Business Process Reengineering

What is reengineering? 

“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[4].” The key words in the preceding definition are the italicized ones.  

BPR advocates that enterprises go back to the basics and reexamine their very roots. It doesn’t believe in small improvements. Rather it aims at total reinvention. As for results: BPR is clearly not for companies who want a 10% improvement. It is for the ones that need a ten-fold increase. According to Hammer and Champy [4], the last but the most important of the four key words is the word-‘process.’ BPR focuses on processes and not on tasks, jobs or people. It endeavors to redesign the strategic and value added processes that transcend organizational boundaries. 

Business process reengineering (often referred to by the acronym BPR) is the main way in which organizations become more efficient and modernize. Business process reengineering transforms an organization in ways that directly affect performance.

The Impact Of BPR On Organizational Performance

The two cornerstones of any organization are the people and the processes. If individuals are motivated and working hard, yet the business processes are cumbersome and non-essential activities remain, organizational performance will be poor. Business Process Reengineering is the key to transforming how people work. What appear to be minor changes in processes can have dramatic effects on cash flow, service delivery and customer satisfaction. Even the act of documenting business processes alone will typically improve organizational efficiency by 10%.

How To Implement A BPR Project

The best way to map and improve the organization's procedures is to take a top down approach, and not undertake a project in isolation. That means:

• Starting with mission statements that define the purpose of the organization and describe what sets it apart from others in its sector or industry.

•     Producing vision statements which define where the organization is going, to provide a clear picture of the desired future position.

•     Build these into a clear business strategy thereby deriving the project objectives.

•     Defining behaviours that will enable the organization to achieve its' aims.

•     Producing key performance measures to track progress.

•     Relating efficiency improvements to the culture of the organization

•     Identifying initiatives that will improve performance.

 
Consolidated Methodology: 

   A consolidated methodology has been developed from the five methodologies previously presented and an 

IDEF0 model was developed to provide a structured approach and to facilitate understanding. But for the sake of 

brevity, we have shown only the major activities in the IDEF0 model in Figure 1. 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. Before attempting reengineering, the question ‘Is BPR necessary?’ 

should be asked? There should be a significant need for the process to be reengineered. The justification of this need 

marks the beginning of the Preparation activity[9]. 

This activity begins with the development of executive consensus on the importance of reengineering and 

the link between breakthrough business goals and reengineering projects. A mandate for change is produced and a 

cross-functional team is established with a game plan for the process of reengineering. While forming the crossfunctional team, steps should be taken to ensure that the organization continues to function in the absence of several 

key players[5]. As typical BPR projects involve cross-functional cooperation and significant changes to the status 

quo, the planning for organizational changes is difficult to conduct without strategic direction from the top. The 

impact of the environmental changes that serve as the impetus for the reengineering effort must also be considered 

in establishing guidelines for the reengineering project. Another important factor to be considered while establishing 

the strategic goals for the reengineering effort, is to make it your first priority to understand the expectations of your 

customers and where your existing process falls short of meeting those requirements. Having identified the customer 

driven objectives, the mission or vision statement is formulated. The vision is what a company believes it wants to 

achieve when it is done, and a well-defined vision will sustain a company’s resolve through the stress of the 

reengineering process. It can act as the flag around which to rally the troops when the morale begins to sag and it 

provides the yard stick for measuring the company’s progress[4, 9]. 

Activity #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 current 

enterprise, saying that it inhibits the creative process, that might not always hold true[1]. It varies from case to case. 

While some organizations which are in dire straits might go the Hammer and Champy way (attempt a new process 

design while totally ignoring the existing processes) most organizations need to map the existing processes first, 

analyze and improve on it to design new processes. The important aspect of BPR (what makes BPR, BPR) is that the 

improvement 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 is 

an illustration that illustrates this fallacy. 

 A large manufacturer spent six million dollars over a period of one year in a bid to develop a parts-tracking 

system and was all set to go online. Only then did he realize that he had totally overlooked a small piece of 

a phone call.’ But just because this small yet vital information had not been documented all his efforts added up to 

information – ‘the mode of transmission of information between the scheduling staff and the shop floor was through 

naught and the whole system that he had so painstakingly developed had to be scrapped. Alas! He had recognized 

the need for an As-Is analysis, way too late[1]. 

 The main objective of this phase is to identify disconnects (anything that prevents the process from 

achieving desired results and in particular information transfer between organizations or people) and value adding 

processes[9]. This is initiated by first creation and documentation of Activity and Process models making use of the 

various modeling methods available. Then, the amount of time that each activity takes and the cost that each activity 

requires in terms of resources is calculated through simulation and activity based costing(ABC). All the groundwork 

required having been completed, the processes that need to be reengineered are identified. 

Activity #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 relevant 

peer organizations to obtain ideas for improvement[7].” The peer organizations need not be competitors or even 

from the same industry. Innovative practices can be adopted from anywhere, no matter what their source. 

Having identified the potential improvements to the existing processes, the development of the To-Be 

models is done using the various modeling methods available, bearing in mind the principles of process design. 

Then, similar to the As-Is model, we perform simulation and ABC to analyze factors like the time and cost involved. 

It should be noted that this activity is an iterative process and cannot be done overnight. The several To-Be models 

that are finally arrived at are validated. By performing Trade off Analysis the best possible To-Be scenarios are 

selected for implementation. 

Activity #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[2]. If we expect that the environment would be conducive to the reengineering effort we are sadly mistaken. The question that confronts us would be,’ If BPR promises such breath taking results then why wasn’t it adopted much earlier?’ We could expect to face all kinds of opposition - from blatantly hostile antagonists to passive adversaries: all of them determined to kill the effort. When so much time and effort is spent on analyzing the current processes, redesigning them and planning the migration, it would indeed be prudent to run a culture change program simultaneously with all the planning and preparation. This would enable the organization to undergo a much more facile transition. But whatever may be the juncture in time that the culture change program may be initiated, it 

should be rooted in our minds that ‘winning the hearts and minds of everyone involved in the BPR effort is most vital for the success of the effort[10]. Once this has been done, the next step is to develop a transition plan from the As-Is to the redesigned process. This plan must align the organizational structure, information systems, and the business policies and procedures with the redesigned processes. “Rapid implementation of the information system that is required to support a reengineered business process is critical to the success of the BPR project. The IDEF models that were created in the As-Is can be mapped to those created during the To-Be and an initial list of change requirements generated. Additional requirements for the construction of the To-Be components can be added and the 

result organized into a Work Breakdown Structure (WBS). Recent developments in BPR software technologies enable automatic migration of these WBS activity/relationships into a process modeling environment. The benefit here is that we can now define the causal and time sequential relationships between the activities planned[9].” Using prototyping and simulation techniques, the transition plan is validated and it’s pilot versions are designed and demonstrated. Training programs for the workers are initiated and the plan is executed in full scale. 

Activity #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. Two things have to be monitored – the progress of action and the results. The progress of action is measured by seeing how 

wherein the process is remapped, reanalyzed and redesigned. Thereby continuous improvement of performance is 

much more informed the people feel, how much more commitment the management shows and how well the change 

ensured through a performance tracking system and application of problem solving skills. Continuous improvement 

(TQM) and BPR have always been considered mutually exclusive to each other. But on the contrary, if performed 

simultaneously they would complement each other wonderfully well. In fact TQM can be used as a tool to handle 

the various problems encountered during the BPR effort and to continuously improve the process. In corporations 

that have not adopted the TQM culture as yet, application of TQM to the newly designed processes should be 

undertaken as a part of the reengineering effort[8]. 

teams are accepted in the broader perspective of the organization. This can be achieved by conducting attitude 

surveys and discrete ‘fireside chats’ with those initially not directly involved with the change. As for monitoring the 

results, the monitoring should include such measures as employee attitudes, customer perceptions, supplier 

responsiveness etc[12]. Communication is strengthened throughout the organization, ongoing measurement is 

initiated, team reviewing of performance against clearly defined targets is done and a feedback loop is set up