Business Process Re-Engineering: Getting Your Business Ahead of the Competition

Learn how to improve business performance through rethinking your work processes.

business team meeting for business process reengineering efforts

Published 23 Sep 2022

What is Business Process Re-Engineering (BPR)?

Business Process Re-engineering (BPR) involves identifying inefficient or ineffective processes and improving them. BPR aims to help businesses achieve higher measures of performance by streamlining processes and eliminating wasteful steps. In many cases, BPR can involve radical redesigns of a company's core operations, such as its manufacturing, sales, or customer service processes. BPR projects can be complex and challenging but can significantly improve productivity, quality, and customer satisfaction. BPR can be a powerful tool for achieving competitive advantage when implemented correctly.

Examples and Use Cases of BPR

Below are some of the most well-known use cases of BPR:

Ford Motor Company

By creating an online database that followed the process from purchase order to delivery and then automatically made a payment, Ford revolutionized accounts payable (AP) management. The transition to paperless bills eliminated the need for employees to spend time matching paper purchase orders with incoming documents and invoices.

The auto company decreased its AP department’s headcount by 75% by rethinking the purchase process to take advantage of technology.

Duke Power Co.

Duke Power Co. reengineered its client operations procedures in the 1990s to minimize expenses and enhance customer service in preparation for power deregulation. Despite this, Duke discovered numerous bottlenecks and anomalies after it began BPR. Staff followed standard procedures for all customer service, and “scorecards” were adopted so that staff could assess how their efforts affected Duke’s financial targets of higher earnings and improved service.

IBM Credit Corp.

IBM reduced the time it takes to approve credit from a week or more to hours and even minutes by establishing a team of executives who would follow the company’s credit approval procedure from application to approval. They discovered that the real job took 90 minutes. The rest of the more than seven days passed from one department specialist to the next.

IBM replaced its specialists with “deal structures” who, aided by expert systems, handled the procedure from beginning to end.

Benefits of Business Process Reengineering

BPR significantly impacts business performance by lowering operational costs, improving quality, increasing delivery speed, and boosting employee productivity. The main benefits of BPR are:

  • Cost reduction – BPR can help businesses reduce costs by streamlining processes and eliminating wasteful steps. In many cases, BPR projects can result in significant cost savings.
  • Increased competitiveness – BPR can give businesses a competitive advantage by improving their process efficiency and quality.
  • Increased productivity and efficiency – BPR can help companies to achieve higher performance levels by streamlining processes and eliminating wasteful steps.
  • Boosted employee productivity – BPR can also help businesses increase employee productivity by simplifying processes and eliminating waste.
  • Enhanced customer satisfaction – By improving process efficiency and quality, BPR can help companies to meet customer needs and expectations better.

Different BPR Methodologies

There are various BPR methodologies that businesses can use to streamline their processes. Some of the most popular BPR methodologies include:

Hammer and Champy Methodology

Michael Hammer developed the Hammer and Champy methodology and James Champy in their 1993 book, “Reengineering the Corporation.” This methodology focuses on identifying and eliminating wasteful steps in a business process. The goal of this methodology is to help businesses achieve dramatic improvements in performance by streamlining their business operations.

The Davenport Methodology

As discussed in his book, “Process Innovation: Reengineering Work Through Information Technology,” Thomas Davenport developed the Davenport methodology. It focuses on using information technology to improve business process efficiency. This methodology aims to help businesses achieve better process performance by leveraging the power of technology.

Manganelli and Klein Methodology

The Manganelli and Klein methodology is a top-down approach that involves identifying core business processes, redesigning these processes, and implementing new process designs.

Kodak Methodology

The Kodak method is a process used in all Kodak factories throughout the world.

Is BPR the Same as Business Process Improvement (BPI)?

It is common to use the terms Business Process Re-engineering (BPR) and Business Process Improvement (BPI) synonymously, but they have significant differences. BPR is a more radical approach that seeks to identify and redesign core business processes from scratch. At the same time, BPI takes a more incremental approach, seeking to improve existing processes step-by-step.

In most cases, BPR occurs in response to significant changes or challenges, such as a shift in the competitive landscape or an introduction of new technology. By contrast, BPI is possible at any time.

BPR can be costly and disruptive, but it can also lead to dramatic improvements in performance. On the other hand, BPI is typically less expensive and less disruptive, but the improvements tend to be more incremental. As a result, businesses must carefully consider their needs and objectives before deciding which approach to take.

When Should You Consider BPR?

There are several situations in which BPR may be the best course of action:

  • When your business faces significant changes or challenges, such as the introduction of new technology or a shift in the competitive landscape
  • When traditional methods of process improvement have failed to achieve desired results
  • When you want to achieve dramatic improvements in performance
  • When you have the resources and commitment to undertake a large-scale project
  • When your organization is struggling to keep up with the competition

As mentioned earlier, BPR can cost time and money and disrupt your operations. Thus, businesses must carefully consider their needs and objectives before deciding whether or not to pursue BPR.

Steps in Business Process Reengineering

To make business process reengineering fair, open, and efficient, stakeholders must thoroughly understand the major phases. Although the procedure might differ from one firm to the next, these points below provide a good overview of how it works:

Create a Map of Your Current Business Processes

Gather data from all possible sources, both software tools, and stakeholders. Get a sense of how the process is working now.

Analyze and Find Any Process Gaps or Disconnects

Examine all the obstructions and delays in the process to identify them. Ensure stakeholders can make rapid judgments by including all necessary details at each stage.

Look For Ways to Improve and Validate Them

Check to see whether any of the stages are truly necessary. Take a step only meant to inform the individual if it’s not essential and add an automated email trigger if needed.

Create an Innovative Future State Process Map

Create a new procedure to handle all of your issues. Don’t be scared to create an entirely new method that will succeed. For each step in the process, set KPIs.

Future State Changes and Dependencies Must Be Considered

Make sure everyone is aware of the new procedure. Only execute the new method once all stakeholders agree and know how it works. Keep a close eye on the metrics.

What to Look For in a BPR Tool?

There are a few key features you should look for when choosing a business process reengineering tool:

Planning Capabilities

Look for a platform that has mapping capabilities to obtain a visual representation of your workflow’s stages. You may also want to identify the people involved and any other circumstances that might arise.

Easy to Learn

Look for a tool that’s simple to learn and gives your team clear training resources. A basic program should be simple to navigate so everyone can get started as soon as it’s in place.

No Coding Required

BPR tools should automate as much of the process as possible to make it easier and faster. A no-code platform is ideal because it doesn’t require any coding knowledge or specialized skills.

Automation

Look for a tool that makes it simple to generate digital forms, records, and requests that can be routed to the correct departments and approvers automatically. Automatic alerts will also help you avoid delays, while automated record-keeping functions guarantee that all records are up to date.

Performance Tracking

Find a tool with an analytics dashboard that shows process performance in an easy-to-understand format so you can track progress over time.

 

Business Process Reengineering FAQs

The principles of business process reengineering are:

  • Simplify the process
  • Automate where possible
  • Eliminate steps that don’t add value
  • Reduce cycle time
  • Improve quality

BPR aims to enhance product output, quality, and cost. It usually entails the study of business processes and the identification of procedures that are sub-par or inefficient, as well as methods for eliminating them or changing them.

The primary purpose of business process reengineering is to simplify a company’s workflow by removing unnecessary steps, automating repetitive tasks, and improving communication between departments.

BPR involves identifying company procedures that could be improved or eliminated and implementing new methods to streamline the workflow. A business must map out its current processes and find ways to optimize them to achieve this.

Robertson Paredes

SafetyCulture staff writer

Rob Paredes

Rob Paredes is a content contributor for SafetyCulture. He is a content writer who also does copy for websites, sales pages, and landing pages. Rob worked as a financial advisor, a freelance copywriter, and a Network Engineer for more than a decade before joining SafetyCulture. He got interested in writing because of the influence of his friends; aside from writing, he has an interest in personal finance, dogs, and collecting Allen Iverson cards.

Rob Paredes is a content contributor for SafetyCulture. He is a content writer who also does copy for websites, sales pages, and landing pages. Rob worked as a financial advisor, a freelance copywriter, and a Network Engineer for more than a decade before joining SafetyCulture. He got interested in writing because of the influence of his friends; aside from writing, he has an interest in personal finance, dogs, and collecting Allen Iverson cards.