Business Process Reengineering (BPR): De nition,

Steps, Examples
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Proper execution of Business Process Reengineering can be a game-changer to any

If properly handled, it can perform miracles on a failing or stagnating company, increasing

Business process reengineering, however, is not the easiest concept to grasp. It involves
enforcing change in an organization – tearing down something people are used to and
creating something now.

And that’s not an easy task.

So, What is Business Process Reengineering?

Business process reengineering is the act of recreating a core business process with the
goal of improving product output, quality, or reducing costs.

Typically, it involves the analysis of company work ows, nding processes that are sub-par
or ine cient, and guring out ways to get rid of them or change them.

Business process reengineering became popular in the business world in the 1990s,
inspired by an article called Reengineering Work: Don’t Automate, Obliterate which was
published in the Harvard Business review by Michael Hammer.

His position was that too many businesses were using new technologies to automate
fundamentally ineffective processes, as opposed to creating something different,
something that is built on new technologies.

Think, using technology to “upgrade” a horse with lighter horseshoes which make them
faster, as opposed to just building a car.

In the decades since, BPR has continued to be used by businesses as an alternative to

Business Process Reengineering Steps

As we’ve mentioned before, business process reengineering is no easy task.

Unlike business process management or improvement, both of which focus on working with
existing processes, BPR means changing the said processes fundamentally.

This can be extremely time-consuming, expensive and risky. Unless you manage to carry out
each of the steps successfully, your attempts at change might fail.

Step #1: Identity and Communicating the Need for Change

If you’re a small startup, this can be a piece of cake. You realize that your product has a high
user drop-off rate, send off a text to your co-founder, and suggest a direction to pivot.

For a corporation, however, it can be a lot harder. There will always be individuals who are
happy with things as they are, both from the side of management and employees. The rst
might be afraid that it might be a sunk investment, the later for their job security.

So, you’ll need to convince them why making the change is essential for the company. If the
company is not doing well, this shouldn’t be too hard.

In some cases, however, the issue is with the company not doing as well as it could be.
Meaning, you should do your research. Which processes might not be working? Is your
competition doing better than you in some regards? Worse?

Once you have all the information, you’ll need to come up with a very comprehensive plan,
involving leaders from different departments. The management will have to play the role of
salespeople: conveying the grand vision of change, showing how it’ll affect even the lowest-
ranked employee positively.

Risk of Failure: Not Getting Buy-In From The Company

If you fail to do this, however, your business process reengineering efforts might be
destined to fail long before they even start.
Business Process Re-Engineering can seriously impact on everyone in the company, and
sometimes this can appear to be a negative change for some. Some employees might, for
example, think you’ll let them all go if you nd a better way to function (which is a real
possibility).

In such cases, even if the management is on board, the initiative might fail because the
employees aren’t engaged.

Usually, it’s possible to get the employees buy-in by motivating them or showing them
different views they weren’t aware of. Sometimes, however, the lack of employee
engagement might be because of a bad workplace culture – something that might need to
be dealt with before starting any BPR initiatives.

Step #2: Put Together a Team of Experts

As with any other project, business process reengineering needs a team of highly skilled,
motivated people who will carry out the needed steps.

In most cases, the team consists of:

Senior Manager. When it comes to making a major change, you need the supervision
of someone who can call the shots. If a BPR team doesn’t have someone from the
senior management, they’ll have to get in touch with them for every minor change.
Operational Manager. As a given, you’ll need someone who knows the ins-and-outs of
the process – and that’s where the operational manager comes in. They’ve worked
with the process(es) and can contribute with their vast knowledge.
Reengineering Experts.  Finally, you’ll need the right engineers. Reengineering
processes might need expertise from a number of different elds, anything from IT to
manufacturing. While it usually varies case by case, the right change might be anything
– hardware, software, work ows, etc.

Risk of Failure: Not Putting The Right Team Together

There are a lot of different ways to mess this one up.

If the team consists of individuals with a similar viewpoint and agenda, for example, they
might not be able to properly diagnose the problems/solutions.
Or, the team might involve too many or too few people. In the rst case, the decision making
might be slowed down due to con icting viewpoints. In the later, there might not be enough
experts in certain elds to create adequate solutions.

It’s hard to put all that down as a framework, as it depends on the project itself. There is one
thing, however, that bene ts every BPR team: having a team full of people who are
enthusiastic (and yet unbiased), positive and passionate about making a difference.

Step #3: Find the Ine cient Processes and De ne Key Performance Indicators (KPI)

Once you have the team ready and about to kick-off the initiative, you’ll need to de ne the
right KPIs. You don’t want to adapt to a new process and THEN realize that you didn’t keep
some expenses in mind – the idea of BPR is to optimize, not the other way around.

While KPIs usually vary depending on what process you’re optimizing, the following can be
very typical:

Manufacturing
Cycle Time – The time spent from the beginning to the end of a process
Changeover Time – Time needed to switch the line from making one product to
the next
Defect Rate – Percentage of products manufactured defective
Inventory Turnover – How long it takes for the manufacturing line to turn
inventory into products
Planned VS Emergency Maintenance – The ratio of the times planned
maintenance and emergency maintenance happen
IT
Mean Time to Repair – Average time needed to repair the system / software /
app after an emergency
Support Ticket Closure rate – Number of support tickets closed by the support
team divided by the number opened
Application Dev. – The time needed to fully develop a new application from
scratch
Cycle Time – The time needed to get the network back up after a security breach

Once you have the exact KPIs de ned, you’ll need to go after the individual processes. The
easiest way to do this is to do business process mapping. While it can be hard to analyze
processes as a concept, it’s a lot easier if you have everything written down step by step.
This is where the operational manager comes in handy – they make it marginally easier to
de ne and analyze the processes.

Usually, there are 2 ways to map out processes:

Process Flowcharts – the most basic way to work with processes is through
owcharts. Grab a pen and paper and write down the processes step by step.
Business Process Management Software – if you’re more tech-savvy, using software
for process analysis can make everything a lot easier. You can use Tallyfy, for example,
to digitize your processes, set deadlines, etc. Simply using such software might end up
optimizing the said processes as it allows for easier collaboration between the
employees.

Risk of Failure: Inability to Properly Analyze Processes

Or, to put it more succinctly – impatience. It’s uncommon for someone to try business
process reengineering if they pro ts are soaring and the projections are looking great.

BPR is usually called for when things aren’t going all that well and businesses need drastic
changes. So, it can be very tempting to hurry things up and skip through the analysis
process and start carrying out the changes.

The thing is, though, the business needs analysis needs to be done properly, not rushed
through to get to the more exciting parts.

There are always time and money pressures in the business world, and it’s the responsibility
of the senior management to resist the temptation and make sure the proper procedure is
carried out. Problem areas need to be identi ed, key goals need to be set and business
objectives need to be de ned and this takes time.

Ideally, each stage requires input from groups from around the business to ensure that a full
picture is being formed, with feedback and ideas being taken into consideration from a
diverse range of sources. The next step is to identify and prioritize the improvements that
are needed and those areas and processes that need to be scrapped. Any business that
doesn’t take this analysis seriously will be going into those next steps blind and will nd that
their BPR efforts will fail.

Any business that doesn’t take this analysis seriously will be going into those next steps
blind and will nd that their BPR efforts will fail.
Step #4: Reengineer the processes and Compare KPIs

Finally, once you’re done with all the analysis and planning, you can start implementing the
solutions and changes on a small scale.

Once you get to this point, there’s not much to add – what you have to do now is keep
putting your theories into practice and seeing how the KPIs hold up.

If the KPIs show that the new solution works better, you can start slowly scaling the
solution, putting it into action within more and more company processes.

If not, you go back to the drawing board and start chalking up new potential solutions.

Business Process Reengineering Examples

The past decade has been very big on change. With new technology being developed at
such a breakneck pace, a lot of companies started carrying out business process
reengineering initiatives. There are a lot of both

There are a lot of both successful and catastrophic business process reengineering
examples in history, one of the most famous being that of Ford.

BPR Examples: Ford Motors

One of the most referenced business process reengineering examples is the case of Ford,
an automobile manufacturing company.

In the 1980s, the American automobile industry was in a depression, and in an attempt to
cut costs, Ford decided to scrutinize some of their departments in an attempt to nd
ine cient processes.

One of their ndings was that the accounts payable department was not as e cient as it
could be: their accounts payable division consisted of 500 people, as opposed to Mazda’s
(their partner) 5.

While Mazda was a smaller company, Ford estimated that their department was still 5 times
bigger than it should have been.

Accordingly, Ford management set themselves a quanti able goal: to reduce the number of
clerks working in accounts payable by a couple of hundred employees. Then, they launched
a business process reengineering initiative to gure out why was the department so
overstaffed.

They analyzed the current system, and found out that it worked as follows:

1. When the purchasing department would write a purchase order, they sent a copy to
accounts payable.
2. Then, the material control would receive the goods, and send a copy of the related
document to accounts payable.
3. At the same time, the vendor would send a receipt for the goods to accounts payable.

Then, the clerk at the accounts payable department would have to match the three orders,
and if they matched, he or she would issue the payment. This, of course, took a lot of
manpower in the department.

So, as is the case with BPR, Ford completely recreated the process digitally.

1. Purchasing issues an order and inputs it into an online database.

This way, the need for accounts payable clerks to match the orders was completely
eliminated.

You can learn more about the case here.

Have any personal experiences with BPR? Was it successful? Why, or why not? Let us know
down in the comments!