The Business Process Reengineering method (BPR) is defined by Hammer and Champy as 'the fundamental reconsideration and radical redesign of organizational processes, in order to achieve drastic improvement of current performance in cost, service and speed'.
Value creation for the customer is the leading factor for BPR and information technology often plays an important enabling role.
Davenport (1992) prescribes a five-step approach to the Business Process Reengineering model:
1. Develop the business vision and process objectives: The BPR method is driven by a business vision which implies specific business objectives such as cost reduction, time reduction, output quality improvement.
2. Identify the business processes to be redesigned: most firms use the 'High- Impact' approach which focuses on the most important processes or those that conflict most with the business vision. Lesser number of firms use the 'Exhaustive approach' that attempts to identify all the processes within an organization and then prioritize them in order of redesign urgency.
3. Understand and measure the existing processes: for avoiding the repeating of old mistakes and for providing a baseline for future improvements.
4. Identify IT levers: awareness of IT capabilities can and should influence BPR.
5. Design and build a prototype of the new process: the actual design should not be viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with successive iterations. The metaphor of prototype aligns the Business Process Reengineering approach with quick delivery of results, and the involvement and satisfaction of customers.
As a 6th step of the BPR method some mention to adapt the organizational structure and governance model towards the newly designed primary process.
When should BPR be used?
Although it is difficult to give generic advice on this, some factors that can be considered are:
- is the competition outperforming the company by factors?
- are there many conflicts in the organization?
- is there an extremely high frequency of meetings?
- excessive use of non-structured communication? (memos, emails, etc)
- is a more continuous approach of incremental improvements not possible? (see: Kaizen).
When Kaizen is compared to the BPR method is it clear the Kaizen philosophy is more people-oriented, more easy to implement, requires long-term discipline.
The Business Process Reengineering approach on the other hand is harder, technology-oriented, enables radical change but requires major change management skills.