In this article, we discuss the fundamentals of Business process re-engineering? It will help you in understanding the process of BPR. So, what is BPR?
Business process is the way in which a business carries out its tasks to fulfil a goal and business process re-engineering is about changing the way business carries out the tasks to achieve same goal but with added benefits and reduced overheads.
Fundamentals of BPR
Business Process Re-engineering is associated with rethinking of a business process to take a substantial step in business process performance. It is redesigning/restructuring of core business processes and workflows in an organisation in order to achieve higher efficiency, reduced expenses, improved quality and face competition.
Enterprises utilize Business Process Reengineering to achieve the below advantages:
- Reduce cost and cycle time – BPR reduces costs and cycle times by eliminating unproductive activities and the stakeholders who perform them. Re-engineering accelerates flow of information and reduces errors, redundancy and rework.
- Improve quality – BPR improves quality by establishing clear ownership of processes. Stakeholders gain responsibility for their tasks as there is no discrepancy and ambiguity whatsoever.
- Enhance productivity – BPR reduces the unnecessary tasks thereby reducing the pointless effort that goes into these tasks leading to enhanced productivity.
- Improve competitive position – BPR enables an organization to face competitive market and strengthen its position in the market by bringing in radical changes in a short span of time.
Key Steps of BPR
The Six Key Steps of Business Process Re-engineering are as shown below:
BPR is always confused with the likes of business process improvement (BPI) but these are different methodologies in terms of their application. While BPI focuses on toying with the existing processes in order to bring about improvement while BPR looks at the broader picture and bring about radical changes in the way things are being done.
There are myriad of examples of companies that have gone for reengineering of their business processes to achieve specific goals.
Few stand-out examples are mentioned below –
- Ford – Ford identified a major business process area which could be revamped to address wasteful activities. They moved completely from paper based invoicing process to maintaining all relevant data in a centralized database. If the stats are to be believed, it led to 75% decrease in accounts payable staff and thus their cost to company was saved.
- Taco Bell – Taco Bell was staring down the barrel and facing major losses when it made a significant process change. It removed kitchen from all its restaurants instead of preparing everything from fresh within restaurants. The major food items was prepared in centralized kitchens and only basic food ingredients was prepared in restaurant. The result was that Taco bell’s revenues started to go up and it soon became one of the most famous food chains.
High failure rates of business process engineering initiatives have discouraged organisations to go for its implementation. Organisations struggle to achieve transformational and maintainable change irrespective of the amount of time and resources spent. The major reasons contributing to BPR initiatives failures are management heterogeneity, vague methodology, problems caused by cross-functional teams, focus on short-term objectives, overlooking the importance of effective communication among others.
Any discussion on Business Process Re-engineering would be incomplete without the mention of Michael Hammer, Father of Re-engineering. He wrote one of the most influential Harvard Business Review articles “Re-engineering Work: Don’t Automate, Obliterate”. It talked about a radical approach to creating competitive advantage and was so successful that Hammer and Champy collaborated on a follow-up much-acclaimed book that was considered as one of the most important business books of its time “Re-engineering the Corporation: A Manifesto for Business Revolution”.
What’s next – You might have heard about BPM. How is it different from BPR?
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