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Business process reengineering is the redesign of business processes and the associated
systems and organizational structures to achieve a dramatic improvement in business
performance. The business reasons for making such changes could include poor financial
performance, external competition, erosion of market share or emerging market
opportunities. BPR is not - downsizing, restructuring, reorganization, automation, new
technology, etc. It is the examination and change of five components of the business:
1. Strategy
2. Processes
3. Technology
4. Organization
5. Culture
Michael Hammer defines business process reengineering in his book Reengineering the
Corporation as:
Fundamental rethinking and radical redesign of business processes to
bring about dramatic improvements in performance.
Hammer focuses on one of the key concepts of BPR, that it is fundamental and radical.
The alternative business improvement methodology is Continuous Process Improvement,
which emphasizes small and measurable refinements to an organization's current
processes and systems. Continuous process improvement has its origins in total quality
management (TQM) and Six Sigma,a program that began at Motorola.
BPR, as a term and as a practice, has a tarnished history. Reengineering became very
popular in the early 1990s, however, the methodology and approach was not fully
understood nor appreciated. Many times, improvement projects labeled with the title
"BPR" were poorly planned and executed. Employees and organizations cringed at the
thought of another "BPR" experience. The term itself is being used less, or is being
altered so that these types of initiatives are not associated with the "BPR" of the past.
Despite this abuse of the practice and tarnished name, the practice of redesigning
business processes and the associated technology and organizational structure is more
popular today than ever. Companies continue to reexamine and fundamentally change the
way they do business. Competitive pressures and a sluggish economy provide the
impetus for continued efforts to "deliver more with less." Reengineering remains an
effective tool for organizations striving to operate
Reengineering Success Factors

More than half of early reengineering projects failed to be completed or did not achieve
bottom-line business results, and for this reason business process reengineering "success
factors" have become an important area of study. The success factors below are derived
from benchmarking studies with more than 150 companies over a 24 month period.
Success factors are a collection of lessons learned from reengineering projects.
Reengineering team members and consultants that have struggled to make their projects
successful often say,
"If I had it to do over again, I would" ,
and from these lessons common themes have emerged. In this module we examine these
themes or success factors that lead to successful outcomes for reengineering projects.
These include:

Top Management Sponsorship (strong and consistent involvement)

Strategic Alignment (with company strategic direction)
Compelling Business Case for Change (with measurable objectives)
Proven Methodology (that includes a vision process)
Effective Change Management (address cultural transformation)
Line Ownership (pair ownership with accountability)
Reengineering Team Composition (in both breadth and knowledge)

Top Management Sponsorship

Major business process change typically affects processes, technology, job roles and
culture in the workplace. Significant changes to even one of these areas requires
resources, money, and leadership. Changing them simultaneously is an extraordinary
task. If top management does not provide strong and consistent support, most likely one
of these three elements (money, resources, or leadership) will not be present over the life
of the project, severely crippling your chances for success.
It may be true that consultants and reengineering managers give this topic a lot of
attention. Mostly because current models of re-designing business processes use staff
functions and consultants as change agents, and often the targeted organizations are not
inviting the change. Without top management sponsorship, implementation efforts can be
strongly resisted and ineffective.

Top management support for large companies with corporate staff organizations has
another dimension. If the top management in the "line" organization and "staff"
organization do not partner and become equal stakeholders in the change, AND you only
have staff management support, you most likely are ill-prepared for a successful
reengineering project (line management in this context are the top managers of the
operation ultimately accountable for business performance -- P&L, customer service,
etc.). Projects that result in major change in an organization rarely succeed without top
management support in the line organization.
Strategic Alignment
You should be able to tie your reengineering project goals back to key business objectives
and the overall strategic direction for the organization. This linkage should show the
thread from the top down, so each person can easily connect the overall business
direction with your reengineering effort. You should be able to demonstrate this
alignment from the perspective of financial performance, customer service, associate
(employee) value, and the vision for the organization.
Reengineering projects not in alignment with the company's strategic direction can be
counterproductive. It is not unthinkable that an organization may make significant
investments in an area that is not a core competency for the company, and later this
capability be outsourced. Such reengineering initiatives are wasteful and steal resources
from other strategic projects.
Moreover, without strategic alignment your key stakeholders and sponsors may find
themselves unable to provide the level of support you need in terms of money and
resources, especially if there are other projects more critical to the future of the business,
and more aligned with the strategic direction.
Business Case for Change
In one page or less you must be able to communicate the business case for change. Less
is preferred. If it requires more than this, you either don't understand the problem or you
don't understand your customers.
You may find your first attempt at the business case is 100 pages of text, with an
associated presentation of another 50 view graphs (overhead slides). After giving the
business case 20 times you find out that you can articulate the need for change in 2
minutes and 3 or 4 paragraphs. Stick with the shorter version.
Why is this important? First, your project is not the center of the universe. People have
other important things to do, too. Second, you must make this case over and over again
throughout the project and during implementation - the simpler and shorter it is, the more
understandable and compelling your case will be.

Cover the few critical points. Talk to the current state, and what impact this condition has
on customers, associates and business results. State the drivers that are causing this
condition to occur. State what your going to do about it (vision and plan), and make
specific commitments. Keep focusing on the customer. Connect this plan to specific,
measurable objectives related to customers, associates, business results, and strategic
direction. Show how much time and money you need and when you expect to get it back.
Don't sell past the close. No matter how long you talk, you will get resistance from some,
and support from others, so you might as well keep it short.
The business case for change will remain the center piece that defines your project, and
should be a living document that the reengineering team uses to demonstrate success.
Financial pay back and real customer impact from major change initiatives are difficult to
measure and more difficult to obtain; without a rigorous business case both are unlikely.
Proven Methodology
The previous module presented several BPR methodologies, and it is important to note
that your methodology does matter. Seat-of-the-pants reengineering is just too risky given
the size of the investment and impact these projects have on processes and people.
Not only should your team members understand reengineering, they should know how to
go about it. In short, you need an approach that will meet the needs of your project and
one that the team understands and supports.
Change Management
One of the most overlooked obstacles to successful project implementation is resistance
from those whom implementers believe will benefit the most. Most projects
underestimate the cultural impact of major process and structural change, and as a result
do not achieve the full potential of their change effort.
Change is not an event, despite our many attempts to call folks together and have a
meeting to make change happen. Change management is the discipline of managing
change as a process, with due consideration that we are people, not programmable
machines. It is about leadership with open, honest and frequent communication.
It must be OK to show resistance, to surface issues, and to be afraid of change.
Organizations do not change. People change, one at a time. The better you manage the
change, the less pain you will have during the transition, and your impact on work
productivity will be minimized.

Line Ownership
Many re-design teams are the SWAT type -- senior management responding to crisis in
line operations with external consultants or their own staff. It's a rescue operation.
Unfortunately the ability of external consultants to implement significant change in an
organization is small. The chances are only slightly better for staff groups. Ultimately the
solution and results come back to those accountable for day-to-day execution.
That does not mean that consultants or staff are not valuable. What it does mean, though,
is that the terms of engagement and accountability must be clear. The ownership must
ultimately rest with the line operation, whether it be manufacturing, customer service,
logistics, sales, etc.
This is where it gets messy. Often those closest to the problem can't even see it. They
seem hardly in a position to implement radical change. They are, in a matter of speaking,
the reason you're in this fix to begin with. They lack objectivity, external focus, technical
re-design knowledge, and money.
On the other hand, they know today's processes, they know the gaps and issues, they have
front-line, in-your-face experience. They are real. The customers work with them, not
your consultants and staff personnel.
Hence your dilemma. The line operation probably cannot heal itself when it comes to
major business re-design. Staff and consultants have no lasting accountability for the
solution, and never succeed at forcing solutions on line organizations.
You need both. You need the line organization to have the awareness that they need help,
to contribute their knowledge, and to own the solution and implementation. At the same
time you need the expertise and objectivity from outside of the organization.
Building this partnership is the responsibility of the line organization, stakeholders and
re-design team. No group is off the hook.
Reengineering Team Composition
The reengineering team composition should be a mixed bag. For example,

some members who don't know the process at all,

some members that know the process inside-out,
include customers if you can,
some members representing impacted organizations,
one or two technology gurus,
each person your best and brightest, passionate and committed, and
some members from outside of your company.

Moreover, keep the team under 10 players. If you are finding this difficult, give back
some of the "representative" members. Not every organization should or needs to be
represented on the initial core team. If you fail to keep the team a manageable size, you
will find the entire process much more difficult to execute effectively.
Seven reengineering success factors have been introduced in this module. Subsequent
modules in this series written by industry experts will take several of these success
factors into greater depth.
Good reengineering projects design and implement solutions that:

are customer focused

capitalize on best practices and learning from others

are designed for the future

produce significant bottom-line improvements for the


Recommended Approach
The recommended approach for a business process reengineering project includes
the following phases:
1. Project Planning and Launch (team selection, objective setting, scope
definition, methodology selection, schedule development, consultant
selection, sponsor negotiations, change management planning, team
2. Current State Assessment and Learning from Others (high-level
process definition, benchmarking, customer focus groups, employee focus
groups, technology assessment)
3. Solution Design (process design, enabling technology architecture,
organizational design, job design)
4. Business Case Development (cost and benefit analysis, business case
preparation, presentation to key business leaders)
5. Solution Development (detailed process definition, system requirements
writing and system development, training development, implementation
planning, operational transition plan, pilots and trials)
6. Implementation (larger-scale pilots and phased implementation, measurement
systems, full implementation)
7. Continuous Improvement (on-going improvement and measurement of
new processes and systems)
Report findings include:

The #1 contributor to project success is strong, visible and

effective sponsorship.
The top obstacle to successful change is employee resistance at all
levels: front-line, middle managers, and senior managers.

Employees want to hear messages about change from two people:

the CEO or their immediate supervisor (and these messages are not
the same).

When asked what they would do differently next time, most teams
would begin their change management activities earlier in their
next project, instead of viewing it as an add-on or afterthought.

The top reasons for employee resistance are a lack of awareness

about the change, comfort with the ways things are and fear of the

Middle managers resist change because of fear of losing control

and overload of current tasks and responsibilities.
Business Process Reengineering involves the following 7 Steps:

Study the current system

Design and develop new systems
Define Process, organization structure and procedure
Develop and customize the software
Train people
Implement new systems
Monitor and reevaluate
Business Process Reengineering
BPR is the redesign of business processes for substantial improvement. Said simply, it is
the redesign of the way work is performed. A process is any series or combination of
tasks or activities which produce a result. The result could be a machined part, a drawing,
or a requisition for materials.
Traditionally those activities may be performed in a sequential manner. In this situation
each step is completed before the next one begins. A supply chain, in contrast, is the
chain of processes of moving goods from the customer order through the raw materials
stage, supply, production, and distribution of products to the customer.
Business Process Reengineering is approached by examining the strings of processes or
cycles. Cycles are sequences of recurring successions of processes or events. The cycle
time is the time from the beginning of the first step of the process until the beginning of
the first step of the next process. Processes can be decomposed into smaller activities.
Every business has basic cycles that govern the way that paper is processed, parts are
manufactured, and decisions are made. They may be documented in the form of
procedures or routings. Examples of business cycles are customer order, product
development, production, and procurement.
A customer order cycle begins with the placement of an order by a customer. It ends
when you are finally paid for goods or services rendered. But there are activities in
between the two events that consume time. Some add value, such as packing and
shipping, and some are non-value adding and delay time, such as moving the order
around the building from mailbox to mailbox, sitting on a desk, or repetitive motions.
When a cycle ends, a lot of non-value adding time has been consumed that may constitute
90-95 percent of total time. Some of the time is lost in travel, some is lost in the
processing backlog, and some may be lost diverting a customer's order to a credit
department for release. If you can identify the non-value added time in the cycle, you can
devise ways to eliminate the causes.
Long sequential strings of cycles make up the mainstream order flow and contribute to
long throughput times. Poor physical logistics worsen the time delays; i.e. when
distribution is physically separated from the main assembly plant, or engineering is
separated from sales, etc. Component plants located overseas add even more to the
overall throughput time of the service chain of events.

Mapping process flow is a fundamental step in reducing total cycle times. Mapping the
flow and tracking time for each of the events provides a basis for analysis. The process is
not difficult, however it is time consuming. It provides a step by step image of work flow,
systems, procedures, and volumes. It reveals the relationships between the tasks.
Once cycles are mapped, the opportunities to compress time can be pursued. The goal in
compressing time is not to devise the best way to perform a task, but rather to either
eliminate the task altogether or perform it parallel with other tasks so that the overall
system response time is reduced. A basic premise of reducing total cycle times is to
separate activities between in-line and off-line.
Extending this approach to the entire supply chain and focusing in on the mainstream
activities that add value is key. Each of the steps can be further decomposed into smaller
activities. By providing the output, such as transferring information, from smaller
activities much sooner to the subsequent smaller activities, time can be compressed.

The Issues
BPR has unfortunately been associated with "downsizing" or "rightsizing" both of which
mean laying off workers. This has been used incorrectly as an umbrella excuse for
managers to justify downsizing actions. This should not take away from the need to
streamline processes and induce velocity in product and information flow in a company.
Consulting firms coin phrases to promote their company: Time Based Competition,
World Class Manufacturing, Lean Manufacturing, etc. The essence of the new approaches
quite often amount to nothing more than "old wine, new bottles." Just like anything else,
business process reengineering is no panacea, nor should it be embraced as a religion. It
is an operational strategy that, if implemented properly, will provide a new dimension to
competing: quickly introducing new customerized high quality products and delivering
them with unprecedented lead times, swift decisions, and manufacturing products with
high velocity.

Pragmatic Applications
BPR is an excellent tool to use in inducing velocity within an operation. Process mapping
can reveal the constraints and bottlenecks in an operation. This identification can
facilitate the streamlining of processes, increasing both productivity and throughput. We
suggest initially identifying and mapping the critical path processes to discover the
bottlenecks that affect the total throughput time, and reengineering those first.
Bottlenecks will shift from one operation to the next as each one is resolved. This is an
application of basic constraint theory, and will get results that have greater impact on the