Business Process Reengineering
Irrespective of the size, longevity, financial position or market share of your organization, at a certain point in time, a radical change or restructuring of the core business processes of the organization is critical to ensure business continuity and competitiveness. This is exactly what Business Process Reengineering (BPR) is all about:
“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.”—Hammer and Champy, 1993
Some have called it continuous business improvement while others call it innovation but Hammer and Champy who are today considered the forefathers and champions of this concept, called it Business Process Re-engineering or simply BPR.
BPR pays special emphasis on eliminating entire processes that do not deliver value to the overall production chain of a product or service as these inflate costs and time. This involves the following preliminary activities:
- Automation where necessary of any existing ineffective processes
- Use of sophisticated machinery or information system to streamline obsolete processes
- Re-working of work flows to do more with less employees
- Redesigning job descriptions and downsizing where necessary.
Why Consider BPR in the first place?
In a world where business becomes very fierce and competitive, staying ahead of competition requires a constant rethinking and redesigning of your core business activities bearing in mind customer satisfaction in terms of cost and quality of service / product offered. As rightly put by the legendary Management Guru Peter Drucker, in any business, you either “Innovate or die”. Any business that fails to innovate is bound to phase out of the market to give way to those that do.
Though BPR is not explicitly considered a mandatory business requirement for excellence, leadership of contemporary businesses would testify having in one way or the other contemplated using BPR concepts when faced with certain business difficulties or threats requiring them to brainstorm and rethink the status quo and adopt new measures or processes in order to mitigate or eliminate the effects of these threats or challenges.
When to consider the use BPR?
Problems faced by organizations are similar, be it large, small or medium enterprises. Therefore, BPR is an indispensable tool which must be used to resolve some of these problems:
- Steady shrinking of revenue and profits
- Decline in customers and thus market share
- Increased complaints from users of your products or services
- High employee turn-over, especially when they move to your competitor(s)
- Demotivation within the organization resulting to low productivity
- Stagnation in revenue and profits
- Your competitors are offering similar products or services for less
When any of the above happens to your organization, then BPR is the tool you need to turn things around for your organization.
Steps to Implement a BPR
Like any other change initiative, Senior Management’s implication and support is important if the initiative is meant to succeed. Nonetheless, the approach with which management uses to introduce this change initiative MUST be appealing to get the full involvement and support of employees. It should be noted here that the human capital of any organization is its main asset and thus must take part in every change initiative, given that they will either be the direct beneficiaries or implementors of the change.
Therefore, management must ensure that the employees see this change initiative with a positive perspective especially if it will take away their routine work schedules, interests or in some cases require downsizing and thus layoffs.
Management must set up a dedicated Project team made up of a Project Manager with clear Project Mandate (Charter) to implement the BPR. These are some of the steps they might use as proposed by Hammer and Champy, 1993 :
Identify Process for Review
In some cases, not all processes must be re-engineered, it is therefore important to work with management to identify those processes that require re-engineering or optimisation. The identification process is therefore the preliminary and most essential step
Review Process to Analyze “As is”
Once the processes requiring optimization have been identified, they are then reviewed, weaknesses identified and prioritized in order of importance in the value chain. This is to ensure that enough energy, and time is dedicated to those processes where change or redesign is an urgency.
Design “To be” Process
It is time to assign the design exercise to the project team to propose optimized designs aimed at reducing and eliminating waste while increasing efficiency and effectiveness. This requires that subject matter experts be assigned tasks according to their area of specialization to ensure effective designs.
Test and Implement “To be” Process
Once project team complete the designs, trials are carried out in a live operation or offline depending on the sensitivity of the services being offered. If the test achieves the set Key Performance Indicators (KPIs) which were outlined during the initiation of the project, the process is therefore validated by management and implemented. Post implementation is monitoring and feedback to ensure that KPIs are in order.