Business process reengineering (BPR) can turn a company’s direction around. In the long run, it can reverse failing businesses, improve employee satisfaction, and boost customer loyalty.
But it can also feel quite formidable – because it requires change from the ground up.
In this article, we’ll explore business process reengineering:
What is Business Process Reengineering (BPR)?
According to
Bain & Company, business process reengineering “involves the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality.”
Companies typically engage in a BPR process when they reach a certain stage of growth. When you’re just starting, it can serve efficiency to cut some corners or bootstrap some operations. But those patchwork solutions no longer help when you’re ready to scale.
In business process reengineering, you go back to the drawing board on your business processes. You ask: How could we do this better? How can we deliver better value to the customer? You question assumptions and rethink every step.
Why is Business Process Reengineering Important?
The term itself was popularized in the 1990s in a
Harvard Business Review article titled “Reengineering Work: Don’t Automate, Obliterate.” In the article, author Michael Hammer explained its critical role in the modern marketplace:
Reengineering strives to break away from the old rules about how we organize and conduct business. It involves recognizing and rejecting some of them and then finding imaginative new ways to accomplish work. From our redesigned processes, new rules will emerge that fit the times. Only then can we hope to achieve quantum leaps in performance.
BPR initiatives deliver immense value to a company if done correctly. BPR aims to produce the following results.
Reduce Costs
Outdated processes often cost companies more than they realize. You may be paying fees for doubled labor, inefficient workflow, or services that are no longer of value. It’s like going through your personal finances and cutting out those subscriptions you never use. BPR evaluates where companies are overspending or wasting money and cuts those processes out.
Drive Higher Profits
BPR reorganizes your workflow to prioritize efficiency, productivity, and output. At the same time, it’s reducing costs. The net gain is higher profits.
Increase Speed and Efficiency
Over time, outdated processes tend to balloon into inefficient operations. Companies may find five people working on a process that only requires one. Or they may realize technology can handle several functions and free up employees to focus on higher-level work. Overall, these changes bump up the speed of work and increase productivity.
Improve the Quality of Products or Services
When employees are freed from burdensome processes, they can focus more on the products or services you’re selling. Increased efficiency in workflow leads to better quality in your end product. Generally, BPR initiatives boost key performance indicators (KPIs) across the board.
Boost Customer Service
When you have better processes, your customers will experience shorter wait times, higher quality of service, and faster resolution. In fact, one of the primary reasons companies engage in business process redesign is to improve lagging customer service.
What are the Steps for Business Process Reengineering?
Companies tend to follow several basic steps for a BPR project. These projects must involve senior management and focus on the company’s desired future state.
Here are the typical steps for reengineering business processes.
Step 1: Assemble a BPR Team and Set Goals
Identifying your team is the first step. You’ll need internal, cross-functional stakeholders, but most business process reengineering involves outside BPO partners. These partners are experts in business process management and BPR. Set goals to evaluate the project.
Step 2: Audit Your Current Business Processes
Set up an audit of all your processes. Create a workflow diagram and identify all the stakeholders, process owners, and tools used throughout the company.
Step 3: Identify Weak Points
Identify problem areas like duplicated work, error-prone data, processes that always run late, gaps in communication, etc. Document all of these meticulously because these are the processes you’ll be reinventing.
Step 4: Map Out Future Processes
Create a new diagram that simplifies processes and identifies new tools that can streamline workflow and relieve the burden on your employees.
Step 5: Implement your plan
This step is where change management is vital. You must ensure your entire company understands the new processes. Conduct in-depth training, send out helpful documentation, and keep communication flowing.
Step 6: Evaluate the project’s success
Once you’ve implemented changes, set a timeline for getting feedback and evaluating their success. You may want to set up surveys for your employees and have several checkpoints to assess your plan against your goals.
Real-Life Business Process Reengineering Examples
Let’s round all this up by looking at a few real-life business process reengineering examples.
Ford
One of the most famous historical examples of BPR is from
Ford Motor Company. In the 1980s, the automotive industry was in a slump. Ford knew that several of their departments were bloated and could use trimming. Accounts payable, in particular, was five times the size they felt it should be, compared to their competitors.
So, they analyzed every part of the process, following invoices, purchase orders, and payments from beginning to end. They realized most of their employee time was spent fixing mismatches between invoices and purchase orders.
In response, Ford implemented “invoiceless payments.” They cut out the middleman entirely and used a database to ensure that purchase orders were correct. Instead of matching 14 data items, accounts payable now only had to match three. This BPR initiative achieved a 75% reduction in headcount and cost savings.
T-Mobile
T-Mobile built a brand on the idea of delivering happy customers. But when they introduced self-service portals, their customer service team started receiving only high-level needs from customers. A single call queue and complex phone tree frustrated customers, and call center agents often couldn’t resolve their problems without multiple transfers.
Instead of implementing business process improvement – an incremental change like tweaking the existing phone tree – T-Mobile reorganized its entire call center team. They employed the TEX model: Team of Experts. They organized cross-functional groups focused on specific regions, and each representative was trained to manage customer calls from start to finish.
Another key? T-Mobile changed the way rep performance was evaluated. They moved to a model based on individual and team performance, which drove innovation and initiative.
The result? T-Mobile was ranked the number one wireless company with a 13% reduction in cost to serve and a 21% reduction in calls per account.
Cloud Communications
At J-Curve, we’ve helped leading companies drive solutions through business process reengineering. Here’s one example.
We brought on a new
cloud communications client who had just undergone a massive acquisition. The senior leadership faced a challenge: justify the costs of the acquisition while managing massive internal realignment. Obstacles to success included an 80% turnover rate in sales and high overhead costs, disconnected systems, and outdated, manual workflows.
J-Curve ran a BPR initiative to solve these issues and provided proprietary technology and customer support. Reengineering included developing a plan to centralize project management, implementation services, and customer support. We streamlined agent workflow, eliminating redundancies and creating clear roles based on agent strengths and performance. We also moved most agent support to low-cost locations and implemented a proprietary CRM that helped streamline customer support.
The result? The client saw a 32% reduction in cost, a 10+ improvement in CSAT score month-over-month, and a 40% increase in business growth.
Final Thoughts
Business process reengineering is one of the most powerful tools for companies focused on growth and longevity. The world’s top companies use BPR to evolve their companies and differentiate from their competition. BPR initiatives can do a 180 for a failing department or business.
While BPR can seem overwhelming, partnering with BPR specialists can help smooth the process and give critical objective insight into your company. To learn more about how business process reengineering can help your company, check out J-Curve’s
services or read more on
our blog.
