Business Process Reengineering: Is it the perfect solution for your problems?

Quixy Editorial Team

July 12, 2024

With constantly changing demands, new technology, and forms of innovation, businesses need to remain at the top of their game to stay relevant. Sometimes, businesses must make high-impact decisions to remain in front of the competition and ensure that they thrive in the business landscape. One such decision is the activity of Business Process Reengineering (BPR).

Revamping all of your business processes can seem like a big step. However, it’s also an amazing opportunity to innovate and provide value for your customers as no other company can. You can remedy any broken and inefficient processes while implementing exciting new, effective solutions in one shot. Thus, BPR can be an amazing opportunity for your business as long as the members of your company are eager for change and on board for any new developments.

In this blog, we’ll discuss business process reengineering, how it can help your company, how it’s different from Business Process Management (BPM) and Business Process Improvement (BPI), the 6 steps that can ensure successful BPR efforts, and an example of business process reengineering.

What is Business Process Reengineering?

Business Process Reengineering is also known as BPR, it is the activity of drastically redesigning existing business processes and workflows to achieve huge improvements in key aspects of the business such as output, quality, reduction of costs, service, and efficiency. This also involves redesigning any peripheral systems and organizational structures related to the business processes. This phrase was first coined by Michael Hammer in 1990, in his article “Reengineering Work: Don’t Automate, Obliterate,” according to Wikipedia.

Business process reengineering involves major components of a business such as the organization, process, technology, culture, and the overall strategy. These efforts can be categorized into 3 broad phases – the analysis phase, the design phase, and the implementation phase.

How can Business Process Reengineering help your company?

Business process reengineering often takes place when there is a pending threat to the company such as increasing competition, decreasing market share, or new and innovative business opportunities that need to be leveraged. BPR can help increase employee productivity and customer satisfaction by streamlining business processes and revamping existing systems. This activity can also positively impact the company’s profitability and competitive advantage against competitors.

Business process reengineering is the ideal solution for companies needing to pivot their strategy and plan to survive these changing times. Reengineering the entire business processes of a company only increases in difficulty as the company gets bigger. However, it’s the bigger companies that may need to adapt the most.

Business Process Reengineering Vs. Business Process Management

Business Process Reengineering involves completely overhauling existing business processes and building them back up according to the current needs. BPR involves a one-time radical change that can take a long time to implement for each major process. This process generally involves a business process expert, and the risk can be high, due to concerns with cultural issues and implementation.

Business Process Management is a holistic approach that involves managing and organizing business processes across the organization so that they run smoothly between departments and employees. BPM is a continuous process that is flexible and can be implemented in ways that suit the unique needs of your company. This process requires input from every employee involved with the business process in question; thus, there is a lower risk of cultural and implementation issues.

Business Process Reengineering Vs. Business Process Improvement

Business Process Improvement is a focused approach that involves continuously improving specific business processes in a steady manner by reiterating the processes. Since specific processes are targeted, this low-risk process won’t cause any cultural or implementation problems. It simply involves recommending changes that can streamline and improve efficiency.

Also read: What Processes Every Business Must Automate?

6 Steps of Business Process Reengineering

Following the below steps can help you undergo BPR according to the previously mentioned phases – the analysis phase (Step 1,2,3,4), the design phase (Step 5), and the implementation phase (Step 6). There are also different BPR methodologies such as the Hammer/Champy methodology, the Davenport methodology, the Manganelli/Klein methodology, and the Kodak methodology.

These efforts can be categorized into 3 broad phases – the analysis phase, the design phase, and the implementation phase.

Here are 6 steps that can help you with successful business process reengineering for your business:

1. Understand the current state of your processes

Business process reengineering needs to begin with a clear idea of the current state of your existing business processes and systems. This can help you understand which processes and which departments will need to be included in this process and help define the scale of this operation. This can also help you pinpoint the areas that are in desperate need to be streamlined to help provide the best output. Gather data and carefully analyze the current processes.

2. Set your vision and goals

Define your goals and objectives for this BPR effort, both quantitatively and qualitatively. This will also help the senior management clearly visualize where the company needs to be after reengineering the processes. Defined objectives can also help you convince the other employees and leaders of the need for business process reengineering as they will be able to see the end goal easily.

3. Build a competent team

Every BPR team will need a member from senior management (for approval of any changes made), an operational manager (for in-depth knowledge of the operations and processes that are currently in place), and reengineering experts (engineers from various departments that have in-depth knowledge to define the best change in processes). This team needs to come from various backgrounds to ensure that the team has different viewpoints. A diverse team will ensure that the best solution is found and reduce the chance of failure. As long as the team is enthusiastic and ready for change, this business process reengineering effort could help your company grow in leaps and bounds!

4. Identify the areas for improvement

There are many different reasons that a process may need to be redesigned, such as broken, cross-functional, bottle-necked, or high-impact processes. These processes need to be prioritized and the KPIs need to be properly defined. Mapping out these processes through flowcharts can help you define areas where the process can be optimized and streamlined better. Take your time during this step, otherwise, you might end up with confusing goals and vague measures of performance which will ultimately result in an unsuccessful BPR effort.  

5. Reengineer the processes and implement

In this step, do your best to design the processes in a way that all of the identified problems and issues can be solved. This can involve reengineering and redesigning the process, on the whole, to get the best results possible. KPIs are also supremely important to ensure that the processes have a defined way to measure success. The correct KPIs can lead to perfectly redesigned processes that meet the needs of your business.

6. Measure and compare the KPIs

After you implement the new processes, compare your KPIs before and after. Your KPIs are the best way for you to gauge whether your new processes are actually performing better than your previous processes. This can also help you decide how far to scale the new processes and which departments can benefit the best from these redesigned processes. This will also be the best way for you to measure whether your business process reengineering efforts have been successful.

Also read: How Process Automation Accelerates Digital Transformation

Examples of Business Process Reengineering – Case Study: Airbnb

Airbnb is a household name and it’s known for its incredibly disruptive business. This innovative business has redefined vacations and hotels in a way that was never seen before. However, this innovation did not come without its own hurdles in terms of the business processes involved.

The Problem

Airbnb was having trouble with defining a sustainable and quick product development process.

Designers, developers, and researchers were the three main positions that were involved in the Airbnb product development process. The issue was that they were working in silos and only jumping into the process when needed. The final aim of producing a great product on time was not fulfilled efficiently due to these problems in the workflow.

Before a mock-up could be visualized on the computer, designers had to wait for engineers to write code. In turn, engineers had to wait for researchers to confirm product ideas, only to find those project assumptions were off at the very end. Rather than a failure from any of the involved parties, this was actually a process failure.

The Solution

The people at Airbnb came up with an innovative solution: a unique digital environment that allowed designers and engineers to work together effortlessly. This single digital environment allows files to display updates in real-time and reflect real data, rather than each team working on separate systems. This cut out the constant revisions and enabled the three teams to work together on a shared platform. The whole existing business process was reengineered to enable teams at Airbnb to recreate screens in 45 minutes instead of days of revisions.

The Learnings

1. Create teams based on end goals:
   Airbnb ensured that the team that was created was centered around the outcome that they wanted. This ensured that every member had something unique that they brought to the table and this directly benefited the speed and productivity of the team formed.
2. Find ways to centralize resources:
   The designers, developers, and researchers were working from different places, however, that didn’t mean that they had to be treated as such. Airbnb fixed this situation by providing them a centralized platform to work on, which enabled them to work on the same file in real-time with the most recent updates, which further enabled seamless collaboration.
3. Ensure parallel activities occur simultaneously:
   In the previous process, the researchers used to come in and bring up issues that should have been discussed at the beginning of the process. By inviting researchers to become an equal part of the process, the opinions of the guests and hosts could be incorporated throughout the process, leading to a better end product.

With this business process reengineering example you can understand how this exercise in helped Airbnb overcome an inefficient and bothersome business process and allow the designers, researchers, and developers to collaborate on a platform that led to a better, finished product.

Why should you adopt Business Process Reengineering?

Adopting business process reengineering is crucial because it enables organizations to thoroughly evaluate and redesign their existing processes to achieve significant improvements in efficiency, effectiveness, and competitiveness. By challenging traditional methods and embracing innovative approaches, it allows companies to eliminate unnecessary tasks, streamline workflows, reduce costs, and enhance customer satisfaction. It provides an opportunity to break free from outdated practices, embrace digital transformation, and leverage technology to drive sustainable growth and success in today’s dynamic business landscape. Embracing business process reengineering helps organizations stay agile, adaptable, and resilient in the face of evolving market demands, enabling them to achieve operational excellence and maintain a competitive edge.

How to Know If Your Business Needs Business Process Reengineering?

Determining if your business requires Business Process Reengineering (BPR) involves assessing various factors within your organization. Here are key indicators suggesting the need for BPR:

1. Performance Issues: Persistent inefficiencies, bottlenecks, or delays hindering workflow and causing frequent errors or rework could signal the need for reengineering.
2. Outdated Processes: Processes that haven’t adapted to technological advancements or changing market needs may indicate the necessity for a significant overhaul.
3. Declining Performance Metrics: Declining productivity, increased operational costs, low-quality outputs, or declining customer satisfaction metrics can highlight the need for reevaluation.
4. Rigid and Complex Workflows: Overly complex or rigid workflows that impede agility, creativity, and adaptability in responding to market changes or customer demands may require reengineering.
5. High Turnover or Dissatisfaction: Increased employee turnover, dissatisfaction, or frequent complaints about work processes could suggest underlying issues demanding reevaluation.
6. Ineffective Communication and Collaboration: Poor inter-departmental communication, siloed information, or a lack of collaboration leading to operational inefficiencies can signal the need for process reengineering.
7. Lagging Behind Competitors: If your organization is consistently trailing competitors in delivering products/services, innovating, or adapting to market changes, it may necessitate rethinking existing processes.
8. Significant Changes in Business Environment: Mergers, acquisitions, regulatory changes, or shifts in customer preferences that render current processes outdated or inadequate may call for reengineering.
9. Excessive Redundancies or Waste: Identification of unnecessary steps, redundancies, or high levels of waste within processes could indicate the need for reengineering to streamline operations.
10. Lack of Flexibility or Scalability: Processes that lack flexibility to accommodate growth or scale to meet changing demands may require reengineering for improved adaptability.

Assessing these factors can help you recognize when Business Process Reengineering may be necessary. It’s crucial to conduct a thorough analysis and involve key stakeholders before embarking on a BPR initiative to ensure successful outcomes.

How Effective BPM Minimizes Business Process Reengineering

Business Process Management (BPM) and Business Process Reengineering (BPR) are two important concepts in the world of organizational efficiency. While both aim to improve processes, they take vastly different approaches.

BPR is a radical overhaul of a business process. Imagine a complete renovation of your kitchen – ripping out old cabinets, changing the layout, and installing new appliances. BPR can be highly effective when existing processes are fundamentally broken or outdated. However, it’s disruptive, expensive, and requires significant resources.

Here’s where BPM shines. BPM is a continuous improvement methodology. Think of it like regularly maintaining your kitchen – cleaning appliances, organizing cabinets, and tweaking the layout for better workflow. Effective BPM involves:

• Analyzing and documenting existing processes to identify inefficiencies and bottlenecks.
• Standardizing processes to ensure consistency and quality.
• Optimizing workflows to eliminate waste and improve efficiency.
• Monitoring and measuring performance to track progress and identify areas for further improvement.

By continuously monitoring and improving processes, BPM can prevent the need for drastic BPR interventions. Here’s how:

• Early Identification of Issues: Regularly analyzing processes allows you to spot inefficiencies before they snowball into major problems.
• Incremental Improvements: BPM focuses on making small, ongoing improvements that accumulate over time, leading to significant efficiency gains.
• Increased Transparency: Documented and standardized processes create a clear understanding of how things work, fostering collaboration and problem-solving within teams.
• Continuous Innovation: The focus on improvement in BPM encourages a culture of innovation, where employees are constantly looking for ways to streamline processes.

Also Read: Top Business Process Management Tools For Your Business

Conclusion

Business Process Reengineering is a great way to revamp your existing business processes to suit your needs. When you look at your existing processes and see all of the issues, BPR allows you to fix all of these issues in one swoop by redesigning the whole process from scratch.

By following the 6 steps that we mentioned above, you can ensure that all of your business processes run smoothly and efficiently. Improving and revamping your processes to provide an amazing product to your customers has never been so easy!

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