What is BPR?

BPR is 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. Improved customer satisfaction is often the primary aim.

Illustration 4 - IBM and BPR

Prior to re-engineering, it took IBM Credit between one and two weeks to issue credit, often losing customers during this period.

• On investigation it was found that performing the actual work only took 90 minutes. The rest of the time (more than seven days!) was spent passing the form from one department to the next.
• The solution was to replace specialists (e.g. credit checkers) with generalists - one person (a deal 'structurer') processes the entire application from beginning to end.
• Post re-engineering, the process took only minutes or hours.

Features of a re-engineered process

The following are common features of re-engineered processes:

• several jobs are combined into one
• workers make real decisions
• work is performed where it makes most sense
• checks and controls are reduced
• reconciliation processes are reduced
• a case manager provides a point of contact.  

The influence of BPR on organisational performance

• Despite some success stories, e.g. at IBM and Ford, BPR became unpopular in the late 1990s due to some widely discussed failures.
• Numerous organisations have attempted to redesign their business processes but have failed to enjoy the enormous improvements in organisational performance that were promised.
• The key to realising these improvements in performance seems to be continuous learning. As problems emerge, they must be identified, analysed and communicated in order to improve the future success rate of BPR.

Advantages and disadvantages of BPR

Advantages of BPR

• BPR revolves around customer needs and helps to give an appropriate focus to the business.
• BPR provides cost advantages that assist the organisation's competitive position.
• BPR encourages a long-term strategic view of operational processes by asking radical questions about how things are done and how processes could be improved.
• BPR helps overcome the short-sighted approaches that sometimes emerge from excessive concentration on functional boundaries. By focusing on entire processes the exercise can streamline activities throughout the organisation.
• BPR can help to reduce organisational complexity by eliminating unnecessary activities.

Criticisms of BPR

• BPR was sometimes seen (incorrectly) as a means of making small improvements in existing practices. In reality, it should be a more radical approach that questions whether existing practices make any sense in their present form.
• BPR was often perceived (incorrectly) as a single, once-for-all cost-cutting exercise. In reality, it is not primarily concerned with cost cutting (though cost reductions often result), and should be regarded as on-going rather than once-for-all. This misconception often creates hostility in the minds of staff who see the exercise as a threat to their security.
• BPR requires a far-reaching and long-term commitment by management and staff. Securing this is not an easy task, and many organisations have rejected the whole idea as not worth the effort.
• In many cases business processes were not redesigned but merely automated.
• In some cases the efficiency of one department was improved at the expense of the overall process. To make BPR work requires a focus on integrated processes (as discussed above) that often involves obliterating existing processes and creating new ones.
• Some companies became so focused on improving internal processes that they failed to keep up with competitors' activities in the market.

Most companies are now more likely to talk about 'business process redesign' instead.

The influence of BPR on systems development

BPR results in more automation and greater use of IT/IS to integrate processes.

Some of the key technologies that allow fundamental shifts in business operations to occur are:

• shared database access from any location
• expert systems (a database system providing expert knowledge and advice) to devolve expertise
• powerful communication networks for remote offices
• wireless communication for on-the-spot decision making
• tracking technology for warehouses and delivery systems
• internet services to re-engineer channels of distribution.

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Tags:	BPR;business process engineering;business process redesign