Published: 17 April 2024
Contributors: Matthew Finio, Amanda Downie
Business process reengineering (BPR) is the radical redesign of business processes to achieve dramatic improvements in performance, efficiency, and effectiveness.
Business process engineering (BPR) is a strategic management approach that is focused on fundamentally rethinking and redesigning core business processes to achieve significant improvements in performance and efficiency.
BPR focuses on optimizing end-to-end processes and eliminating redundancies. By critically examining and redesigning business processes, BPR improves efficiency, effectiveness, and performance. These improvements can impact various aspects of the business including cost, output, service, speed, and quality. BPR is not a one-time project, but a continuous journey of innovation and optimization. Organizations must continuously evaluate and refine their processes to adapt to evolving business environments and maintain a competitive edge.
BPR implementation spans organizations of all sizes and industries. Its purpose is to streamline workflows, eliminate unnecessary steps and improve resource utilization to optimize efficiency and effectiveness. BPR involves radical changes that challenge existing norms and methods within an organization. It should not be confused with business process management (BPM) or business process improvement (BPI), which initiate more incremental change.
To implement BPR, companies first analyze processes to identify gaps and opportunities for improvement. Techniques such as artificial intelligence (AI)-powered process mining analyze information systems for insights. This assessment guides decision-making about how work should be performed, including consideration of using business process outsourcing (BPO) and redefining third-party roles. BPR aims to fundamentally reshape how work is run. Using IT for automation and integration to optimize workflows, eliminate tasks that don’t add value and restructure or replace existing processes.
Successful implementation of BPR requires strong leadership, effective change management and a commitment to continuous improvement. Leaders must champion the BPR initiative and provide the necessary resources, support, and direction to enable meaningful change. Also, organizations must invest in change management strategies to mitigate resistance and ensure that employees are engaged and empowered throughout the process.
Read this report that investigates the potential of generative AI and automation and explores the practices of generative AI leaders.
What is business process automation (BPA)?
Business process reengineering (BPR) emerged in the early 1990s as a management approach aimed at radically redesigning business operations to achieve business transformation.
BPR methodology gained prominence with the publication of the book Reengineering the Corporation by Michael Hammer and James Champy in 1993. Hammer, a management theorist and professor, is often credited as one of the founding figures of BPR. Process Innovation, a book written by Thomas Davenport published in the same year, also contributed to the BPR discourse. Davenport emphasized the importance of innovation in the process model and the systematic approach to identifying opportunities for improvement within business processes.
One of the early adopters of BPR was Ford Motor Company, which implemented reengineering initiatives in the 1990s to streamline its manufacturing processes and improve competitiveness. By reorganizing workflows, reducing layers of management, and using technology, Ford achieved significant cost savings and operational efficiencies.
As BPR gained attention in the business world in the 1990s, it also faced criticism. Its emphasis on lean workforces can overlook the human factors that are involved in organizational change. Its association with the downsizing and outsourcing trends that were unpopular at the time brought negative attention to the template’s methods. Despite the criticisms, BPR has continued to evolve, incorporating new methods and new technologies that are associated with digital transformation to further overhaul and enhance business operations. Today, BPR remains a relevant and influential approach to driving organizational innovation and performance.
Implementing BPR is a strategic decision for organizations seeking to drive transformative change and improve their operational performance. Some of the reasons an organization might implement BPR include:
- Dissatisfied staff with high turnover
- High operational costs due to wasted time and resources
- Inadequate technology that renders current processes inefficient or obsolete
- Inefficient processes with redundant steps and delays
- Organizational growth and existing processes that don’t align with the new scale
- Poor quality products or services that consistently fail to meet industry standards or customer needs and expectations
- Unhappy customers who make complaints and request refunds
Here are the common steps of the reengineering process organizations use to achieve significant improvements in performance, efficiency, and competitiveness:
The first step in BPR is for senior management and process owners to clearly define the goals or wanted outcomes. Understand what needs to be achieved from the reengineering effort, such as faster delivery times or improved customer satisfaction.
Map the current state of business processes. Gather data and interview stakeholders about existing workflows to determine inefficiencies, bottlenecks, and areas for improvement. Analyze performance metrics to fully understand the state of the process.
Once the current state is understood, identify gaps between the current performance and wanted outcomes. Check whether all steps of the process are necessary. Set up key performance indicators (KPIs) to measure progress and identify improvement opportunities.
Based on the analysis, develop a future state for the business processes that aligns with the organization's strategic objectives. Design a cutting-edge process map that addresses the identified gaps and incorporates innovative solutions. If necessary, design a new process. Ensure that KPIs are designated for every step of the process to track performance.
Implement the changes outlined in the future state process map, ensuring that all stakeholders are informed and on board with the new processes. Be mindful of dependencies and resource requirements to successfully roll out the changes. Constantly monitor KPIs to assess the impact of the changes compared to the original workflows.
Continuously evaluate the performance of the redesigned processes and iterate as needed to further improve efficiency and effectiveness. Solicit feedback from stakeholders and adjust based on lessons learned. BPR is an iterative process—ongoing evaluation and optimization are essential for long-term success.
BPR offers organizations the opportunity to achieve dramatic improvements in performance, competitiveness, and profitability. Potential benefits include:
Competitive advantage: By driving significant improvements in efficiency, quality management and customer satisfaction, BPR can provide organizations with a sustainable competitive advantage within their industry. As BPR drives significant improvements in efficiency, quality, and customer satisfaction, it provides organizations with a sustainable competitive advantage within their industry.
Enhanced quality: The objective of BPR is to improve the quality of products and services by redesigning processes to eliminate errors and defects. By standardizing processes, enforcing best practices and integrating quality checks, organizations can deliver higher-quality outcomes to customers, leading to increased satisfaction and loyalty.
Faster time-to-market: BPR helps organizations accelerate time-to-market for new products and services by streamlining product development, manufacturing, and delivery processes. By reducing cycle times and increasing agility, organizations can respond more quickly to market demand.
Improved customer satisfaction: BPR focuses on delivering value to customers by redesigning processes with their needs in mind. By improving the delivery of services and increasing responsiveness and quality, organizations can enhance customer loyalty and retention.
Increased efficiency: BPR focuses on radical redesigning of processes, leading to streamlined workflows, reduced cycle times and better use of resources. By eliminating redundant tasks and non-value-adding activities, organizations can accomplish more with fewer resources, resulting in increased efficiency.
Reduced costs: Reducing unnecessary steps, automating manual tasks and improving resource allocation can lower operational costs and lead to significant savings for organizations.
Strategic alignment: BPR enables organizations to align their processes with strategic objectives and business goals. By rethinking how work is done and focusing on activities that add the most value, organizations can ensure that resources are allocated effectively to support their strategic priorities.
Curate your business’s data to create powerful, one-of-a-kind solutions across your entire enterprise.
Use generative AI and automation technology designed to lighten your team’s workload.
Discover solutions that deliver intelligent automations quickly with low-code tools.
Explore this survey of over 5,000 C-suite tech leaders for insights about leading technology organizations throughout a period of exceptional disruption.
Read a discussion about and examples of the 21st century challenges and solutions related to process excellence.
Learn why every aspect of automation is changing, including some that have previously been ignored.
Learn how Water Corporation modernizes and migrates its mission-critical SAP architecture to the cloud with help from IBM Consulting®.
Explore this two-track interactive demo, each presenting a scenario for different personas that would be suitable for the Orchestrate platform.
Learn how an R&D firm automated the many steps of lengthy, error-prone processes critical to their business using IBM watsonx Orchestrate.