Business Process Reengineering
Business Process Re-engineering (BPR) is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary modern measures of performance, such as cost, quality, service, and speed.
Michael Hammer, 1993
Business Process Re-engineering (BPR) helps organisations in any public or private environment to analyse their processes and rethink how the work gets done.
Methodology of Business Process Re-Engineering (BPR)
Firstly, Business Process Re-engineering begins with a review of the strategic priorities of the organisation. When doing so, one needs to take into consideration the external and internal operating environment, i.e. business or market-level and corporate-level strategies.
Secondly, driven by the strategic priorities, process priorities are defined. These process priorities help focus on the for accomplishing the strategic objectives most important processes. BPR needs to start with these processes in order to best use the given resources.
Finally, strategic priorities and process priorities determine workforce priorities. These workforce priorities include resourcing strategies, development and career planning interventions as well as performance management and incentive structure. Additionally, necessary competencies and human resource strength are results of defining workforce strategies.
Understanding strategic priorities may include, amongst other activities, analysing
- mission and strategic goals of the organisation,
- the fulfilment of strategic elements and organisational KPI’s,
- the organisations cost structure, revenue distribution and working capital burden,
- reactive and proactive customer satisfaction data and
- employee satisfaction data.
The analysis of strategic priorities helps to identify priorities for process analysis. Tools include customer and employee surveys, focus group discussions, Jaccard analysis, Kano analysis and others.
Based on this analysis, Business Process Re-engineering may require the need to redefine strategic goals and strategic elements to better meet customer needs and hence the organisation’s mission.
As the name suggests, Business Process Re-engineering focuses on processes. Procedures and instructions govern these processes. They embody the list and sequence of activities, i.e. the way resources are used to deliver the desired outcome, namely strategic goals and elements.
BPR analyses these business processes in order of their strategy-driven priorities, identifies weaknesses and improves or redesigns these processes. Contrary to other approaches, Business Process Re-engineering advocates fundamental rethinking of processes instead of optimising single steps or parts of a process. BPR discourages thinking in functions but encourages thinking in end-to-end processes. It emphasises the delivery of the desired outcome independently of functions involved, hence cross-functional thinking is a key concept of Business Process Re-engineering.
Business Process Re-Engineering and IT Support
After redesigning core and support business processes, the adaptation of IT support for performing the tasks is an option. Implementing IT support to speed up broken processes may result in improvements. But this intervention usually does not use the full potential of the approach.
Automating a Mess Yields an Automated Mess.
Business Process Re-Engineering Tools
Most importantly, a central theme of BPR is process mapping. There are many different ways for doing process mapping, and the tool of choice depends on the main objective.
More often than not, the application of a certain tool is the result of the previous tool. Hence, there is no standard tool set for Business Process Re-engineering, but rather a large tool box from which the experienced project leader chooses what is appropriate.
Rethinking business strategy and redesigning business processes must ultimately lead to defining workforce priorities. As a result, along with process redesign, job redesign is necessary as well. Usually, enhanced processes or IT enabled work require update of competencies. Often, re-engineering also leads to introducing new work concepts like flexible workforce, flexible working hours or telecommuting. The key theme should always be:
People don’t Make Mistakes on Purpose.
If the process is capable of delivering flawless results on time and people have the competency (skills, knowledge and attitude) as well as the motivation to run the process, it will deliver on the designed specifications.
Business Process Re-Engineering (BPR) and Change Management
Where Are We Now? What Is The Case For Change?
Business Process re-engineering usually causes major changes to an organisation and therefore needs change management. This change management requires the communication of a clear case for change. I.e. everyone who is part of the BPR project and everyone who will take part in the implementation of changes as well as those who will experience the changes need to clearly understand the need for the change. Better yet, they need to “feel the pain”, that makes the change necessary.
Customer or employee feedback may support the formulation of this case for change. This case for change can also be derived out of organisational objectives or departmental or personal KPI’s that are not met, or other indicators for unsatisfactory performance from customers’, employees’ or organisational perspective. It is of great advantage if this case for change is supported by data, ergo it is measurable.
Where Are We Going? What Is The Future Scenario?
Every business intervention deserves a clear and measurable objective. Usually, the objective for Business Process Re-engineering follows the case for change. If the case for change is measurable, the objective can be put in measurable terms, too. The objective should be aggressive. Conservative objectives can be achieved by small changes here and there. Aggressive objectives can not. Additionally, these small changes are reversible and hence, do not deliver impactful changes. Aggressive objectives require and yield rethinking the process environment fundamentally. This is what BPR is about.
How Do We Get There?
In order to support the change and make the change last, a series of support interventions are advisable:
The core of Business Process Re-engineering is about changes in the process. The To-Be process needs to be mapped and moulded in SOPs, instructions etc. The acceptance of process changes by process stakeholders depends on their involvement in the To-Be design exercise.
More often than not, process changes suggest or even require structural changes. Structure must follow the process, not vice versa. Hence, structure changes may come with changes in roles and responsibilities. These may require job-redesign in order to be able to support process changes.
These process changes and job-redesign tasks often lead to changes in competencies needed to run the new process. And, changes in the competency framework of the organisation may have an effect on the learning and development system and even career planning of personnel involved. Hence, working carefully in these areas may result in key incentives to support the process changes.
As a result, Business Process Re-engineering is or at least requires OD interventions and a carefully crafted communication strategy and plan to implement them. Hence, a BPR communication plan is necessary.
A major undertaking like Business Process Re-engineering needs milestones and early successes (quick wins) along these milestones. Implementing quick wins early and communicating them widely will generate buy in from key stakeholders and management. It is not a good practice to wait for month until the end of the BPR exercise before communicating results. Implementing and “selling” Quick Wins early is needed and possible. These Quick Wins serve as catalysts for success of the BPR project.
How Do We Know We Are Getting Closer?
How do we know that our Business Process Re-engineering delivers results? It is necessary to continuously measure and review the key metrics that make the case for change and show the objective. However, this is not enough. More often than not, these measures are lagging indicators such as financials, customer satisfaction score or employee engagement score. Collecting this information is always delayed and often lags weeks or even months behind the actual process delivery.
Leading indicators show process performance much closer to real events. These leading indicators are a result of process analysis and not available at the beginning of the BPR project. As soon as they become obvious, they build the foundation for process monitoring.
For example, if the lagging indicator is customer satisfaction and the high-level leading indicator is turn-around-time, a lower level leading indicator might be processing time for a certain part of the service delivery process. This processing time will be a better leading indicator for tracking progress.
Consequentially, Business Process Re-engineering (BPR) is usually a major project that needs a proper project management. Apart from project leader and project team, it calls for a steering committee and a powerful project sponsor for each core business process, usually the process owner. And, the BPR project needs milestones. Advisable milestones are:
- Project Kick-off with a data-driven explanation of the need for change by the CEO,
- Presentation of the As-Is situation (process maps), process problem areas and measurable objectives for each core business process,
- Presentation of To-Be process maps with an explanation of ways to solve process problems with approval for suggestions by steering committee and
- Update presentations of the status of the implementation at various stages supported by a process dashboard showing the core process performance.
At COE, we support our clients with our vast experience in various BPR engagements. We partner with our clients with different level and depth of support to deliver measurable results with their Business Process Re-engineering undertaking.