Understanding Business Process Re-engineering
What is business process engineering?
Business process re-engineering (BPR) is the process of redesigning organizational workflows and processes to achieve radical improvement in quality, efficiency, and cutting costs. It is a business management strategy that originated and widely popular in the 1990s. In 1990, Michael Hammer, professor at Massachusetts Institute of Technology (MIT) published an article called ‘Reengineering Work: Don’t Automate, Obliterate’ in the Harvard Business Review, where he claimed that Most of the work being done does not add any value for customers, and this work should be removed, not accelerated through automation. Instead, companies should reconsider their inability to satisfy customers and their inefficient cost structure.
BPR consists of the analysis of existing processes to identify opportunities for improvement. This analysis is conducted by representing business process in the form of flow charts.
Why someone would do it?
Business Process Reengineering is used by companies to reduce cost, improve cycle time and customer experience to gain an edge over the new entrants and foreign competitors.
BPR has shown to reduce cost, cycle time and errors through the elimination of tasks and processes that are identified as unproductive. Through the implementation of lean processes, employees can focus on providing better customer experience. The elimination of unproductive process allows companies to be able to quickly respond to customer needs and build products.
What are the steps to implement BPR?
The key steps to successfully implement Business Process Re-engineering as follows:
- Define the objective and framework: This step involves the identification of the goals and objective of implementing BPR. Once the objective has been identified, the company must layout the framework and build the foundation by creating a BPR team.
- Process analysis: Map out the current processes and tasks to identify bottlenecks or steps that do not add value.
- Redesign: Identify the opportunities for improvement for the processes that were identified as unproductive.
- Implementation: For BPR to be successful, it is necessary for the company to involve its employees in the process by constantly validating hypothesis and gathering feedback.
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