6 Key Steps for a Successful Business Process Reengineering

What is Business Process Reengineering?

Michael Hammer, a former MIT Professor, authored an article in 1990 in Harvard Business Review. It described the management approach, Business Process Reengineering, which became very popular.

He defines Business Process Reengineering as, “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.”

Moreover, he taught a generation of business leaders. He believed that business processes were conceptualized during the Industrial era and that needs to change.

Michael Hammer states in his book, Reengineering the Corporation, “business is entering the twenty-first century with companies designed during the nineteenth century to work well in the twentieth.”

Business Process Reengineering (BPR) helps companies reassess existing processes and redesigns the steps to reach exceptional goals. BPR helps companies to separate and anatomize process steps to improve and enhance them. Hence, it helps achieve improvements in performance, productivity, and quality for the business.

Importance of Business Process Reengineering Steps

Business processes define the execution and performance of operations. Moreover, business leaders may often wonder how following Business Process Reengineering methodology procures returns. Hence, here are the importance of Business Process Reengineering and its steps:

• Firstly, when businesses implement BPR they comprehend the real-time value and state of the business. It also ensures that businesses follow the correct structure while automating tasks which reduces the additional cost of errors.
• Moreover, BPR helps mitigate excess processes that slow down execution by streamlining and structuring tasks. Hence, processes become more objective-oriented and provide employees with clarification of processes.
• Further, while mitigating redundant tasks in the operational processes businesses make processes easier and faster. Therefore, there is an automatic and efficient improvement.
• Most importantly, with an improvement in the process and its efficiency employees can focus on achieving more business objectives. Moreover, this may also include engaging with the customers and building relations through the process.
• It also helps build effective communication between cross-functional teams within the business. Hence, information travels faster through these communication channels which makes the business adaptable to market changes.
• Above all, following Business Process Reengineering steps help increase the ROI.

What are the Principles of Business Process Reengineering?

Michael Hammer and theorist James Champy wrote in their book, “Reengineering the Corporation: A Manifesto for Business Revolution”, seven principles for Business Process Reengineering. Moreover, reengineering the processes could help improve quality, time management, speed, and profitability. Hence, here are the seven principles in Business Process Reengineering Methodology:

• Systemize processes around objectives and not tasks.
• Determine all processes in the business and prioritize them according to their redesigning urgency.
• Incorporate information into the real-time running processes that generate the information.
• Execute geographically separate and remote resources as though they were centralized.
• Connect parallel tasks within the workflow rather than just integrating outcomes. 
• Set a decision point in the execution of work and develop control over the process.
• Gather and store information from the source at a certain time.

What is the Role of Business Process Reengineering?

Business Process Reengineering plays an important role in simplifying and streamlining operations. Companies utilize BPR for the following:

• Cost and Time Efficiency: 

BPR helps reduce costs and increases time efficiency for the business. Moreover, it eliminates redundant activities and streamlines the resources performing them to another activity.

Further, the reorganization of teams reduces the requirement for management layers. Therefore, it accelerates the flow of information and mitigates errors that occur due to multiple handoffs.

• Quality Improvement:

BPR helps improve the quality of processes and outcomes by decreasing the decentralization of tasks. It also establishes and allocates ownership of processes. Hence, employees gain more responsibility for their tasks. As a result, it helps assess their performances using set standards.

Business Process Reengineering Examples

• Ford Motor Company:

Ford Motor Company successfully re-engineered a primary business process using BPR. Furthermore, Ford is globally the second largest manufacturer of cars and trucks. It also sells its products in more than 200 markets. 

The company also employs over 400,000 people worldwide. Moreover, it is eighth of the world’s most recognizable automotive brands. 

Although, Ford began facing challenges with inherent large-scale growth issues, more demands, and higher costs. Hence, they were required to change their linear, top-down bureaucratic business model. Therefore, they began searching for an internet-ready, to engage and integrate customers, suppliers, and employees.

As a result, Cisco offered their solution to help integrate and leverage Ford’s supplier base by developing Covisint. Covisint is certainly an end-to-end infrastructure that centralizes the marketplace online. It also connects the automotive supply chain. Hence, Ford improved the buying experience of consumers with a redesign and user-friendly websites.

Today, Ford is reaping the benefits of the rise in customer satisfaction and the opportunities to develop and retain loyal consumers.

• Airbnb:

Airbnb is a popular name and offers an extraordinary business process. Moreover, its innovative business redefines vacations and hotels in a unique way. However, the company faced its own difficulties while executing business processes.

They were facing an issue with structuring a sustainable and faster product development process. Hence, the requirement for designers, developers, and researchers were the primary positions in the product development process. 

Moreover, the issue was that they executing operations independently and only relied on the process when required. Therefore, the objective of creating a robust product on time was not met efficiently due to these issues in the workflow.

As a result, to resolve the issue, Airbnb developed an innovative solution. The solution is a unique digital infrastructure to enable designers and engineers to work cooperatively. Moreover, the infrastructure enables files to display updates in real-time and provide data. 

Hence, this mitigates the constant revisions and corrections and enables the teams to work in conjunction on the platform. Further, the reengineering of the entire business process allows teams to recreate screens within 45 minutes.

The Key Steps in Business Process Reengineering

Companies are now implementing Business Process Reengineering steps to improve outcomes and increase profits. Hence, here are the steps that businesses must follow for a successful BPR:

• Defining the Business Processes:

It is important for businesses to define and structure their processes. Moreover, it helps maps the actual states of activities, workflows, roles, and reporting relationships. 

Defining business processes also help identify the requirement for any changes due to bottlenecks. Moreover, asking fundamental questions while defining the process will comply leaders to focus on the various aspects of a business. It will also help determine primary business processes, requirements, and techniques in the workflow.

• Assessing the Business Processes:

Businesses must comprehend and assess any bottlenecks, root causes, communication gaps, or strategic disconnects to improve efficiency. Hence, it helps enhance organizational effectiveness, workflow efficiency, and achieves strategic objectives.

• Identifying and Assessing Opportunities:

It is pivotal for businesses to identify, assess and validate opportunities by addressing the bottlenecks and their root causes in businesses. Moreover, it plays a key role in the growth and development of businesses. It not only identifies and validates bottlenecks but also opportunities for improvement. 

• Design and Plan Processes:

Businesses must select the improvement opportunities from the previous steps. Essentially, these opportunities affect organizational effectiveness, workflow efficiency, and strategies. 

It is also important for businesses to select opportunities that are cost-efficient, time-efficient, and easy to implement in the workflow. Moreover, the design and plan of the process should be adaptable for future advancements. 

• Develop and Build Processes:

Businesses must operationalize opportunities before their implementations. It is also important to design and communicate new workflows and procedures before developing and testing them. Hence, it is pivotal for businesses to operationalize changes and opportunities before implementing them.

• Implementation of Changes:

After designing and developing the process, it is now time to implement the same. Although, there is a constant requirement for businesses to monitor, evaluate and assess processes. Moreover, it helps detect errors to take immediate action. Hence, it helps improve the process and set high standards to enhance activities and reach goals.