Business Process Reengineering, BPR refers to an attempt to improvise the operation of a business on a large scale. The primary aim of Business Process Re-engineering is to cut down process redundancies and enterprise costs.
We have shared a detailed article on BPR today. Here you will find BRP Meaning, Principles, Function, Example, Methodology, or Steps involved in Business Process Reengineering.
► What is BPR? (Business Process Reengineering)
Business Process Reengineering also known as BPR, simply means Fundamental rethinking and radical redesign of the manufacturing processes and other business operations to achieve improvements.
The key to Business Process Reengineering (BPR) is for organizations to look at their business processes from a detailed perspective and determine how they can best construct or re-design these processes to improve how they conduct business.
◉ BPR Meaning
- The full form of BPR is Business Process Reengineering in operations management.
- BPR means not only a change in process but a dramatic improvement that results in as better performance.
◉ Definition of Business Process Reengineering
Business Process Reengineering (B.P.R) can be defined as the analysis and redesign of workflows of the organization in order to optimize the critical processes and automate non-value-added tasks.
Business process reengineering (BPR) is a management approach that focuses on improvements by means of increasing the efficiency and effectiveness of the processes that exist within and across organizations.
► Concept of Business Process Reengineering
Business process reengineering (BPR) is a concept that involves rethinking and breaking down existing business processes. This enables a business to cut expenses and boost productivity by implementing newer, more efficient processes.
It’s essential to remember, that while there are times when business process reengineering is vital, it’s not without its drawbacks.
As a result, it is critical that you thoroughly consider your options. Low morale is one of the most visible negative consequences of a company and they re-engineer it.
The majority of individuals are averse to change and have a difficult time adapting to it. This is something to consider when deciding whether or not to participate in the activity.
► History of Business Process Reengineering
BPR stands for business process reengineering, which is the process of redesigning and analyzing workflow in order to make it more efficient.
Michael Hammer and James Champy released “Reengineering the Corporation” in the early 1990s, claiming that in some circumstances, radical redesign and reorganization within a firm was the only option to cut costs and increase service quality. They claimed that information technology was significant in allowing this to happen.
Most large firms, according to Hammer and Champy, made (now-invalid) expectations about their goals, people, and technology, which affected the workflow.
They presented seven principles for reengineering and streamlining workflows, with the goal of improving quality, time management, and cost.
In their book, Hammer and Champy proposed the following seven principles.
- Organize around results rather than duties.
- Identify procedures and rank them in terms of how urgent they should be redesigned.
- Integrate data processing operations with the actual work that produces the data.
- Use of resources that are spread geographically as if they were centralized.
- Rather than integrating the outputs of concurrent tasks in the workflow, link them together.
- Build control into the process and place the decision point where the task is done.
Capture data only once, at the source.
Must Read :What is TQM (Total Quality Management)?
In layman’s terms, In order to have an effective BPR endeavor, you must look at all of the tasks that are working toward the same goal. This technique can then be used to merge numerous jobs into one.
Furthermore, rather than integrating outcomes at the end, parallel processes leading to the same output should be connected inside the process. It’s also crucial to consider all available resources and assign actual tasks to the most appropriate location.
To make the process more efficient, the individuals who are doing it should have the authority to make decisions about it, and any unneeded control systems should be removed.
Rather than having additional processes to record data relevant to the process, a resource within the process should provide all necessary data to increase accuracy and reduce redundancy.
► Steps in Process of BPR (Stages & Methods)
It’s important to differentiate between business process re-engineering and business process improvement BPR Vs BPI. BPI focuses on simply updating an organization’s current processes. On the other hand, BPR’s objective is to make fundamental changes to the entire scope of a business’ systems.
BPR professionals are present in all kinds of industries. So the specific day-to-day duties will vary from job to job. However, all BPR experts will follow these general steps:
- Step 1: Identify and communicate the problem
- Step 2: Build a team
- Step 3: Identify the inefficient process and define KPI
- Step 4: Re-engineer the process
◉ 1. Identify and Communicate the problem
Problem identification is the primary task of growing any business. You need to find out what issues are holding the company back and what’s the root cause.
identifying the problem and then communicating it with other team members is the very first step in implementing BPR.
◉ 2. Build a Team
Now when you know what the problem is, you will need a team of experts to help you to find its solution.
When it comes to process reengineering, the operational manager will provide in-depth expertise and communicate with other employees.
The operational manager will provide the in-depth expertise when it commands and then communicates to the process you’re reengineering. Outsourcing of BPR experts might be necessary as well, depending on the scope of the project.
◉ 3. Identify the inefficient process and define KPI (key performance indicators)
You’ll begin designing multiple solutions at this step, putting them into process flowcharts, analyzing them with your team, and recognizing the benefits and drawbacks of each one (paying extra attention to any new expenses that will be incurred).
◉ 4. Re-engineer the Process
At last reengineering, the whole process is the last option. it’s time to implement the solutions that you’ve practiced.
► Principles of BPR
Michael Hammer and James Champy proposed the following seven principles in their book Reengineering the Corporation: A Manifesto for Business Revolution:
- Work should be designed for result-oriented and not process-oriented.
- Involve those people in the process who are also involved in facing output.
- Merging data collection and processing units.
- Shared databases to interconnect dispersed departments.
- Bridging the similar processes that are running parallel lines.
- Decision-making should also be a part of the operational work.
- Capture data at its point of origin.
✔ 1. Work should be designed for result-oriented and not process-oriented.
The first principle says that multiple people’s tasks can be integrated into a single specialized task. Consider the redesign of a manufacturing corporation with multiple divisions doing various duties in sequential order.
The first determines the customer’s needs, the second enters the data, and the third distributes it to numerous plants and warehouses.
✔ 2. Involve those people in the process who are facing the output.
According to this idea, the work will be done by the person who receives the output, i.e., the consumer. This is known as “self-service” in today’s world.
If a consumer has an issue, for example, he must fill out the data himself rather than having an office do it for him. The work is pushed to the customer.
✔ 3. Merging data collection and processing units.
This approach has evolved into the concept of division of labor. This implies that the data must be handled by the same person who collects the data. By removing external contact from a process, the amount of errors is reduced.
A firm, for example, may have a structure in which one department collects data and the other records it. While translating information from one department to another, the shared database will have numerous errors.
The corporation can use a shared database to connect geographically scattered units attributable to developments in information technology.
Because there are improved agreements amongst the vendors, centralized databases give economies of scale as well as flexibility and quick replies to clients.
✔ 5. Bridging the similar processes that are running parallel lines.
According to Hammer, rather than the final outcomes, the activities’ processes must be integrated. Communication networks and common databases must be used to coordinate the parallel functions.
During the process execution, these concurrent operations must be continuously linked and coordinated. This will eliminate significant costs and delays in the process’s completion.
✔ 6. Decision-making should also be a part of the operational work.
To reduce needless restrictions and keep a check on the process, decision-aiding technology is required. According to Hammer, the decision should be made by the individual performing the work.
By entrusting the authority of the resource with the obligation of making decisions and improving the workflow, the processes can be improved.
✔ 7. Capture data at its point of origins
Decision-aiding technology is required to minimize unnecessary constraints and maintain track of the process. The decision, according to Hammer, should be made by the person doing the work.
The procedures can be improved by entrusting the authority of the resource with the responsibility of making decisions and improving the workflow.
► Examples of BPR
The past decade has made a drastic and big change. Because new technology was developing at such a fast pace, many businesses have begun to implement business process reengineering initiatives.
There have been many successful and failed business process reengineering examples throughout history, ford motors are a well-known example of BPR.
◉ Ford Motors
One of the most well-known examples of business process reengineering is Ford motors, an automobile manufacturer.
The American automobile industry was in a recession in the 1980s, so Ford decided to examine certain of its departments in order to identify inefficient processes and decrease expenses.
Ford executives set a measurable objective for themselves: to reduce the number of accounts payable clerks by a couple of hundred personnel.
Then they started on a business process reengineering project to determine why the department was so overstaffed.
They analyzed the current scenario, and after analyzing the findings they used the below method:
- A copy of every purchase order was sent to accounts payable by the purchasing department.
- The goods would next be received by material control, who would submit a copy of the corresponding document to accounts payable.
- The vendor would also send a receipt of the products to accounts payable at the same time.
The accounts payable clerk would then have to match the three orders, and if they were identical, he or she would issue the payment. This, of course, required a significant amount of people in the department.
So, in the case of BPR, Ford recreated the whole digital process:
- Purchase, place an order, and enters it into a database online.
- Material control gets the items and checks to see if they match an order in the database.
- If it matches, the order is accepted by material control on the computer.