The purpose of Business Process Reengineering is to give a company a world class status as a result of sustainable business processes, cost reduction and excellent customer services. Business process reengineering involves the radical redesign of a company’s core business processes to deliver superior value to the customer. It is a rethinking and redesigning of workflow in an organisation to better support the company’s business mission and reduce cost.
A business process is a set of logically related tasks carried out in order to achieve a predetermined business outcome. Reengineering emphasized a holistic focus on business objectives and how processes related to them, encouraging full-scale recreation of processes rather than iterative optimization of sub-processes
In business process reengineering, the company starts with a high-level analysis of their mission, goals and customer services. Management will question the model upon which the company business and processes rests. Questions such as: “is our mission realistic? How do we measure performance? Are our strategic goals aligned with our mission? What do our customers really want?” helps the company to identify its current position. A company may be operating based on a false business model, it is only through an analysis of this sort that it can identify that and then redesign its processes to enable it align with its strategic intent.
Business Process Reengineering is different from other approaches to organization development especially the continuous improvement or Total Quality Management movement, because it aims for fundamental and radical change rather than iterative improvement. In order to achieve the major improvements Business Process Reengineering is seeking for, the change of structural organizational variables, and other ways of managing and performing work is often considered as being insufficient.
Generally, a company’s business processes are divided into sub-processes and tasks that are carried out by several specialized departments within the organization. And in many cases no one is responsible for the overall performance of the entire process. Reengineering maintains that optimizing the performance of sub-processes can result in some benefits, but cannot produce dramatic improvements if the process itself is fundamentally inefficient and obsolete.
As a result business process reengineering focuses on a holistic re-design of the process in order to achieve the greatest possible benefits to the organization and their customers. This drive for realizing dramatic improvements by fundamentally re-thinking how the organization’s work should be done distinguishes the reengineering from process improvement efforts that focus on functional or incremental improvement.
The aspects of a business processes management effort that are affected include organizational structures, management systems, employee responsibilities and performance measurements, incentive systems, skills development, and the use of IT.
Business Process Reengineering is so important because it gives the business the chance to examine its structures and processes and it can potentially affect every aspect of how business is conducted today.
How to implement Business Process Reengineering in a Company
If successful, a Business Process Reengineering initiative can result in improved quality, customer service, and competitiveness, as well as reductions in cost or cycle time. However, 50-70% of reengineering projects are either failures or do not achieve significant benefit. To successfully implement Business Process Reengineering in any organization, the management must take the following steps:
- Create new value system that focuses on customer needs. This is because this very purpose of the initiative is to offer superior value to the customer. The customer is the reason the company exist in the first place so the more a business focuses on the customer and how to serve them better, the more efficient it will be.
- Redesign the fundamental business processes. Especially use information technology to increase efficiency. Information technology facilitates new forms of working and collaboration within an organization and across organizational boarders.
- Restructure the company into cross-functional organizations with end-to-end responsibility for each business process. When you assign task to a team composed of multi-disciplinary individuals, the level of creativity and intellection increases significantly because each member offers an alternative perspective to the problem and potential solution to the task.
- Reconsider core organization and people issues. One reason many well planned business process reengineering initiatives fail is focus on processes and technology alone. Employees are people, not computers. Organizations do not change unless people change. Therefore to implement an effective Business Process Reengineering, managers must give attention to the people that will drive the new process as well as effective team management issues.
- Create efficient business processes throughout the company. It is important that management enables work to be done without wasting time, effort and money.
Uses of Business Process Reengineering
A company can use Business Process Reengineering to substantially improve its performance in key areas that affect customers:
- Reduction in cost and cycle time: Business Process Reengineering reduces costs and the time it takes to produce successive units on a production line by eliminating unproductive processes and the employees that perform them. Cross functionality breaks down barriers to information flow, reduces management layers and eliminates mistakes that result from multiple hand-offs.
- Quality improvement: Business Process Reengineering helps reduce work fragmentation and establishes clear ownership of work. This encourages employee confidence as they gain responsibility and can easily measure their performance based on prompt feedback.
Brian Reuben is a business teacher and consultant. His books are available on amazon.com. brianreubenc@gmail.com
