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07. Business Process Reengineering (BPR)

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Chapter 9: Basic Information Systems Concepts. Definitions u A system is a set of interrelated components that must work together to achieve some common.

Business Proces Reengineering (BPR) Fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in performance.

Business Process Reengineering & Innovation Jason Chen School of Business Administration Gonzaga University Spokane, WA 99223

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Business Process Reengineering

Business Process Reengineering is the radical redesign of business processes to achieve dramatic improvements in productivity, cycle times, quality, and employee and customer satisfaction.

• January 31, 2023

What Is Business Process Reengineering?

Business Process Reengineering is the radical redesign of business processes to achieve dramatic improvements in productivity, cycle times, quality, and employee and customer satisfaction. Companies start by assessing what work needs to be done to deliver customer value. Techniques such as process mining (the analysis of information systems event logs) can help discover, monitor, and improve processes. Then they decide how to do the work—or if it should be done at all. Rethinking the roles of third parties or outsourcing is also a crucial component of Business Process Reengineering.

Usage and satisfaction among survey respondents

How is business process reengineering implemented.

Business Process Reengineering is a dramatic change initiative that contains seven major steps:

• Refocusing company values on customer needs and eliminating low-value work
• Simplifying and standardizing overly complex work, and automating repetitive work
• Enabling processes with modern systems and data
• Locating work in the most efficient and effective environment
• Reorganizing a business into cross-functional teams with end-to-end responsibility for a process
• Rethinking basic organizational and people issues
• Determining appropriate roles for third parties or outsourcers, focusing on where they truly add value

Related Topics

Cycle Time Reduction

Process Redesign

What Are the Common Uses for Business Process Reengineering?

Companies use Business Process Reengineering to improve the performance of key processes that affect customers by:

• Reducing costs and cycle times by eliminating unproductive activities and locating work in the most efficient and effective environment
• Reorganizing by teams to decrease the need for management layers, accelerate information flows, and eliminate errors and rework caused by multiple handoffs.
• Improving quality by standardizing and automating work to reduce errors and focus workers on higher-value activities. It also reduces the fragmentation of work and establishes clear ownership of processes.

Davenport, Thomas H., and Andrew Spanyi. “What Process Mining Is, and Why Companies Should Do It.” Harvard Business Review , April 23, 2019.

Dumas, Marlon, Marcello La Rosa, Jan Mendling, and Hajo A. Reijers. Fundamentals of Business Process Management . Springer, 2018.

Franz, Peter, and Mathias Kirchmer. Value-Driven Business Process Management: The Value-Switch for Lasting Competitive Advantage . McGraw Hill, 2013

Hammer, Michael, and James Champy. Reengineering the Corporation: A Manifesto for Business Revolution. Revised and updated. HarperBusiness, 2006.

Jeston, John. Business Process Management: Practical Guidelines to Successful Implementations . Routledge, 2022.

Kirchmer, Mathias. High Performance Through Business Process Management: Strategy Execution in a Digital World . Springer, 2018.

Martin, Karen, and Mike Osterling. Value Stream Mapping: How to Visualize Work and Align Leadership for Organizational Transformation. McGraw Hill, 2013.

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Business Process Reengineering

Dec 19, 2019

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Business Process Reengineering. Learning Objectives. Explain the role of Business Process Reengineering (BPR) within the organization Understand the origins and key characteristics of BPR Identify and be able to use core BPR Symbols Understand and be able to implement a BPR Strategy

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Learning Objectives • Explain the role of Business Process Reengineering (BPR) within the organization • Understand the origins and key characteristics of BPR • Identify and be able to use core BPR Symbols • Understand and be able to implement a BPR Strategy • Understand the main challenges in implementing a BPR Strategy

BPR & The Organization

What is BPR? • Reengineering is the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed. (Hammer & Champy, 1993)

BPR is Not? • Automation • Downsizing • Outsourcing

BPR Versus Process Simplification Process Simplification Incremental Change Process-Led Assume Attitudes & Behaviors Management-Led Various Simultaneous Projects Process Reengineering Radical Transformation Vision-Led Change Attitudes & Behaviors Director-Led Limited Number of Initiatives (Source Coulson-Thomas, 1992)

BPR Versus Continuous Improvement Continuous Improvement Incremental Change People Focus Low Investment Improve Existing Work Unit Driven Process Reengineering Radical Transformation People & Technology Focus High Investment Rebuild Champion Driven

What is a Process? • A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action. (Davenport, 1993)

What is a Business Process? • A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives

Why Reengineer? • Customers • Demanding • Sophistication • Changing Needs • Competition • Local • Global • Change • Technology • Customer Preferences

Why Organizations Don’t Reengineer? • Complacency • Political Resistance • New Developments • Fear of Unknown and Failure

Performance • BPR seeks improvements of • Cost • Quality • Service • Speed

Origins • Scientific Management. FW Taylor (1856-1915). • Frederick Herzberg - Job Enrichment • Deming et al - Total Quality Management and Kaizen • In Search of Excellence (Peters and Waterman) • Value-Added Analysis (Porter).

Key Characteristics • Systems Philosophy • Global Perspective on Business Processes • Radical Improvement • Integrated Change • People Centred • Focus on End-Customers • Process-Based

Systems Perspective Feedback Inputs Transformation Outputs Environment

Process Based • Added Value • BPR Initiatives must add-value over and above the existing process • Customer-Led • BPR Initiatives must meet the needs of the customer

Radical Improvement • Sustainable • Process improvements need to become firmly rooted within the organization • Stepped Approach • Process improvements will not happen over night they need to be gradually introduced • Also assists the acceptance by staff of the change

Integrated Change • Viable Solutions • Process improvements must be viable and practical • Balanced Improvements • Process improvements must be realistic

People-Centred • Business Understanding • Empowerment & Participation • Organizational Culture

Focus on End-Customers • Process improvements must relate to the needs of the organization and be relevant to the end-customers to which they are designed to serve

BPR Symbols

Business Process Flowchart Symbols An Activity A Document A Decision Data (input as outputs)

Business Process Flowchart Symbols A Predefined Process The Start of a Process The End of a Process Representing a Relation Start End

Business Process Flowchart Symbols Continuation of the process at the same page at an equal symbol with the same number. Used when a relation arrow crosses another relation arrow Off-Page Connector - Process will continue on the next page Integration Relation - A relation to another module is identified and described

Data Flowchart Symbols An Activity A Document A Decision Flat Data File (input as outputs)

Data Flowchart Symbols Manual Data Item A Database File Representing a Relation Continuation Off-Page Connector

Rules For Data Symbols

Rules For Data Symbols Start Symbol used to identify the start of a business process Activities must be described as a verb Decisions have only two possibilities (Yes & No) Crossing lines are not allowed If one side of the decision has no further processes defined this symbol has to be used Generate Purchase Order OK? Yes No End

Rules For Data Symbols Continuation symbol within the same number must be present twice on the same page Name the document Off- Page Connector is used to continue a process at the next page or to let the process to flow over at the previous to the next page. If more than one is needed use A, B, C, D … Name the data I Purchase Order A Posting of Bonus

Rules For Data Symbols Sub-Process Delivery Predefined Processes always have a relation to level and stream by a number in the line below a sub-process description A predefined process must be described in a different flowchart. To make the relation clear between the predefined process and the belonging flowchart a unique alpha numeric number should be assigned to this predefined process. BC 4.04

Version Management • For different versions of a business process or data flow some mandatory information must be on the flowchart. • Name of the business process • Unique number of the business process • Revision number • Date of last change • Author • Page number with total pages

Implementing a BPR Strategy

Key Steps Select The Process & Appoint Process Team Understand The Current Process Develop & Communicate Vision Of Improved Process Identify Action Plan Execute Plan

Select the Process & Appoint Process Team • Two Crucial Tasks • Select The Process to be Reengineered • Appoint the Process Team to Lead the Reengineering Initiative

Select the Process • Review Business Strategy and Customer Requirements • Select Core Processes • Understand Customer Needs • Don’t Assume Anything

Select the Process • Select Correct Path for Change • Remember Assumptions can Hide Failures • Competition and Choice to Go Elsewhere • Ask - Questionnaires, Meetings, Focus Groups

Appoint the Process Team • Appoint BPR Champion • Identify Process Owners • Establish Executive Improvement Team • Provide Training to Executive Team

Core Skills Required • Capacity to view the organization as a whole • Ability to focus on end-customers • Ability to challenge fundamental assumptions • Courage to deliver and venture into unknown areas

Core Skills Required • Ability to assume individual and collective responsibility • Employ ‘Bridge Builders’

Use of Consultants • Used to generate internal capacity • Appropriate when a implementation is needed quickly • Ensure that adequate consultation is sought from staff so that the initiative is organization-led and not consultant-driven • Control should never be handed over to the consultant

Understand the Current Process • Develop a Process Overview • Clearly define the process • Mission • Scope • Boundaries • Set business and customer measurements • Understand customers expectations from the process (staff including process team)

Understand the Current Process • Clearly Identify Improvement Opportunities • Quality • Rework • Document the Process • Cost • Time • Value Data

Understand the Current Process • Carefully resolve any inconsistencies • Existing -- New Process • Ideal -- Realistic Process

Develop & Communicate Vision of Improved Process • Communicate with all employees so that they are aware of the vision of the future • Always provide information on the progress of the BPR initiative - good and bad. • Demonstrate assurance that the BPR initiative is both necessary and properly managed

Develop & Communicate Vision of Improved Process • Promote individual development by indicating options that are available • Indicate actions required and those responsible • Tackle any actions that need resolution • Direct communication to reinforce new patterns of desired behavior

Identify Action Plan • Develop an Improvement Plan • Appoint Process Owners • Simplify the Process to Reduce Process Time • Remove any Bureaucracy that may hinder implementation

Identify Action Plan • Remove no-value-added activities • Standardize Process and Automate Where Possible • Up-grade Equipment • Plan/schedule the changes

Identify Action Plan • Construct in-house metrics and targets • Introduce and firmly establish a feedback system • Audit, Audit, Audit

Execute Plan • Qualify/certify the process • Perform periodic qualification reviews • Define and eliminate process problems • Evaluate the change impact on the business and on customers • Benchmark the process • Provide advanced team training

Information Technology & BPR

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BUSINESS PROCESS REENGINEERING CONCEPTS. Chapter 1 - “Know Where You Are”. Learning Objectives. At the end of the course, you will be able to: Define business process redesign Describe the nine dimensions of BPR Discuss the benefits of BPR

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Business Process Reengineering Examples – Understand and Learn from them

Do you know what business process reengineering is?

I t’s the radical reconsideration of a business process to achieve dramatic improvement in cost, quality, service and speed performance. Business process reengineering is the analysis and redesign of company processes. Check out some business process reengineering examples below.

You should observe some points when implementing business process reengineering, such as:

• A change of focus from management to the customer
• Managers must give power to their team’s
• Focus on results
• It’s not positive to score points, but to lead and teach
• Simple and optimized processes are better than complicated and intricate processes
• If a process continually doesn’t work, it’s time to come up with a new one, looking to the future.
• Always identify goals and purposes
• Keep the company mission in mind

Only by following these recommendations will business process reengineering work as expected.

Now that you understand what Business Process Reengineering is, let’s look at some examples and case studies.

Also see: What is process reengineering methodology?

Business process reengineering examples: BPR that works

There’s nothing better than tried and true BPR examples to really understand the subject. With this in mind, we’ve separated some business process reengineering examples that have been successful.

Business process reengineering examples : Fast food company

An example of business process reengineering that we can cite is that of a fast food company.

Completely redesigning the delivery of products can give you unexpected results. In this type of restaurant, the process goes like all others, the customer orders, the order goes to the kitchen, which prepares the meal and then delivers to the consumer.

Business process analysts realized that it would be more advantageous if the meal portions were previously prepared in a separate center, and delivered to the restaurants daily.

When the customer orders, staff place everything together and deliver it. This is a complete change in the process, resulting in greater control, fewer accidents, greater employee satisfaction, and increased ability to focus on customer needs, all without losing quality.

CURIOSITY : The next time you go to a hamburger fastfood restaurant, note that your cup is always placed in the center of the tray, reducing the risk of it falling over.

To relax before you check out the next Business Process Reengineering case study, watch this fun video:

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.

On average, it takes three months for new items to reach the shelves. Across market research , it’s possible to realize that there would ideally be new products every month.

At first glance, it’s easy to say that the delay was at the production stage. When analyzing and mapping the process, it’s verified that the creation stage was the most time consuming.

Oftentimes the creative team receives the concept and several employees begin to perform the same task (duplicate actions), or an idea takes days to get off the paper. With this information, we can redesign the process completely, defining a cross-functional team from concept and creation, with incredible results in speed, costs and effectiveness.

This is an example of business process reengineering that shows the importance of studying the process and then modifying it.

Also see: Process mapping examples.

Process reengineering is about finding new solutions to old processes, check out this video because, often, we’re unable to see obvious process change solutions:

Business process reengineering examples : Creation, application and proofreading

One of the most distressing tasks for teachers and students, whether in universities or schools, is test creation, their use by students and subsequent marking.

One of the great problems teachers face is the student’s writing, which is often unintelligible, brought on by the students’ weariness to write by hand.

The solution? The application of evidence through electronic forms in notebooks where students can type, as well as having access to other tools that assist in their answers, such as spreadsheets.

To prevent students from querying improperly, these devices don’t have a wi-fi or internet enabled connection. They’re simple (and low-cost) devices in which the students upload the tests via pen-drive and then the teacher collects them. The teacher then connects the data to a system that helps them correct the tests (without needing to interpret the writing), share comments with students, access performance statistics, and access a database of questions that helps to develop the tests.    

See this infographic that summarizes the steps of Business Process Reengineering in a schematic way:

Business process reengineering examples : Creative Quartets

The process of creation in advertising agencies is divided, in brief, into 6 stages:

• The customer service team interviews the customer and passes the information to the planning team
• The planning team makes the necessary studies. Then develops strategy and delivers the request for the creation of pieces for the creative pair (editor and designer)
• After developing the requested pieces the creative pair alongside the planning and customer service teams carry out a presentation meeting. Eventual adjustments are then made to the campaign
• Customer service presents the campaign to the customer, often in conjunction with the creative pairing and planning team. Then receives customer feedback
• The process resumes, if the client requests adjustments or disapproves of the campaign

You should’ve noticed that these processes have four agents: the creative pair, a customer service professional, and a planning agent.

Conflicts between creation, planning and customer service are very common. Customer service complain of deadlines and not understanding the scope as much as the others. Creatives and planning, defend their points of view and claim that they’re doing the correct work and that customer service must convince clients of this.

To end this conflict in teamwork , an agency has developed creative quartets in which the 4 professionals work in their area of expertise, but divide a table and everyone are jointly abreast of all steps from the process, from the initial briefing to receiving customer feedback.

With this closeness, it became easier for each one to understand the difficulties of the others, generating a synergy that made this process much more productive and agile, becoming an example of successful process reengineering.

Know more: Definition of process management

Check out this schematic chart with important information on Business Process Reengineering:

Business process reengineering examples : Cereal products

The process of transforming food into cereal products begins on the farm with the harvest. This is followed by primary processing, packing and transportation to the processing plants (depending on the grain).

This large company analyzed its process and discovered a serious logistical problem. It lost almost 20% of the grains harvested during transportation from farms to the factories, located near the biggest consumption centers, due to the precariousness of the roads.

After a study, this Business Process Reengineering case came to the conclusion that it would be more profitable to move the factories nearer to the farms. Afterwards, they transport final products to large centers with much fewer losses.

The old factory sheds were transformed into distribution centers, helping to reduce the impact of the initial investment, they already had docks and other ready-made logistics infrastructure.

Know more: Watch this video with more in-depth details on what is Business Process Reengineering, take advantage of it now:

Business process reengineering examples : Non-integrated system

It might also be that your company has a disconnected system. This forces each team member or customer to go through several departments and people to solve a problem.

People lose information, they constantly repeat data, which frustrates everyone. You can solve this by a general change in the company’s system. Integrate systems with effective software that makes all information clear and available.

These are just a few business process reengineering examples, and how BPR can help companies with problems. Business Process Reengineering case studies, like these, are key to being inspired and provoking thoughts of innovative solutions for your business.

It’s important to remember that you shouldn’t make changes before mapping and modeling processes. For this, HEFLO is the best tool in the market, which allows you to understand exactly what your company needs.

Now that you’ve read about Business Process Reengineering examples, also check out examples of how to reduce costs in your company and get onto it now!

3 Comments . Leave new

Nice article. Well explained these terms and infographics really help me to understand this concept.

Thank you very much.

Good article. How can this be applied in small (tiny) organizations, mainly in trading businesses?

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The Business Process Reengineering Project: A Successful Case Study

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• Edi Snaidero &
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It is rather difficult to relate a successful case study after months spent in the fore front, initially nurturing an idea then a project and eventually developing a new way of doing and being in business . One of the risks here is to boast or, even worse, to give a detailed account of what should have been achieved and yet remained in paper.

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Snaidero, E., Tramontano, A. (2004). The Business Process Reengineering Project: A Successful Case Study. In: Process Management for the Extended Enterprise. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-17051-5_5

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GAP iNTERDISCIPLINARITIES - A GLOBAL JOURNAL OF INTERDISCIPLINARY STUDIES

Dr Gurudutta Japee

Activity based costing is a system of allocating overheads to jobs, processes or products on the basis of activities responsible for such expenses, instead of the traditional system, so that true and logical cost is obtained. According to traditional system, firstly the overheads are apportioned over various departments on some basis and then they are absorbed to the individual product on the basis of direct wages or direct labour hours or direct machine hours etc. Suppose factory overheads are absorbed on the basis of machine hours, this is not logical, because all factory overheads are not dependent on machine hours and so the overheads allocated are incorrect and consequently the total cost and selling price based on such costs are all incorrect and illogical, which may put business into trouble. The overheads are absorbed under Activity Based Costing on the basis of activities giving rise to overheads, e.g. to allocate the expenses of procurement of goods, it can be divided into...

Zechariah Patterson

Until 1985, companies relied on traditional costing methods and simple cost pools, such as direct labor-hours and machine-hours, to allocate overhead costs. As economies and business processes became increasingly complex, a new system for cost allocation was devised, called activity-based costing (ABC). Compared to traditional costing methods, ABC is more accurate in assigning revenues and costs because it assigns different costs to separate cost pools. To implement ABC, managers follow five steps: Determining cost pools and measures, assigning costs to said pools, calculating rates, assigning costs to cost objects, and writing performance reports. As for assigning costs to cost objects, they are assigned by unit, by batch, by product, and by customer; and if costs do not belong to any of these cost objects, they are assigned to costs that sustain businesses. Although ABC was originally intended for use by manufacturing companies, this is more common among service companies. ABC cannot be used by itself; rather, it must be combined with other business techniques such as decision support systems (DSSs). It is also useful for differential analysis and segment reporting. A variant of ABC, time-driven ABC (TDABC) is useful when using time as a cost driver, and provides a more accurate estimate of expenses than does standard ABC.

Babu George

IOSR Journals

It is said "If you can"t measure it, you cannot manage it". Costing, being at the core of performance measurement of an enterprise, requires a systematic and structured approach, with aim of providing a holistic framework to manage the costs. This initiative, called as Total Cost Management (TCM), involves the process of managing the financial outcome of activities-internal and external to the organization-to support efficient and effective decision-making. TCM uses various techniques and tools for achieving its objectives. It aims is to improve the profitability without sacrificing the value for the customers. Activity Based costing is an important tool among them. It is in this context the present paper explains the tool of ABC with an illustration in banking sector

Falconer Mitchell

Aetivity based costing systems emerged in the West during the mid 1980s in order to improve product costing. However as activity analysis was applied to organizations it became apparent that the technique had a considerably wider potential than indicated by this single initial objective. This paper explores a number of other areas within the field of cost management to which ABC has contributed, These comprise the analysis of cost behavior, customer profitability analysis, a,ctivity cost profiling, budgeting and cost control and performance mesurement. While there is danger in viewing ABC as a panacea which will solve all costing problems at a stroke, it is an approach which offers interesting and valuable insights into how costs ca[n be effectively managed.

Research Journal of Finance and Accounting

Ishter Mahal

Global Journal of Management and Business Research

Dalgobind Mahto

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