Hammer and Champy, its first proponents, define BPR as - "The fundamental reconsideration and the radical redesign of organizational processes, in order to achieve drastic improvement of current performance in cost, services, and speed."
Simply, it is the difference between efficiency and effectiveness. While effectiveness entails doing the right things in a goal-oriented manner, efficiency is doing the right things in a process-oriented way.
If you're efficient, you're definitely the most effective, translated as competitive. Whether it is cost, time-to-market, or customer satisfaction, if you're efficient, you're indeed one of the leaders.
In both management as well as computer science, BPR involves a series of radical changes in a business's work processes, not in a functional manner, but in a holistic program ranging from acquisition to distribution and after-sales service. The change is implemented on the basis of an unbiased perspective.
Michael Hammer and James Champy think that, as too much valuable time goes in the passing of tasks from one department to another, it is far more efficient to appoint a cross-functional management team.
BPR, which began as a private sector initiative to increase customer satisfaction, decrease operational costs, and increase overall competitiveness, is undertaken through the following steps (suggested by Davenport - 1992):
Business Vision and Objectives
It all starts with a clear-cut outline of measurable objectives. Whether it is cost-cutting, time reduction, or an improvement in output quality, the dimensions for the new yardstick, need to be clearly set. It is of course essential to ensure that all set goals are in line with the company's vision and mission.
Identification of Slacking Processes
The business processes that are either slacking or are considered as 'can be improved', need to be highlighted. The processes that have the most impact on product evolution and the ones that are at most conflict with the company's mission, are included in the list of 'reds'. Proper identification is the first step towards a successful BPR.
Understand and Measure the 'Red' Processes
When one identifies slacking processes, one has to be sure of the measurement used to identify where they were lacking. Maybe they are too time-consuming, maybe too lenient on quality, or anything else, but without measuring parameters, it is impossible to judge objectively what needs to be changed.
All the existing processes can be measured against industry standards or those of a good competitor, if such information is ethically available.
Information System and Technology Capabilities
It is a basic BPR enabler. Without the relevant systems in place, it is very difficult to measure and control affecting factors. Before starting a radical change process, it is a prerequisite to have the information systems that can handle a change of that magnitude.
Design, Build and Test the New Prototype
Anything new has to start with a testable prototype. It is foolhardy to implement something that hasn't worked in the testing stage. More than 70 percent of BPR projects fail for various reasons, but one major reason is the failure to accept the shortcomings in the testing stage.
During this stage, it is wise to assess the mood of the employee, the management's attitude towards the extra work, etc., before the project's full-fledged implementation.
Adapting the Organization
This is the stage that gives the finishing polish to the BPR product. Like anything new, an abrupt ending to BPR activities may leave behind a sour taste, so it is best to finish with finesse.
Adapting the organizational structure and governance model, along with the updation of the authority, responsibility, and accountability charts, clears up the air and ends the scope for doubts.
BPR is a radical change activity that has a one-time frequency, so one must get it right, the first time only. It requires a top down participation and has a broad functional scope. There is also a high-risk involved, as big money and even bigger employee morale is at stake in the BPR process.
The structural and cultural change brought on by BPR has the following advantages and criticisms.
- The process increases global competitiveness by bringing the product quality, price, and service at par with the best industry competitors.
- It eliminates non value-adding processes and in turn reduces the firm's operating costs.
- It is a way to achieve maximum customer satisfaction with the usage of minimum resources - the ideal scenario described in any and all management texts.
Criticisms Against BPR
- Many believe BPR to be an excuse for automation. It is mostly the other way round, however, as BPR is the reason for bringing in more automation, which sometimes is the best way to cut down time.
- It is most often associated with severe downsizing and cost cutting. BPR however, centers on increasing quality and decreasing cost, by keeping just the adequate number of people to do a task, not one more, nor one less.
- Many believe it to be an unnecessary change to a status quo that is working just fine, but hardly anyone, let alone a company, will dish out such high figures for something completely unnecessary.
It is a miracle cure for companies plagued with ineffectiveness and low competitiveness. It has helped many giants, Proctor and Gamble Corporation and General Motors, to name a few, revamped their businesses towards increased profitability.
With proper management support, employee faith, and reasonable expectations, BPR can bring about changes that will always be for the better. It all boils down to - how well was the project managed?