What is Business Process Reengineering: A Guide for Any Size Business (2022)

Lee Candy

What is Business Process Reengineering? That’s what a number of business owners ask me often, so I thought i would create this guide to help you understand what it is and how to use it to benefityour business, whether large or small.

So, what is business process reengineering?

It’s simply a tool that looks at systems or processes from end to end, designed to make step changes and drastic shifts in improvement.

This improvement normally sits within:

  • Productivity
  • Delivery
  • Cost
  • Quality
  • Safety

You’ve heard of Incremental improvement, right?

Well, business process reengineering is the opposite.

It’s about making large, focused changes that transform the process from start to finish.

What’s a process?

Where there’s a sequence of activities, there’s a process.

So, where there’s a process, there’s an opportunity to ‘reengineer’ that sequence of activities to drastically improve the output.

The difference between making smaller continuous process improvements and answering the question of what is Business Process Reengineering……. well, it’s about the impact on the business.

Ideally, you want to focus your efforts on the systems that will get you the biggest results.

Focus on the vital few things that will get the maximum output.

And so, look at your key processes and find the current most critical one to improvefirst.

“The 80 / 20 Rule – 20% of processes, activities and inputs will create 80% of the impact.”

Typical systems that have a large impact on the wider business performance are higher level processes, like:

  • How a product is manufactured and delivered to plan?
  • The quality of data entry and processing in a call centre
  • How a service is delivered on time and in budget?
  • How a business captures its leads, and turns quotes around quickly?
  • How the business invoices and processes payment?
  • How quickly and accurately new products can be released to the market?

These are just some examples of what I mean. I’m sure you have plenty more.

So, when you’re looking at end to end processes, at a more top level view, then business process re-engineering can help.

(Video) Business Process Reengineering - Definition

It means you must give the project strategic focus.

You must also give it the right amount of time.

And so too, resource – teams must be given clear roles and targets to improve the process.

And where permitting, a decent budget to invest in improvements, like IT, infrastructure and other things that can help transform the process.

Business process reengineering or BPR for short, is often referred to as business improvement or business process improvement (BPI).

Each reference the same outcome: it’s about looking at your processes strategically, and making drastic improvements to improve customer satisfaction and the business’ bottom-line performance.

What is Business Process Reengineering and How Does it Link to Process Improvement?

What is Business Process Reengineering In the Context of Non-value Added Activities? Well,In one of my previous articles, I explained what NVA and VA is in more detail.

NVA, is the sticking point or bottleneck in any process or system. It stands for non-value-added activity, which ultimately means activities, which do not add value in the eyes of the customer.

What do I mean? Well, if you can understand exactly what the customer wants from your business, then you can understand what activities are value added and which aren’t.

So, BPR is a process in itself, which allows the team to come together and analyse a specific process or system, and then get to work to drive out as much NVA activity as they can.

Because if you can reduce NVA, you can have a drastic impact on:

  • waiting times between processes
  • getting things right first time
  • improving communication
  • reducing lead times
  • reducing stock requirements
  • improving productivity
  • increasing the response time to customer enquiries
  • simplifying processes
  • reducing costs
  • increasing profitability

Every Process Has Outputs

All processes follow the same framework.

They have an input.

An output.

And in the middle, they have a sequence of activities, which need resource and controls to complete.

Here’s what I mean:

What is Business Process Reengineering: A Guide for Any Size Business (1)

The performance of the process is governed by the quality of its inputs, resource, controls, and activities.

So, if you have poor processes that captures inputs inefficiently, then perhaps the end result may be a costly, slow overall process, with poor quality and long lead times.

If the ‘in-process controls’ are weak or not performing particularly well, perhaps the quality of the output will be effected, the cost to administer the process may be high through rework, warranties and defects, and the lead time will be long, with delays in delivery to the customer.

If there’s insufficient resource or skills, then the same result could happen. Unhappy customers could be queuing at the door. Complexity and chaos in your processes, poor delivery and staff morale, too.

(Video) Business Process Re-engineering (BPR)

So, what is business process reengineering? It’s about optimising the inputs, controls, resources and the in-process activities. It’s also about redesigning them in a way that they link symbiotically, and which maximise value to the customer….. because adding more value means being more competitive…….and improving performance to the business’ bottom line.

The Critical Steps to Business Process Reengineering

Here’s the basic steps to mapping and remodelling your key business process:What is Business Process Reengineering: A Guide for Any Size Business (2)

  1. We need to map our current process first. This is often called the ‘as-is’ process or the current state.

It’s simply a matter of walking your process, with your team and taking notes of every step along the way.

  1. Identify the value added and non-value-added steps – hunt out the NVA so you can see where the major bottlenecks are and also where you can startto see wherethings can improve
  2. Understand the costs incurred in the current process, so you can then agree what the costs should be in the improved process, and then set yourself improvement targets
  3. Understand the impact of the NVA steps and bottlenecks on the overall performance of the process
  4. Then map the ‘Future State’ process, or sometimes called the ‘To-Be’ process
  5. Test the future state on a smaller scale and then upscale quickly when it works and then lock in the new way, making amendments using continuous improvement

A Data Driven Approach

What is business process reengineering? It’s a data driven approach.

When making improvements, you have to know what you’re up against, before you can improve it.

That means measuring it……

How is the process currently performing?

How much is the current process costing the business?

  • This could be in terms of cost oferrors
  • cost of labour, including overtime
  • waiting and delays
  • lead time, which will affect the length of time it takes to get paid
  • cost of warranties and returns
  • Cost of poor information and repeated activities
  • Cost of poor quality delivery of the product or service (you may be too expensive for your market, due to the fact that your processes are too cumbersome)

These are just to name a few.

And when designing your sparkly new process, you want to focus on two key ways to help drastically improve performance:

Drastic impact #1: Delayer Decision Making. Use a cross functional team to work together to manage the process. This means people from different departments coming together to manage the day-to-day performance of the entire process.

By doing this, you are de-layering the communication and decision making, making the process run faster and more agile.

Drastic Impact #2: Automate Routine Tasks. Automate as much of the administration and communication flow as possible. That means being prepared to invest in the most appropriate information technology for your business.

It’s worth looking at cost / benefit analysis and pay back. I.E. “If we purchase this software, how long will it take to make a return on this investment? Is the initial cost going to benefit the process, customer and business in the long run?”

Is This Concept Just for Large Organisations?

Absolutely not!

Where there’s a process there can be improvements made to any business in any industry or sector.

No matter how big or small the business or process is.

The key point to note is to include a small team right at the start.

Buy-in from employees comes with opening up to them. And quite, frankly, success doesn’t come from one person. It comes from teams and many individuals working together in a system.

So, whether a large or small organisation, you should try to stick to the following steps:

  • Pick the process with the biggest problems, or strategic importance. Try not to focus on small departmental activities. Try to create a massive step change, and that would mean stepping back a little and looking at the larger process, which crosses departments and functions.

If you are looking too low at your process, look up a level or two, and try to focus around level 3 (depending on your organisation’s size).

(Video) Business Process Re Engineering BPR

Here’s what I mean: there are different levels that you can view any process.

The top Level –at the organisational level, which may just show a simple top level view, like this. We’ll call this level 1

What is Business Process Reengineering: A Guide for Any Size Business (3)

Top level process mapping view

The Next Level Down – may show the main processes of the business. These are typically around 5 or 6 key processes that run across your business. We’ll call this level 2

What is Business Process Reengineering: A Guide for Any Size Business (4)

Level 2 Process Mapping view

The next level down – this can be seen by picking one of the main processes and drilling down to view its individual steps. You are now viewing the end-to-end process. We’ll call this level 3

What is Business Process Reengineering: A Guide for Any Size Business (5)

Level 3 process mapping view

At the next level down still – you can pick a part of the process and drill down further to see individual steps or activities, which normally can be seen conducted by a small team or department. At this level, you are now looking at a small portion of the big process but in a highly detailed view. We’ll call this level 4

What is Business Process Reengineering: A Guide for Any Size Business (6)

Whilst you may want to drill down to level 4 as part of the detailed analysis and process improvements during the business process reengineering project, the level to map is at level 3, where you can see and map the whole process from end to end, across departments and teams.

These levels are just for example purposes and may vary depending on your business size, but I’m sure you get the picture!

The point is, you need to look at the end to end process view, that spans across departments.

So how do you map the process? It’s easy, with a pack of post its, and a pen!

  1. Walk the process with a small elected, cross functional group
  2. Get everyone to map it individually, on paper, and based on their interpretation
  3. Return, discuss and agree the process as a team, using good old post-its and a flip chart pad.
  4. Once you have this on paper, make a few amendments and compile the final draft.

Then go Hunting for Tim Woods

And once you’ve found Tim Woods, for every activity identified, look to do one of three things, to improve productivity.

Option One: eliminate the activity there and then. If you don’t need to do it, then get rid of it! Sometimes processes informally evolve and activities creep in that made sense once, but don’t now. If it’s not needed anymore, then just get rid.

(Video) Business Process Reengineering Tips

Option Two: if you can’t single-handedly eliminate that activity because it needs to be done to support that process, then look to reduce the time it takes to do this activity. Some things like processing data or confirming information have to be done, but how can you do it in a slick and clean way (cue automation……)

Option Three: if you can’t physically reduce the time it takes to do that activity, then look to combine it with other non-value-added activities, so you can process two activities at the same time.

Perhaps someone gets the material whilst another sets a machine up, is a good example of this in the manufacturing world.

Either way, by following the three-option rule with every NVA activity, your productivity will improve, and so too your process.

Factor in other costs – cost of labour and overtime, and processing, and you should have a great end-to-end understanding of your process.

Now Re-Engineer Your Process from The Ground Up

The next step is to get bold. Redesign your current process with zest. Pick out drastic ideas.

Use automation – where can you use technology to improve flow and productivity? What impact will it have? Is it worth it, or is there another way?

Create clear team ownership, so everyone knows what’s expected to manage the new day to day process. How can you de-layer the decision making and communication? How can you improve flow?

  • Flow of ideas
  • Flow of communication and decisions
  • Flow of reviews and actions
  • Flow of leadership, perhaps

The next is to create the major milestones and project plan;

  • what actions need to be taken to make this future state process, a reality?
  • How long will it take? Clearly state owners and timescales.

And Implement Trials to See If It Provisionally Works

At this point, it’s about trialling on a small scale and then ramping up if results are to plan (or check, adjust and go again, if they aren’t.)

Its then about managing the project through to completion, with regular status updates to keep on track.

And when the processes are in place, locking the new changes in is the next challenge, by providing standard processes, training and reviews to ensure that everyone is adopting the new ways of working.

We are now in change management territory, so leading teams to adopting the new ways of working, is critical.

  • Give them time to learn new ways and thinking
  • To learn new skills
  • To adjust and transition through their change curve
  • And celebrate and reward the new behaviours and outcomes

Most of all, ensure the new process is being adhered to.

So too, the teams are monitoring performance regularly, so they can continuously improve the process, furthermore.

The Key points

So, what is Business Process Reengineering?

It’s a systematic process in itself, designed to make a drastic improvement to your key processes.

Whether you’re in a large or small business, business process reengineering can make large-scale improvements to your business capability. It can provide great value to customers anddoesit in a way that improves your bottom line performance.

The key points to remember are:

  • Pick the right level of mapping. Don’t go too high, where you can’t get enough detail, and don’t go too low, where you focus on one sub area of the process. Focus on the level which cuts across departments
  • Look to automate administration and communication using technology
  • Delayer the decision making and information flow, by focusing on a cross functional team to oversee the process and make day-to-day decisions
  • Look for NVA and drive it out through the 3 option rule
  • Focus on managing change to ensure people adopt the new activities
  • Continuously improve day by day and review performance regularly

Return from What is Business Process Reengineering, to Business Improvement Home Page

Previous postSmart Goal Setting Examples – 37 Of ‘Em For You To Steal!Next post5 Business Process Improvement Steps to MAXIMISE Your Bottom Line

(Video) what is business process reengineering ?

FAQs

What is business process reengineering explain its process? ›

Business Process Reengineering involves the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality. In Business Process Reengineering, companies start with a blank sheet of paper and rethink existing processes to deliver more value to the customer.

What is business process re engineering why it is required? ›

Business process re-engineering(BPR) is the radical redesign of business processes to achieve dramatic improvements in critical aspects like quality, output, cost, service, and speed. Business process reengineering (BPR) aims at cutting down enterprise costs and process redundancies on a very huge scale.

What is business process reengineering explain with an example? ›

Business process reengineering examples: company selling commemorative cards. In a company that offers products such as Christmas, anniversary, commemorative cards, etc., renewing the stock and changing the design of the cards is constantly fundamental.

What is the first step in the process of Business Process Reengineering? ›

BPR Implementation | Business Process Reengineering Steps
  1. Step 1: Set the vision and business goals. ...
  2. Step 2: Establish a competent team. ...
  3. Step 3: Understand the current process. ...
  4. Step 4: Redesign the process. ...
  5. Step 5: Implement the reengineered process.
12 Sept 2022

What is the meaning reengineering? ›

transitive verb. 1 : to engineer again or anew : redesign reengineered the chassis. 2 : to reorganize the operations of (an organization) so as to improve efficiency.

What is the most important factor in BPR success? ›

According to the results, having the BPR project motivated by customer demand and competitive pressure, on the average, is considered to be more important for project success than the use of industry specialists or other outsiders.

What are the features of business process reengineering? ›

The following are some of the salient features:
  • (i) Make the customer the starting point for change:
  • (ii) Design work processes in light of organisational goals:
  • (iii) Restructure to support front-line performance:
  • (i) The human dimension:
  • (ii) The work process dimension:
  • (iii) The technology dimension:

What is the purpose of business process reengineering quizlet? ›

What is the purpose of business process reengineering? Business process management integrates all of an organization's business process to make individual processes more efficient. BPM can be used to solve a single glitch or to create one unifying system to consolidate a myriad of processes.

What is an example of business process improvement? ›

Business process change examples cover a wide range of operational improvements, such as: Speeding up cycle time. Improving product quality. Reducing costs.

Why is business process re engineering needed for implementing an ERP? ›

Business process reengineering provides a realistic understanding of the existing process and helps organizations to go for a successful ERP implementation by cutting extra cost and pacing the process at the same time. Employees can also easily embrace the new ERP system after the process reengineering is done.

How can you improve the success of the BPR process? ›

Take a look at these five key factors in making a BPR initiative successful.
  1. Agency/Leadership Commitment and Sponsorship. ...
  2. Inclusion of the Right People. ...
  3. Clear Understanding of the Business Needs. ...
  4. Crucial Change Management. ...
  5. Ongoing Continuous Improvement.
11 Feb 2020

How many steps are in business process reengineering? ›

Also called Business Process Redesign, it's an approach to structurally changing your process workflows. What are the 7 steps of BPR implementation? Vision, Hypothesis, Mining, Design, Simulation, Go Live, and Monitoring.

What is the objective of reengineering? ›

Reengineering—the use of information technology. to radically redesign business processes in order to achieve dramatic improvements in performance— can significantly improve an organization's effectiveness, efficiency, competitiveness, and profitability.

What is another word for reengineering? ›

What is another word for reengineering?
refactoringrecoding
restructuringrewriting
editing

What's another word for re engineer? ›

What is another word for reengineer?
redesignremake
remodelrestructure
reformreshape

How BPR adds value to an organization? ›

BPR is an approach to improving business processes that seeks to make revolutionary changes as opposed to small, iterative changes. BPR does this by taking a fresh look at what the organization is trying to do in all its business processes, and then eliminating non-value-added steps.

What causes business process re engineering fail? ›

The analysis showed that the improper reengineering of IS legacy systems, ineffective process redesign problems, IT investment & sourcing decision, training problems and ineffective use of consultants are the most significant contributors to a BPR project failure whereby these factors can collectively explain about ...

What are the four basic components of process reengineering? ›

4 Components of an Organisation for Business Process...
  • Leader of BPRE Team: ...
  • Process Owners: ...
  • Reengineering Teams: ...
  • Non members (other employees) involved in the reengineered process:

Why is process important? ›

Why are processes important? They are important because they describe how things are done and then provides the focus for making them better and how they are done determines how successful the outcomes will be. If you focus on the right processes, in the right way, you can design your way to success.

Which is not a BPR methodology Mcq? ›

Which of the following is not one of the stepsoftheBusinessProcessReengineering (BPR)? (D) Partial modification or marginal improvement in the existing work processes. Answer: (D) Partial modification or marginal improvement in the existing work processes.

What is a business process a the analysis and redesign of workflow within and between enterprises? ›

Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises.

What are the steps in business process reengineering quizlet? ›

Terms in this set (5)
  • define organization horse power strategy you want to adopt.
  • identify the effective process that need to be reengineered.
  • identify the goal for each process.
  • identify the process participants and a facilitator for each process.
  • mapping the "as is " process.

How do you improve process? ›

The basic steps for process improvement are to identify the opportunity, analyze the challenge and implement improvements. The specific steps in the process depend on the process improvement methodology. A popular methodology is PDCA, whose steps are broken into Plan, Do, Check and Act.

How do you develop processes? ›

How to Develop a New Process
  1. Outline the Current and Future States. ...
  2. Establish Benchmarks for the New Process. ...
  3. Focus on Reducing Waste. ...
  4. Battle Test Before Deployment. ...
  5. Define Processes as Frameworks. ...
  6. Avoid the One-Size-Fits-All Trap. ...
  7. Implementation of New Processes Starts with Communication.
23 Jan 2016

How do you answer a process improvement question? ›

How to answer the question "Tell me about a time you improved a process?"
  1. Share a story. If possible, choose an example story that relates to an aspect of the new position, as this may add significance to the interview. ...
  2. Describe the benefit. ...
  3. Relate your experience to the interview.

What are the challenges of employing BPR? ›

Business Process Reengineering (BPR/BPRE) Challenges
  • Inadequate Knowledge.
  • Wrong Direction and Irregularity in Implementation.
  • Unsuited Team Formulation.
  • Insufficient And Incorrect Placement Of Resources.
  • Unsound analysis and lack of support.

How do you audit a business process? ›

Any business process can be audited in three steps.
  1. Prepare the data. Choose an appropriate time frame that gives enough sample data. ...
  2. Analyze the process. Average cycle time gives a rough idea of how fast and efficient the process functions. ...
  3. Make changes to the process.

Which is the first place in BPR? ›

BPR Cycle: Plan, Discover, Analyze, Re-Model and Implement are the five steps of BPR. BPR implementation completes in three phase; first phase-process consulting, second phase-change management, and third phase- project management.

What type of approach is business process reengineering? ›

Business process reengineering (BPR) is a management practice in which the related tasks required to obtain a specific business outcome are radically redesigned.

What is re engineering strategy? ›

Strategic Reengineering Defined:

Reengineering involves completely rethinking existing business methods, work procedures, and attitudes toward customers and suppliers. It usually starts from a “clean sheet of paper”. It is not about marginal improvement…it is about reinvention rather than evolution.

What are the 7 phases of business process reengineering? ›

Also called Business Process Redesign, it's an approach to structurally changing your process workflows. What are the 7 steps of BPR implementation? Vision, Hypothesis, Mining, Design, Simulation, Go Live, and Monitoring.

What are the 7 principles of BPR? ›

To achieve that Michael Hammer & James Champy suggested the following seven principles in their manifesto for Business Revolution:
  • Shared Information. ...
  • Result oriented. ...
  • Reusable technology. ...
  • Just in Time. ...
  • Industry benchmarks. ...
  • Standardization around industry processes. ...
  • Outsourcing non-core activities.
30 May 2020

Which of the following is the best explanation of business process reengineering? ›

The Correct Answer forthe given question is Option D. Transformation of business processes for more effective achievement of business goals.

What is the most important factor in BPR success? ›

According to the results, having the BPR project motivated by customer demand and competitive pressure, on the average, is considered to be more important for project success than the use of industry specialists or other outsiders.

What are the benefits of BPR? ›

The benefits of BPR are countless – increased revenue, improved customer service, reduced cost, higher employee retention, faster processing time. Nearly any business benefit can be gained from business process reengineering. However, the key is when to use BPR.

What is the principal idea of reengineering? ›

The principal idea of reengineering is to revolutionize key organizational systems and processes to answer the question: "If you were the customer, how would you like us to operate?" The answer to this question forms a vision for how the organization should run, and then decisions are made and actions are taken to make ...

Why is business process re engineering needed for implementing an ERP? ›

Business process reengineering provides a realistic understanding of the existing process and helps organizations to go for a successful ERP implementation by cutting extra cost and pacing the process at the same time. Employees can also easily embrace the new ERP system after the process reengineering is done.

Which of the following are the key components of business process re engineering? ›

5 Key Factors in Making a Business Process Reengineering Initiative Successful
  • Agency/Leadership Commitment and Sponsorship. ...
  • Inclusion of the Right People. ...
  • Clear Understanding of the Business Needs. ...
  • Crucial Change Management. ...
  • Ongoing Continuous Improvement.
11 Feb 2020

How BPR adds value to an organization? ›

BPR is an approach to improving business processes that seeks to make revolutionary changes as opposed to small, iterative changes. BPR does this by taking a fresh look at what the organization is trying to do in all its business processes, and then eliminating non-value-added steps.

What is business process analysis? ›

Business process analysis (BPA) is an approach to analyzing business operation processes. It is a detailed, multi-step examination of each part of a process to identify what is working well in your current process, what needs to be improved and how any necessary improvements can best be made.

Videos

1. Business Process Re-engineering
(Ain ruhaiza)
2. What is Business Process Modeling?
(IBM Technology)
3. Business Process Reengineering: A Key Component of ERP ROI
(Panorama Consulting Group)
4. BUSINESS PROCESS RE-ENGINEERING
(jithin joy)
5. Business Process Reengineering - A Key Component of ERP ROI
(Panorama Consulting Group)
6. Guide to Business Process Mapping | Author Nakatindi Chalansi Website: www.nakatindichalansi.com
(Nakatindi Chalansi)

Top Articles

Latest Posts

Article information

Author: Lidia Grady

Last Updated: 09/08/2022

Views: 6435

Rating: 4.4 / 5 (45 voted)

Reviews: 92% of readers found this page helpful

Author information

Name: Lidia Grady

Birthday: 1992-01-22

Address: Suite 493 356 Dale Fall, New Wanda, RI 52485

Phone: +29914464387516

Job: Customer Engineer

Hobby: Cryptography, Writing, Dowsing, Stand-up comedy, Calligraphy, Web surfing, Ghost hunting

Introduction: My name is Lidia Grady, I am a thankful, fine, glamorous, lucky, lively, pleasant, shiny person who loves writing and wants to share my knowledge and understanding with you.