What is Business Process Reengineering? [7 Key Components]

What is business process reengineering? This is the practice of redesigning the workflows at your company and examining all the interactions between various business functions.

Even if your business practices worked in the past, the pace of business is rapid. There’s a good chance you’ve outgrown some of the processes you’ve relied on for years.

At best, they could be inefficient, slowing your teams down and reducing performance. At worst, they could be actively working against your business, preventing it from growing, expanding, and staying competitive.

Business process reengineering (BPR) can help you get to the bottom of where your inefficiencies lie. Today, we’re sharing some of the high-level the details you need to know. 

The Principles of Business Process Reengineering

The goal of business process reengineering is to identify which processes improve performance and enhance customer value and which do not.

Process reengineering isn’t an activity that your team can accomplish in a day. It requires a well-planned strategy and cross-department communication.

Before you begin working together, take the time to understand the goals and principles of business process reengineering. These include:

• Prioritizing your processes in terms of redesign urgency
• Minimizing information processing and optimizing information production 
• Linking parallel activities within workflows
• Treating geographically-dispersed resources as centralized ones
• Building controls into the processes you keep and those you add

As you complete these practices, remember to keep an outcome-focused perspective. Organize all your efforts around the end results you want to achieve, not the specific tasks you’re analyzing.

The Benefits of Business Process Reengineering

Business process reengineering is a necessary practice, especially if you’re in the early stages of an ERP project. If this is the case, then you mustn’t automate all your workflows as they currently exist. You should first conduct BPR (or at least process improvement) to make sure your processes are fully optimized. Otherwise, you could end up automating inefficiencies. 

Regardless of whether new technology is part of your initiative, some of the benefits of reengineering your business processes include:

• Ensuring your processes align with your business goals
• Improving and opening up lines of communication
• Improving operational efficiency and work quality
• Reducing costs and cycle times

When you eliminate unproductive activities within your organization, you can accelerate the flow of information, reduce errors, and improve overall performance.

7 Business Process Reengineering Steps

Step 1: Acknowledge the Problem

Overtime, certain parts of a business can begin to break down. This is true for both equipment and processes.

When a breakdown occurs, you’ll feel it. You might notice that things just aren’t running as smoothly as they once did. There are more worker complaints and morale seems low.

On the operations side, you may find that more defects are occurring, customers are complaining, and revenue is dropping.

These are all signs that it’s time to re-examine your current ways of doing business. 

Step 2: Build a Team and Develop a Vision

Once you know there are issues to solve, it’s time to put together a team to solve them. You need experts who are closely familiar with your business processes and have the authority to make real change happen. 

This means enlisting the help of your C-suite. Your senior executives need to know where your processes are lacking and the consequences your organization could face if they’re not improved. Then, your executives need to allocate the resources required to carry out your plan. 

In addition to upper management, you need department managers on your team. These are the leaders who work most closely with individual employees in each department. They know the ins and outs of every process, including the hierarchies and reporting structures. 

Depending on the scope of the project, you may require other resources and stakeholders, as well.

Once everyone is together, you can create a vision for your BPR tasks. What do you hope to improve, and what benefits do you want to achieve?

Gain strategic alignment around this vision and outline the concrete steps you plan to take as you move forward. Without strategic alignment and a detailed, planned approach, it can be impossible to ensure you’re updating the right processes and data. 

Step 3: Identify Inefficiencies

Together with your project team, understand the high-level processes within your organization. As you perform this task, you’ll naturally identify where inefficiencies occur.

For instance, you might find that the same data is being recorded in two different locations by two different employees. This can lead to rework and confusion as well as manual errors.

Step 4: Set Key Performance Indicators

A key performance indicator (KPI) is the measure of a desired outcome that you hope to achieve after making a change.

In the case of BPR, it’s important to set KPIs at the outset. This way, you can track whether the changes you make are successful.

For example, you might notice that the employee onboarding process is taking too long due to manual paperwork and inefficient communication. While you might not know the solution yet, you can envision the best outcome. That’s your KPI.

In this case, you might set a goal to reduce onboarding time by 20% with the new ERP system you implement. 

Step 5: Understand Enterprise Software Functionality

When you re-engineer inefficient processes with the intent to implement new enterprise software, don’t just put new steps in place and call it a day. Rather, consider the industry best practices built into your selected software. 

Are many of your process problems based on in-house miscommunication? If so, reengineer your processes while considering the functionality of your software. This allows you to streamline and simplify cross-department collaboration while minimizing software customization.

In a similar vein, reengineering your processes based on the functionality of a manufacturing ERP system can help you automate supply chain tasks, including supplier communication, inventory management, quality control, and more. 

Step 6: Design and Build a Process Prototype

You’ve established what’s wrong, what needs to be done, and how you’ll measure a successful outcome. Now, it’s time to put pen to paper.

Before you introduce the new workflows to your entire organization, we recommend designing a process prototype. This process modeling allows you to build a visual representation of how the new processes will work and what the day-to-day functions will look like.

Step 7: Guide Your Team Through the Changes

Organizational change management (OCM) is a critical part of the BPR stage.

When you introduce the changes that the new workflows will result in, it’s common to experience some form of employee pushback. This is a natural reaction, especially if you’re radically changing a process that your employees have grown closely familiar with.

This becomes even more challenging when you introduce new workflows while expecting employees to embrace new technology. 

Keeping OCM top of mind means taking a people-based approach to change. It means listening to employee feedback, regularly communicating updates, and taking steps to proactively identify and mitigate change resistors. 

What is Business Process Reengineering? It’s Your Key to Enterprise Success​

Successful BPR, however painstaking, is the key to business transformation – and digital transformation for that matter.

What is business process reengineering? It means uncovering problems and pain points and looking for ways to design new processes.

Our business process management consultants can help you transform your business and adopt ERP best practices where it makes sense. Contact us below for a free consultation.