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Understanding The Background Of Business Process Re-engineering

Business Process Re-engineering is a very important concept when trying to bring in something innovative in the way business is implemented. The details cited below will give you clarity on the fundamentals behind the business process re-engineering.

The knowledge shared in this blog has a practical angle to the topic. It will help you in understanding the basics very clearly. So, let’s see the highlights as what all we are covering in this blog -

  • Business Process Re-engineering Definition
  • Overview and Basic Concepts
  • BPR Lifecycle, Its Principles, and Framework
  • Advantages of BPR and Some Examples

Definition of Business Process Re-engineering

Business Process re-engineering is an art of redesigning the core business process and implementing radical thinking for better growth, performance, efficiency, and revenue. It can also be said as an analysis principle which is implemented to redesign business processes across organization. The goal is focused to improve overall product quality with higher revenue for the company. Business Process re-engineering is sometimes also said as a business management strategy that focuses on redesign workflows and business processes.

It has helped organizations to restructure their business functions and their business processes to deliver flawless products. The steps for business process re-engineering are aligned logically and implemented to have maximum efficiency. The focus is on business goals.

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To understand it better, we can also call it a makeover, which formulates organizations’ inputs to business outputs.

Check out the diagrammatic representation of Business Process Re-engineering -  

BPR Concepts Business Process Reengineering 1

Overview of Business Process Re-engineering

Business Process re-engineering was first used in the 1990s. It sees with a very holistic approach as it focuses on business goals. It would not wrong if this re-engineering method is named “Business Transformation”.

Obviously, BPR is a heavy analytical task. The employees of the organization have to go under various brainstorming sessions to come with the redesign process. In a way, a lot of rethinking process and creativity needs to be applied. This helps to come up with out of the box ideas. The focus of so much rethinking is to have better support for the organization’s mission and vision.

So re-engineering is based on these principles –

  • Rethinking of existing business process
  • Mission and Vision of the organization
  • Mapping of Customer Journey
  • Understanding the needs of customers
  • Keeping a check on strategic goals.

Business Processing Re-engineering has to be a collaborative approach. It takes a closer look at all the business units. No one is single-handedly responsible for the success of this redesign. That’s the reason these are divided into multiple sub-processes.

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Initially, it came up to improve customer service, reduce overall costs and to beat the competitors. With that fundamental, it explains it much better how accurate this redesign process needs to be.

We need to be very clear that this re-engineering changes processes and not business units. The reason business process re-engineering has become so important is to deal with our competitors. 

BPR Concepts Business Process Reengineering 2

Conceptual Explanation of Business Process Re-engineering

Business Process Re-engineering revolves around four main pillars - 

  • Fundamental 
  • Radical 
  • Process
  • Dramatic

By taking a closer look at the definition, don't we get a fair idea as to how business process re-engineering is revolving around these four pillars? These are the basic concept behind BPR in any organization. 

So if we combine all four, we can conceptualize BPR as a fundamental rethinking and radical redesign of business processes to see dramatic improvements in growth, efficiency, and revenue. Let’s understand each one of them - 

Fundamental 

The first step in business re-engineering should be analyzing the fundamental operations of our businesses. A couple of questions must be asked and analyzed - 

  • Why do we do what we do?
  • Why do we do it in a particular manner?
  • Basic principles followed in an organization
  • How we do it better?

Radical 

Radical re-engineering is always associated with a re-design mechanism. It is always seen as coming up with new ideas and innovation so as to discard the existing one. Radical re-engineering can be visualized as a reinvention with a strong knowledge of fundamental operations of the business.

Process

The process can be defined as basic steps followed in a specific manner to produce some valuable output. They usually have a sequential flow, but sometimes it also follows a parallel flow. 

Let’s understand this with an example - 

From any clothing app, a customer orders a piece of shirt. The organization follows a defined process to deliver the product. The order gets received followed by its confirmation. Then the order gets packed at the warehouse, followed by it being shipped. Next, the order passes through various delivery hubs and finally getting delivered to the customer. Yes, these processes are also looked upon to be changes based on various experiences and feedbacks.

Dramatic

So now you would be getting an idea of what exactly the concept of the dramatic means. It focuses on overall performance improvements, unlike marginal improvements and modifications.

All these four pillars if applied effectively helps companies to stand out from competitors. 

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Details on Business Process Re-engineering Lifecycle

Business Process Re-engineering lifecycle is the recent methodologies that have been added for Business Process Re-engineering. As process re-engineering requires immense effort, it is important that it follows a sequential step to achieve the end result.  

That’s why BPR Lifecycle has six steps which are being followed in the sequential pattern –

  • Envision new processes
  • Initiate Change
  • Process diagnosis
  • Process redesign
  • Reconstruction
  • Process Monitoring

Let’s see each one of them –

Envision – This step helps to visualize re-engineering opportunities and identify emerging technologies. This, in turn, helps to align the organization’s strategies so as to achieve a common goal.

Initiate – Initiation of business process re-engineering means starting the work and setting up the right expectations. This calls for kick-off meeting and an organized team is being formed for BPR. The formation of a structured team helps people to realize the ultimate goal and work towards it.

Process Diagnosis – This step helps to track the process being followed by reviewing the current process on a timely basis. The aligned team checks for any bottlenecks and issues throughout the journey of business process re-engineering.  

Process Redesign – These steps are implemented immediately after diagnosis. All the alternative flows are being identified and new architecture is being designed. Make sure when process redesign is being implemented it follows a set of agreed protocols.

Reconstruction – Reconstruction step helps to finalize the implementation plan after the diagnosis has been done and redesign methodology has been decided.  

Process Monitoring – The end step of this lifecycle calls for monitoring the new changes. The redesigned methodology should be aligned with quality output and so it needs constant monitoring  

Below diagram would help you to have a simplified look on business process re-engineering - 
Understanding The Background Of Business Process Re-engineering 2

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Examples of Business Process Re-engineering

Let’s see some of the examples which would constantly need redesign -

  • A company which offers gifts, cakes, cards, party decorations items would constantly need process re-engineering so as to meet its end customers’ demands.

Suppose the launch of any new item takes two months, but the market and competition say that every week a new product is launched. So this would call for re-engineering, where thought could having variations of each product type and bringing to the website every week. 

  • Let’s take an example of the Human Resource Department in any business. The HR department is one solution for all the employees and continuous process re-engineering is needed to maintain employee satisfaction. Earlier human resource department was more of pen and paper-based, but with leading change these are now integrated with IT systems. 

So by replacing so much manual effort, it increases the efficiency and performance of this particular business unit. The resultant is that employees have their entire data - profile, insurance, paycheques details, retirement details, employee benefits, and policies integrated into one system.

  • One more simple example - A simple use-case of any financial system. Imagine, initially there is one queue for all kinds of or similar services. But with demands, market competition and customers’ time, it has to be redesigned to have separate queues as per the services being offered. 

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Basic Principles Of Business Process Re-engineering

There are some core principles behind business process re-engineering. Let’s see each one of them - 

  • Organize the Outcomes, not the task - The focus should always be on the end result rather than organizing a single task. 
  • The information needs to be arranged at once and that too at the source. This reduces repetitions in the process and resubmission of data.
  • Approach of Parallel Workflow  - All those tasks which can be done parallelly should implemented together, rather having a sequential approach.
  • Focus on “Why this approach” and “What if it does not work out” - This would always help you to know the reason behind current redesign method and would also prepare for the alternatives.
  • Maintain a centralized repository for all the information which would flow from various sources. This also enables to maintain a cross-functional work approach and knowledge transfer.

What is the framework behind business process re-engineering?

Now having known the principles of BPR, it is important for us to understand the framework behind it. Business process re-engineering follows the approach of reinventing the wheel which means revisiting each and every process from scratch and working towards the reinvention. The final goal of setting up this framework is for the prompt end product in order to increase performance, growth, and revenue.

BPR Framework revolves under three components - 

  • Organization and Its People
  • Tools and Technologies 
  • Vision and Mission

Understanding The Background Of Business Process Re-engineering 4

Steps followed in BPR Framework - 

  • Initiation of a new re-engineering project along with BPR documentation.
  • Identification of processes that needs to be redesigned. 
  • Getting approval from the management.
  • Setting up a project plan which would give insights on tasks involved, process to be changed, stakeholders details, efforts and deadlines, and implementation timelines.
  • Analyzing the problem areas, rethinking to fix them and monitoring the status.
  • Implementation of the new process.

Advantages of Business Process Re-engineering

By now you would have definitely understood that business process re-engineering has multiple benefits for the organizations. Let’s see some of its advantages - 

  • BPR helps organizations to bring in radical changes to achieve high performance, potential growth, and higher revenue. 
  • Re-engineering always prepare the organization to be compatible with the latest tools and technologies.
  • This redesign principle makes us competition ready and opens for innovations to be implemented.
  • It deeply focuses on business needs as it revolves around needs o end customers.
  • By having constant checks, it avoids the organization’s complexity and promotes cross-functional process implementation. 
  • Since the focus is on the central system, it integrates several functions immediately.

Business Analyst Demo ClassConclusion

Thus, we now have an understanding that business process re-engineering is a strategic approach that helps organizations to always be ready for the change. It is managed in a way of project and always owned by the organization. BPR is not a miracle but it's also not painless, it requires immense dedication, transparent communication, and efficient teamwork to constantly improve business performance, growth, efficiency, brand value, and revenue. I hope you had a great learning experience with this blog. Stay tuned for more and I wish you a very Happy learning!

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    Nidhi

    I believe in knowledge sharing and bringing change in people's lives. As a business analyst by profession, I love to explore everything about the way businesses should drive. I keep in touch with the latest business analysis updates.


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