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 need to 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, all 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.
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.
BPR affects many major components of a business such as the organization, process, technology, culture, and the overall strategy of the business. These efforts can be categorized into 3 broad phases – the analysis phase, the design phase, and the implementation phase.
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 have a positive impact on the company’s profitability and competitive advantage against competitors.
Business process reengineering is the ideal solution for companies who need to pivot their strategy and plan to survive in 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 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 of the major processes. 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 inputs from every employee involved with the business process in question and thus, there is a lower risk of cultural issues and implementation issues.
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 is a low-risk process that 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?
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:
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.
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.
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 there are different viewpoints in the team. 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!
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.
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.
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
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.
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 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.
This exercise in business process reengineering 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.
Business Process Reengineering is a great way to revamp your existing business processes to suit your needs. When you take a look at your existing processes and see all of the issues, BPR provides you an opportunity 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!
To know more about how Quixy can help with your unique business process need, contact us for a free trial now!
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