What is Business Process Reengineering & How Does It Enhance Organizational Performance?

What is business process reengineering in an organization? Business process reengineering plays a significant role in enhancing a company’s efficiency, productivity, and the standard of quality of its various processes.

Business process reengineering involves reassessing the existing design of your fundamental organizational processes, then making significant changes and adjustments to it. Business process reengineering steps in when, as company owners and managers, you deem it necessary to adopt new business intelligence systems that add maximum value to your clients, putting ahead their needs and demands.

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What is Business Process Reengineering?

Business process reengineering refers to a company’s business processes revamp to improve crucial aspects of the enterprise, such as:

  • Productivity
  • Technologies
  • Performance metrics
  • Culture and structure
  • Quality of services
  • Speed of output delivery
  • Expenditure
  • Strategies
  • Profitability

BPR business process reengineering aims to reduce unnecessary costs. It also intends to remove redundant internal and external processes in an organization, closely reexamining current automated and human or manual workflows.

A tested and proven methodology for creating improvements and optimizing expenses, the business process reengineering steps are well-structured, organized, disciplined, and thoroughly systematic.

How Does BPR Business Process Reengineering Work?

A drastic change initiative within your enterprise, BPR business process reengineering involves:

  • Repositioning your company’s mission, vision, and goals to underscore consumer needs
  • Revisiting and redefining your organizational and people structure as well as the culture
  • Reorganizing and reformulating core processes by leveraging business management software and other relevant technologies to assist with improvements
  • Revising departmental and team functions
  • Realigning long-term goals, responsibilities, and accountabilities

Your in-house team can execute BPR, or you can opt to employ the professional services of a business solutions company to perform the redesign on your organization’s behalf.

When Should You Consider Adopting the Business Process Reengineering Approach?

The need for BPR arises in different ways. Here are indicators that your company requires BPR business process restructure:

  • Declining profitability and poor overall cash flow situation
  • The falling customer satisfaction rate
  • More complaints and frequent requests for refund
  • Increasing distress among employees, resulting in rising attrition and turnover rate
  • Inefficient management and general corporate governance
  • Impactful marketplace shifts
  • Unexpected competition imbalances

Benefits of Business Process Reengineering

Business process redesign is a radical, large-scale undertaking for any enterprise. However, unruly old ways with your business operations causing recurring mistakes can be more costly. In addition, it can be expensive, too, depending on how drastic your plans for BPR are and how many processes will undergo the extensive redesign.

When you detect chief indicators, as mentioned in the above section, suggesting that you should carry out a BPR project, the initiative will most likely be worth it. To ease any more apprehensions you may have, read through these benefits your whole organization will reap when you re-engineer your business processes:

Streamlined, Well-Oiled Operations

At the end of a BPR project, your organization can experience and enjoy smooth-running, time-efficient, and labor-saving operations with the redundant steps taken out of the equation. Through business process restructuring, you and your workforce can better focus your attention and efforts on the most critical areas of your operations.

With clarity and transparency of objectives, each player on your teams and departments can have a vivid outlook of your company’s future path and plans.

Company-Wide Increased Efficiency for Optimal Productivity

You can sustain excellent quality standards of your products or services. With your newly tweaked and potentially digitized processes in place, your employees will be equipped with the right tools to deliver better results swiftly. As a result, you will get an increasing number of satisfied clients.

Greater ROI

Investing in business process repositioning and improvement can help maximize your revenues. You can redirect more time and energy toward building a community for your consumers and establishing genuine rapport with them through more targeted goals, boosted efficiency, and heightened productivity. In turn, you will get higher conversion and retention rates. This can even fortify your business and prepare it to be robust and resilient when faced with market shifts in the future.

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Business Process Reengineering Steps for Implementation

It is imperative for you to maintain the transparency, effectiveness, and impartiality of the BPR techniques you choose for your business. Your teams and other stakeholders should clearly understand the changes in your organization and the new direction it is taking.

Below are the five general BPR steps:

Step #1: Map Out and Completely Figure Out Your Current Processes

Make sure you know the ins and outs of your current business processes and flowcharts and how these affect your company’s overall performance. Do this by collecting information from all available sources, including your people and the software tools you use.

During this phase of the BPR, you need to determine the following:

  • Problematic, inconsistent, or broken processes that contribute to bottlenecks
  • Value-adding and highly-impactful processes that drive the enterprise toward a well-fueled performance

Afterward, you refocus your priorities by outlining the correct performance measurements for each process. Redefining your KPIs enables you to monitor if these procedures bring about the anticipated changes and projected positive effects.

Step #2: Properly Communicate All Gaps and Roadblocks

When you have your process maps thoroughly laid out, it is time to find the problem, i.e., the inefficiencies and the blockers holding back your business from growing, causing it to decline and weaken.

Sketch out every detail for a better run-through and analysis of issues, errors, and disconnects that disrupt the process flow. This will allow the management and leadership teams to arrive at sounder decisions and quicker solutions for BPR.

Step #3: Validate Your Opportunities to Improve

At this stage of BPR, you should be able to discover ways of process enhancement and begin developing solutions to help boost your production process and business output. This step includes:

  • Rethinking and elevating your KPIs
  • Adjusting process maps
  • Meticulously reviewing these process flowcharts
  • Recognizing and weighing the advantages and disadvantages
  • Trying out and validating the newly formulated KPIs and process maps, paying extra attention to whether or not all of them are necessary

In addition, it is vital to keep in mind and forecast the expenses incurred when you implement your techniques for business process reorganization.

Step #4: Redesign Your Processes to Become Forward-Facing and Future-Proof

With your organization’s goals carefully considered, revise and reengineer your business processes. Illustrate the future state of the process flowcharts and maps. Highlight how the new methods will fix breaches, fill in cracks, and bridge gaps where the current state process previously missed and failed to stitch together.

Step #5: Implement the Reengineered Processes

Get all stakeholders on board on how the re-engineered processes work. Inform your people and educate them about it.

Before an organization-wide implementation, test the new processes in one or two areas of the business and ensure you consistently track your previously defined KPIs. When the new process flow yields incremental improvements, you can put it into operation on a larger scale.

What are the Most Popular BPR Methodologies?

Listed here are three of the most widely utilized BPR methodologies, together with the summarized business process reengineering steps for each:

The Hammer and Champy Methodology

The Hammer & Champy Method is a popular six-step approach to BPR.

  • Step #1: The overall company head, typically the CEO, explains the present situation of the business and the future envisioned for the organization. The CEO relays the plan for a BPR to the whole workforce and proceeds to initiate it.
  • Step #2: The core team dedicated to BPR visualizes and maps out the processes within the company and the external-facing work procedures.
  • Step #3: Choose the specific processes with the most potential to add value to the business once they undergo reengineering.
  • Step #4: Evaluate these select processes. Analyze how they are performing now vs. how they are expected to impact the company in the future after BPR positively.
  • Step #5: Execute the BPR through creativity and lateral thinking.
  • Step #6: Put into practice the redesigned processes.

The Davenport Methodology

With information technology as the core of business redesign, the Davenport BPR model also covers six business process reengineering steps:

  • Step #1: Set the company’s vision of its process objectives in-depth.
  • Step #2: Isolate the process flows and maps that require BPR. Following the standards of the Davenport Method, the number of processes for simultaneous redesign should not exceed 15.
  • Step #3: Get an exhaustive understanding of the present functions and the performance of each selected process. Based on this, establish the new metrics or benchmarks for the prospective reengineered processes.
  • Step #4: Investigate how integrating software and other technological applications can optimize the newly designed business processes. Incorporate the IT tools that are most relevant to the process of restructuring.
  • Step #5: Produce a working business process prototype that your team can use and study so they can provide feedback about the aspects which may need modification for improvement.
  • Step #6: After the prototype is tested and approved to be fully functional, implement the reengineered process across the company.

The Manganelli and Klein Methodology

According to the Manganelli & Klein Method, a business should only focus its process, rethinking initiatives on the most crucial areas affecting the strategic and tactical goals of the company and consumer requirements.

  • Step #1: Define the purpose of executing a business reengineering project.
  • Step #2: Select the core processes for reengineering.
  • Step #3: Determine what you want to achieve with the future performance of your reformulated processes.
  • Step #4: Develop a technological design and a new structure for your workspace that support the realigned process flows and maps.
  • Step #5: Implement the BPR output within the entire organization.

Key Takeaways on BPR Business Process Reengineering

Ultimately, initiating a BPR project aims to create efficiencies and eliminate redundancies, assisting with the progress of your organizational performance as a whole. The approach gears your business for imminent changes, whether in the ever-dynamic technologies or the marketplace itself.

This practice can be pricey and even risky. Yet, when done correctly, the forward-thinking BPR can give you an immense competitive edge in your industry, transforming your business into a leader in the market.

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