MSMES IN THE PHILIPPINES

For Nueca Technologies Inc., their time

to shine came during a pandemic

SEP 29, 2020 2:28 PM PHT
MARJ CASAL

INFO

MANILA, PHILIPPINES

If you’re an aspiring entrepreneur who’s starting to lose hope, Nueca’s story will inspire you
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Community Mart was a failed attempt. It was introduced in 2018 as an app where residents of
Naga City can have their groceries delivered to their homes, like how people were doing it in
Metro Manila.
But people couldn’t see then why they would want to have someone do their groceries when they
could do it themselves. Very few used the app so Nueca decided to park it. But its founder
Magno Edilberto R. Conag III still thought about it from time to time, and even mentioned the
idea of partnering with public markets to Vice President Leni Robredo during Bicol’s 2019
Halyao Awards where she was a guest speaker.
He quickly forgot about it as Nueca was busy running two other successful e-commerce apps:
Tindahang Tapat and Hungrily, as well as their logistics company, Nueca Delivery Services.
Tindahang Tapat’s clients are the sari-sari store nanays. Whenever they’re running low on
stocks, they can order reinforcements from the app and have the products delivered to them for
free. There’s no need to close down the store for long periods of time for "paninda" runs, saving
these hardworking sari-sari store owners' time, energy, and money.   
Meanwhile, Hungrily is Naga’s version of foodpanda or GrabFood. Just like its counterparts, the
app aims to make food deliveries convenient to the public and at the same time help local Naga
restaurants reach more customers. 
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Unlike Community Mart, these two apps found their niche and continued to grow actively.
While Nueca dedicated all their energies to Tindahang Tapat and Hungrily, the pandemic
happened. Everyone was asked to stay in their homes indefinitely. People didn’t know where or
how to buy their essentials. Businesses didn’t know how they could continue operating when
customers are locked down. 
Nueca thrives on solving problems, just like how they solved the problems of sari-
sari store nanays as well as that of local restaurants who had to compete with the much bigger
ones.  The effects of the pandemic on the community and the local economy are no different. It is
a huge problem.  
With this they had to act fast. There was not much time to brainstorm for a breakthrough
product. Good thing they already had one. It was time for Community Mart to shine. 
SPECIAL DELIVERY. Community Mart partnered with public markets to help store owners
reach their customers.
They reintroduced Community Mart to the market in February this year, expanding the services
to include not just groceries but also department stores, drug stores, bookstores, hardware stores,
and many more. It was starting to pick up. People were starting to see the value of an app where
they can order things like wood, cement, plumbing, and electrical supplies conveniently. And
when the quarantine happened, the value of Community Mart just shot up – the public realized
they needed an app where they could easily order everything they need.
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“This was a decision point,” said Conag. “Half of our team was for pausing the operations of our
3 e-commerce platforms while some were for continuing. After two days of pause and reflection,
it was clear that we needed to operate. Nueca, being an e-commerce company, was much more
needed at that time not only by customers but by local businesses also.”
So while everyone else was slowing down during the quarantine period, Nueca was speeding up
their hiring process, app development, coordination, and marketing efforts. They were working
remotely but effectively by using digital tools like Zoom, Telegram, and Meet. They heavily
relied on the strong internet connection provided to them by Globe myBusiness.
“[Globe myBusiness] has helped us in many ways. From my personal phone line, which they
recently upgraded to allow unlimited calls and texts to all networks, what a convenience!” said
Conag. “To Globe SMS API, which is practically what’s powering our eCommerce customer
registration and notifications, to internet connections.”
This time, everyone was willing to sign up. Now home depots, specialty stores, water, LPG,
restaurants selling ready-to-cook food to prevent spoilage, beauty stores, even internet providers,
and more importantly, public markets, are on Community Mart.
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It has always been Conag’s dream to get the public markets on board. Thanks to the support of
Naga City’s local government, this vision came true. The residents were safely shopping from
home, businesses started earning, and tricycle drivers who lost their livelihood were hired as
delivery riders.
DRIVER TO RIDER. Community Mart hired displaced tricycle drivers as delivery riders.
Conag was happy to see their city’s problems being addressed. But this wasn’t enough for him.
He figured that other cities might be in need of their help, too. He messaged the Facebook pages
of other local government units (LGUs) but didn’t get any reply. So he decided to level up his
game. He went straight to the Office of the Vice President who, as luck would have it, already
had an idea about what Community Mart was. 
“I waited for a response but when [Vice President Leni Robredo] herself responded, oh boy! It’s
game time! I was starstruck! Within days, Quezon City’s Kamuning Public Market is on
Community Mart. Weeks after, Pasig Mega Market followed with the help of Mayor Vico Sotto.
Alabang Public Market opened as well,” said Conag. “All these 3 [public markets] have reached
a revenue of no less than P10 million in just a short period of time.”
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COLLABORATING FOR GOOD. The teams of Vice President Leni Robredo and Pasig City
Mayor Vico Sotto.
COMMUNITY MART PASIG. Vice President Leni Robredo oversees the launch of Community
Mart in Pasig City.
It’s not only Community Mart that’s thriving. Tindahang Tapat is now serving thousands of sari-
sari stores in Naga City, Camarines Sur, Batangas, and Cavite while Hungrily is now partnered
with more than a hundred restaurants.
It goes to show that when you fail, it pays to try again. That’s what Nueca as a company is all
about. Nueca, derived from the original Spanish name of Naga City – Ciudad de Nueva Caceres
(New Caceres City), is what Conag now calls the version 2.0. He previously built a tech startup
but failed. And Nueca is his “try again”.
His motivation for doing so is the same. He wanted his students from the Ateneo de Naga
University to have opportunities in Naga. He wanted the best and the brightest developers,
animators, designers, to find a job without having to go to Manila or overseas. He just knows
better now. He started from experience and now he’s reaping the rewards. 
That’s just the thing that aspiring entrepreneurs can all learn from. It’s always harder in the
beginning. Failure is part of the journey. But success comes to the tenacious, to those who won’t
stop trying, who persist until their moment arrives, and then leap at the opportunity. 
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Keeping a business alive and thriving also requires openness to continuous learning and growth.
And the best lessons can come from experts and fellow entrepreneurs who share real-life
experiences at business resource portals like Globe myBusiness Academy.
The importance of agility, of being able to pivot a plan and change course midstream, especially
during a time of adversity, is a lesson Nueca learned well. They turned the pandemic to their
advantage, using an urgent consumer need and their own know-how to legitimize their business
by partnering with merchants, organizations, the office of the vice president, and other LGUs.
By being persistent, Nueca has now grown from less than 30 to now 97 employees. Their
revenue has tripled and they have over 250 partners. And from only servicing Naga previously,
they’re now in most parts of Bicol and even Metro Manila.
“Have a firm resolve never to retreat from this health and economic crisis. Keep committed to
serving others above the self,” said Conag. “In this way, you will naturally discover ways to
evolve. And in your evolution, you will become relevant, again. In relevance, you will be able to
serve. In serving others, thriving is a natural consequence.” – Rappler.com

ABOUT US
3GX is an independent business firm that specializes on Computer, I.T. Solutions & Services, Electronics, Telecom
and Electrical products. Since its inception in the year 1998 within the city of Naga, it has evolved as an emerging
company that strive itself in bringing excellence in I.T. Solutions within the region.
3GX specializes in designing and implementing I.C.T business solutions suited to the costumers' specific needs and
budget. It offers competitive prices and quality on a comprehensive selection of reliable brand name of computers,
electronics, telecoms and electrical products.

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Business Process Reengineering

(BPR): Definition, Steps,
Examples
 POS T  by SONIA PEA RSON

WELCO ME TO  TALLY FY . WE BELIEV E SUCCESSF UL P EOP LE AND

CO MPAN IES RELY ON  REP EA TA BLE SYSTEM S  TO WIN .

Proper execution of Business Process Reengineering can be a game-changer to any business. If

properly handled, business process reengineering can perform miracles on a failing or stagnating
company, increasing the profits and driving growth.

Business process reengineering, however, is not the easiest concept to grasp.

It involves enforcing change in an organization – tearing down something people are used to and
creating something new.

And that’s not an easy task.

Jump to any section

 So, What is Business Process Reengineering?

o Are you looking to document and run your processes?
 Business Process Reengineering Steps
o Step #1: Identity and Communicating the Need for Change
 Risk of Failure: Not Getting Buy-In From The Company
o Step #2: Put Together a Team of Experts
 Risk of Failure: Not Putting The Right Team Together
o Step #3: Find the Inefficient Processes and Define Key Performance Indicators (KPI)
 Risk of Failure: Inability to Properly Analyze Processes
o Step #4: Reengineer the Processes and Compare KPIs
 Business Process Reengineering Examples
o BPR Examples: Ford Motors
o Next Steps
So, What is Business Process
Reengineering?
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.

Are you looking to document and run your processes?

Don't use MS Word or Google Docs, and don't use flowcharts.

Documenting your processes using flowcharts might look pretty and

nice – but you can’t run them. Even worse – nobody looks at
flowcharts.

SEE WHY HERE

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.

Think, using technology to “upgrade” a horse with lighter horseshoes which make them faster,
as opposed to just building a car.

In the decades since, BPR has continued to be used by businesses as an alternative to business

process management (automating or reusing existing processes), which has largely superseded it
in popularity.

And with the pace of technological change faster than ever before, BPR is a lot more relevant
than ever before.

 Want more information about what business process reengineering is? Check out
our video: What is Business Process Reengineering?

Business Process Reengineering Steps

As we’ve mentioned before, business process reengineering is no easy task.

Unlike business process management or improvement, both of which focus on working with

existing processes, BPR means changing the said processes fundamentally.

This can be extremely time-consuming, expensive and risky. Unless you manage to carry out
each of the steps successfully, your attempts at change might fail.

Step #1: Identity and Communicating the Need for Change

If you’re a small startup, 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.

So, you’ll need to convince them why making the change is essential for the company. If the
company is not doing well, this shouldn’t be too hard.

In some cases, however, the issue is with the company not doing as well as it could be. Meaning,
you should do your research. Which processes might not be working? Is your competition
doing better than you in some regards? Worse?
 Once you have all the information, you’ll need to come up with a very comprehensive plan,
involving leaders from different departments. The management will have to play the role of
salespeople: conveying the grand vision of change, showing how it’ll affect even the lowest-
ranked employee positively.

Risk of Failure: Not Getting Buy-In From The Company

If you fail to do this, however, your business process reengineering efforts might be destined
to fail long before they even start.

Business Process Re-Engineering can seriously impact everyone in the company, and sometimes
this can appear to be a negative change for some. Some employees might, for example, think
you’ll let them all go if you find a better way to function (which is a real possibility).

In such cases, even if the management is on board, the initiative might fail because the
employees aren’t engaged.

Usually, it’s possible to get the employees buy-in by motivating them or showing them different
views they weren’t aware of. Sometimes, however, the lack of employee engagement might be
because of a bad workplace culture – something that might need to be dealt with before starting
any BPR initiatives.

  Getting your employee to commit to change isn’t easy. There are a bunch of change
management models that help you accomplish this, though. Some of our favorites
include the ADKAR Model and Bridge’s Transition Model.

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.
 Risk of Failure: Not Putting The Right Team Together
There are a lot of different ways to mess this one up.

If the team consists of individuals with a similar viewpoint and agenda, for example, they might
not be able to properly diagnose the problems/solutions.

Or, the team might involve too many or too few people. In the first case, the decision making
might be slowed down due to conflicting viewpoints. In the later, there might not be enough
experts in certain fields to create adequate solutions.

It’s hard to put all that down as a framework, as it depends on the project itself. There is one
thing, however, that benefits every BPR team: having a team full of people who are enthusiastic
(and yet unbiased), positive and passionate about making a difference.

Step #3: Find the Inefficient Processes and 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.

While KPIs usually vary depending on what process you’re optimizing, the following can be
very typical:

 Manufacturing
o Cycle Time – The time spent from the beginning to the end of a process
o Changeover Time – Time needed to switch the line from making one product to the
next
o Defect Rate – Percentage of products manufactured defective
o Inventory Turnover – How long it takes for the manufacturing line to turn inventory into
products
o Planned VS Emergency Maintenance – The ratio of the times planned maintenance and
emergency maintenance happen
 IT
o Mean Time to Repair – Average time needed to repair the system / software / app after
an emergency
o Support Ticket Closure rate – Number of support tickets closed by the support team
divided by the number opened
o Application Dev. – The time needed to fully develop a new application from scratch
 o Cycle Time – The time needed to get the network back up after a security breach
Once you have the exact KPIs defined, you’ll need to go after the individual processes. The
easiest way to do this is to do business process mapping. While it can be hard to analyze
processes as a concept, it’s a lot easier if you have everything written down step by step.

This is where the operational manager comes in handy – they make it marginally easier to define
and analyze the processes.

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.

  Want to get started with BPMS, but not sure how? Our guide to different BPM tools
(and their distinct features) is as good of a start as any.

Risk of Failure: Inability to Properly Analyze Processes

Or, to put it more succinctly – impatience. It’s uncommon for someone to try business process
reengineering if they profits are soaring and the projections are looking great.

BPR is usually called for when things aren’t going all that well and businesses need drastic
changes. So, it can be very tempting to hurry things up and skip through the analysis process and
start carrying out the changes.

The thing is, though, the business analysis needs to be done properly, not rushed through to get
to the more exciting parts.

There are always time and money pressures in the business world, and it’s the responsibility of
the senior management to resist the temptation and make sure the proper procedure is carried out.
Problem areas need to be identified, key goals need to be set and business objectives need to be
defined and this takes time.

Ideally, each stage requires input from groups from around the business to ensure that a full
picture is being formed, with feedback and ideas being taken into consideration from a diverse
range of sources. The next step is to identify and prioritize the improvements that are needed
and those areas and processes that need to be scrapped.

Any business that doesn’t take this analysis seriously will be going into those next steps blind
and will find that their BPR efforts will fail.
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.

If not, you go back to the drawing board and start chalking up new potential solutions.

Business Process Reengineering Examples

The past decade has been very big on change. With new technology being developed at such a
breakneck pace, a lot of companies started carrying out business process reengineering
initiatives. There are a lot of both successful and catastrophic business process reengineering
examples in history, one of the most famous being that of Ford.

BPR Examples: Ford Motors

One of the most referenced business process reengineering examples is the case of Ford, an
automobile manufacturing company.

In the 1980s, the American automobile industry was in a depression, and in an attempt to cut
costs, Ford decided to scrutinize some of their departments in an attempt to find inefficient
processes.

One of their findings was that the accounts payable department was not as efficient as it could
be: their accounts payable division consisted of 500 people, as opposed to Mazda’s (their
partner) 5.

While Mazda was a smaller company, Ford estimated that their department was still 5 times
bigger than it should have been.

Accordingly, Ford management set themselves a quantifiable goal: to reduce the number of
clerks working in accounts payable by a couple of hundred employees. Then, they launched a
business process reengineering initiative to figure out why was the department so overstaffed.

They analyzed the current system, and found out that it worked as follows:
1. When the purchasing department would write a purchase order, they sent a copy to accounts
payable.
2. Then, the material control would receive the goods, and send a copy of the related document to
accounts payable.
3. At the same time, the vendor would send a receipt for the goods to accounts payable.
Then, the clerk at the accounts payable department would have to match the three orders, and if
they matched, he or she would issue the payment. This, of course, took a lot of manpower in the
department.

Old Payable Process

So, as is the case with BPR, Ford completely recreated the process digitally.

1. Purchasing issues an order and inputs it into an online database.

2. Material control receives the goods and cross-references with the database to make sure it
matches an order.
3. If there’s a match, material control accepts the order on the computer.
 New payable process

This way, the need for accounts payable clerks to match the orders was completely eliminated.

You can learn more about the case here.

Have any personal experiences with BPR? Was it successful? Why, or why not? Let us know
down in the comments!

Next Steps

 Document processes, onboard and train your team from anywhere

 Track processes to prevent errors and omissions
 Automate business decisions and client experiences
 See more about Tallyfy
 Try Tallyfy for free
 Talk to Tallyfy Sales
 Definition – What is Business Process Redesign (BPR)?
 Business Process Management (BPM): Definition, Benefits &
Steps
 Business Process Modeling: Definition, Benefits and Techniques
 Continuous Improvement: Definition, Benefits and Tools
 What is Operations Management [Theory & Practice]
 Business Process Analysis: Definition, Techniques, and Examples

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5 thoughts on “Business Process

Reengineering (BPR): Definition, Steps,
Examples”

1.

Afonso PenaJune 4, 2019 REPLY  ↓

 I really love the way Sonia Pearson summarised everything. I understood what I was being
taught for the past 5 months in one night.
Thank you very much.

2.

AYUSHI DHENGULANovember 27, 2019 REPLY  ↓

Very beautifully crafted

3.

Cesar ArditoDecember 30, 2019 REPLY  ↓

I am a real estate investor in Panama. We manage our own construction and need to revise all my
business processes. Any help?

1.

AmitDecember 31, 2019 

Hey Cesar – contact us via https://tallyfy.com/experts

4.
ManasiApril 15, 2020 REPLY  ↓

I liked it. Amazingly explained.

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The Easy Guide to Business Process

Reengineering
Updated on: 5 December 2019

Business process reengineering is a crucial element in the agenda of many

large as well as small companies in many industries, with manufacturing and
banking/ finance being the leading sectors. It allows organizations to view
their business processes from a fresh perspective in order to understand how
to redesign them to improve the way they work.

In this guide, we aim to simplify the concept of business process

reengineering by explaining what it is and the process steps. We have also
provided business process templates that you can use right away to kickstart
your own BPR project.

What is Business Process Reengineering

“Business Reengineering is the fundamental rethinking and radical redesign
of business processes to achieve dramatic improvements in critical,
contemporary measures of performance, such as cost, quality, service, and
speed” – Michael Hammer and James Champy

Business process reengineering is an approach used to improve

organizational performance by increasing the efficiency and effectiveness of
processes that exist across the organization.  In addition to the redesigning of
business processes, it also involves the redesigning of associated systems
and organizational structures. 

Usually, reasons like new market opportunities, increasing competition, poor

financial performance, and decreasing market share trigger the need for a
business process transformation. 
BPR involves the analysis and transformation of several major components of
a business. These include,

 Strategy
 Organization
 Process
 Technology
 Culture

BPR includes three phases; analysis phase, design phase, and

implementation phase. It is also referred to as business process redesign,
business process change management, and business transformation.
Three Phase BPR Model Proposed by Cross Feather and Lynch (Click on the
template to edit it online)

Benefits of Business Process Reengineering

BPR plays a major role in organizational performance improvement in terms
of cost, quality, delivery, employee productivity, etc. It also helps

 Streamline business processes and systems 

 Companies easily adapt to changing times and reduce operating
expenses
 Improve company profitability and sustain competitive advantage
 Boost employee productivity 
 Increase customer satisfaction by improving the quality of products and
services

Principles of Business Process Reengineering

Following are the 7 principles of reengineering proposed by Michael Hammer
and James Champy

1. Organize around outcomes, not tasks.

2. Identify all the organization’s processes and prioritize them in order of
redesign urgency
3. Integrate information processing work into the real work that produces
the information
4. Treat geographically dispersed resources as though they were
centralized
5. Link Parallel activities in the workflow instead of just integrating their
results
6. Put the decision point where the work is performed, and build control
into the process
7. Capture information once and at the source

To learn about these principles in more detail, refer to this resource.

BPR Implementation | Business Process Reengineering Steps

Reengineering a process focuses on redesigning a process as a whole which
includes fundamentally rethinking how the organizational work should be done
in order to achieve dramatic improvement. That’s what differentiates BPR
from process improvement which only focuses on functional or incremental
improvement. 

Reengineering might not be appropriate in all situations, especially if your

processes only require optimization and if your organization is not looking to
undergo dramatic change. In such a case, you can opt for a process
improvement technique.

Step 1: Set the vision and business goals 

This is where the senior management needs to identify the business situation;
customer expectations, competition, opportunities, etc.

This will make it easier to understand the need for change and create a clear
vision of where the company needs to be in the future. Then clarify the
objectives in both qualitative and quantitative terms. 

Step 2: Establish a competent team

The team you select needs to be cross-functional because expertise and
perceptions from all levels of the organization are necessary to minimize the
chances of failure. 

It should be the responsibility of the top management to have a clear vision of

the activities that need to be carried out and provide strategic direction. You
also need to have an operational manager who knows the ins and outs of the
processes. It is equally important to have the right engineers with different
expertise from various fields to make the team complete. 

At this stage, it is important to have the goals and strategies outlined properly.
You can also carry out surveys and benchmarking activities to identify
customer needs and analyze the competition.   

In this step, it’s also necessary to communicate the business case for change
and the objectives of the project to the rest of the employees. This will
encourage their feedback as well and help them get ready for what’s to
come.  
Step 3: Understand the current process
In this step, you need to select the process(es) that you will be redesigning.
Such processes that are broken, cross-functional, value-adding, have
bottlenecks or have high-impact on the organization, etc. can be prioritized. 

Once you select them, map them out using flowcharts or process maps to
analyze them thoroughly to identify the gaps, inefficiencies, blockers, etc. 
Business Process Flow Template (Click on the template to edit it online)
Then define the right KPIs for the processes in order to monitor that the
process has gained the desired effect once you implement them. 
Step 4: Redesign the process
Keeping your vision in mind, redesign a new process that effectively
overcomes the inefficiencies of the previous process. Here you will create a
future-state map that highlights the solutions you have identified for the issues
of the current state process. 
Background Check Process Flow (Click on the template to edit it online)

Step 5: Implement the reengineered process

Once the process has been redesigned, you can run a small test to see how it
works by monitoring with the KPIs you have defined earlier. This will allow you
to make necessary adjustments to the process before implementing it
company-wide. If the new process works better than the current one, you can
implement it on a larger scale.

BPR Methodologies
There are several business process reengineering methodologies out there,
and we have listed some of them below, along with the steps. They highlight
more ways of reengineering business processes in addition to what we have
discussed above. 

Hammer/Champy Methodology
The methodology introduced by Hammer and Champy popularized business
process reengineering. It involves six steps. 

Step 1: The CEO who initiates the reengineering process should introduce it
to the employees by explaining the current situation of the company and
his/her future vision for the company. 

Step 2: Identify business processes in terms of how they interact within the
company and in relation to the outside world. Here process maps can be used
to visualize the processes. 

Step 3: Select the processes that have the potential to bring value to the
company once reengineered and those that are easy to be reengineered. 

Step 4: Analyze the current performance of the processes as opposed to

what is expected from them in the future. 

Step 5: Redesign the selected business process using creativity, lateral

thinking and imagination. 

Step 6: Implement the redesigned processes. 

The Davenport Methodology
Davenport puts information technology at the heart of business reengineering.
The Davenport model covers six steps.

Step 1: Develop business vision and process objectives.

Step 2: Identify the business processes that should be reengineered.

Davenport advises selecting not more than 15 processes at a time. 

Step 3: Understand the functioning and performance of the selected

processes. And set up performance benchmarks for the reengineered
processes. 

Step 4: Study how information technology tools and applications can be

applied to the newly designed business processes. 

Step 5: Design a functioning prototype of the new business process. Allow the
team to study the prototype and identify areas for improvement. 

Step 6: Implement the tested prototype across the organization. 

Manganelli/ Klein Methodology

Manganelli and Klein state only to focus on those business processes that are
crucial to the strategic goals of the company and customer requirements.

Step 1: Ask everyone involved to define goals and prepare for the business
reengineering project. 

Step 2: Select the key business processes for redesign

Step 3: Study the current performance of the selected processes and

determine the future performance that you want to achieve.

Step 4: Develop information technology design to support new processes.

And design new work environments for the people. 

Step 5: Implement the redesigned processes and the new work environments
within the organization. 
Kodak Methodology
Developed by the international Kodak organization, the Kodak methodology is
applied across all Kodak facilities worldwide. 

Step 1: Plan the process reengineering project and define all project
administration rules and procedures.

Step 2: Bring together your project team,  assign project managers, and
design a comprehensive process model for the organization.

Step 3: Redesign the selected processes. This step should conclude with a
plan of a Pilot Implementation of the redesigned processes.

Step 4: Implement the newly designed processes across the organization.

Adjust the organization’s infrastructure to the requirements of the new
processes. 

Step 5: The last step is performed parallel to the other steps. Here the project
team should find ways to deal with the obstacles that may occur during the
reengineering project. 

What Are Your Ideas on BPR? 

We hope that this guide has helped you get the hang of business process
reengineering. Got more questions? Do share it in the comments section
below.

Benefits of Business process reengineering Business process redesign business process

reengineering Business process reengineering methodology  Business process reengineering
principles Business process reengineering steps What is Business process reengineering

More related articles

 5 Business Process Mapping Best Practices to Effectively Visualize Work

Processes
  The Easy Guide to Creating a Business Contingency Plan

 How to Effectively Manage a Project Remotely

Author

Amanda Athuraliya
Amanda Athuraliya is the communication specialist/content writer at Creately, online
diagramming and collaboration tool. She is an avid reader, a budding writer and a
passionate researcher who loves to write about all kinds of topics.
View all posts by Amanda Athuraliya →

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1. Mike Marko

This is amazing thanks for sharing.

26.11.2019 - 

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Business Process Redesign (BPR)

By ADAM HAYES

 Updated Mar 26, 2020

What Is Business Process Redesign (BPR)?

The term business process redesign refers to a complete overhaul of a company's key business
process with the objective of achieving a quantum jump in performance measures such as return
on investment (ROI), cost reduction, and quality of service. Business processes that can be
redesigned encompass the complete range of critical processes, from manufacturing and
production to sales and customer service. Businesses may call in consultants to direct or assist
with the redesign.

KEY TAKEAWAYS

 Business process redesign is a complete overhaul of a company's key business processes.

 A BPR improves efficiency by cutting slack and excess, reducing costs, and sharpening
management.
 Success is often measured using profitability metrics.
 BPRs may be costly and time-consuming, and may also lead to layoffs and the disruption of
workflow.
Understanding Business Process Redesign (BPR)
The term business process redesign is also referred to as business process reengineering or
business process transformation. Redesigning became popular in the 1990s as a way for business
leaders to focus on adapting to changing technology and other forces in their industries. This
requires a review of the company's current workflow and process structure and overhauling it to
make it more efficient. Because they require a certain degree of expertise, some companies may
require external parties to review, design, and implement any changes.

Many companies undergo business process redesigns because of changes in the industry that

require new infrastructure to remain competitive. In some cases, companies may be required to
make radical changes by completely scrapping their processes and adopting new ones. For
example, if a more efficient way of manufacturing a product or accessing a resource is
developed, a business may be compelled to abandon its processes and adopt new ones in order to
remain abreast of its peers.

Industry forces may require companies to undergo business process redesigns in order to remain
competitive—some may be more radical than others.

A regulatory mandate might require new safety measures to be included in a manufacturing

process—a step that forces the company to rearrange its workflow. For instance, lead was
banned from being used in the production of household paints, as well as in the manufacture of
toys and other items. Companies that used lead in their products had to rework their processes to
cease using it and to find ways to replace it as an ingredient.

Some companies may need to consider eliminating parts of their business that hurt their profit. A
process redesign could be launched to reduce costs. This may involve consolidation, staff
reductions, tighter budgeting, selling unprofitable operations, and closing offices and other
facilities. Executive positions and layers of management may be eliminated to narrow the
channels of authority.

Special Considerations
It's important for companies to review their operations, mission statements, and other key
components before undergoing any changes in their business processes. For instance, they may
consider:

 Identifying their key customers

 Determining how the business delivers value
 Asking themselves if they need a redesign or just redefine themselves as a whole
 Comparing their mission to their long-term goals

If a redesign makes sense, it's essential for a business to consider going through a series of steps
including:

 Setting up clear goals and intentions

 Identifying core business processes
 Determining any gaps or areas that require improvement
 Designing and developing changes
 Implementing and monitoring changes
Limitations of Business Process Redesign (BPR)
After assessing and mapping the processes that currently drive the business, the redesign often
aims to eliminate unproductive departments or layers and any redundancies of the operation. The
focus of the redesign can be to maximize aspects of the business that can generate the
greatest revenue and returns for the organization. That may mean the changes follow a narrow
path, only repositioning the neediest parts of the company.

In some cases, the redesign may take a more expansive approach, reaching into every department
and division. Extensive redesigns may be more time-consuming and cause more disruption.

The redesign can disrupt operations for a period of time and alter who employees report to,
realign and consolidate divisions, or eliminate certain aspects of the business. Two major
criticisms of business process redesign are as follows:

1. It may entail a large number of job redundancies or layoffs.

2. It assumes that faulty business processes are the main reason for the company's poor
performance when other factors may also be responsible for under-performance.

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 3 Business Process Reengineering Examples:
Airbnb, T-Mobile, Ford Motor Company

Success Stories
 
PROCESS IMPROVEMENT

 10. 02. 2020

 

 8 min read
 Share on social media

   

Search online for Business Process Reengineering (BPR) case studies or examples of its

successful implementation, and you’ll find what we found — Ford Motor Company.
Ford’s successful attempt at reengineering a core business process is a textbook example of
Business Process Redesign done right (we'll get to that, don't worry).

It’s the BPR case study talked about a 1,000 times online, and the story made famous in
“Reengineering the Organization”, a book written by American business consultants, Michael
Hammer and James Champy, in 1993. 

But that was 1993 … that was pre-dot-com boom, pre-social media, and only 2 years after the
World Wide Web became publicly available. Jurassic times, really. 
What About New Examples of Business Process Reengineering Projects?
For thoroughness' sake, and because it is a damn good example of BPR, we do take a moment at
the end of this article to describe how Ford Motor Company transformed Procure-to-Pay with
invoiceless processing. 
But now for freshness’ sake, we want to explore how modern businesses of the 21st century
undergo Digital Transformations associated with process redesign.
Free Guide: Business Process Reengineering as a way out of crisis 
We turned to two well-known companies who have undergone massive process transformation
and are relevant to how businesses operate in 2020 — Airbnb and T-Mobile.

You won’t find these BPR implementation case studies cited in any textbook, nor will you find
them quoted across the internet. That’s because we dug deep to find stories about businesses of
today that are applying the principles of Business Process Reengineering to achieve quantum
leaps. 

Yet, they don’t always call it BPR. 

Digital Transformation, Change Management, and Process Reinvention are sometimes more
popular terms to call what Hammer and Champy coined as “Business Process Reengineering”.

A rose by any other name would smell as sweet, thus, the underlying rules of Business Process
Reengineering apply to these examples:
 A core business process is broken, dysfunctional, or underperforming
 Leadership seeks dramatic process change (reengineering) as a solution
The following stories from Airbnb, T-Mobile, and Ford are all within this thread. A Problem /
Solution / Learning format can help you identify similar patterns within your own organization. 
How Airbnb Reengineered the Product Development Process
Airbnb is known for their coolness. Want to sleep in a treehouse in the Balinese jungle? It’s just
a few clicks away. Looking to make some secondary income on your vacation home? List it on
Airbnb. 
Behind the scenes, the company was struggling to find their internal identity in a design-centric
Silicon Valley, and to create a sustainable, quick to deliver, product development process.

Problem Definition 

The three main functions which contributed to the Airbnb product development process
— designers, engineers, and researchers — worked in silos, only jumping into the process at
defined times. 

Those defined times weren’t serving the end goal of delivering a great product on time.  

Designers had to wait on engineers to write code before a mock-up could be visualized on
screen. In turn, engineers had to wait on researchers to validate product ideas, only to find at the
very end that project assumptions were off-base. 

This was less so a failure of bulldozing researchers, needy designers or overly-coveted engineers.

It was a process failure. 

“This was a strong signal to me [of] a failure of process and the need for more deep and
consistent engagement between ... teams,” said Judd Antin, Head of Research at Airbnb.
Solution #1: Treat Geographically Dispersed Resources as Though They Were Centralized
The product development process needed to be reengineered. Not optimized or automated, but
fundamentally redesigned. According to Alex Schleifer, Head of Design at Airbnb, he and about
300 other people on Airbnb’s product team spent nine months doing just that.

The solution? To create one digital environment where designers and engineers work
seamlessly together. 

Rather than each team working on separate systems, which meant rounds and rounds of “quasi-
prototypes” and “layers of abstraction”, this single digital environment enables files to show
updates in real time and reflect real data. 
“To prototype [something] before, it would have taken us days of revisions. Using the new system, we
can redesign one of those screens in 45 minutes.” 

Alex Schleifer, Head of Design at Airbnb

BPR Learning
Treat geographically dispersed resources as though they were centralized. In Airbnb’s case,
the way to centralize the product development process was to centralize 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.
Solution #2: Organize Around Outcomes, Not Tasks
Another part of the reengineering solution of Airbnb's product development process was to
design product teams around outcomes, not features. 
“If you [organize] based on features, then you’re going to be perpetuating those features whether
they’re useful or not,” explained Jonathan Golden, Airbnb’s Head of Product. 

This approach baked in an unfamiliar step into the product development process — emotions.
Teams were now pushed to talk about outcomes from both a lofty, aspirational perspective, as
well as a nitty gritty code perspective.
“Outcomes define what we want to achieve for people in our community.”

Jonathan Golden, Airbnb’s Head of Product

BPR Learning
Organize around outcomes, not tasks. This principle holds true when applied to common
business processes such as Procure-to-Pay and Order-to-Cash, but also to Product Development.
When individual tasks (or in Airbnb’s case, features) become the organizational priority, the
larger outcome is mistakenly shelved for the immediate need of the task.
Solution #3: Link Parallel Activities Instead of Integrating Their Results
What about the researchers who would come in at the end of a project and bulldoze everything
designers and developers had built? 

According to Antin, researchers became “deeply embedded into teams, as equal partners on the
product team, forming strong and enduring relationships.”

They now participate in every stage of the product development process to ensure the voices
of guests and hosts are incorporated throughout the project, not just as a validation stage at the
very end. 
“By making all this happen at the right point in the process, things move faster, not slower, because
there's … more informed decisions and less backtracking.”

Judd Antin, Head of Research, Airbnb

BPR Learning
Link parallel activities instead of integrating their results. By embedding researchers into the
process, they were able to validate development stages along the way.
Rather than trying to massage in research outcomes to an already existing product, Airbnb links
research activities along with designer and engineering activities.(This case study was sourced
from the following articles: Wired, Wired, Airbnb, Firstround.)
T-Mobile Becomes Un-Carrier by Reinventing Customer Service Process
T-Mobile had one goal — to make customers happy. Simple, humble, some may say obvious,
but in the telecommunications world, happy customers were not the KPI customer service reps
cared about.

Pay structure and customer service success at large were measured mainly by First Response
Time (FRT) and Average Handling Time (AHT). Two metrics that screamed “Be quick!” Not
“Be kind, be helpful, make customers happy!”

Problem Definition
T-Mobile found itself in a KPI pickle: stick with the industry standard of quick service at a low
cost, or find a new process for serving customers and transform how value is measured from a
service performance perspective?
Due to the introduction of self-service portals, customers no longer used the T-Mobile call center
for basic transactional tasks such as balance inquiries and change of address.

Now, customers were calling with complex issues that customer service reps, with their existing
level of training, low level of authority, and disconnect to local markets, could not solve.

Solution #1: Have Those Who Use the Output of the Process Perform the Process
T-Mobile set out to reengineer the customer service process for the new needs of customers, by
undergoing a wholesale transformation from factory floor to knowledge-work.
“Unshackled from legacy metrics like handle time, [customer service reps] instead think about
the best way to solve each caller’s problem and, ultimately, how best to improve customer
retention, share of wallet, and loyalty.” - Harvard Business Review
Within the Business Process Reengineering initiative, T-Mobile started redesigning the team
structure – the core of how customer service is delivered.
Like most call centers, there was one long queue and customers were connected to agents via an
often frustrating phone tree. Rather than optimize the existing phone tree, or invest in bots that
could better understand human voice requests, T-Mobile reorganized teams based on a typical
B2B “named accounts” format.
They called this structure TEX — Team of Experts model.
Cross-functional groups of 47 people were formed which served a dedicated market,
geographically speaking. The TEX structure gave representatives power over the entire process
of customer service. They were empowered and trained to solve a customer’s problem from start
to finish.
“Transfers are rare; the only time a rep will hand off a customer is when an … unusually
complex problem requires the help of the team’s tech specialists. Even then, the rep will stay on
the call to learn how to resolve similar matters in the future.” Harvard Business Review
BPR Learning
Have those who use the output of the process perform the process. Agents are the ones
responsible for the outcome of the process — happy customers.
KPIs are connected to Profit and Loss (P&L), so the process outcome is extremely
important to agents. Because they perform the customer service process, often in full, they are
happy to be accountable for the outcome.
Solution #2: Put the Decision Point Where Work Is Performed and Build Control Into the
Process
The next big change, deeply connected to the new TEX model, was shifting authority and
decision points within the process.

Managers were playing a superficial role, being called upon for the tiniest of things “officially”
beyond the scope of the low-level agent. It was clogging up the process, increasing wait times,
and left agents stuck at the bottom of the ladder.

By shifting the decision point directly to customer service agents, the entire process became
stronger and shorter. Those performing the work were responsible for the work and could make a
true impact on process outcomes.
“TEX teams are expected to manage their own profit and loss statements. They’re like mini-
CEOs running their own businesses,” said Callie Field, executive vice president of customer care
at T-Mobile.
BPR Learning
Put the decision point where the work is performed, and build control into the process.
Now agents don’t need to turn to managers to make decisions, they can decide what’s best for
the customer at the right moment of the process.
The overall outcomes of reengineering the customer service process have been astounding.
Over three years since introducing the new measures in 2015, T-Mobile achieved a 71%
decrease in transfered customer calls, 31% reduction in calls escalated to supervisors, 25% drop
in postpaid customer churn, 56% increase in Net Promoter Score, and 48% decrease in annual
customer agent attrition.
Ford Motor Reengineers Purchase-to-Pay Process With BPR
Now, for the evergreen of all the BPR examples, Ford Motor Company.

The American automotive giant was probably aweb by the news that Japanese competitor Mazda
had operated with an Accounts Payable team of 5. Ford had a whopping head count of 500 for
the same department.

Initially, before turning to Business Process Reengineering, Ford had a modest

improvement goal of 25% headcount reduction. After the revolution that Mazda, a much
smaller company but viable competitor nonetheless, managed the Procure-to-Pay process with
significantly less resources, Ford reconsidered the necessary measures needed to compete in a
globalized market.

Ford formulated a hypothesis — if we rethink how Accounts Payable, part of the Procure-to-Pay
process, creates value, then we can restructure our entire approach to invoicing, and thus, save a
lot of money.

Ford put this hypothesis into action, took a page from their competitor’s playbook and reduced
headcount by 75% through invoiceless processing. Read about Ford Motor Company’s
experience with BPR here or here.
What Role Could Process Mining Play in These Business Process Reengineering
Examples?
Did Airbnb, T-Mobile, and Ford Motor Company use Process Mining to undergo their Business
Process Reengineering projects? Maybe, maybe not. We don't know.

But, if we assume that:

#1: these companies are data driven,

#2: the majority of their process workflows occur within systems,

We can discuss how Process Mining technology could have been applied to these BPR
examples.
1. Business Process Discovery: mine event logs to reveal the as-is process. This basic function of
Process Mining technology enables teams to align assumptions and create a shared understanding of
reality.
2. Identify Process Bottlenecks: it’s easy for employees to give anecdotal evidence of what’s
causing a process bottleneck. But diving into the data can reveal unintended consequences, such as
process bottlenecks, from well intended activities.
3. Process Simulation: once a new process design is proposed based on mined data, the best way
forward is to simulate that process in a controlled environment, but with real data and real parameters.
Simulation provides a space for play, without risking a complete process fallout.
4. Business Process Monitoring: an ongoing element of BPR is ensuring the process is continuously
working as intended. Particularly if RPA or other forms of automation are employed in the new process,
process monitoring is the built in security that things are running according to process architecture.
Start Your Business Process Reengineering Project With Minit!
Business Process Reengineering is a big step towards Operational Excellence. It favors drastic
change over incremental and challenges you to step back, rethink how the process really works,
and ask:
1. Which steps are superficial and which steps are fundamental?
2. Where is value really added and how can we be sure a proposed change is the right change?

These are all valid questions, and sometimes fears, that come along with undergoing Business
Process Reengineering. Minit has created a solution for mitigating the risks associated with
BPR — Process Mining combined with Process Simulation.
We make it possible to deliver a BPR project supported by real data. Your data + our system =
data-driven process reengineering.
How to run a successful BPR initiative?
Apply the 7 steps from our guide and get inspired by real-life examples.
Get the Free Guide
See how it works and get in touch with our team today to try Minit for yourself.
Cover photo: Plush Design Studio on Unsplash
 WRITTEN BYCarly BurdovaCopywriter
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