saying that it
inhibits the creative process, that might not always hold true.
.
The important aspect of BPR (what makes BPR, BPR) is that theimprovement
should provide dramatic results. Many people do not understand the value of an As-Is analysis
and rather prefer to spend a larger chunk of their valuable time on designing the
To-Be model directly. What follows isan illustration that illustrates this fallacy.

a phone call.’
But just because this small yet vital information had not been documented all his efforts added
up tonaught and the whole system that he had so painstakingly developed had to
be scrapped.
This is initiated by first creation and documentation of Activity and
Process models making use of the various modeling methods available. #3: Design
To-Be process:
 
The objective of this phase is to produce one or more alternatives to the current
situation, which satisfy the strategic goals of the enterprise.
The first step in this phase is benchmarking.
“Benchmarking is the comparing of both the performance of the organization’s
processes and the way those processes are conducted with those relevantpeer
organizations to obtain ideas for improvement.

#4: Implement Reengineered Process:

The implementation stage is where reengineering efforts meet the most resistance and hence it
is by far the most difficult one
If we expect that the environment would be conducive to the reengineering effort we are
sadly mistaken.
The question that confronts us would be,
5: Improve Process Continuously:
A process cannot be reengineered overnight. A very vital part in the success of every
reengineering effort lies in improving the reengineered process continuously. The first step in
this activity is monitoring.
BPR advantages

Increased effectiveness; identifying the core functions as well as any that are
inefficient or obsolete
 Reduced overall cost and cycle time
 Meaningful work for staff; the process promotes greater staff involvement
 Improved organizational approach; realize business rules from the past,
decreasing new product and process activity time
 Solidified business focus
 Business growth; improving the industry position with radical improvements
 Increased customer base
Downsized company structure, empowering employees
.
 Early on, the field of BPR discovered numerous recommendations:
Organize around the outcome, not the specific task. One person owns a whole
process, performing or coordinating all steps.

Those closest to the process should perform the process. Instead of farming
out different types of easily managed work, the people who need the quick
outcomes from simple tasks take ownership.

Have the people who produce the information process it. This streamlines the
outcome of the information gathered into usable data.

Centralize resources. Databases and other technology systems can

consolidate resources to cut down on redundancies and increase flexibility.

Integrate corresponding activities, not merely their results. This keeps the
content cohesive, without the gaps and miscommunication that could cause
delays.

Control the decision points and where the work is done. Built-in controls
enable the employees who perform the work to self-manage, so managers can
become supportive rather than directive.

Common guiding principles for the stages of BPR are as follows:

BPR Step 1: Preparation and Coordination

Although all the steps in a BPR plan are important to a successful product, you will
have the best chance for success when you properly lay the foundation. The
company vision and mission statements should already be developed, and you
should have an idea of where the current processes fall short of meeting customer
needs.

BPR Step 2: Set the Vision

Companies must be clear on why they want or need to reengineer their
processes and why they aren’t where they have to be. A business-needs
analysis could help start the process and convince stakeholders with clearly
defined and measurable objectives.
The organization must understand that their current processes require changes
and invest in a vision for the future. Understanding the reasons are critical
because they ensure employee buy-in. Otherwise, the employees may feel
that their work life is threatened.
They may obstruct the change, especially the necessary radical alterations
that come with BPR. Since absolute support is critical, a clear vision of the
intended consequences can give the employees a goal to rally.

BPR Step 3: Assemble the Team

Next, the company gathers a team that can consist of internal employees,
consultants, or a mix of both to conduct the reengineering. Depending on the
project scope, the business should consider these factors choosing a team:

Should an initial team consider the reengineering?

Should the team be responsible for the BPR in its entirety?

 This portion of BPR requires a comprehensive study of the company

itself, looking at its mission, goals, the needs of its customers, and how
the company is meeting those demands.
 the team reviews and analyzes current performance of the processes,
rooting out weaknesses and non-value-add tasks, while asking what
each process is trying to accomplish.
 It is imperative at this step to choose which process(es) to initially
evaluate, starting with a small amount so as not to overwhelm the
company. Hammer and Champy(developer) discourage benchmarking
— measuring your company’s performance against similar but best-in-
class companies — because it can restrict innovative thinking.

BPR Step 4: Redesign

This is the portion of BPR where the team gets to flex its creative muscle and
craft the main principles that will be applied to the reengineering effort.

These include figuring out what biases and assumptions that the team works
under and looking for opportunities to integrate technology.
 Team members should remember that they are not only making the old
processes better, but completely redesigning how they are performed. Also,
no specific rules govern the redesign.

BPR Step 5: Include the Whole Company

Companies should remember that BPR does not work well if it is done in a bubble.

Not only should companies get employee feedback, they should also review the
other portions of the company that will evolve because of the changes.

The company is managing change, thus ensuring maximum benefits and minimal
negative impact. This may include organizational and management structures, as
well as logistics, operations, customer case managers, production, manufacturing,
corporate, and different management levels. Experts in reengineering techniques can
help design ways to communicate with a variety of project stakeholders.

Further, continued communication about the reengineering process itself, the results,
and the employees’ part in it is essential and empowers the workers. Reinforcing the
reengineering method through performance incentives keeps them positive and
engaged.

Method for change to EC/EDI

Step 1: Define change management process and practices ƒ Procedures for
handling changes –

How changes are requested, how they are processed and scheduled for
implementation, how they are applied, and what the criteria are for backing out
changes that cause problems ƒ

Roles and responsibilities of the IT support staff – who receives the change
request, who tracks all change requests, who schedules change implementations,
and what each entity is supposed to do ƒ

Measurements for change management - what will be tracked to monitor the

efficiency of the change management discipline ƒ Tools to be used ƒ
Type of changes to be handled and how to assign priorities - priority
assignment methodology and escalation guidelines

ƒ Back-out procedures - Actions to take if applied changes do not perform as

expected or cause problems to other components of the system

Step 2: Receive change requests

Receive all requests for changes, ideally through a single change coordinator.
Change requests can be submitted on a change request form that includes the
date and time of the request.

Step 3: Plan for implementation of changes

Examine all change requests to determine: ƒ

 Change request prioritization ƒ

 Resource requirements for implementing the change
 Impact to the system ƒ
 Back-out procedures ƒ
 Schedule of implementation

Step 4: Implement and monitor the changes;

back out changes if necessary At this stage, apply the change and monitor the
results. If the desired outcome is not achieved, or if other systems or
applications are negatively affected, back out the changes.

Step 5: Evaluate and report on changes implemented

Provide feedback on all changes to the change coordinator, whether they were
successful or not. The change coordinator is responsible for examining trends in
the application of changes, to see if: ƒ

 Change implementation planning was sufficient.

 Changes to certain resources are more prone to problems.

Step 6: Modify change management plan if necessary

You may need to modify the entire change management process to make it
more effective. Consider re examining your change management discipline if: ƒ

 Changes are not being applied on time. ƒ

 Not enough changes are being processed. ƒ
 Too many changes are being backed out. ƒ
 Changes are affecting the system availability. Not all changes are being
covered.