The principles of Business Process Reengineering (BPR) play an important role in streamlining business operations, improving service quality, and reducing costs.
BPR is the systematic analysis and improvement of business processes to make them more efficient and effective. It involves identifying and streamlining redundant or inefficient processes, and implementing new best practices that can improve performance.
BPR can be applied to any business process, from customer service and order fulfillment to manufacturing and accounting.
In this article, we’ll take a look at the BPR and its 7 core principles, along with some of the keys to success and common challenges businesses face in implementing BPR.
Table of Contents
- How Is Business Process Engineering Defined?
- 7 Principles of Business Process Reengineering
- Focus on Results Instead of Tasks
- Allow Individuals Already Involved to Become Part of the Process
- Combine Data Collection With Processing Work
- Share Resources Between Usually Disparate Departments
- Join Parallel Processes Instead of Linking Their End Results
- Integrate Decision-Making Throughout the Steps of Each Process
- Accurate Data Collection Should Be Captured Once and Directly from the Source
- The Keys to Successful BPR
- What Are the Benefits of Business Process Reengineering?
- The Challenges of Applying BPR Principles
How Is Business Process Engineering Defined?
Business process reengineering is a management strategy where companies reevaluate their current processes and practices to determine where there are areas for improvement.
Then, the next step of the strategy is to utilize the findings to re-engineer these processes and improve overall performance in terms of costs, customer service, speed and proficiency.
This business process improvement strategy can be helpful for both smaller and larger companies that seek to improve their day-to-day operations.
Established companies that have been active for many years (and often entrenched in their ways) can also benefit from utilizing such a strategy.
In fact, these established companies are usually the best candidates for BPR, as they may be struggling to adjust their processes to adapt to meet the needs of digitally minded customers.
Also, BPR is not just for the private sector. In fact, it is also useful for public entities and has been used to improve efficiency in healthcare, education, utilities, and economic projects.
Basically, business process reengineering helps companies and organizations confront the inefficiencies of their existing processes, helping them deal with and take advantage of new trends, tools, and advancements to improve their performance and business operations.
7 Principles of Business Process Reengineering
To better explain business process reengineering and operational processes, let’s analyze the seven core principles of this strategy, as established by Michael Hammer and James Champy in their book Reengineering the corporation: A manifesto for Business Revolution.
The seven principles illustrate why business process reengineering can be very helpful and successful in its application in business operations.
The first principle is for a business to focus more on the outcomes instead of the operational processes.
This means that companies should pay more attention to their desired results instead of how they will achieve them, and create the best strategies that will guarantee these expected outcomes.
Essentially, they should aim to achieve their business goals and organize the needed processes around said desired goals.
The second principle is about involving people who are already participating in one way or another in specific processes to become active contributors to the entire process.
This principle can often be seen in customer-facing companies that allow their customers to be part of the solution when they face an issue with the company’s product or service through online DIY tools.
This principle promotes the participation of the party that is most directly involved or benefits from the process.
This principle suggests that the task of gathering information should be completed by the same individual or department responsible for completing the actual work.
In a more contemporary context, this could be interpreted as the use of process automation through advanced information technology that merges several processes into a single, more efficient one.
The combination and automation of tasks previously completed by employees or other business departments have proven to prevent the frequent mistakes that are generated due to human error.
Interconnectivity is at the core of this principle. It suggests that sharing resources connects separate departments of a company and produces a centralized type of operation that can be very productive.
The fifth principle indicates that it is more efficient to bridge a few different but equivalent processes than to combine their outcomes.
If said processes run parallel to each other, and you aim to use their results in tandem, it would be more beneficial to coordinate the processes during each step to ensure that there won’t be any delays in the overall process.
It is a fact that a lot of delays in certain work activities are due to approval requirements from supervisors. According to the sixth principle, decision-making should be implemented throughout each activity to accelerate processing times.
This can be done by either having supervisors entrust their employees to make certain decisions themselves or, in a more contemporary context, by using decision-making technology that extracts the human component out of the process in certain stages.
The more people involved in collecting data, the more errors can happen. This last principle suggests that data should only be captured once, which is the first time, and be directly from the source.
This allows the data collection process to be more efficient, not requiring multiple reentries that lead to more errors. It ensures the data is valid as it originates from the source.
The Keys to Successful BPR
The principles of business process reengineering provide a high-level framework for companies. But what does it take to actually implement these principles into the fabric of an established business?
In one study focused on implementing BPR in developing economies, several key factors were uncovered, including:
- Defining project expectations
- Conducting proper gap analysis
- Change management
- Good communication
- Clear documentation
- Leadership commitment
Additionally, as this HBR article noted, a successful BPR strategy must include the following:
- Radical redesign of business processes
- Using IT to enable these processes
- Achieving organization level strategic outcomes
- Interfunctional in its efforts
What Are the Benefits of Business Process Reengineering?
Applying the principles of business process reengineering has several benefits across the many aspects of a business.
First and foremost, this strategy clarifies the business’ primary purpose and core business process goals.
As mentioned above, several older companies might lose their purpose over time, so this strategy can clear the organizational goals and vision.
Moreover, it also gives the business a competitive advantage against other companies by establishing new company values that can uncover opportunities for differentiating within a competitive market.
It also streamlines the business’ operations by (ideally) discarding unnecessary processes that ultimately do not help the organization but instead negatively affect its workflow.
Eliminating redundant aspects of the work also impacts employee satisfaction.
For example, the streamlining of the operations leads to easier and more productive work activities that make employees more satisfied with their daily tasks, increasing productivity.
This disposal of non-helpful activities could also have another positive result, which is the reduction of certain costs.
Indeed, it is commonplace for businesses to have certain processes in place that have not been reevaluated in quite some time, which do not only hinder operations but also increase expenses.
Increased operational efficiency in processes also creates better quality products and services, leading to higher customer satisfaction and greater returns on your BPR efforts.
The Challenges of Applying BPR Principles
While the benefits of business process reengineering may appear obvious, there’s a reason many companies fall short when trying to implement a transformative program.
In fact, there are several reasons, including:
- Lack of management support: Lack of leadership commitment is often cited as one of the main reasons BPR initiatives fail. If management is not on board with the program, it’s difficult to get employees to buy-in and support the changes.
- Lack of clear goals: Another common challenge is a lack of clear goals. Without a clear understanding of what you’re trying to achieve, it’s difficult to measure success.
- Lack of employee involvement: Involving employees in the BPR process is essential for success. Without their input, it’s difficult to understand how the current processes are working and what improvements need to be made.
- Lack of resources: Implementing a successful BPR program requires substantial resources, including time, money, and human capital. Without adequate resources, it’s difficult to make the necessary changes.
- Lack of technological competence: This is especially true for established businesses who still rely on dated, legacy systems and procedures. Without the technological infrastructure in place, it’s even more difficult (and expensive) to initiate changes.
Despite these challenges, there are many companies that have been successful in implementing BPR programs and reaping the benefits.
Like digital transformation, a successful BPR strategy should start with a clear understanding of the company’s goals and, most importantly, where the real value will come from.