Business process re-engineering (BPR) is the critical analysis and redesign of business processes within an organization. It's a management approach that focuses on fundamental changes in the processes that exist within and between departments.

To remain competitive, successful organizations recognize the necessity of consistently improving how they do things. By following a carefully planned approach, the regular review, analysis, and redesign of your business processes can significantly boost efficiency and effectiveness, as well as enhance customer satisfaction.

Where to Start

To begin your process re-engineering initiative, pull together a project team. Job one for the team is to define, in 25 words or less, the critical business issue you intend to address. It often helps to state this as a question. For example: How do we decrease DSO by 10 days over the next 12 months?

To assist in the definition of the critical business issue, answer these key questions:

What is the company's core business?
How do customers measure us?
Who owns (makes the final decision on) the process?
What portion of the process relates to the core business?
What about this process produces the greatest frustration?
What takes up the most time and budget?
Is there a specific problem we are trying to solve?
Are there any parameters/givens/sacred cows?
Does the sponsor have a preference for a team driven or consultant driven project?

Define the current process

Depending on the critical business issue being addressed, the project team may need to create a process map. This is a schematic of the process that directly impacts the critical business issue you're focusing on. It shows the major steps and the staff involved in that process.

In creating the process map, the project team should consider:

Who is involved in the start to finish process? Which people or departments touch this process?
What is each person's/department’s responsibility to the process?
What are the primary tasks?
Do written task descriptions exist?
What are the volumes for the primary tasks?
Are there fluctuations in the volumes of the primary tasks based on sales or other process characteristics?
How does the process work today? What are the detailed steps in the workflow?

It's especially important to describe each step in sufficient detail. When collecting data regarding the current process, focus on results not activities. Look for:

What is happening at each step in the workflow?
What value is being added?
How long this series of steps take?

Analyze the steps in the workflow

Once the process workflow has been defined, each step should be examined from Time, Value, and Cost perspectives. The project team should consider:

Time

How much time does it take to perform the primary tasks?
What is the elapsed time for the primary tasks?
What is the acceptable cycle time for the primary tasks?
Are the cycle time requirements driven by customer expectations?
Would customers benefit from a shortened cycle time?
Would a reduced cycle time benefit cash flow?
Would customers be negatively impacted by an extended cycle time?
What factors negatively affect the performance of these tasks?
Do the task steps ever vary and why? Are any steps short-changed during cyclical highs or lows?

Value

What are the specific value expectations for this process?
What control system is currently in place?
Who is responsible for quality checking?
Are the value metrics in line with customer expectations?
What additional tasks should or could be performed if there were additional time or staff?

Cost

What is the cost of performing the primary tasks?
How many units are processed?
What is the rate of production?
Do all hand-offs between entities create value?
What is the hourly rate of the person(s) performing the tasks?
Would a customer's expectations be satisfied if they knew we were investing their dollarsto fund this activity?

Develop the New Process

Once the tasks have been analyzed, create a "fantasy" or "ideal" process map. This map portrays how your project team would like this process to look if there were no obstacles.

Your fantasy map should stimulate creative thinking. After a defined brainstorming period, your team can develop an "improved" process map with a challenging but measurable target – such as a time or cost reduction. This map should zero in on low hanging fruit – those steps that can be implemented immediately to improve performance.

The next step is to develop a list that outlines changes from the current process to the new process, together with the benefits of each change. It's important that there is a complete understanding of the scope of the changes being made.

There are three levels of change:

Organizational Level Change - Changes made to a process, which affect the entities currently involved in that process. These changes are generally the most significant and represent the addition or elimination of a person or group of people.

Process Level Change - Changes made to the way work is done - generally in the inputs and outputs between entities in a process.

Task Level Change - A change to the way an individual performs a task. This is generally the least effective way to implement change.

Create an Action Plan for Implementation

Prior to implementing the new process, develop a clear statement specifically defining what has to be done. Draw relationships between the action items that identify any dependencies. Do any of the actions have to be completed before others can be initiated?

Assign one person to each action item and stipulate a start and end date.

Be sure to build in time for rechecking. It's vital to the acceptance of the new process that all items are working as expected.

Some Final Thoughts

As you begin your business process re-engineering initiatives, remember:

Things are the way they are because they got that way.
Unless things change, they will stay the same.
People don't mind change, they mind being changed.
Change would be easy, if it weren't for the people.

No process lasts forever. The minute a new process is implemented, you should begin reviewing it for potential further improvements.

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