Business Process Reengineering (BPR): Definition & Examples
What is business process reengineering (BPR)?
Business process reengineering (BPR) refers to a model of process change in which processes are radically redesigned and reorganized in order to achieve significant improvements in efficiency, quality, and speed. BPR stands in contrast to models of process improvement in which changes are made incrementally or gradually.
The BPR model was developed in the early 1990s by business process experts James Champy and Michael Hammer, who later wrote about the model in their book “Reengineering the Corporation: A Manifesto for Business Revolution“. BPR was widely embraced by businesses after its introduction. Today, much of its framework takes place within the broader strategy of business process management (BPM).
BPM vs. BPR
Business process reengineering is sometimes confused with business process management (BPM). While there is much overlap in their goals, these two frameworks can be easily differentiated in terms of their scope.
BPR should be thought of as a short-term, well-defined initiative that aims to change a single process. BPM, on the other hand, is a more long-term and strategic approach to organizing and adapting business processes.
Within the BPR framework, changes are made all at once. In BPM, changes may be made incrementally. BPM also considers how various processes and workflows intersect with and impact each other, while BPR takes a more narrow focus and zooms into one process at a time.
9 common characteristics of BPR
Although the specifics of any BPR initiative will be unique to the process, industry, and competitive landscape, BPR can be usually be identified by nine characteristics, as outlined by Hammer and Champy:
|Several tasks or activities are combined into one job.||Instead of having work handed off multiple times, related tasks are grouped together and completed by a single person. |
|Workers are empowered to make more decisions.||Employees are given more autonomy over their work, which speeds things up by minimizing back-and-forth. It also improves job satisfaction.|
|Processes follow a natural sequence.||Steps in the process should be performed sequentially when it makes sense, and in parallel when it makes sense.|
|Multiple versions of a process are present when needed.||Processes are modified when needed to better meet the needs of the customer or recipient of the output. Multiple versions may exist at the same time.|
|Work is completed where it makes sense.||Reduce the number of handoffs as much as possible, and do not move work items unnecessarily.|
|The number of quality checks and controls is minimized.||Empower employees to be more accountable for their work. Additional layers of QA are eliminated where possible.|
|Reconciliation processes are minimized or eliminated.||Multiple rounds of reconciliation cause delays and produce no additional value.|
|Case managers are assigned to complex work items.||Having a single point of contact for complex work items or processes improves the customer experience.|
|Centralized and decentralized operations are balanced.||IT enables information/data to be centralized, while decision-making can be decentralized where necessary.|
“Reengineering strives to break away from the old rules about how we organize and conduct business. It involves recognizing and rejecting some of them and then finding imaginative new ways to accomplish work. From our redesigned processes, new rules will emerge that fit the times. Only then can we hope to achieve quantum leaps in performance.”Michael Hammer
Examples of business process reengineering
Examples of successful BPR initiatives include changes made by Ford Motors and Mutual Benefit Life Insurance in the 1980s. In both cases, the company’s ability to remain competitive hinged on its ability to completely abandon previous process models in order to imagine new workflows and ways of getting things done.
Ford Motor Company
According to Michel Hammer, Ford successfully implemented the BPR model when the company needed to reduce the size of its accounts payable department from 500 to 400 employees during the automotive downturn of the 1980s. However, upon learning that competitor Mazda’s entire accounts payable department only consisted of 5 people, the company decided to recalibrate its goal.
Mazda had proven that a much more efficient model was possible. In response, Ford decided to update its goal from a 20% reduction in AP headcount to a 75% reduction. To succeed, Ford had to completely abandon its previous accounts payable process and start from scratch. With the new, simplified AP process, teams now only had to match three data items per transaction, whereas with the old process teams had to match 14 data items per transaction.
Mutual Benefit Life Insurance
Mutual Benefit Life Insurance was also able to make bold improvements to its application process through BPR. In this case, the goal was to improve productivity by 60%. To make this happen, the existing process — which was siloed and sequential — also had to be replaced. The new process incorporated a centralized database and allowed a single person to complete many tasks, rather than having each application move through a long sequence of handoffs in which many people made only a minor contribution. The result was a reduction in processing time that ranged from 5-25 days to just 4 hours.
Business process reengineering steps
By now we’ve defined BPR, explored a common framework, and considered two examples of the kinds of results BPR can achieve. Now it’s time to look at how to go about implementing business process reengineering.
According to Thomas H. Davenport and James E. Short, there are five distinct steps involved in BPR:
1. Define the vision and objectives.
BPR should only be implemented in pursuit of a specific goal or gain. Identifying the objective will help identify which changes need to be made and determine whether or not your changes have been successful.
2. Select the target process for BPR.
Every process has defined boundaries: starting points (or triggers) and end results (or outcomes). Make sure you understand the scope of the process before you begin so that you don’t make changes that impact other processes or workflows unnecessarily.
3. Measure the existing process.
Gather data on your target process to establish a baseline. You can use this to measure the impact of your BPR activity.
4. Assess the IT components of the process.
IT plays a critical role in scaling processes, often through automation. Understanding all the IT components and requirements in play is essential for redesigning a process that works.
5. Model the to-be version of the process.
After assessing the current process, you need to build a model of the new process including all actors, systems, tasks, workflows, and handoffs. Some teams will choose a low-code platform, others will rely on pen and paper. No matter which tool you choose to model your process, you’ll likely want to use the common flowchart symbols.
6 software features that support BPR
Virtually every company relies on software of some type to monitor and manage its processes. In some cases, this will look like a complex, siloed stack that doesn’t operate that efficiently. Other companies may rely on BPM or BPA software to help them build and recalibrate their processes.
A simple, integrated, unified software solution will make the work of managing and modifying processes much easier and less expensive. Below are some of the features to look for:
You’ve probably heard the wisdom that automation magnifies the efficiency of efficient processes, and magnifies the inefficiency in inefficient processes. In the BPR framework, however, eliminating redundancies and repetitive tasks is a high priority. Once a process has been rebuilt, automation can reduce the need for human input in tasks that occur frequently and which don’t require decision-making skills.
2. Low-code implementation
Low-code process management tools can help BPR by getting projects past one major hurdle: IT. Low-code minimizes the amount of time and effort required by the IT team, and provides an easy-to-use interface that managers, employees, and citizen developers can use to easily build or modify processes.
3. Data centralization
Business process reengineering requires a balance of centralized and decentralized activity. Now that many teams are distributed and remote work is more common, providing data access to all team members and systems plays a pivotal role in process speed and outcome quality. Look for software that captures and organizes data and requests from multiple sources, including mobile, and which integrates easily with your existing tools and apps.
BPR aims to create frictionless processes. A big part of that means making sure that all of the software and apps present in the process are integrated and working in harmony so that requests and data can move freely. Integrations also help create seamless user experiences, both for employees and customers.
5. Dashboards and reporting
Understanding current process efficiency is central to BPR. At the same time, empowering employees to make decisions is a top priority. Software that includes customizable reporting elements and dashboards can deepen visibility and make it easier for anyone with access to make data-driven decisions more quickly than ever.
Other software features can make BPR much easier for you and your team. Here is a list of additional software features that can help users find the right BPR software:
More about business process reengineering
BPR can help companies make critical changes to their processes in order to fix problems, improve productivity, and streamline operations. As we saw in the examples above, BPR can make the difference between being able to compete and being left behind.
Before you get started, check out our related articles on how to automate a manual process, how to create a workflow, and completing a workflow analysis. These resources will prepare you to review and adapt any workflow or process.