Business process reengineering

the analysis and design of workflows and processes within an organization. A business process is
a set of logically related tasks performed to achieve a defined business outcome. Re-engineering
is the basis for many recent developments in management. The cross-functional team, for
example, has become popular because of the desire to re-engineer separate functional tasks into
complete cross-functional processes.[citation needed] Also, many recent management information
systems developments aim to integrate a wide number of business functions. Enterprise resource
planning, supply chain management, knowledge management systems, groupware and
collaborative systems, Human Resource Management Systems and customer relationship
management.

Business Process Reengineering is also known as Business Process Redesign, Business

Transformation, or Business Process Change Management.

Contents
[hide]

 1 Overview
 2 History
o 2.1 Development after 1995
 3 Business process reengineering topics
o 3.1 Definition
o 3.2 The role of information technology
o 3.3 Research & Methodology
 4 Critique
 5 See also
 6 References
 7 Further reading
 8 External links

[edit] Overview
Business process reengineering (BPR) began as a private sector technique to help organizations
fundamentally rethink how they do their work in order to dramatically improve customer service,
cut operational costs, and become world-class competitors. A key stimulus for reengineering has
been the continuing development and deployment of sophisticated information systems and
networks. Leading organizations are becoming bolder in using this technology to support
innovative business processes, rather than refining current ways of doing work.[1]
Reengineering guidance and relationship of Mission and Work Processes to Information
Technology.

Business process reengineering is one approach for redesigning the way work is done to better
support the organization's mission and reduce costs. Reengineering starts with a high-level
assessment of the organization's mission, strategic goals, and customer needs. Basic questions
are asked, such as "Does our mission need to be redefined? Are our strategic goals aligned with
our mission? Who are our customers?" An organization may find that it is operating on
questionable assumptions, particularly in terms of the wants and needs of its customers. Only
after the organization rethinks what it should be doing, does it go on to decide how best to do it.
[1]

Within the framework of this basic assessment of mission and goals, reengineering focuses on
the organization's business processes—the steps and procedures that govern how resources are
used to create products and services that meet the needs of particular customers or markets. As a
structured ordering of work steps across time and place, a business process can be decomposed
into specific activities, measured, modeled, and improved. It can also be completely redesigned
or eliminated altogether. Reengineering identifies, analyzes, and redesigns an organization's core
business processes with the aim of achieving dramatic improvements in critical performance
measures, such as cost, quality, service, and speed.[1]

Reengineering recognizes that an organization's business processes are usually fragmented into
subprocesses and tasks that are carried out by several specialized functional areas within the
organization. Often, no one is responsible for the overall performance of the entire process.
Reengineering maintains that optimizing the performance of subprocesses can result in some
benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient
and outmoded. For that reason, reengineering focuses on redesigning the process as a whole in
order to achieve the greatest possible benefits to the organization and their customers. This drive
for realizing dramatic improvements by fundamentally rethinking how the organization's work
should be done distinguishes reengineering from process improvement efforts that focus on
functional or incremental improvement.[1]

[edit] History
In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute
of Technology (MIT), published an article in the Harvard Business Review, in which he claimed
that the major challenge for managers is to obliterate non-value adding work, rather than using
technology for automating it.[2] This statement implicitly accused managers of having focused on
the wrong issues, namely that technology in general, and more specifically information
technology, has been used primarily for automating existing processes rather than using it as an
enabler for making non-value adding work obsolete.

Hammer's claim was simple: 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 processes in order to maximize customer value, while minimizing the
consumption of resources required for delivering their product or service. A similar idea was
advocated by Thomas H. Davenport and J. Short in 1990[3], at that time a member of the Ernst &
Young research center, in a paper published in the Sloan Management Review the same year as
Hammer published his paper.

This idea, to unbiasedly review a company’s business processes, was rapidly adopted by a huge
number of firms, which were striving for renewed competitiveness, which they had lost due to
the market entrance of foreign competitors, their inability to satisfy customer needs, and their
insufficient cost structure[citation needed]. Even well established management thinkers, such as Peter
Drucker and Tom Peters, were accepting and advocating BPR as a new tool for (re-)achieving
success in a dynamic world[citation needed]. During the following years, a fast growing number of
publications, books as well as journal articles, were dedicated to BPR, and many consulting
firms embarked on this trend and developed BPR methods. However, the critics were fast to
claim that BPR was a way to dehumanize the work place, increase managerial control, and to
justify downsizing, i.e. major reductions of the work force [4], and a rebirth of Taylorism under a
different label.

Despite this critique, reengineering was adopted at an accelerating pace and by 1993, as many as
65% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to
have plans to do so[citation needed]. This trend was fueled by the fast adoption of BPR by the
consulting industry, but also by the study Made in America[citation needed], conducted by MIT, that
showed how companies in many US industries had lagged behind their foreign counterparts in
terms of competitiveness, time-to-market and productivity.

[edit] Development after 1995

With the publication of critiques in 1995 and 1996 by some of the early BPR proponents[citation
needed]
, coupled with abuses and misuses of the concept by others, the reengineering fervor in the
U.S. began to wane. Since then, considering business processes as a starting point for business
analysis and redesign has become a widely accepted approach and is a standard part of the
change methodology portfolio, but is typically performed in a less radical way as originally
proposed.

More recently, the concept of Business Process Management (BPM) has gained major attention
in the corporate world and can be considered as a successor to the BPR wave of the 1990s, as it
is evenly driven by a striving for process efficiency supported by information technology.
Equivalently to the critique brought forward against BPR, BPM is now accused[citation needed] of
focusing on technology and disregarding the people aspects of change.

[edit] Business process reengineering topics

[edit] Definition

Different definitions can be found. This section contains the definition provided in notable
publications in the field:

 "... 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."[5]
 "encompasses the envisioning of new work strategies, the actual process design activity,
and the implementation of the change in all its complex technological, human, and
organizational dimensions."[6]

Additionally, Davenport (ibid.) points out the major difference between BPR and other
approaches to organization development (OD), especially the continuous improvement or TQM
movement, when he states: "Today firms must seek not fractional, but multiplicative levels of
improvement – 10x rather than 10%." Finally, Johansson[7] provide a description of BPR relative
to other process-oriented views, such as Total Quality Management (TQM) and Just-in-time
(JIT), and state:

 "Business Process Reengineering, although a close relative, seeks radical rather than
merely continuous improvement. It escalates the efforts of JIT and TQM to make process
orientation a strategic tool and a core competence of the organization. BPR concentrates
on core business processes, and uses the specific techniques within the JIT and TQM
”toolboxes” as enablers, while broadening the process vision."

In order to achieve the major improvements BPR is seeking for, the change of structural
organizational variables, and other ways of managing and performing work is often considered
as being insufficient. For being able to reap the achievable benefits fully, the use of information
technology (IT) is conceived as a major contributing factor. While IT traditionally has been used
for supporting the existing business functions, i.e. it was used for increasing organizational
efficiency, it now plays a role as enabler of new organizational forms, and patterns of
collaboration within and between organizations[citation needed].

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".[8]

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[citation needed]. Technology is concerned with the use of computer
systems and other forms of communication technology in the business. In 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 BPR. These processes are characterized by a number
of attributes: Process ownership, customer focus, value adding, and cross-functionality.

[edit] The role of information technology

Information technology (IT) has historically played an important role in the reengineering
concept[citation needed]. It is considered by some as a major enabler for new forms of working and
collaborating within an organization and across organizational borders.

Early BPR literature [9] identified several so called disruptive technologies that were supposed to
challenge traditional wisdom about how work should be performed.

 Shared databases, making information available at many places

 Expert systems, allowing generalists to perform specialist tasks
 Telecommunication networks, allowing organizations to be centralized and decentralized
at the same time
 Decision-support tools, allowing decision-making to be a part of everybody's job
 Wireless data communication and portable computers, allowing field personnel to work
office independent
 Interactive videodisk, to get in immediate contact with potential buyers
 Automatic identification and tracking, allowing things to tell where they are, instead of
requiring to be found
 High performance computing, allowing on-the-fly planning and revisioning

In the mid 1990s, especially workflow management systems were considered as a significant
contributor to improved process efficiency. Also ERP (Enterprise Resource Planning) vendors,
such as SAP, JD Edwards, Oracle, PeopleSoft, positioned their solutions as vehicles for business
process redesign and improvement.

[edit] Research & Methodology

Although the labels and steps differ slightly, the early methodologies that were rooted in IT-
centric BPR solutions share many of the same basic principles and elements. The following
outline is one such model, based on the PRLC (Process Reengineering Life Cycle) approach
developed by Guha.[10].

Simplified schematic outline of using a business process approach, examplified for

pharmceutical R&D:
1. Structural organization with functional units
2. Introduction of New Product Development as cross-functional process
3. Re-structuring and streamlining activities, removal of non-value adding tasks

Benefiting from lessons learned from the early adopters, some BPR practitioners advocated a
change in emphasis to a customer-centric, as opposed to an IT-centric, methodology. One such
methodology, that also incorporated a Risk and Impact Assessment to account for the impact that
BPR can have on jobs and operations, was described by Lon Roberts (1994)[citation needed]. Roberts
also stressed the use of change management tools to proactively address resistance to change—a
factor linked to the demise of many reengineering initiatives that looked good on the drawing
board.

Some items to use on a process analysis checklist are: Reduce handoffs, Centralize data, Reduce
delays, Free resources faster, Combine similar activities. Also within the management consulting
industry, a significant number of methodological approaches have been developed.[11]
[edit] Critique
Reengineering has earned a bad reputation because such projects have often resulted in massive
layoffs[citation needed]. This reputation is not altogether unwarranted, since companies have often
downsized under the banner of reengineering. Further, reengineering has not always lived up to
its expectations. The main reasons seem to be that:

 Reengineering assumes that the factor that limits an organization's performance is the
ineffectiveness of its processes (which may or may not be true) and offers no means of
validating that assumption.
 Reengineering assumes the need to start the process of performance improvement with a
"clean slate," i.e. totally disregard the status quo.
 According to Eliyahu M. Goldratt (and his Theory of Constraints) reengineering does not
provide an effective way to focus improvement efforts on the organization's
constraint[citation needed].

There was considerable hype surrounding the introduction of Reengineering the Corporation
(partially due to the fact that the authors of the book reportedly[citation needed] bought numbers of
copies to promote it to the top of bestseller lists).

Abrahamson (1996) showed that fashionable management terms tend to follow a lifecycle, which
for Reengineering peaked between 1993 and 1996 (Ponzi and Koenig 2002). They argue that
Reengineering was in fact nothing new (as e.g. when Henry Ford implemented the assembly line
in 1908, he was in fact reengineering, radically changing the way of thinking in an organization).
Dubois (2002) highlights the value of signaling terms as Reengineering, giving it a name, and
stimulating it. At the same there can be a danger in usage of such fashionable concepts as mere
ammunition to implement particular reform. Read Article by Faraz Rafique. The most frequent
and harsh critique against BPR concerns the strict focus on efficiency and technology and the
disregard of people in the organization that is subjected to a reengineering initiative. Very often,
the label BPR was used for major workforce reductions. Thomas Davenport, an early BPR
proponent, stated that:

"When I wrote about "business process redesign" in 1990, I explicitly said that using it for cost
reduction alone was not a sensible goal. And consultants Michael Hammer and James Champy,
the two names most closely associated with reengineering, have insisted all along that layoffs
shouldn't be the point. But the fact is, once out of the bottle, the reengineering genie quickly
turned ugly." [12]

Michael Hammer similarly admitted that:

"I wasn't smart enough about that. I was reflecting my engineering background and was
insufficient appreciative of the human dimension. I've learned that's critical." [13]

Other criticism brought forward against the BPR concept include

  It never changed management thinking, actually the largest causes of failure in an
organization
 lack of management support for the initiative and thus poor acceptance in the
organization.
 exaggerated expectations regarding the potential benefits from a BPR initiative and
consequently failure to achieve the expected results.
 underestimation of the resistance to change within the organization.
 implementation of generic so-called best-practice processes that do not fit specific
company needs.
 overtrust in technology solutions.
 performing BPR as a one-off project with limited strategy alignment and long-term
perspective.
 poor project management.

Business Process Reengineering

 

An Introductory Guide
by Peter Carter

Business process reengineering (often referred to by the acronym BPR)

is the main way in which organizations become more efficient and
modernize. Business process reengineering transforms an organization
in ways that directly affect performance.

The impact of BPR on organizational performance

The two cornerstones of any organization are the people and the processes. If Business Process
individuals are motivated and working hard, yet the business processes are Reengineering
cumbersome and non-essential activities remain, organizational performance expert: Peter
will be poor. Business Process Reengineering is the key to transforming how Carter
people work. What appear to be minor changes in processes can have
Peter Carter is Managing
dramatic effects on cash flow, service delivery and customer satisfaction. Even Director of Corporate
Information Systems Ltd, a
the act of documenting business processes alone will typically improve UK firm providing
consultancy and training
organizational efficiency by 10%. services in business process
reengineering and associated
areas.
How to implement a BPR project
For the benefit of students,
Peter has written some
The best way to map and improve the organization's procedures is to take a additional business process
management articles
top down approach, and not undertake a project in isolation. That means: providing answers to
  Starting with mission statements that define the purpose of the
frequently asked questions.
organization and describe what sets it apart from others in its sector
or industry. Companies look for help
 Producing vision statements which define where the organization is with business processes can
contact Peter Carter.
going, to provide a clear picture of the desired future position.
 Build these into a clear business strategy thereby deriving the project
objectives.
 Defining behaviours that will enable the organization to achieve its'
aims.
 Producing key performance measures to track progress.
 Relating efficiency improvements to the culture of the organization
 Identifying initiatives that will improve performance.
Once these building blocks in place, the BPR exercise can begin.

Tools to support BPR

When a BPR project is undertaken across the organization, it can require managing a massive amount of
information about the processes, data and systems. If you don't have an excellent tool to support BPR,
the management of this information can become an impossible task. The use of a good
BPR/documentation tool is vital in any BPR project.

The types of attributes you should look for in BPR software are:

 Graphical interface for fast documentation

 "Object oriented" technology, so that changes to data (eg: job titles) only need to be made in
one place, and the change automatically appears throughout all the organization's procedures
and documentation.
 Drag and drop facility so you can easily relate organizational and data objects to each step in the
process
 Customizable meta data fields, so that you can include information relating to your industry,
business sector or organization in your documentation
 Analysis, such as swim-lanes to show visually how responsibilities in a process are transferred
between different roles, or where data items or computer applications are used.
 Support for Value Stream mapping.
 CRUD or RACI reports, to provide evidence for process improvement.
 The ability to assess the processes against agreed international standards
 Simulation software to support 'what-if' analyses during the design phase of the project to
develop LEAN processes
 The production of word documents or web site versions of the procedures at the touch of a
single button, so that the information can be easily maintained and updated.
The software we use by choice is Protos, a very comprehensive Dutch system that has been translated
into English. Protos meets all the above requirements, and many more, and is better than any system
originated in English that we have seen.
Conclusion

To be successful, business process reengineering projects need to be top down, taking in the complete
organization, and the full end to end processes. It needs to be supported by tools that make processes
easy to track and analyze. If you would like help with your BPR project, please contact Peter Carter.

(c)2005 Peter Carter

Business Process Re-engineering (BPR) is the strategic analysis of business

processes and the planning and implementation of improved business
processes. The analysis is often customer centred and holistic in
approach.BPR is a multi-disciplinary subject and should involve more than IT
specialists. Nevertheless, IT can support BPR in many ways: Software can be
used to help with gathering information about the current business
organisation. Workflow and process analysis tools, business modelling and
simulation, On-line analytic processing (OLAP), Data mining all have a role to
play.

Topic Outline - KnowledgeBases - Newsgroups and FAQs - Magazines and Ezines - White Papers - Organizations
and User Groups - News - Events - Related Topics - Books - Key Manufacturers - Where to Buy - Key Solutions
Providers - Where to get Help - Key Service Providers - Key Training Providers

Business Process Reengineering (BPR) - Knowledge Bases

 BPMI.org, The Business Process Management Initiative

o The Business Process Management Initiative (BPMI.org) is a
group of software vendors, consulting firms, and non-profit
organizations working on the development of open standards
for the management of mission-critical business processes
that span multiple applications, corporate departments and
business partners
 BPR OnLine Learning Center for reengineering and change management
teams (ProSci Learning Centers)
o The BPR Online Learning Center is one of the industry's
most comprehensive resources for reengineering and change
management teams. The learning center offers an index of
BPR articles from around the world, an online tutorial series,
benchmarking studies, yellow pages for BPR resources, and
information on reengineering toolkits and document
templates for project teams.
 BPR: Business Process Reengineering: Research,Tools,Practice (Business
Processes Resource Centre at the University of Warwick)
o "Business Process Reengineering- taking a holistic customer-
focused systems view and changing the organisation.
Encompassing: "the vision thing", understanding business
processes and workflow along the supply chain; business,
CIM and IT-based analysis; organisation theory and HRM; IT
support through the internet, computer supported co-
 operative working (CSCW), and the possibility of teleworking"
 Business Process Reengineering (University of Glamorgan, Wales)
 Business Process Reengineering (BPR) & Innovation (BRINT)
 Business Process Resources (Command, Control, Communications and
Intelligence)
 Business Processes Resource Centre- Knowledge Management, CPD,
Complexity (Business Processes Resource Centre, Warwick
University )
 Change Management Resource Library (ProSci)
o A comprehensive reference site for books, articles, training,
web sites and consultants in the area of change
management.
 Process Management Links & Resources (Scitor Corp)
 Reengineering Resource Center
o www.reengineering.com was the online version of the
Enterprise Reengineering publication before it closed it's
doors in September, 1996. Some of the articles that were
available can still be seen in the Library Archives.
 Tools for Business Process Re-engineering (Business Process
Reengineering Advisory Group, University of Toronto)
 WARIA Groupware / BPR Vendors and Consultants (The Workflow And
Reengineering International Association)
 SEE also Related Topics