Business Process Reengineering

Business Process Reengineering can be defined in many ways, including as:

• 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 (Hammer & Champy).
• The analysis and design of workflows and processes within and between organisations. Business activities should be viewed as more than a collection of individual or even functional tasks; they should be broken down into processes that can be designed for maximum effectiveness, in both manufacturing and service environment. (Davenport).
• A management discipline, where the design of existing processes (within a company and between companies) and their business components are first analyzed and changed according to criteria of efficiency, economy, and value added to business objectives.
• Discovering how business processes currently operate, how to redesign these processes to eliminate the wasted or redundant effort and improve efficiency, and how to implement the process changes in order to gain competitiveness.
• Is … about rejecting the conventional wisdom and received assumptions of the past. … Reengineering is the search for new models of organizing work. Tradition counts for nothing. Re-engineering is a new beginning. … To succeed at reengineering, you have to be a visionary, a motivator, and a leg breaker (Hammer and Champy).
• The redesign of processes to take advantage of the enormous potential of information technology ( Gant).

 

The intent of business process of reengineering is to make organizations significantly more flexible, responsive, efficient, and effective for their customers, employees and other stakeholders.

When process of reengineering is applied, a business’s priorities must change in the following ways:

• From manager/owner to customer focus.
• From controlled workers to empowered, involved process owners and decision makers.
• From activity-based work to a results orientation.
• From scorekeeping to leading and teaching so that people measure their own results.
• From functional (vertical) to process (horizontal/cross functional) orientation.
• From serial to simultaneous
• From complex to simple.
• From status quo to inventing new systems and processes and looking toward the future.

One reason the change in BPR is radical rather than incremental is “to avoid being trapped by the way things are currently done” (Vidgen). BPR, therefore, is a technique that focuses on the processes that span an organisation, as opposed to being functionally or organizationally focused.Concept of reengineering cannot be reduced to processes alone because its principles are applied in all parts of an organization, and it has significant fundamental objectives. Companies use business process reengineering to improve performance substantially on key processes that impact customers.

The change management is an essential skill to facilitate the insertion of newly-designed processes and structures into working practices, and to deal effectively with resistance. This is considered to be a crucial component of any BPR effort.

The purpose of reengineering is to make all your processes the best-in-class.

Business processes are characterized by three elements:

• The inputs, (raw materials, knowledge, information).
• The processing (transformations which usually go through several stages and may turns out to be time and money consuming).
• The outcome (the delivery of the expected result).

The problematic part of the process is processing. Business process reengineering mainly intervenes in the processing part, which is reengineered in order to become less time and money consuming.

Business process reengineering means to take everything from the beginning, from the foundation, to change fundamentally, drastically and dramatically.

For this, the business is reinventing itself from a blank sheet of paper that you put in front of you and begin to answer this questions: “Why exactly do we do what we are doing?” and “Why do we do it like this?”.

In the organizations where the management is asking: “How do we do it sooner?”, “How can we do it cheaper?” or “How can we do it better?” it gets to apply, in the end, only process improvements.

Quite often it is necessary for an organization to revise and re-examine its decisions, goals, targets etc., in order to improve the performance.

Most organizations are not process-oriented, they are focused on tasks, on jobs, on people, on structures, but not on processes.

The process – oriented organization has a number of benefits compared with the functional one, like:

• Making it possible for process managers to pursue the work flow across different company functional area.
• Helping in removing the barriers between departments totally or at least partially.
• Minimizing rivalry and quarrel between employees of different departments
• Encouraging cooperation between employees of various departments
• Coaching employees to understand the work.

The reengineering projects are designed on the specifics of each company. Process reengineering is not a standard, uniform and uniformly applicable in any field, it needs to take into account a multitude of variables specific to the company and the industry for which it is designed and implemented.

Process Reengineering Life Cycle includes six sequential stages:

• Envisioning new processes
• Initiating change
• Process diagnosis
• Process redesign
• Reconstruction
• Process monitoring

Business Process Reengineering  refocuses company values on customer needs, redesigns core processes, reorganizes a business into cross-functional teams with end-to-end responsibility for a process, rethinking basic organizational and people issues and improving business processes across the organization.

 

Seven principles that could be used to reengineer and help streamline workflows, thus improving quality, time management and cost (Hammer and Champy).

Reasons why you should consider Business project reengineering

When applying the BPR management technique to a business organization the implementation team effort is focused on the following objectives:

• Customer focus. Customer service oriented processes aiming to eliminate customer complaints (waiting time reduction).
• Dramatic compression of the time it takes to complete a task for key business processes

• Compression (task elimination/automation). Cutting major tasks of cost and capital, throughout the value chain.
• Process integration. Organizing the processes a company develops transparency throughout the operational level of reducing cost.
• Adaptive processes and structures to changing conditions and competition. Being closer to the customer the company can develop the awareness mechanisms to rapidly spot the weak points and adapt to new requirements of the market.
• Enthusiasm with the superior service and value to the customers. The level of quality is always the same controlled and monitored by the processes, and does not depend mainly on the person who is servicing the customer.
• Leadership through imaginative change of providing to an organization a competitive advantage.
• Improve drastically effectiveness and efficiency.
• Data quality/completeness.

Business process reengineering (BPR) should not be considered downsizing, restructuring, reorganization, and/or new technology. It is the examination and change of five components of the business: strategy, process, technology, organization, and culture.

Motivation for Reengineering

The motivations for reengineering and our engagement are many, including to:

Business Process Reengineering benefits:

• Increased effectiveness.  Identifying the core functions as well as any that are inefficient or outmoded.
• Meaningful work for staff. The process promotes greater staff involvement.
• Improved organizational performance. Decreasing new product and process activity time.
• Crystallize business focus.
• Business growth. Improving the industry position with radical improvements.
• Reduce costs and cycle time. Business process reengineering reduces costs and cycle times by eliminating unproductive activities and the employees who perform them. Reorganization by teams decreases the need for management layers, accelerates information flows, and eliminates the errors and rework caused by multiple hand offs.
• Improve quality. Business process reengineering improves quality by reducing the fragmentation of work and establishing clear ownership of processes. Workers gain responsibility for their output and can measure their performance based on prompt feedback.
• Make an organization more flexible, effective, and responsive to its customers, employees, and shareholders

One of the goals of BPR is to support a company organizational change in order to achieve viable improvements and raising of critical processes.

After our engagement we need to determine whether a certain process within your organisation requires minor healing (continuous process improvement) or a major surgery (process reengineering).

In reality, a company cannot always improve on a continuous basis, because at a given point, improvement is either impossible, infeasible or extremely expensive. One, then has to innovate or reengineer. On the other hand, we cannot always reengineer either. Generally, after reengineering, it is necessary to debug, improve, refine and fine tune. At a given point, then continuous improvement has to be stopped and reengineering has to be taken up, if the company wants to remain competitive. This pattern applies to both products and services. Both continuous improvement and reengineering (innovation) are necessary to drive “breakthrough” in organisational performance. One should innovate, then improve, innovate, then improve again and so on and so forth.