What is Business Process Reengineering (BPR)?
Business Process Reengineering (BPR) is the fundamental rethinking and redesign of business processes to achieve significant improvements in critical measures of performance, such as cost, quality, service, and speed.
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To achieve consistent performance, organisations are required to make continuous improvements in their existing processes. In the modern scenario, organisations are adopting Business Process Re-engineering (BPR) to improve and enhance the efficiency of their existing processes.
Business Process Reengineering Definition
In order to understand how BPR helps an organisation, let us first understand the concept of BPR.
According to Hammer and Champy, BPR is 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.
In this definition, focus is laid on three words: radical, redesign, and processes. Thus, it can be implied that:
- BPR involves radical and innovative reorientation of existing business processes.
- BPR is about redesigning existing business processes to achieve goals more effectively.
BPR can help an organisation in achieving its aims more effectively by removing redundancy. Let us understand this with the help of an example:
IBM Credit Corporation re-engineered its credit checking and approval process by replacing specialists with generalists. These generalists were solely responsible for deciding customers’ creditworthiness. As a result, the number of checks and controls reduced. Moreover, a lot of time was saved in assessing the creditworthiness of customers. Consequently, the company was able to deliver services to customers on time. As a result, customer satisfaction increased greatly.
Five Steps of Business Process Reengineering (BPR)
In order to re-engineer processes successfully, an organisation must follow a step-by-step approach. The steps involved in BPR are discussed as follows:
- Ascertaining the business process that needs to be redesigned
- Determining the areas of improvement in the process and the measures to rectify them
- Bringing an improved process in practice and administering changes
- Integrating the improved process with other business processes of the organisation
- Taking regular feedback from employees to ensure that the process is in accordance with the requirements of the organisation
Characteristics of BPR
BPR has become an effective tool for organisations to operate efficiently in today’s dynamic and competitive business environment. The following are some important characteristics of BPR:
BPR compresses time taken to perform strategic business processes. For instance, if the average cycle time of a process before BPR was 4 hours, after BPR, the same can be reduced to an hour.
BPR focusses on serving customers by designing customer-oriented processes. This helps an organisation in eliminating customer complaints.
Through BPR, organisations can transform their traditional processes into highly adaptive processes to respond quickly to changes taking place in the business environment.
Adoption of technology
BPR requires innovative use of technology to achieve the challenging goals defined by an organisation. For example, Information Communication Technology (ICT) is being used in various organisations to reform existing processes.
ERP and BPR
As discussed in the previous chapters, Enterprise Resource Planning (ERP) is an application that supports an organisation in determining the best possible ways to manage its available resources.
On the other hand, BPR involves analysing the performance of business processes and determining the possible changes that can help in streamlining operations.
To improve their overall performance, organisations can deploy both BPR and ERP together. For instance, organisations can use BPR to redesign their existing processes and improve their efficiency. For this, they need accurate information related to processes. Such information needs can be fulfilled by ERP.