Meaning of Business Process

Reengineering (BPR)
“Reengineering is the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of
performance, such as cost, quality, service, and speed” – Micheal Hammer

Business Process Reengineering (BPR) refers to the analysis and redesign of workflows
and processes both within and between organizations. The orientation of the redesign
effort is radical, i.e., it is a total deconstruction and rethinking of a business process in
its entirety, unconstrained by its existing structure and pattern. Its objective is to obtain
quantum gains in the performance of the process in terms of time, cost, output, quality,
and responsiveness to customers. The redesign effort aims at simplifying and
streamlining a process by eliminating all redundant and non-value adding steps,
activities and transactions, reducing drastically the number of stages or transfer points
of work, and speeding up the work-flow through the use of it systems.

Business Process Reengineering (BPR) is an approach to unusual improvement in

operating effectiveness through the redesigning of critical business processes and
supporting business systems. It is revolutionary redesign of key business processes
that involves examination of the basic process itself. It looks at the minute details of
the process, such as why the work is done, who does it, where is it done and when it is
done. Business Process Reengineering (BPR) focuses on the process of producing the
output and output of an organization is the result of its process.

“Business process reengineering means starting all over, starting from scratch“.

Reengineering, in other words, means pulling aside much of the age-old practices and
procedures of doing a thing developed over hundred years of management
experience. It implies forgetting how work has been done so far, and deciding how it
can best be done now. Reengineering begins with a fundamental rethinking. In doing
reengineering people must ask some most basic questions about their organizations
and about their operations. They try to find out answers to such questions like “why
do we do what we do? Any why do we do it the way we do?” An attempt to find out
answers to such questions may startlingly reveal certain rules, assumptions and
operational processes as obsolete and redundant. Reengineering does not begin with
anything given or with any assumptions. The thinking process in reengineering begins
with a totally free state of mind without having any preconceived notion.
Reengineering first determines what a company must do. And then it decides on how
to do it. Reengineering ignores what the existing process is and concentrates on what
it should be. If something is not required to be done it is outright discarded.

Another key element in the reengineering involves radical redesigning of process.

Radical redesigning means going to the root of the problem areas and not attempting
to make any superficial changes. Radical redesign involves completely discarding all
existing structures and procedures and evolving completely new ways of doing the
work. “Reengineering is about business reinvention — not business improvement,
business enhancement, or business modification.”

The next key concept that lies behind reengineering is that it aims at achieving
dramatic improvement in performance. In an organization feels the need for marginal
improvement in any area of operation at any point of time, the same can be achieved
by conventional methods of adjustments in operating processes and reengineering is
not the answer. Reengineering is meant for replacement of the old process by
altogether new one to achieve dramatic improvement in the performance.

Business Process Reengineering (BPR) derives its existence from different disciplines,
and four major areas can be identified as being subjected to change in BPR —
organization, technology, strategy, and people — where a process view is used as
common framework for considering these dimensions. The approach can be
graphically depicted by a modification of “Leavitt’s diamond”. Business strategy is the
primary driver of BPR initiatives and the other dimensions are governed by strategy’s
encompassing role. The organization dimension reflects the structural elements of the
company, such as hierarchical levels, the composition of organizational units, and the
distribution of work between them. Technology is concerned with the use of computer
systems and other forms of communication technology in the business. In Business
Process Reengineering (BPR), information technology is generally considered as
playing a role as enabler of new forms of organizing and collaborating, rather than
supporting existing business functions. The people / human resources dimension deals
with aspects such as education, training, motivation and reward systems. The concept
of business processes — interrelated activities aiming at creating a value added output
to a customer — is the basic underlying idea of Business Process Reengineering (BPR).
These processes are characterized by a number of attributes: Process ownership,
customer focus, value-adding, and cross-functionality.

Implementing Business Process

Reengineering (BPR) in Organizations
 In a crude sense, companies began business process improvement with a continuous
improvement model. This model attempts to understand and measure the current
processes, and make performance improvements. However, some companies make
reengineering efforts under the assumption that the current processes are wrong and
irrelevant. Under such perspectives designers of business process disassociate
themselves from existing processes. This helps in looking at the problem with a clean
mind, free of any biases.

The approach to Business Process Reengineering (BPR) begins with defining the scope
and objectives of the reengineering project. Persons entrusted with the tasks of BPR
have to undertake research in the light of scope and objectives. They have to go
through a learning process. They have to research customers, employees, competitors,
new technology, etc. With the help of this research base BPR designers are in a position
to create a vision for the future and design new business processes. They also create a
plan of action based on the gap between the current and proposed processes,
technologies and structure.

Steps in Business Process Reengineering (BPR) are as follows:

1. Determining Objectives and Framework: Objectives are the desired end results of
the redesign process which the management and organization attempts to realize. This
will provide the required focus, direction, and motivation for the redesign process. It
helps in building a comprehensive foundation for the reengineering process.
2. Identify Customers and Determine their needs: The designers have to understand
customers- their profile, their steps in acquiring, using and disposing a product. The
purpose is to redesign business process that clearly provides added value to the
customer.
3. Study the Existing Process: The existing processes will provide an important base for
the redesigners. The purpose is to gain an understanding of the ‘what’, and ‘why’ of
the targeted process. However, as discussed earlier, some companies go through the
reengineering process with clean perspective without laying emphasis on the past
processes.
4. Formulate a Redesign Process Plan: The information gained through the earlier
steps is translated into an ideal redesign process. Formulation of redesign plan is to
real crux of the reengineering efforts. Customer focused redesign concepts are
identified and formulated. In this step alternative processes are considered and the
best is selected.
5. Implement the Redesign: it is easier to formulate new process than to implement
them. Implementation of the redesigned process and application of other knowledge
gained from the previous steps is key to achieve dramatic improvements. It is the joint
responsibility of the designers and management to operationalzed the new process.
Problems in Business Process
Reengineering (BPR)
Reengineering is a major and radical improvement in the business process. Only a
limited number of companies are able to have enough courage for having BPR because
of the challenges posed. It disturbs established hierarchies and functional structures
and creates serious repercussions and involves resistance among the work-force.
Reengineering takes time and expenditure, at least in the short run that many
companies are reluctant to go through the exercise. Even there can be loss in revenue
during the transition period. Setting of targets is tricky and difficult. If the targets are
not properly set or the whole transformation not properly carried out, reengineering
efforts may turn-out as a failure.