A well-run business will continue providing value to its customers and its shareholders. Failure to do so often points to a problem with how the business is set up or managed across its value chain. And one way to address this challenge is to rethink the processes that create value for the business.
This process of redesign and restructuring is expressed broadly as "Business Process Reengineering," or BPR for short. This article discusses the concept of BPR and provides insight into its crucial role in addressing systemic business challenges.
What is it?
Business process reengineering (BPR) is the remodeling and reconditioning of core business methods and systems to achieve substantial improvements in their performance. It involves a series of actions to reimagine and restructure how a business is set up to provide value. It covers critical areas like order, speed, and quality of workflow. And then, it seeks to cut operational costs by reducing process repetitions.
BPR addresses performance gaps and inefficiencies across key business value chain sectors. Its goal is to promote more efficient, productive, convenient, and cost-effective work processes.
When do we use it?
There are several reasons why a business may need BPR. A few of them are discussed below.
To reorder the value chain
BPR can help you make critical structural changes that will impact your value chain's layers. It can introduce key reforms that reinforce weak links and create a competitive advantage for the business.
To address productivity challenges
A performance gap, a process ineffectiveness, or a material deficit may cause your output to drop. And one way to find out and then fix it is by initiating a reengineering of your business process.
To improve operations
Good BPR can make work safer, faster, more convenient, and more productive. It can automate workflow to minimize time spent on repetitive and tasking work. And it can also change the work culture to promote more innovative and committed work.
To increase profits
BPR can cause a positive turnaround of your business's fortunes when carried out on its value-creating provisions. It can bring about innovations and cost-effective inputs. It can also reduce defects and create differentiated products with higher market prices.
What business questions is it helping us to answer?
Below are a few questions that a BPR approach to work can address.
Are the expected values being delivered by the existing system and processes?
You may need to initiate a BPR to set things right if the answer is no. You may be dealing with a workflow problem or a performance gap impacting your final output.
Do the processes align with your long-term goals and mission?
Is your current system sustainable for profit-making and value creation? Is it meeting your initial projections and fulfilling the conditions for organizational growth? Your answers to these questions will determine if you need BPR.
How can we keep up with a market shift?
The modern market is in constant flux, so it is important to be as flexible as the conditions demand. A good BPR can help you make critical organizational changes when required. This is so you can continue providing value to the customers in whatever shape they need.
Are the current processes capable of sustaining profit?
A business that fails to make a profit for its shareholders cannot be sustained in the long run. This challenge often comes from a negative market perception or high operational cost overruns. BPR can address this problem by creating cost-effective ways to run your business.
How do we use it?
Below are the four most crucial steps to executing a Business Process Reengineering strategy.
Step 1. Map the business's present state of operations and process management
Understand how the business is run and identify the processes contributing to its status. Make out the workflows, routines, operations, and resource utilization across the board by observing and questioning key persons.
Step 2. Carry out a rigorous analysis
After identifying the process setups, probe them inside out to figure out any problems with how they are set up or managed. Look out for obstacles to the free, safe, and quick workflow. Identify the performance inhibitors, operational bottlenecks, and conflict areas to be resolved.
Step 3. Recommend corrective measures and map new paths to improvement
Suggest the measures to redress the problem areas. Reorganize the workflows, reduce repetitive tasks, and optimize key operations. Retool critical sectors and reshuffle equipment and personnel as required. Chart entirely different process paths if needed and assign KPIs to vital procedures.
Step 4. Implement recommendations across the board
Ensure that you get everyone on board with your plans. Validate the recommendations to check their viability, affordability, and sustainability. If they are, carry them out in well-ordered steps and place measures to check their impact.
Practical Example
A gas products supplier discovers that it is failing to meet its supply turnover projections and sales leads. It carries out a BPR to redesign its handling and distribution systems. The BPR procedure uncovers a fresh conveyance bottleneck and other logistic challenges.
It recommends increased automation of handling processes and redesigning the work floor layout to quicken workflows. It also initiates a rigorous quality control and cost-benefit analysis of the BPR procedure before certifying it fit for use. After all consultations and notice is made, it embarks on the BPR.
Advantages
It can help to improve business performance
BPR can be the solution to the performance drop problem in your workplace. It can affect wide-ranging changes that address imbalances in your workflows and across your value chain. And this will have a positive impact on your productivity levels.
It can help you cut down on operational costs
Do you find that your operational costs impact your profit margins and will soon be unsustainable? If yes, a BPR can help you achieve cost-effectiveness while promoting the more intelligent use of available resources.
It improves brand reputation
BPR can change the way your customers perceive your brand. It can create more efficient work processes that improve products and services.
It can create a competitive advantage
A company can develop core competencies by carrying out BPR on key operations across its value chain. It can introduce innovative solutions and create a working setup that uses the full potential of its staff. This way, workplace capabilities are enhanced in unique and efficient ways and then put to productive use.
Disadvantages
It may call for increased investment in resources
The capital costs associated with effective BPR may be too much to ask for your business. It may require company-wide reforms or critical changes that pose significant overhead costs.
It may bring disruption to the workplace
Change is not always easy to process and adjust to for some people. So your BPR must be systematic and steadily effected to avoid causing any serious aftershocks.
It can produce unintended results
There's no guarantee that your BPR will produce a positive turnaround in your business, especially when it is not well done. It is best to carry it out with recourse to best practices and then align it with the existing system.
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