1.

Introduction to Business Processes

 Definition of key terms

 Dimensions of Business processes
 Common Business processes in organizations
 Overview of Business process Reengineering kl
 BPR and Relevant Technologies
 Reengineering Vs other programmes
 Differences between BPR and Process Simplification
 Differences between BPR and TQM
 Differences between BPR and Continuous Improvement
 Difference between Reengineering and Redesign
 Business process Improvement

Business Process Reengineering (BPR) can be defined as a process of analyzing and redesigning
the entire business process of an organization in order to improve the productivity and
performance of the organization and to enhance the quality of products produced by it. Business
Process Reengineering is a process using which the performance and productivity of an
organization can be improved in order to increase its profit generation and reduce costs. The
meaning of the business process reengineering is to redesign and rethink the whole concept of an
organization.

In order to reengineer the business process of an organization, the assessment of its business
goals, strategic goals, and the needs of its customers is done.

It is made sure that the strategic goals of the organization should be aligned with the main
organizational goal of the organization and learn more about the needs and requirements of their
customers in order to serve them better.

Business Process Reengineering focus on two main business area first is the technology. It uses
modern technology in order to make better data dissemination and improve decision-making, and
the second is a functional team. The functional organization is changed to form a functional
team.

In Business Process Reengineering, the main objectives of the organization are assessed, and
also the assessment of the processes and procedures involved in the business is done.
And in addition to this, it also focuses on the resources which are used to create the products and
services to fulfill their needs and requirements of customers and market. The activities of the
business are divided separately and are analyzed and improved.

Some activities which don’t add to the profit-making or useful customers are removed altogether,
and some activities are redesigned to improve the productivity of the organization.

The purpose of eliminating or of improving the activities is to enhance the critical improvement
metrics such as service, cost, quality, and the speed of production.

Overview

Business process reengineering (BPR) is the practice of rethinking and redesigning the way work
is done to better support an organization's mission and reduce costs. Organizations reengineer
two key areas of their businesses. First, they use modern technology to enhance data
dissemination and decision-making processes. Then, they alter functional organizations to form
functional teams. Reengineering starts with a high-level assessment of the organization's
mission, strategic goals, and customer needs. Basic questions are asked, such as "Does our
mission need to be redefined? Are our strategic goals aligned with our mission? Who are our
customers?" An organization may find that it is operating on questionable assumptions,
particularly in terms of the wants and needs of its customers. Only after the organization rethinks
what it should be doing, it does go on to decide how best to do it.

Within the framework of this basic assessment of mission and goals, re-engineering focuses on
the organization's business processes—the steps and procedures that govern how resources are
used to create products and services that meet the needs of particular customers or markets. As a
structured ordering of work steps across time and place, a business process can be decomposed
into specific activities, measured, modeled, and improved. It can also be completely redesigned
or eliminated altogether. Re-engineering identifies, analyzes, and re-designs an organization's
core business processes with the aim of achieving improvements in critical performance
measures, such as cost, quality, service, and speed.
Re-engineering recognizes that an organization's business processes are usually fragmented into
sub-processes and tasks that are carried out by several specialized functional areas within the
organization. Often, no one is responsible for the overall performance of the entire process.
Reengineering maintains that optimizing the performance of sub-processes can result in some
benefits but cannot yield improvements if the process itself is fundamentally inefficient and
outmoded. For that reason, re-engineering focuses on re-designing the process as a whole in
order to achieve the greatest possible benefits to the organization and their customers. This drive
for realizing improvements by fundamentally re-thinking how the organization's work should be
done distinguishes the re-engineering from process improvement efforts that focus on functional
or incremental improvement

Therefore, we can say that the main purpose of reengineering to improve the subpart of the
process which impacts the overall performance of the processor to redesign the whole process if
it is inefficient. There are various steps involved in the business process reengineering process.
Let us learn about the steps involved in the BPR process in the next section.

Steps in Business Process Engineering Process:

Step 1. Determine the reason for the required change:

The first step of the Business Process Reengineering is to determine the reason for making a
change in the business process. For example, the reason can be a reduced customer base or
decreasing revenue generation. Once your objective is clearly mentioned in a quantitative form
or qualitative form.

Discuss it with your employees because reengineering might impact everyone in the
organization. There might be some employees who will be reluctant towards the idea of change
as they are comfortable with the things as they have been done, or they might feel insecure for
their job.
However, it is important for management to take employees on board because the employees’
coordination is necessary for the success of the reengineering process.

Step 2. Create a team of experts:

Once the vision of the reengineering is clearly established, the next step is to create a team of
experts who are skilled and motivated and can carry out the process of reengineering
successfully. The team should consist of

a senior manager who can control and supervise the whole team and have expertise in taking
important decisions

An operational manager, who has a deep understanding of the about the processes involved in
the business process. They have worked on the process for a long time that they share a vast
knowledge about it.

Reengineering expert, who has the technical knowledge to work on the field. The skills required
of a re-engineering experts vary from the work to work. For example, if you want to make
changes in the IT department, then you need an IT or computer engineer to carry out the process.

Step 3. Establish an understanding of the current process:

Before starting the reengineering process, it is important for the reengineer experts and other
people involved in the reengineering process to understand the current process of business.
Having a thorough knowledge of the current process is necessary if you want to optimize it.

Learn about the process by preparing flowcharts and diagrams of the process and then connect
KPI with the process to find out whether the process has desired effect or not.

Moreover, information obtained from the KPI of the current process can be used to compare with
the process after reengineering.

Step 4. Determine the inefficient processes and define necessary Key Performing Indicators
(KPI):
Determine right KPI before you start with the reengineering process and make changes to the
process accordingly. There are different KPIs for different departments for example, for
manufacturing department cycle time, defect rate, change over time, inventory turnover is the
KPI, whereas, for an IT department time for application development, meantime respond, cycle
time and support ticket closure rate are the KPIs.

It is important the KPI that you want to improve before you start the reengineering process
otherwise once the reengineering process is done you might want to change your decision or
want to make changes in different KPI which will make the whole reengineering process waste.

Step 5. Develop a new process:

After deciding the KPIs for the reengineering process, the next step is to develop a new process.

Step 6. Implement the new process:

Run a small test once you have completely developed a new process. Make changes wherever
required. Monitor the results of the KPIs you desired to improve and implement the new process
if the outcome of the new process is better then the older process.

Step 7. Evaluate the process and compare Key Performing Indicators (KPI):

Finally, after implementing the new process, evaluate the performance of the process in a highly
dynamic environment, and measure how much improvement is there in the KPI that you have
selected for the reengineering process.

Importance of Business Process Engineering

The purpose of the whole reengineering process is to improve the performance and productivity
of the Business process. However, there are many other benefits that an organization gets from
Business Process Reengineering. Let us learn about them one by one.

1) Introduction of new technology:

Technology changes rapidly, and with the change in technology, the way business work also
changes. Therefore, it is important for organizations to adopt new technology in order to keep up
their pace with the changing environment.

However, there is one downside which the expense of coping up with the changing technology.

Sometimes, organizations have to spend a lot to adopt new technology. For example, Amazon
has recently introduced robots in its warehouses to move things from one place to another.

2) Reduced Respond time:

Customers these days prefer those organizations which take the least time to respond to their
requests. They want to go to those restaurants which apart from selling good quality of food
takes less time in serving the food.

The problem of respond time can be reduced with the efficient use of Information technology.
Information technology has great potential that organization use to improve their automation
work.

3) Competitive edge over your competitors:

In the present time, it is very difficult to stay ahead in the business. There is competition in every
field. With the help of Business Process Reengineering, you can improve your business process
and performance of your business and can give tough competition to your competitors.

4) Improved Productivity:

In the Business Process reengineering, you identify the low performing factors of your business
and improve them. For example, through the BPR process, you come to know that the work
which was earlier done by three workers can be handled efficiently by two workers.

Time can be saved if the packaging of products is done using a machine rather than doing it with
hands. These small changes in the business process improve the productivity of the business
process.
5) Improved Quality of products:

Through the reengineering process, the quality of the product sold or services rendered can be
improved.

The purpose of the BPR process is to learn about the drawback of the system and to improve
them. Better quality of the product while improving the sales and satisfaction of customers.

Example of Business Process Reengineering

1) Online business:

The first example of Business Process Reengineering is the example of online business. The
online business was introduced to provide goods to people at the comfort of their homes. Take
the example of lenskart, Lenskart sells spectacles, and eye wears online.

2) Restaurants:

The concept of the restaurant is introduced to sell cooked food to people and to provide them a
place to sit and chat. However, earlier restaurants used to prepare a meal after getting an order.
But then they realize that it increases there serving time and customers become impatient.

To solve this problem, they started preparing the portion of the meals beforehand. For example,
they kept boiled noodles in a refrigerator and kept chopped vegetables ready for preparing the
final dish.

This reduced the serving time tremendously, and both satisfied the customers and increased the
productivity of the business.

3) service sector (banking, telecommunication)

History of Business Process Reengineering

BPR began as a private sector technique to help organizations rethink how they do their work in
order to improve customer service, cut operational costs, and become world-class competitors. A
key stimulus for re-engineering has been the continuing development and deployment of
information systems and networks. Organizations are becoming bolder in using this technology
to support business processes, rather than refining current ways of doing work.

Reengineering Work: Don't Automate, Obliterate, 1990

In 1990, Michael Hammer

The concept of Business process Reengineering was introduced by Michael Hammer, a professor
of Computer Science In Massachusetts Institute of Technology (MIT) and a management author.
He introduced the concept of Business Process Reengineering in his article named
“Reengineering Work: Don’t automate, obliterate.”

In this article, he mentioned that the managers should eliminate the business work that doesn’t
add value to the business, rather automating them.

By this statement, he meant that the managers have been focusing on the wrong issues and they
have used technology especially Information Technology to convert existing processes into
automated processes rather than eliminating the non-value adding work altogether.

Hammer stated that all the work that doesn’t add value for the customers should be removed
altogether from the business cycle and should not be made faster using automation and rather
they should focus on their incapability to satisfy the needs of their customers.

The concept of Business Process Reengineering was supported by many well-established

business thinkers and was published in many business journals and books in the following years.

However, there are many critics who criticized the concept of Business Process Reengineering
and even mentioned that it is a process of dehumanizing the workplace.

Despite that, the idea of Business Process Reengineering was adopted by 60% of the fortune 500
companies and have succeeded in leaving behind their counterparts in terms of business
generation and productivity.
With the publication of critiques in 1995 and 1996 by some of the early BPR proponents,
coupled with abuses and misuses of the concept by others, the reengineering fervor in the U.S.
began to wane. Since then, considering business processes as a starting point for business
analysis and redesign has become a widely accepted approach and is a standard part of the
change methodology portfolio, but is typically performed in a less radical way than originally
proposed.

More recently, the concept of Business Process Management (BPM) has gained major attention
in the corporate world and can be considered a successor to the BPR wave of the 1990s, as it is
evenly driven by a striving for process efficiency supported by information technology.
Equivalently to the critique brought forward against BPR, BPM is now accused of focusing on
technology and disregarding the people aspects of change

 Dimensions of Business processes management

BPM is aptly named, because it addresses the comprehensive world of an enterprise across its
three core dimensions.

Business: The value dimension

The business dimension is the dimension of value, and of the creation of value for both
customers and stakeholders. BPM directly facilitates the goals and objectives of the business
enterprise: sustained top line growth and improved bottom line performance; increased
innovation; improved productivity; enhanced customer loyalty and satisfaction; and elevated
levels of staff effectiveness.
BPM brings more capability than ever before to align operational activities with goals and
strategies. It focuses enterprise resources and effort on the creation of customer value. BPM also
enables a much faster response to change, fostering the agility needed for continuous adaptation.
Process: The transformation dimension
The process dimension creates value through structured activities called processes. Operational
processes transform resources and materials into products or services for
customers and end consumers. This “transformation” is how a business works; it’s the magic
elixir of the enterprise. The more effective this transformation, the more successfully you create
value. The applied science of processes and transformation spans the history of modern industrial
management, from the quality gurus like Deming, Juran, Shingo, Crosby, and Peters and recently
the practices of Lean and Six Sigma. BPM fully incorporates these methodologies, and
accelerates them with dramatically enhanced systems of definition, measurement, analysis, and
control. Through BPM, business processes are more effective, more transparent, and more agile.
Problems are solved before they become issues. Processes produce fewer errors, and those errors
surface faster and are fixed sooner.
Process effectiveness
Effective processes are more consistent, generate less waste, and create greater net value for
customers and stakeholders. BPM directly promotes increased process effectiveness through the
adaptive automation and coordination of people, information, and systems.
Unlike methods and tools of the past, BPM doesn’t impose effectiveness through rigid and
unyielding systems of control focused on functional domains. Instead, BPM enables the
continuous response and adaptation to real-world and real-time events and conditions.
Process transparency
Transparency is the property of openness and visualisation and it’s critical to effective
operations. Transparency has long eluded businesses, whose processes are often codified into
arcane systems, unintelligible to mere mortals. BPM opens these black boxes and reveals the
inner workings of business processes. With BPM, you can directly see all the elements
of a process design, including the model, workflows, rules, systems, and participants, as well as
its real-time performance, including events and trends. BPM enables business people to directly
manipulate the structure and flow of processes and track the outcomes as well as the causes.

Process agility
Of all demands on business operations, perhaps the most pressing is the need for change the
ability to adapt to changing events and circumstances while still maintaining overall productivity
and performance. BPM delivers process agility, minimising the time and effort needed to
translate business needs and ideas into action. BPM enables business people to define processes
quickly and accurately through process models. It enables them to perform what-if analysis on
business scenarios. It empowers them to configure, customise, and change transaction flows by
modifying business rules. It directly translates process designs into execution integrating systems
and building applications code less and seamless. Moreover, the BPM platform comes equipped
with technology components that make code less development and integration fast and easy.
Other dimensions
Reliability, responsiveness, price, performance, conformance
Management: The enabling dimension
Management is the enabling dimension. Management sets people and systems into motion and
prods processes into action, in pursuit of the business goals and objectives.
For management, processes are the tools with which they forge business success. Before BPM,
constructing and applying these tools spawned an unwieldy mix of enterprise class automation,
many isolated desktop tools, manual methods and techniques, and brute force.

Common business processes in organization

A business process, business method or business function is a collection of related, structured

activities or tasks by people or equipment in which a specific sequence produces a service or
product for a particular customer or customers. 

Business processes are key assets of an organization. An organization builds infrastructure to

support its processes, people and technology. All stakeholders in an organization, including
suppliers and customers, communicate and exchange products and services only through
the business processes.

The following are common examples of business processes.

 Administration.
 Manufacturing. ...
 Operations. ...
  Procurement. ...
 Information Technology. ...
 Information Security. ...
 Customer Service. ...
 Infrastructure.

the three types of business processes

1. Core Processes: How You Deliver Value

To identify core processes, ask yourself: “How does my business generate value and make its
income?” Core processes are also known as primary processes, so another way of looking at it is
to ask: “What does my business primarily do?”

Every task that directly plays a role in producing your business’s outputs to its clients is part of
a core process. To get outputs, you need inputs, and you follow a process to move from inputs to
outputs. Don’t get confused if you notice that several departments are involved in the end-to-end
process. After all, you’re trying to get away from departmentalized thinking.

You will notice that there are several sub-processes within each core process. Some add value,
some (for example, storage) don’t, but all of them contribute directly to the products or services
that your clients get from you. Because these processes are at the heart of your business’s value,
they’re often referred to as the value-chain. They include:

 Developing and creating a product or service

 Marketing the product or service and conveying it to the buyer
  After-sales service and support also add value and are part of core processes

To deliver excellence, all three of these elements need to work together as one. And since core
processes are at the very heart of your business, getting them working as efficiently as possible is
a strategic priority that has transformed many organizations.

2. Support Processes: Making Value Delivery Possible

On the surface, it may seem that there’s a fine distinction between generating value and enabling
value generation, but there’s a world of difference between the two concepts. Core processes
directly serve external clients and generate income. Support processes serve internal “clients”
and do not generate income in themselves.

That’s not to say that support processes are unnecessary. For example, your HR activities have
nothing to do with your customers, and they don’t directly make you money, but without them,
your business couldn’t function. Your IT department doesn’t directly make you a cent, but
without the systems it oversees, your value-generating functions could grind to a halt.

As soon as we start looking at functions alongside processes, we can see that certain functional
departments will be involved in both support and core activities.

Your financial department keeps track of client accounts – an important part of customer service
that is directly involved in the value chain. However, it also generates the management accounts
you use to determine whether your investment in the business is bearing fruit. That’s a purely
internal service with you as the “customer.”

The bottom line? Support processes make it possible to carry out core processes effectively and
are also of strategic importance – as long as they’re fulfilling their supportive role.

3. Management Processes

Processes, be they core or support processes, require planning, coordination, monitoring, and
control. Management processes also include measuring overall results and dealing with
opportunities and threats that could help or harm your business.
It’s also up to management to ensure that regulatory compliance needs are met and that financial
targets and budgets are met.

Although management processes don’t directly generate income, they optimize income
generation and ensure the continued survival of the business as a whole

 BPR and Relevant Technologies

 Reengineering Vs other programmes

1. Difference Between Re-Engineering And Continuous Improvement:

1.Management Involvement:

In general, Continuous Process Improvement involves the improvement of the work processes;
simultaneously, Process Re-engineering involves the managers in the hands-on role that means
PR often makes great changes in the organizational structures, even it supports the redesigning of
the jobs.

2. Involvement Of Team:

In the CPI, team members also involve part-time simultaneously; they consider the process in the
extended time frame. Alternatively, in PR, employers work regularly even they put effort to
enhance your organization grow in a shorter time frame.

3. Improvement Goals:

Business people achieve successive incremental improvements in the process of CPI in a short
period of time. The Process reengineering is also done based on the time period, which means it
will be done periodically. So it is a great support to achieve dramatic improvement. Especially
this process involves the process of radical redesigning. So it is the most effective way to achieve
organizational growth in the earlier time period.

4. Implementation Approach:

In general, a lot of incremental improvements made within the CPI it adds significant
improvements. Still, the process of reengineering is the process of paying more attention to the
outcome; even it is the process of achieving breakthrough improvements over the CPI.

5. Organizational Change:

In the CPI, organizational changes have also taken place. There are no time limitations; In the
PR, radical process changes only occur in the management system, training, organizational, etc.

6. Extent Of Focus:

In the CPI, the focus is one of the narrowly defined processes that mean the employees put
efforts to achieve a higher-level process. Alternatively, the PR needs to focus on the functional
process to achieve major success in the complete system.

7. Information Systems:

In general, most organizations use it occasionally because it is the finest way to protect their
work from difficulties. The PR information systems give great support to reach radical
improvements; even it completely reduces your investment and time. Organizations also improve
business opportunities. So business people need to find the most suitable technique to achieve
break-through improvements. Even the organizations offer great opportunities for the employees
to respond to their suggestions. At present most organizations are using both process
reengineering and CPI for their business improvements. It is the most important aspects of the
organization. In general, the process of reengineering is one of the most important aspects of
solving problem stain situations.
 Differences between BPR and Process Simplification

process simplification is systematically and thoroughly studying each business process

uncovering the hidden sources of complexity

BPI vs BPR

Both BPR and BPI essentially aim to improve the system. Business process reengineering
involves completely changing the process for an overall different result, which is the opposite of
incremental business process improvement. BPR aims at changing the way a process works
while BPI is tweaking an existing process to optimize it. But the difference is in the depth of
change.
Here are some key differences between BPI and BPR:
1. While BPI or streamlining is done to improve processes within the existing
organizational structure, BPR is done to create dramatic improvements to enable the
organization to break away from conventional wisdom and approaches, thereby creating
widespread change.
2. BPI is a preventive technique that should be applied as a principle across the business,
whether or not there are problems while BPR is often applied to fend off impending
disasters. Some, however, argue that whether or not BPI is implemented within the
organization, BPR may still be necessary for response to changes in the legal/political
environment.
3. BPI is often seen as running repairs/maintenance and can be used to achieve quick wins
while BPR focuses more on the improvement of organizational operations enterprise-
wide, which takes a significant amount of time to accomplish

.
Some organizations shy away from process reengineering because they feel it is too costly and too time-
consuming. The questions asked by them are: “Why scrap a process when we can try to fix it instead?”
The answer is to investigate and appreciate the problem.
Which Approach to Choose?
Companies need to determine whether a certain process within the organization requires minor healing
(continuous process improvement) or major surgery (process, reengineering). Generally speaking, it
depends on the circumstances facing the business. While process improvement efforts should be guided
by organizational efforts, it is important to put these approaches in context to determine which is suitable.
Here are some guidelines for deciding whether to apply BPI or BPR:
Business Process Improvement
1. As-is process is already mapped/documented
2. As-is process fundamentally works but not well enough with some areas in need of improvement
3. Your focus is the process – not on implementing an overarching business strategy.
Business Process Reengineering
1. As-is process is redundant or in need of a rethink and redesign
2. The as-is process fundamentally no longer works and a major overhaul is required.
3. The company focuses is the overall strategy to be achieved, rather tasks or process optimization

 Differences between BPR and TQM

-TQM is concerned about improving productivity through quality improvements while BPR is
about making process improvements through radical redesign and use of advanced
technologies. TQM is focusing on continuous improvements while BPR is concerned about
product innovations.

- BPR is technology based and TQM is statistical based

- Both top down and bottom up approaches can be used in implementing TQM but BPR can be
implemented only through a top down approach
-BPR-is about making process improvement through radical redesign and use of advance
technologies while TQM-is concerned about improving productivity through quality
improvement

 Difference between Reengineering and Redesign

Reengineering involves application of technology while redesigning changes structures and

functions of a system

-Redesign” is a plan for making changes to the structure and functions of an artifact, building or
system so as to better serve the purpose of the original design, or to serve “reengineering” is the
application of technology and management science to the modification of existing systems,
organizations, processes and products in order to improve systems.
-Redesign is a plan for making change to the structure and function of an artifact building so as
to better serves reengineering is the application of technology and management science to the
modification of existing systems, organization, processes and products in order to make more
effective efficient and responsive

 Business process Improvement

Business Process Improvement (BPI) can be seen as the analysis, review, and improvement of
existing business processes. This is done by mapping out the business process, identifying
inefficiencies, redesigning the process & benchmarking to initial metrics.

Business process improvement (BPI) is a management exercise in which enterprise leaders use
various methodologies to analyze their procedures to identify areas where they can improve
accuracy, effectiveness and/or efficiency and then redesign those processes to realize the
improvement

BPI is exercise in which enterprise leaders use various methods to analyze their procedure to
identify areas where they can improve
The goals for BPI

1. reduces processing time

2. Improves output quality

3. cuts out waste