Business Process Re-Engineering (BPR) is the Business Process Redesign methodology that came from the seminal book, Re-Engineering the Corporation by Michael Hammer and James Champy. It swept through corporations in the 1990’s and is still relevant today. BPR addresses the crisis many companies face as they grow, and as customer expectations increase; namely, process complexity and the failure of processes to meet customers’ needs.
BPR allows companies to start with a blank sheet of paper and rethink existing processes to deliver more value to the customer. It follows some basic principles including:
- Don’t improve work-flow, eliminate work
- Adopt technology to eliminate work
- Customers should have a single point of contact that can be reached quickly and easily
- Leverage centralization to improve consistency, utilization and responsiveness of customer service
Business Process Re-Engineering Steps
- BPR Team: BPR requires a cross functional team of employees and if possible customers and suppliers. The team can expect to be fully committed to this project for months, which will include analysis, design and implementation.
- Future State Mapping: BPR involves mapping the desired process by following the principles discussed above. The cross-functional team will reach-out to subject-matter-experts (SMEs) to make sure critical steps are not overlooked.
- Adopt Technology: The future state design is then reviewed for technology requirements. This can involve customizations of ERP systems, adopting ERP modules that were not used, or purchasing bolt-on systems. This is also often the longest step in the implementation of BPR.
- Testing: Like any systems design the re-engineered process must be tested. Fortunately many ERP systems allow for testing parallel environments that don’t affect the actual process, to see if the design team has missed any critical steps.
- Communication and Training: The re-engineered process must be communicated to the entire company with training on process and system changes.
Business Process Re-Engineering Examples
There are many great examples of re-engineered processes from companies large and small. Below are three examples of how BPR has changed entire business functions.
Centralizing Customer Service
Following the BPR principle of centralization, many companies brought field office customer support to centralized call centers. This resulted in many positive outcomes. First, customer service improved. Often customers would have a hard time reaching someone at their local field office. With a large call-center, it has been proven that customers get their calls answered faster, with fewer customer service reps needed. Second, consistency and standardization is easier to achieve because training and deploying tools in a centralized call center is simpler than a nationwide field office network.
BPR heralded the adoption of inside sales organizations. Using inside sales reps, who receive and make phone calls to customers from a call center, companies are able to provide better service by allowing customers to reach their sales rep quickly, versus trying to reach a field sales rep who is probably driving to visit customers. The adoption of an Inside Sales Department changed the economics of selling, allowing deeper selling to smaller customers who previously may have felt ignored.
Work Elimination versus Streamlining
In a famous case study, Ford Motor was able to reduce the number of people in their accounts payable department by 90%. Accounts payable collects supplier invoices, reconciles them against receipt of parts to the Ford assembly plan and gets the supplier paid. The re-engineered process did away with invoices and instead paid suppliers based on the number of vehicles completed and the components from suppliers installed on these vehicles.