Business process re-engineering (BPR) is a business management strategy originally pioneered in the early 1990s, focusing on the analysis and design of workflows and business processes within an organization. BPR aims to help organizations fundamentally rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors.Business Process Re-engineering Assessment Guide, United States General Accounting Office, May 1997.
BPR seeks to help companies radically restructure their organizations by focusing on the ground-up design of their business processes. According to early BPR proponent Thomas H. Davenport (1990), a business process is a set of logically related tasks performed to achieve a defined business outcome. Re-engineering 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. BPR is influenced by technological innovations as industry players replace old methods of business operations with cost-saving innovative technologies such as automation that can radically transform business operations.Subramoniam, S., 2008. Commanding the internet era. Industrial Engineer, pp.44-48.
Business process re-engineering is also known as business process redesign, business transformation, or business process change management.
Organizational research suggests that participation in intensive BPR mapping projects can have ambivalent effects on the employees involved: while detailed visualization of "as-is" processes often empowers team members by revealing actionable improvement opportunities, it may simultaneously alienate them from their pre-existing line roles once the magnitude of systemic inefficiencies becomes visible. A longitudinal multi-company study by Huising (2019) documents how experienced managers, after building wall-sized process maps, voluntarily transitioned into peripheral change-management positions in order to drive reforms from outside the traditional hierarchy.
Overview
Business process re-engineering (BPR) is a comprehensive approach to redesigning and optimizing organizational processes to improve efficiency, effectiveness, and adaptability. This approach involves analyzing and restructuring key business aspects—such as workflow, communication, and decision-making—to achieve significant performance improvements, including increased productivity, cost reduction, and enhanced customer satisfaction.. BPR is a powerful tool that can be applied to various industries and organizations of all sizes, and it can be achieved through various methodologies and techniques, such as process mapping, process simulation, and process automation. Organizations re-engineer two key areas of their businesses. First, they use modern technology to enhance data dissemination and decision-making processes. Then, they alter functional organizations to form functional teams. Re-engineering starts with a high-level assessment of the organization's mission, strategic goals, and customer needs.
Basic questions are asked, such as "Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?" An organization may find that it is operating on questionable assumptions, particularly in terms of the wants and needs of its customers. Only after the organization rethinks what it should be doing, does it go on to decide how to best do it.
Within the framework of this basic assessment of mission and goals, re-engineering focuses on the organization's business processes—the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets. As a structured ordering of work steps across time and place, a business process can be decomposed into specific activities, measured, modeled, and improved. It can also be completely redesigned or eliminated altogether. Re-engineering identifies, analyzes, and re-designs an organization's core business processes with the aim of achieving improvements in critical performance measures, such as cost, quality, service, and speed.
Re-engineering recognizes that an organization's business processes are usually fragmented into sub-processes and tasks that are carried out by several specialized functional areas within the organization. Often, no one is responsible for the overall performance of the entire process. Re-engineering maintains that optimizing the performance of sub-processes can result in some benefits but cannot yield improvements if the process itself is fundamentally inefficient and outmoded. For that reason, re-engineering focuses on re-designing the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. This drive for realizing improvements by fundamentally re-thinking how the organization's work should be done distinguishes the re-engineering from process improvement efforts that focus on functional or incremental improvement.
Central to many contemporary BPR programmes is the creation of large-scale process maps that capture every activity, hand-off and information flow across departmental boundaries. Fieldwork shows that constructing such maps not only supplies the quantitative baseline for cycle-time and cost analysis, but also furnishes a collective "panoramic" representation that allows participants to observe hidden dependencies, shadow databases and rework loops that were previously invisible to senior management.
History BPR began as a private sector technique to help organizations rethink how they do their work in order to improve customer service, cut operational costs, and become world-class competitors. A key stimulus for re-engineering has been the continuing development and deployment of information systems and networks. Organizations are becoming bolder in using this technology to support business processes, rather than refining current ways of doing work.
Reengineering Work: Don't Automate, Obliterate, 1990 In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute of Technology (MIT), published the article "Reengineering Work: Don't Automate, Obliterate" in the Harvard Business Review, in which he claimed that the major challenge for managers is to obliterate forms of work that do not add value, rather than using technology for automating it.Michael Hammer, "Reengineering Work: Don't Automate, Obliterate", Harvard Business Review, July, 1990 This statement implicitly accused managers of having focused on the wrong issues, namely that technology in general, and more specifically information technology, has been used primarily for automating existing processes rather than using it as an enabler for making non-value adding work obsolete.
Hammer's claim was simple: Most of the work being done does not add any value for customers, and this work should be removed, not accelerated through automation. Instead, companies should reconsider their inability to satisfy customer needs, and their insufficient cost structure. Even well-established management thinkers, such as Peter Drucker and Tom Peters, were accepting and advocating BPR as a new tool for (re-)achieving success in a dynamic world.Forbes: Reengineering, The Hot New Managing Tool, 23 August 1993 During the following years, a fast-growing number of publications, books as well as journal articles, were dedicated to BPR, and many consulting firms embarked on this trend and developed BPR methods. However, the critics were fast to claim that BPR was a way to dehumanize the work place, increase managerial control, and to justify downsizing, i.e. major reductions of the work force,(Greenbaum 1995, Industry Week 1994) and a rebirth of Taylorism under a different label.
Despite this critique, re-engineering was adopted at an accelerating pace and by 1993, as many as 60% of the Fortune 500 companies claimed to either have initiated re-engineering efforts, or to have plans to do so.Hamscher, Walter: "AI in Business-Process Reengineering" , AI Magazine Volume 15 Number 4, 1994 This trend was fueled by the fast adoption of BPR by the consulting industry, but also by the study Made in America,Michael L. Dertouzos, Robert M. Solow and Richard K. Lester (1989) Made in America: Regaining the Productive Edge. MIT press. conducted by MIT, that showed how companies in many US industries had lagged behind their foreign counterparts in terms of competitiveness, time-to-market and productivity.
Development after 1995 With the publication of critiques in 1995 and 1996 by some of the early BPR proponents, coupled with abuses and misuses of the concept by others, the re-engineering fervor in the U.S. began to wane. Since then, considering business processes as a starting point for business analysis and redesign has become a widely accepted approach and is a standard part of the change methodology portfolio, but is typically performed in a less radical way than originally proposed.
More recently, the concept of Business Process Management (BPM) has gained major attention in the corporate world and can be considered a successor to the BPR wave of the 1990s, as it is evenly driven by a striving for process efficiency supported by information technology. Equivalently to the critique brought forward against BPR, BPM is now accused of focusing on technology and disregarding the people aspects of change.
Topics The most notable definitions of reengineering are: "... the fundamental rethinking and radical redesign of business processes to achieve ... improvements in critical contemporary modern measures of performance, such as cost, quality, service, and speed."Hammer and Champy (1993) "encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions."Thomas H. Davenport (1993)
BPR is different from other approaches to organization development (OD), especially the continuous improvement or TQM movement, by virtue of its aim for fundamental and radical change rather than iterative improvement.Johansson et al. (1993): "Business Process Reengineering, although a close relative, seeks radical rather than merely continuous improvement. It escalates the efforts of JIT and TQM to make process orientation a strategic tool and a core competence of the organization. BPR concentrates on core business processes, and uses the specific techniques within the JIT and TQM "toolboxes" as enablers, while broadening the process vision." In order to achieve the major improvements BPR is seeking for, the change of structural organizational variables, and other ways of managing and performing work is often considered insufficient. For being able to reap the achievable benefits fully, the use of information technology (IT) is conceived as a major contributing factor. While IT traditionally has been used for supporting the existing business functions, i.e. it was used for increasing organizational efficiency, it now plays a role as enabler of new organizational forms, and patterns of collaboration within and between organizations.
BPR derives its existence from different disciplines, and four major areas can be identified as being subjected to change in BPR – organization, technology, strategy, and people – where a process view is used as common framework for considering these dimensions.