Business Process Reengineering
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.
Definition
Business Process Reengineering (BPR) involves the examination and redesign of business processes and workflows in an organization. BPR is not about making incremental improvements to existing processes. It is about starting from a clean slate and asking: if we were to create this process from scratch today, what would it look like? The goal is to achieve breakthrough performance by redesigning processes from the ground up, often by leveraging new technology.
Origin & Context
The concept was popularized in the early 1990s by Michael Hammer and James Champy in their book, Reengineering the Corporation: A Manifesto for Business Revolution.
Why It Matters
BPR is a powerful tool for breaking out of outdated, inefficient ways of working. It challenges the assumptions that underlie existing processes and can lead to order-of-magnitude improvements in performance. For business architects, BPR is a key technique for translating a new strategic vision or operating model into a new set of core business processes.
Common Misconceptions
- Myth: BPR is the same as downsizing or automation.
- Reality: While BPR may result in headcount reduction or increased automation, these are not its primary goals. The goal is a radical improvement in performance.
- Myth: BPR is the same as continuous improvement.
- Reality: BPR is about radical, discontinuous change, not incremental change.
Practical Example
Ford Motor Company reengineered its accounts payable process in the 1980s. Instead of the traditional process of matching purchase orders, receiving documents, and invoices, they moved to a system where payment was automatically triggered when the goods were received at the loading dock. This invoiceless processing reduced their accounts payable headcount by 75%.
Industry Applications
- Any
- BPR has been applied in virtually every industry. It is most effective in organizations with complex, cross-functional processes that have not been significantly changed in many years, such as insurance claims processing, new product development, or supply chain management.
Related Terms
- Business Process Management: BPR is a radical, top-down approach to process change, while BPM is a more continuous, bottom-up discipline for managing and improving processes.
- Lean Management: Lean focuses on eliminating waste and continuous improvement, while BPR focuses on radical redesign.