Business Process Reengineering (BPR) is a radical change initiative to dramatically and fundamentally improve organisational processes. Whenever someone picks up a piece of paper and starts modifying the way they are doing business, some people consider that reengineering. While they are doing process improvement, it is not reengineering.
Contrary to common thinking, reengineering is not about improving the existing processes, but rather about doing away with the old and coming up with a totally new way of doing business.
While Total Quality Management (TQM) focuses on improving existing processes, BPR takes what is called a "clean sheet" approach to improvements.
The main question to ask is: If we were building the company from scratch today, knowing what we know about the business, what should it look like?
Another highlight of the BPR philosophy is the special attention and focus on the external customer. Other process improvement initiatives give almost equal focus to internal and external customers. Not BPR, where external customer is the key factor and the basis around which the whole organisation should be reengineered.
There are misconceptions around this relatively new technique. Many executives use reengineering as an excuse to downsize the organisation, which is not the purpose of reengineering. While many initiatives result in downsizing, or what some like to politically call it "right-sizing," others do not. Either way, downsizing should not be a preset goal of reengineering. If a company feels it needs to downsize, it should not beat around the bush by calling it reengineering. Long-term, honesty and clarity is the best policy.
BPR is not about fixing the problems in the existing process. This is another misconception. Reengineering is not interested in fixing. It is more concerned with redesigning the processes altogether.
So when to use reengineering? Experts, including the forefathers of BPR, Hammer and Champy, in their book about the subject give three reasons for companies to reengineer. The first two are the existence of, or forecast of, a threat to the organisation that cannot be met by the current way of doing business, or using existing processes. The third is the need to outperform competitors.
What if the company does not have any of these? Some might say it is better to stick to continuous process improvement initiatives like Six Sigma or TQM, which allow a corporation to improve on existing.
In addition to the reasons sited by Hammer and Champy, BPR can be necessary when a company is morphing into a new stage of maturity, or when vision is changing dramatically. Then, there is no place for the old, and new processes have to be sought.
Some think BPR is about tools. Nothing can be further from the truth. Tools help people do better BPR, but what is most needed is an open mind, executive endorsement, the willingness to ask hard questions, and to challenge existing organisational paradigms.
Some people, especially engineers, think process mapping is the most important success element in BPR. Again, this is not the case. Actually, too much attention to mapping and detailing process maps will take away focus from the real issues, which are more about creatively coming up with better ways to do the things that matter to the company.
To demonstrate, a typical example of BPR is the credit approval process of a famous IT company, where credit processing used to take seven days from the moment the credit application is filed until it is approved. They tried to map their processes and look for areas to improve, which resulted in marginal improvements in outputs. The reason for the humble results is that the whole process actually needed an overhaul, not just fine-tuning. Then, maybe out of frustration, two executives of the company physically took a credit application and literary walked it through approval process. To their dismay, they found that the actual processing time was only 45 minutes, out of the seven days the process actually takes.
The process was completely reengineered. This included replacing different departments that processed the application with a single person responsible for everything. This cut down processing time to four hours. Everyone benefited from the activity: The customer, the organisation, and the employees, who were empowered to give excellent service to their clients.
BPR is a tough undertaking. According to research, most companies fail to achieve their chartered results, mainly because of a resistance to change and a neglect of the human element of reengineering.
By Ammar W. Mango
© Jordan Times 2006
