The processes of the activities must be integrated rather than the end results by using communication networks, shared databases. This will eliminate the high costs and delays in the outcome of the process and let be just in time of the customers. According to Dr Hammer’s principles of BPR, it can be identified with various success factors like – customer satisfaction, cost advantage, competitive advantage, creates value for customers and clear Business Vision. Many unsuccessful BPR attempts may have been due to the confusion surrounding the concept and how it should be performed. Organizations know that they need to make changes, but they do not know exactly where to or how to do so. As more businesses reengineer their processes, knowledge of what caused their successes or failures is becoming apparent.
- Often, what they would do is restructure the organizational chart, replace people in the company’s hierarchy, or adjust the roles and responsibilities of some employees.
- It involves identifying and streamlining redundant or inefficient processes, and implementing new best practices that can improve performance.
- According to Hammer’s principles of BPR, it is not all about reorganizing, restructuring, downsizing, or cost-cutting.
As soon the materials arrive, a warehouse worker would check the materials received and confirm delivery. Next, payment would be made automatically without waiting for an invoice from the vendor. You must rethink how your business works in order to improve customer service, cut operational costs, and become a world-class competitor.
Companies That Have Used BPR
One of the quickest and most impactful forms of Digital Transformation is Robotic Process Automation (RPA). You can download an editable PowerPoint presentation on 7 Principles of Business Process Reengineering here on the Flevy documents marketplace. Specialized departments handling specialized processes are slow to react and are quite bureaucratic. This disposal of non-helpful activities could also have another positive result, which is the reduction of certain costs.
Significant changes to even one of those areas require resources, money, and leadership. Changing them simultaneously is an extraordinary task.[18] Like any large and complex undertaking, implementing re engineering requires the talents and energies of a broad spectrum of experts. Since BPR can involve multiple areas within the organization, it is important to get support from all affected departments. Process Improvement involves analyzing and improving existing business processes in the pursuit of optimized performance. The goals are typically to continuously reduce costs, minimize errors, eliminate waste, improve productivity, and streamline activities.
How Is Business Process Reengineering Implemented?
It allows direct exchanges between separate functional departments and based in dispersed geography. This first principle allows quick responses to the final customers and economies of scale for flexible agreements with vendors. Business Process Re-engineering (BPR) is a methodology that seeks to break the standard processes. According to Hammer’s principles of BPR, it is not all about reorganizing, restructuring, downsizing, or cost-cutting. There must be decision aiding-technology to cut unnecessary controls and to keep a check in the process. Hammer states the decision should be made by the person who is doing the work.
According to Hammer, the processes of the activities must be integrated rather than the end results. The parallel functions must be coordinated using communication networks, shared databases. This principle has matured and is visible in the concept, division of labor. This means the data handling must be done by the same person who is collecting the data.
RPA Use Cases: Exploring Top Applications in Business Automation
With time, these work routines become deep rooted and hard to challenge despite their significant flaws. Fragmented conventional processes and disjointed structures are the main cause of bureaucratic red tapes, slipups, cost inefficiencies, and unclear roles and responsibilities. Applying the principles of business process reengineering has several benefits across the many aspects of a business.
For example, the streamlining of the operations leads to easier and more productive work activities that make employees more satisfied with their daily tasks, increasing productivity. It suggests that sharing resources connects separate departments of a company and produces a centralized type of operation that can be very productive. The combination and automation of tasks previously completed by employees or other business departments have proven to prevent the frequent mistakes that are generated due to human error. In a more contemporary context, this could be interpreted as the use of process automation through advanced information technology that merges several processes into a single, more efficient one. The first principle is for a business to focus more on the outcomes instead of the operational processes.
Business Process Reengineering (BPR)
Many companies used reengineering as a reason to downsize although this not the intent of reengineering’s proponents. In the long run, the concept earned a reputation for being known with downsizing and layoffs. Lastly, COVID-19 has expedited Digital Transformation for most organizations.
As mentioned before, major companies across the world have implemented BPR and achieved astonishing results. In this chapter, we take a look at some peculiar case scenarios detailing the company’s situation before BPR and the results after BPR implementation. The above scenario is what happens in a company without business process reengineering. When shared services organizations ask that question of their internal customers and act on the feedback, great business outcomes can happen. Leadership needs to believe in, coach, and encourage their people in the lower ranks—who produce the information—to acquire the capabilities required to process data and make sound decisions. Utilizing technology, organizations now can develop and deploy systems to help their people compare and process data received from different units and initiate appropriate action.
