Business Process Re-engineering (BPR)-00-7317

Written by: 4Ps Marketing
Date: Fri, 27 Aug 2010

Hammer and Champy define BPR as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service and speed".

The key words here are fundamental, radical, dramatic and process.



(a) Fundamental and radical indicate that BPR is somewhat akin to zero base budgeting: it starts by asking basic questions such as 'why do we do what we do', without making any assumptions or looking back to what has always been done in the past.

(b) Dramatic means that BPR should achieve 'quantum leaps in performance', not just marginal, incremental improvements.

(c) Process. BPR recognises that there is a need to change functional hierarchies.

A process" can be thought of as a collection of activities that takes one or more kinds of input and creates an output.

For example, order fulfilment is a process that takes an order as its input and results in the delivery of the ordered goods. Part of this process is the manufacture of the goods, but under BPR the aim of manufacturing is not merely to make the goods. Manufacturing should aim to deliver the goods that were ordered, and any aspect of the manufacturing process that hinders this aim should be re-engineered. The first question to ask might be 'Do they need to be manufactured at all?'

A re-engineered process has certain characteristics.

(a) Often several jobs are combined into one.
(b) Workers often make decisions.
(c) The steps in the process are performed in a logical order.
(d) Work is performed where it makes most sense.
(e) Checks and controls may be reduced, and quality 'built-in'.
(f) One manager provides a single point of contact.
(g) The advantages of centralised and decentralised operations are combined.

Hammer identifies seven principles of BPR.

(a) Processes should be designed to achieve a desired outcome rather than focusing on existing tasks.

(b) Personnel who use the output from a process should perform the process. For example, a company could set up a database of approved suppliers; this would allow personnel who actually require supplies to order them themselves, perhaps using on-line technology, thereby eliminating the need for a separate purchasing function.

(c) Information processing should be included in the work which produces the information. This eliminates the differentiation between information gathering and information processing.

(d) Geographically dispersed resources should be treated as if they are centralised. This allows the benefits of centralisation to be obtained, for example, economies of scale through central negotiation of supply contracts, without losing the benefits of decentralisation, such as flexibility and responsiveness.

(e) Parallel activities should be linked rather than integrated. This would involve, for example, co-ordination between teams working on different aspects of a single process.

(f) 'Doers' should be allowed to be self-managing. The traditional distinction between workers and managers can be abolished: decision aids such as expert systems can be provided where they are required.

(g) Information should be captured once at source. Electronic distribution of information makes this possible.

In summary, BPR involves focusing attention inwards to consider how business processes can be redesigned or re-engineered to improve efficiency.

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