Since every product/service offered to the customer is the output of a business process, it is necessary to examine the process itself to create a product/service that satisfies both customer expectations and relevant regulations at a low cost for the company. This re-examination is called business process reengineering (BPR). What are the steps in business process re engineering?
The importance of ensuring customer satisfaction and attracting loyal customers is well-known in our globalized world, where competition is intense in all areas. Advancement of technology, a rapidly changing regulatory environment, and ultimately differences in the expectations of customers—which have more options now than in the past—have required companies to re-examine their goals, methods, and basic operating rules.
What Is Business Process Reengineering?
Business process reengineering (BPR) is an effort to review the existing structure of the organization and the business process from the very beginning to improve the most important performance measures of our time, such as cost, quality, innovation, and compliance. In today’s competitive environment, BPR is a critical effort to optimize all effective business processes in companies.
It is difficult to establish strict rules and principles regarding BPR. Each company has its processes, and each industry has its regulations. However, the basic principles that are generally accepted are as follows:
- Set a strategy: The company must set its objectives.
- Involve senior management: Since the product/service is a result of the separate but coordinated work of various departments, BPR projects must also cover all parts of the company. Ensuring participation of all departments can only be achieved with the leadership of senior managers.
- Create an urgency: There is always a risk of failure due to pressure or unfortunate events. Therefore, time should not be wasted during the project creation phase. Projects should be updated according to the reality of the day and the company’s needs.
- Design from the outside: Since the ideas of the customers will be the most important factor leading the project to success, it is essential to start from that point. Laws and industry regulations are also important external factors to consider (e.g., having HIPAA compliance policies and procedures in place for a company operating in the healthcare industry).
- Work with a consultant: Implementation of an experienced and out-of-company unit during BPR projects will ensure the company’s earlier and easier success.
In BPR project management, the project team is a main focus. Selecting and organizing the people who will implement BPR is as important as applying it. The members of the team are going to rely on each other in moments of stress and confusion. Roles in the organization include the leader, process owner, BPR team, steering committee, and consultants.
- Leader: A senior executive who approves, motivates, and has all the necessary authority for the execution of all BPR efforts.
- Process owner: A middle-level manager appointed by the leader and given the responsibility to implement BPR efforts.
- BPR team: The group of employees that does the real work, tasked with diagnosing, redesigning, and managing a particular process.
- Steering committee: A senior executive group that develops the BPR strategy and creates the principles that will ensure the realization of the strategy. This group is chaired by the leader.
- Outsource: It will be of great benefit to work with an experienced consulting firm during the BPR projects in companies.
How Do You Achieve Success?
A study of BPR projects involving more than 100 companies has shown how difficult it is to plan and implement redesign. According to the results of this study, five basic items can lead to success:
- Setting an aggressive BPR performance target.
- The leader’s involvement in the project (between 20% to 50% of their time).
- A comprehensive review of customer needs, economic leverage points, and market trends.
- Appointment of an additional senior manager responsible for implementation (must spend at least 50% of their time in practice).
- A comprehensive pilot implementation of the new design.
As mentioned earlier, there is always a risk of failure, and there are three main barriers to a successful BPR:
- Failure to develop necessary leadership.
- Inability to help people view business as a set of processes.
- Neglecting to adapt metrics and awards to new business processes.
Business Process Reengineering Implementation and Methodology
Determining the methodology to be applied is as significant as the implementation of the BPR project. There is no guarantee that the use of the existing methods will lead to the desired outcome. Thus, companies can develop a special method for their problems by adhering to the basic principles and steps in BPR.
Such a methodology should do the following:
- Act as a guide throughout the project, not that it has a set of rules strictly to follow.
- Show empowered human resources and creative use of information technology as the basic elements of change.
- Ensure that objectives and strategies are clearly understood by all employees.
- See customer satisfaction as the driving force behind these goals and strategies.
- Address business processes rather than business functions and consider these processes as fundamental to achieving business objectives.
- Identify processes that create added value for the customer.
- Benefit from other management techniques and business analysis during the project.
- Identify current activities and processes that do not add value.
- Have an understanding that aims at radical changes, and require thinking through the method of creativity and induction.
- Have an implementation plan that specifies all new tasks, resources to be used, and estimated time required.
- Be based on solutions that empower employees in implementing the planned change and use technology.
- Be easy to learn.
- Define the roles and responsibilities of everyone involved in the project.
- Provide an opportunity and guide to analyzing all business processes and the activities that comprise them in all aspects.
Minimizing the Need for Business Process Reengineering
When it comes to achieving better results, BPR should always be something to keep in mind. However, BPR projects may negatively affect the productivity of employees. Shifting from one way of working to another is tough, and it is expensive. Implementation of company policies, procedures, and processes is very important throughout the lifecycle of a company. Moreover, keeping them up to date and performing regular reviews may reduce the need for re-engineering.