What is Business Process Reengineering (BPR)? | Everything You Need to Know
Jonathan D. Rhyne
This article was first published in February 2018 and was updated in November 2024.
Business process reengineering promises efficiency, engagement, and productivity, but is this a realistic expectation?
Getting ahead in the business world requires organizations to survive obstacles and develop a way to turn them into opportunities. Instead of forcing things to go the way you want, sometimes you must step back and rethink your core business functions. That can mean returning to the drawing board and breaking down how everything works.
What Is Business Process Reengineering (BPR)?
You may have recently heard the term BPR in the context of improving processes and increasing business profitability, but what exactly is it? BPR stands for **Business Process Reengineering. The definition of business process reengineering (BPR) is **a systematic, disciplined approach to reducing organizational costs and redundant business processes involving the analysis of existing human and automated workflows.
In large businesses — and even smaller or medium-sized ones — processes can build up over time, becoming legacy snarls deeply entrenched in how things are done. BPR is a proven methodology that allows organizations to cut the Gordian Knots that may hold back genuine improvements and cost optimization.
When is Business Process Reengineering Required?
The need for business process reengineering surfaces in a variety of ways. For instance, our article “Is it Time to Overhaul Your Processes?” provides some indicators that it may be time for a BPR project.
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Customer complaints and refund requests are rising.
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Staff stress, disputes, and turnover are high.
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Chaos reigns after experienced employees depart or go out on leave.
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Profitability is falling.
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Sales leads are not being followed up quickly.
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Corporate governance has been lacking.
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You are struggling with your cash flow.
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Your inventory levels are rising.
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You can’t fill customer orders quickly enough.
History of BPR
Business Process Reengineering (BPR) has its roots in the early 1990s, when it emerged as a groundbreaking business management strategy. The concept was first introduced by Michael Hammer and James Champy in their influential 1993 book, “Reengineering the Corporation: A Manifesto for Business Revolution.” Hammer and Champy emphasized the need for radical change in business processes to achieve significant improvements in performance. They argued that merely automating existing processes was not enough; instead, businesses needed to rethink and redesign their processes from the ground up.
Since its inception, BPR has evolved and been adopted by organizations worldwide as a means to streamline business operations, improve efficiency, and reduce costs. Companies across various industries have leveraged BPR to eliminate redundancies, enhance customer service, and gain a competitive edge. The principles of BPR continue to influence modern business practices, making it a vital tool for organizations seeking transformative change.
Key Principles of BPR
Business Process Reengineering (BPR) is guided by several key principles that aim to transform business processes and achieve significant improvements in performance. These principles include:
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Focus on Business Outcomes: BPR aims to improve customer service, cut operational costs, and become a world-class competitor. The focus is on achieving tangible business outcomes that drive success.
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Holistic Approach: BPR emphasizes a holistic focus on business objectives and how processes relate to them. It requires looking at the entire organization and understanding how different processes interconnect and impact overall performance.
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Radical Change: BPR seeks to radically restructure organizations by designing business processes from the ground up. This involves questioning existing assumptions and being open to innovative solutions that can lead to breakthrough improvements.
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Continuous Improvement: BPR encourages continuous monitoring and evaluation of progress to ensure that improvements are sustained over time. It is not a one-time effort but an ongoing commitment to excellence.
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Collaboration and Communication: BPR requires effective communication and collaboration among stakeholders to ensure that all parties are aligned and working towards common goals. Engaging employees, customers, and other stakeholders is crucial for successful implementation.
By adhering to these principles, organizations can achieve significant improvements in their business processes, leading to enhanced efficiency, reduced costs, and better customer satisfaction.
What Are the Business Process Reengineering Steps?
1. Figure out what you want
What do you expect to see after the execution of a specific business workflow? Once you understand how you want your business outcomes to work, you can start figuring out why it isn’t happening. For example, if you’re looking to get deliveries to customers within a specific timeframe, look at ways to speed up getting items out of the warehouses and into a delivery truck.
2. Define the current state
Go through the steps involved in completing a work process. Look at places where logjams might occur that bring down efficiency and add to costs.
3. Identify gaps
Set up key performance indicators (KPIs) that give you an idea of how close or far you are from achieving your business goals. Look at cycle time, the production process, or how long it takes to load trucks at the warehouse.
4. Select a test case
Look for an essential process that impacts your organization’s effectiveness. Then, develop a future state that helps you achieve your company’s strategic objectives.
5. Develop and test your hypothesis
Develop new workflow and procedures, then communicate to the relevant stakeholders. Create test scenarios for any new or enhanced functions within your revamped process.
6. Implement the new process
Ensure you have the dependencies and resources to roll out your changes successfully.
7. Evaluate performance
Track the performance of the new process and use your KPIs to assess the impacts compared to the original business workflow.
Your goal should be creating clear strategic improvements to your work processes versus trying to go about business as usual in a shiny new package. It’s about coming up with new ideas, like changing how you engage with customers at every point in the sales process.
Tools and Techniques for BPR
Several tools and techniques are used in Business Process Reengineering (BPR) to analyze, design, and implement new business processes. These include:
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Process Mapping: Process mapping involves creating a visual representation of business processes to identify areas for improvement. It helps in understanding the flow of activities and pinpointing bottlenecks or inefficiencies.
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Root Cause Analysis: Root cause analysis is a method used to identify the underlying causes of problems in business processes. By addressing the root causes, organizations can implement solutions that prevent issues from recurring.
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Feedback Loops: Feedback loops are mechanisms to collect feedback from customers, employees, and other stakeholders. This feedback is crucial for identifying areas of improvement and making informed decisions to enhance business processes.
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Decision-Making Tools: Techniques such as decision trees and SWOT analysis support decision-making in BPR. These tools help in evaluating different options and selecting the best course of action to achieve desired outcomes.
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Systems Thinking: Systems thinking is an approach that focuses on understanding the interrelationships between different components of a business process. It helps in seeing the bigger picture and designing processes that are efficient and effective.
By utilizing these tools and techniques, organizations can effectively analyze their current processes, identify areas for improvement, and implement changes that lead to better performance and efficiency.
Measuring the Success of BPR
Measuring the success of Business Process Reengineering (BPR) is crucial to ensure that the improvements achieved are sustained over time. Key performance indicators (KPIs) are used to measure the success of BPR, including:
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Customer Satisfaction: Measures such as customer satisfaction surveys and net promoter score (NPS) provide insights into how well the reengineered processes meet customer needs and expectations.
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Cost Reduction: Measures such as cost savings and return on investment (ROI) help in evaluating the financial benefits of BPR initiatives. These metrics indicate how effectively the reengineering efforts have reduced operational costs.
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Process Efficiency: Measures such as cycle time, throughput, and productivity assess the efficiency of the new processes. These KPIs help in determining whether the reengineered processes are faster and more efficient than the previous ones.
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Employee Engagement: Measures such as employee satisfaction surveys and turnover rates provide insights into how the changes have impacted employee morale and engagement. Engaged employees are more likely to contribute to the success of BPR initiatives.
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Business Growth: Measures such as revenue growth and market share indicate the overall impact of BPR on the organization’s growth and competitiveness. These metrics help in assessing the long-term success of the reengineering efforts.
By tracking these KPIs, organizations can evaluate the effectiveness of their BPR initiatives and make adjustments as needed to ensure that the improvements achieved are sustained over time. This continuous monitoring and evaluation are essential for maintaining the benefits of BPR and driving ongoing success.
BPR and Continuous Improvement
Continuous improvement (CI) is an ongoing effort to improve a product, service, or process. The American Society for Quality (ASQ) holds that CI efforts can include incremental improvement, where improvement occurs gradually over time, and breakthrough improvement, where the improvement happens simultaneously. CI often requires an organization first to undergo a cultural change before it can have any real chance of success.
Business process reengineering is often part of CI efforts, as teams look for ways to improve business processes as part of the overall CI scope. BPR is also closely tied to Business Process Management (BPM), and it makes sense to have a healthy understanding of both disciplines. You can read our Introduction to Business Process Management for a complete overview of BPM.
What are the Pros and Cons of Business Process Reengineering?
While most companies find that the benefits of BPR far outweigh the negatives, here are some pros and cons to consider.
Pros
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Can improve business performance and productivity.
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It can reduce costs and improve competitive advantage.
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Can improve customer service.
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It can introduce greater flexibility and responsiveness.
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It can simplify operations and processes.
Cons
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It can require a significant investment of resources.
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This can create disruption and resistance within the organization.
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It can be challenging to manage and implement.
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This can lead to increased complexity and confusion.
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It can produce unexpected negative results.
So, Is BPR the Same as BPM?
No. While BPM focuses on defining and automating existing processes, BPR completely re-imagines how businesses operate, especially regarding customer experience. BPR also has much higher stakes because today’s roles and processes may be shelved entirely.
If you’d like to learn more about BPM, we have a free, open guide you can read online or download as a PDF. Visit the Guide.
Process Re-Engineering Examples
BPR Resources
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Excellent overview with examples on Cleverism.com
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Video on Study.com
Interested in Reengineering and Automating Your Processes?
We have a variety of resources to help you on your journey to an automated workflow.
Jonathan joined Nutrient in 2014. As CEO, Jonathan defines the company’s vision and strategic goals, bolsters the team culture, and steers product direction. When he’s not working, he enjoys being a dad, photography, and soccer.
