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.
Execution of Business Process Reengineering in the proper way can be a game-changer to any organization. If properly handled, business process reengineering can perform miracles on a failing or stagnating Enterprise, driving profits and growth should be at the next level.
Business process reengineering, however, is not the easiest concept to grasp.
It involves enforcing a change in an organization – tearing down something people are used to and creating something new.
When is Business Process Re-Engineering Required?
The requirement for Business Process Reengineering surfaces in different ways. here are some indications alters that it may be time for a BPR project.
- Customer complaints and refund requests are rising.
- Staff stress, disputes, and turnover are high.
- Chaos reigns after experienced employees depart or go out on leave.
- Profitability is falling.
- Sales leads are not being followed up upon quickly.
- Corporate governance has been lacking.
- You are struggling with your cash flow.
- Your inventory levels are rising.
- You can’t fill customer orders quickly enough.
Business Process Reengineering Phases:
Project kick-off: A number of workshops are held where project scope, sponsors commitment, project risk, milestones, and deliverables are discussed. Strength, Weakness, and Opportunities are carried out with active participation.
Business Process Reengineering consultants define objectives, finalize scope, select procedures, and kickoff meetings. After that, they analyze process issues, do GAP analysis and recommend solutions.
Process identification and data gathering: The current practice of Interfacing with business partners is gathered. The use of existing technologies is comprehended. Strategic business processes to be reengineered, are identified.
Process Reengineering: Actual reengineering begins in this phase. A number of brainstorming sessions are held with the project team and other stakeholders, where current business processes are critically analyzed to determine non-value adding activities and identify excess control and check, always with customer value as a prime focus. The impact of new technologies on process improvement is also evaluated. New process ideas with reduced check and control and enabling technologies such as Workflow automation and ERP are envisioned.
Change management: Business Process Reengineering consultants finalize the team, prepare a project, perform risk analysis and develop project plans in the planning step. They focus on project oversight, client relationship, status report, and project closure.
Blueprint of a new system: Blueprinting involves information requirements, of new business processes. New organization structures, HR needs, performance monitoring and compensation, and technological needs, are also outlined.
Transformation: The migration plan would include the establishment of a new organizational structure, detailed training, and reallocation of the workforce, and cut-off dates for implementation. Change management and the introduction of new technologies will form an important part and may need the engagement of outside consultants for this specific purpose.
Project management: Business Process Reengineering consultants plan awareness campaigns, communication workshops, and top management workshops. They change profile characteristics, change readiness assessment, change management plan and implement the change management plan.
How is ERP helpful in Business Process Reengineering?
For successful Business Process Reengineering implementation, Information Technology plays the role of a key enabler. So, the question is raised whether it is logical to directly implement ERP and re-engineer business processes by adopting world-class practices, contained in ERP packages.
This approach would avoid embarking on Business Process Reengineering which is time-consuming, expensive, and risky. Also reengineered processes arising out of the Business Process Reengineering exercise may not be the best of class.
There is a risk in this approach if a proper ERP package is not chosen. Process orientation and ownership will be lacking from employees which may lead to major implementation difficulties.