Business process reengineering

Business Process Reengineering Cycle

Business process re-engineering is a business manage-ment strategy, originally pioneered in the early 1990s,focusing on the analysis and design of workflows andbusiness processes within an organization. BPR aimedto help organizations fundamentally rethink how they dotheir work in order to dramatically improve customerservice, cut operational costs, and become world-classcompetitors.[1] In the mid-1990s, as many as 60% of theFortune 500 companies claimed to either have initiatedreengineering efforts, or to have plans to do so.[2]

BPR seeks to help companies radically restructure theirorganizations by focusing on the ground-up design oftheir business processes. According to Davenport (1990)a business process is a set of logically related tasks per-formed to achieve a defined business outcome. Re-engineering emphasized a holistic focus on business ob-jectives and how processes related to them, encouragingfull-scale recreation of processes rather than iterative op-timization of subprocesses.[1]

Business process re-engineering is also known as busi-ness process redesign, business transformation, or busi-ness process change management.

Reengineering guidance and relationship of Mission and WorkProcesses to Information Technology.

1 Overview

Business Process Reengineering (BPR) is the practiceof rethinking and redesigning the way work is doneto better support an organization’s mission and reducecosts. Reengineering starts with a high-level assess-ment of the organization’s mission, strategic goals, andcustomer needs. Basic questions are asked, such as “Doesour mission need to be redefined? Are our strategic goalsaligned with our mission? Who are our customers?" Anorganization may find that it is operating on questionableassumptions, particularly in terms of the wants and needsof its customers. Only after the organization rethinkswhat it should be doing, does it go on to decide how bestto do it.[1]

Within the framework of this basic assessment of missionand goals, re-engineering focuses on the organization’sbusiness processes—the steps and procedures that governhow resources are used to create products and servicesthat meet the needs of particular customers or markets.As a structured ordering of work steps across time andplace, a business process can be decomposed into specificactivities, measured, modeled, and improved. It can alsobe completely redesigned or eliminated altogether. Re-engineering identifies, analyzes, and re-designs an orga-nization’s core business processes with the aim of achiev-

1

2 3 BUSINESS PROCESS REENGINEERING TOPICS

ing dramatic improvements in critical performance mea-sures, such as cost, quality, service, and speed.[1]

Re-engineering recognizes that an organization’s businessprocesses are usually fragmented into subprocesses andtasks that are carried out by several specialized func-tional areas within the organization. Often, no one is re-sponsible for the overall performance of the entire pro-cess. Re-engineering maintains that optimizing the per-formance of subprocesses can result in some benefits,but cannot yield dramatic improvements if the process it-self is fundamentally inefficient and outmoded. For thatreason, re-engineering focuses on re-designing the pro-cess as a whole in order to achieve the greatest possi-ble benefits to the organization and their customers. Thisdrive for realizing dramatic improvements by fundamen-tally re-thinking how the organization’s work should bedone distinguishes the re-engineering from process im-provement efforts that focus on functional or incrementalimprovement.[1]

2 History

Business process reengineering (BPR) began as a pri-vate sector technique to help organizations fundamen-tally rethink how they do their work in order to dramat-ically improve customer service, cut operational costs,and become world-class competitors. A key stimulusfor re-engineering has been the continuing developmentand deployment of sophisticated information systems andnetworks. Leading organizations are becoming bolder inusing this technology to support innovative business pro-cesses, rather than refining current ways of doing work.[1]

2.1 Reengineering Work: Don't Auto-mate, Obliterate, 1990

In 1990, Michael Hammer, a former professor of com-puter science at the Massachusetts Institute of Technol-ogy (MIT), published the article “Reengineering Work:Don't Automate, Obliterate” in the Harvard Business Re-view, in which he claimed that the major challenge formanagers is to obliterate forms of work that do not addvalue, rather than using technology for automating it.[3]This statement implicitly accused managers of having fo-cused on the wrong issues, namely that technology in gen-eral, and more specifically information technology, hasbeen used primarily for automating existing processesrather than using it as an enabler for making non-valueadding work obsolete.Hammer’s claim was simple: Most of the work beingdone does not add any value for customers, and this workshould be removed, not accelerated through automation.Instead, companies should reconsider their inability tosatisfy customer needs, and their insufficient cost struc-ture. Even well established management thinkers, such as

Peter Drucker and Tom Peters, were accepting and advo-cating BPR as a new tool for (re-)achieving success ina dynamic world.[4] During the following years, a fast-growing number of publications, books as well as jour-nal articles, were dedicated to BPR, and many consultingfirms embarked on this trend and developed BPR meth-ods. However, the critics were fast to claim that BPR wasa way to dehumanize the work place, increase managerialcontrol, and to justify downsizing, i.e. major reductionsof the work force,[5] and a rebirth of Taylorism under adifferent label.Despite this critique, reengineering was adopted at anaccelerating pace and by 1993, as many as 60% of theFortune 500 companies claimed to either have initiatedreengineering efforts, or to have plans to do so.[2] Thistrend was fueled by the fast adoption of BPR by the con-sulting industry, but also by the study Made in Amer-ica,[6] conducted by MIT, that showed how companies inmany US industries had lagged behind their foreign coun-terparts in terms of competitiveness, time-to-market andproductivity.

2.2 Development after 1995

With the publication of critiques in 1995 and 1996 bysome of the early BPR proponents, coupled with abusesand misuses of the concept by others, the reengineeringfervor in the U.S. began to wane. Since then, consideringbusiness processes as a starting point for business analy-sis and redesign has become a widely accepted approachand is a standard part of the change methodology portfo-lio, but is typically performed in a less radical way thanoriginally proposed.More recently, the concept of Business Process Manage-ment (BPM) has gained major attention in the corporateworld and can be considered as a successor to the BPRwave of the 1990s, as it is evenly driven by a striving forprocess efficiency supported by information technology.Equivalently to the critique brought forward against BPR,BPM is now accused of focusing on technology and dis-regarding the people aspects of change.

3 Business process reengineeringtopics

The most notable definitions of reengineering are:

• "... the fundamental rethinking and radical redesignof business processes to achieve dramatic improve-ments in critical contemporary modern measuresof performance, such as cost, quality, service, andspeed.”[7]

• “encompasses the envisioning of new work strate-gies, the actual process design activity, and the im-

3.2 Research and methodology 3

plementation of the change in all its complex techno-logical, human, and organizational dimensions.”[8]

BPR is different from other approaches to organiza-tion development (OD), especially the continuous im-provement or TQM movement, by virtue of its aimfor fundamental and radical change rather than iterativeimprovement.[9] In order to achieve the major improve-ments BPR is seeking for, the change of structural organi-zational variables, and other ways of managing and per-forming work is often considered as being insufficient.For being able to reap the achievable benefits fully, theuse of information technology (IT) is conceived as a ma-jor contributing factor. While IT traditionally has beenused for supporting the existing business functions, i.e. itwas used for increasing organizational efficiency, it nowplays a role as enabler of new organizational forms, andpatterns of collaboration within and between organiza-tions.BPR derives its existence from different disciplines, andfour major areas can be identified as being subjected tochange in BPR - organization, technology, strategy, andpeople - where a process view is used as common frame-work for considering these dimensions.Business strategy is the primary driver of BPR initiativesand the other dimensions are governed by strategy’s en-compassing role. The organization dimension reflects thestructural elements of the company, such as hierarchicallevels, the composition of organizational units, and thedistribution of work between them. Technology is con-cerned with the use of computer systems and other formsof communication technology in the business. In BPR,information technology is generally considered as playinga role as enabler of new forms of organizing and collabo-rating, rather than supporting existing business functions.The people / human resources dimension deals with as-pects such as education, training, motivation and rewardsystems. The concept of business processes - interrelatedactivities aiming at creating a value added output to a cus-tomer - is the basic underlying idea of BPR. These pro-cesses are characterized by a number of attributes: Pro-cess ownership, customer focus, value adding, and cross-functionality.

3.1 The role of information technology

Information technology (IT) has historically played animportant role in the reengineering concept.[10] It is con-sidered by some as a major enabler for new forms ofworking and collaborating within an organization andacross organizational borders.BPR literature [11] identified several so called disruptivetechnologies that were supposed to challenge traditionalwisdom about how work should be performed.

• Shared databases, making information available at

many places

• Expert systems, allowing generalists to perform spe-cialist tasks

• Telecommunication networks, allowing organiza-tions to be centralized and decentralized at the sametime

• Decision-support tools, allowing decision-making tobe a part of everybody’s job

• Wireless data communication and portable comput-ers, allowing field personnel to work office indepen-dent

• Interactive videodisk, to get in immediate contactwith potential buyers

• Automatic identification and tracking, allowingthings to tell where they are, instead of requiring tobe found

• High performance computing, allowing on-the-flyplanning and revisioning

In the mid-1990s, especially workflow management sys-tems were considered as a significant contributor to im-proved process efficiency. Also ERP (Enterprise Re-source Planning) vendors, such as SAP, JD Edwards, Or-acle, PeopleSoft, positioned their solutions as vehicles forbusiness process redesign and improvement.

3.2 Research and methodology

Model based on PRLC approach

Although the labels and steps differ slightly, the earlymethodologies that were rooted in IT-centric BPR solu-tions share many of the same basic principles and ele-ments. The following outline is one such model, based on

4 4 BPR SUCCESS & FAILURE FACTORS

the PRLC (Process Reengineering Life Cycle) approachdeveloped by Guha.[12] Simplified schematic outline ofusing a business process approach, exemplified for phar-maceutical R&D

1. Structural organization with functional units

2. Introduction of New Product Development as cross-functional process

3. Re-structuring and streamlining activities, removalof non-value adding tasks

Benefiting from lessons learned from the early adopters,some BPR practitioners advocated a change in empha-sis to a customer-centric, as opposed to an IT-centric,methodology. One such methodology, that also incorpo-rated a Risk and Impact Assessment to account for theimpact that BPR can have on jobs and operations, was de-scribed by Lon Roberts (1994).[13] Roberts also stressedthe use of change management tools to proactively ad-dress resistance to change—a factor linked to the demiseof many reengineering initiatives that looked good on thedrawing board.Some items to use on a process analysis checklistare: Reduce handoffs, Centralize data, Reduce delays,Free resources faster, Combine similar activities. Alsowithin the management consulting industry, a signifi-cant number of methodological approaches have beendeveloped.[14]

4 BPR success & failure factors

BPR projects and efforts have revealed some interestingfindings for both academics and practitioners. Some BPRresearchers have focused on key factors in the BPR pro-cess that enabled a successful outcome. Many lessonswere learned and many elements were identified as es-sential to the success of a BPR activity. Some importantBPR success factors, which will be discussed in furtherdetails later, include, but are not limited to the following:

1. BPR team composition.

2. Business needs analysis.

3. Adequate IT infrastructure.

4. Effective change management.

5. Ongoing continuous improvement

Generally, BPR does not only mean change, but ratherdramatic change. The constituents of this drastic changeinclude the overhaul of organizational structures, man-agement systems, employee responsibilities and perfor-mance measurements, incentive systems, skills develop-ment, and the use of IT. BPR can potentially impact ev-ery aspect of how business is conducted today. Change

on this scale can cause results ranging from enviablesuccess to complete failure. In spite of the depth ofchange involved in undertaking BPR efforts, a recent sur-vey showed that some 88 percent of CIOs were satisfiedwith the end result of BPR efforts.[15] Successful BPRcan result in enormous reductions in cost or cycle time.It can also potentially create substantial improvements inbusiness operations, quality, customer service, or otherbusiness objectives. Reengineering can help an aggres-sive company to stay on top, or transform an organizationon the verge of bankruptcy into an effective competitor.The successes have spawned international interest, andmajor reengineering efforts are being conducted aroundthe world.[16]

On the other hand, BPR projects can fail to meet theinherently high expectations of reengineering. In 1998,it was reported that only 30 percent of reengineer-ing projects were regarded as successful.[17] The earlierpromise of BPR has not been fulfilled as some organiza-tions have put forth extensive BPR efforts only to achievemarginal, or even negligible, benefits. Other organiza-tions have succeeded only in destroying the morale andmomentum built up over their lifetime. These failuresindicate that reengineering involves a great deal of riskbesides remarkable rewards.[16]

There are many reasons for sub-optimal business pro-cesses which include:

1. One department may be optimized at the expense ofanother

2. Lack of time to focus on improving business process

3. Lack of recognition of the extent of the problem

4. Lack of training

5. People involved use the best tool they have at theirdisposal which is usually Excel to fix problems

6. Inadequate infrastructure

7. Overly bureaucratic processes

8. Lack of motivation

Many unsuccessful BPR attempts may have been due tothe confusion surrounding BPR, and how it should beperformed. Organizations were well aware that changesneeded to be made, but did not know which areas tochange or how to change them. As a result, processreengineering is a management concept that has beenformed by trial and error or, in other words, practical ex-perience. As more and more businesses reengineer theirprocesses, knowledge of what caused the successes orfailures is becoming apparent.[16] To reap lasting bene-fits, companies must be willing to examine how strategyand reengineering complement each other by learning toquantify strategy in terms of cost, milestones, and timeta-bles, by accepting ownership of the strategy throughout

4.2 BPR team composition 5

the organization, by assessing the organization’s currentcapabilities and process realistically, and by linking strat-egy to the budgeting process. Otherwise, BPR is only ashort-term efficiency exercise.[18]

4.1 Organization wide commitment

Major changes to business processes have a direct impacton processes, technology, job roles, and workplace cul-ture. Significant changes to even one of those areas re-quire resources, money, and leadership. Changing themsimultaneously is an extraordinary task.[16] Like any largeand complex undertaking, implementing reengineeringrequires the talents and energies of a broad spectrum ofexperts. Since BPR can involve multiple areas within theorganization, it is important to get support from all af-fected departments. Through the involvement of selecteddepartment members, the organization can gain valuableinput before a process is implemented; a step which pro-motes both the cooperation and the vital acceptance ofthe reengineered process by all segments of the organiza-tion.Getting enterprise wide commitment involves the fol-lowing: top management sponsorship, bottom-up buy-infrom process users, dedicated BPR team, and budget allo-cation for the total solution with measures to demonstratevalue. Before any BPR project can be implemented suc-cessfully, there must be a commitment to the project bythe management of the organization, and strong leader-ship must be provided.[19] Reengineering efforts can byno means be exercised without a company-wide commit-ment to the goals. However, top management commit-ment is imperative for success.[20][21] Top managementmust recognize the need for change, develop a completeunderstanding of what BPR is, and plan how to achieveit.[15]

Leadership has to be effective, strong, visible, and cre-ative in thinking and understanding in order to provide aclear vision.[22] Convincing every affected group withinthe organization of the need for BPR is a key step in suc-cessfully implementing a process. By informing all af-fected groups at every stage, and emphasizing the positiveend results of the reengineering process, it is possible tominimize resistance to change and increase the odds forsuccess. The ultimate success of BPR depends on thestrong, consistent, and continuous involvement of all de-partmental levels within the organization. It also dependson the people who do it and how well they can be moti-vated to be creative and to apply their detailed knowledgeto the redesign of business processes.[23]

4.2 BPR team composition

Once organization-wide commitment has been securedfrom all departments involved in the reengineering ef-fort and at different levels, the critical step of selecting a

BPR teammust be taken. This teamwill form the nucleusof the BPR effort, make key decisions and recommenda-tions, and help communicate the details and benefits ofthe BPR program to the entire organization. The deter-minants of an effective BPR team may be summarized asfollows:

• competency of the members of the team, theirmotivation,[24]

• their credibility within the organization and theircreativity,[25]

• team empowerment, training of members in processmapping and brainstorming techniques,[26]

• effective team leadership,[27]

• proper organization of the team,[28]

• complementary skills among team members, ade-quate size, interchangeable accountability, clarity ofwork approach, and

• specificity of goals.[29]

The most effective BPR teams include active representa-tives from the following work groups: top management,business area responsible for the process being addressed,technology groups, finance, and members of all ultimateprocess users’ groups. Team members who are selectedfrom each work group within the organization will havean impact on the outcome of the reengineered processaccording to their desired requirements. The BPR teamshould be mixed in depth and knowledge. For example, itmay include members with the following characteristics:

• Members who do not know the process at all.

• Members who know the process inside-out.

• Customers, if possible.

• Members representing impacted departments.

• One or two members of the best, brightest, passion-ate, and committed technology experts.

• Members from outside of the organization [20]

Moreover, Covert (1997) recommends that in order tohave an effective BPR team, it must be kept under tenplayers. If the organization fails to keep the team at amanageable size, the entire process will be much moredifficult to execute efficiently and effectively. The ef-forts of the team must be focused on identifying break-through opportunities and designing new work steps orprocesses that will create quantum gains and competitiveadvantage.[15]

6 4 BPR SUCCESS & FAILURE FACTORS

4.3 Business needs analysis

Another important factor in the success of any BPR effortis performing a thorough business needs analysis. Too of-ten, BPR teams jump directly into the technology with-out first assessing the current processes of the organiza-tion and determining what exactly needs reengineering.In this analysis phase, a series of sessions should be heldwith process owners and stakeholders, regarding the needand strategy for BPR. These sessions build a consensus asto the vision of the ideal business process. They help iden-tify essential goals for BPR within each department andthen collectively define objectives for how the project willimpact each work group or department on individual ba-sis and the business organization as a whole. The ideaof these sessions is to conceptualize the ideal businessprocess for the organization and build a business processmodel. Those items that seem unnecessary or unrealisticmay be eliminated or modified later on in the diagnosingstage of the BPR project. It is important to acknowledgeand evaluate all ideas in order to make all participants feelthat they are a part of this important and crucial process.Results of these meetings will help formulate the basicplan for the project.This plan includes the following:

• identifying specific problem areas,

• solidifying particular goals, and

• defining business objectives.

The business needs analysis contributes tremendously tothe re-engineering effort by helping the BPR team to pri-oritize and determine where it should focus its improve-ments efforts.[20]

The business needs analysis also helps in relating theBPR project goals back to key business objectives andthe overall strategic direction for the organization. Thislinkage should show the thread from the top to the bot-tom of the organization, so each person can easily con-nect the overall business direction with the re-engineeringeffort. This alignment must be demonstrated from theperspective of financial performance, customer service,associate value, and the vision for the organization.[16]Developing a business vision and process objectives re-lies, on the one hand, on a clear understanding of orga-nizational strengths, weaknesses, and market structure,and on the other, on awareness and knowledge about in-novative activities undertaken by competitors and otherorganizations.[30]

BPR projects that are not in alignment with the organiza-tion’s strategic direction can be counterproductive. Thereis always a possibility that an organization may make sig-nificant investments in an area that is not a core compe-tency for the company and later outsource this capabil-ity. Such reengineering initiatives are wasteful and steal

resources from other strategic projects. Moreover, with-out strategic alignment, the organization’s key stakehold-ers and sponsors may find themselves unable to providethe level of support the organization needs in terms of re-sources, especially if there are other more critical projectsto the future of the business, and are more aligned withthe strategic direction.[16]

4.4 Adequate IT infrastructure

Researchers consider adequate IT infrastructure reassess-ment and composition as a vital factor in successful BPRimplementation.[22] Hammer (1990) prescribes the useof IT to challenge the assumptions inherent in the workprocess that have existed since long before the adventof modern computer and communications technology.[31]Factors related to IT infrastructure have been increasinglyconsidered by many researchers and practitioners as a vi-tal component of successful BPR efforts.[32]

• Effective alignment of IT infrastructure and BPRstrategy,

• building an effective IT infrastructure,

• adequate IT infrastructure investment decision,

• adequate measurement of IT infrastructure effec-tiveness,

• proper information systems (IS) integration,

• effective reengineering of legacy IS,

• increasing IT function competency, and

• effective use of software tools are the most impor-tant factors that contribute to the success of BPRprojects.

These are vital factors that contribute to building an ef-fective IT infrastructure for business processes.[22] BPRmust be accompanied by strategic planning which ad-dresses leveraging IT as a competitive tool.[33] An IT in-frastructure is made up of physical assets, intellectual as-sets, shared services,[34] and their linkages.[35] The wayin which the IT infrastructure components are composedand their linkages determines the extent to which infor-mation resources can be delivered. An effective IT in-frastructure composition process follows a top-down ap-proach, beginning with business strategy and IS strategyand passing through designs of data, systems, and com-puter architecture.[36]

Linkages between the IT infrastructure components, aswell as descriptions of their contexts of interaction, areimportant for ensuring integrity and consistency amongthe IT infrastructure components.[32] Furthermore, ITstandards have a major role in reconciling various infras-tructure components to provide shared IT services that

4.6 Ongoing Continuous Improvement 7

are of a certain degree of effectiveness to support busi-ness process applications, as well as to guide the processof acquiring, managing, and utilizing IT assets.[35] TheIT infrastructure shared services and the human IT in-frastructure components, in terms of their responsibilitiesand their needed expertise, are both vital to the process ofthe IT infrastructure composition. IT strategic alignmentis approached through the process of integration betweenbusiness and IT strategies, as well as between IT and or-ganizational infrastructures.[22]

Most analysts view BPR and IT as irrevocably linked.Walmart, for example, would not have been able toreengineer the processes used to procure and distributemass-market retail goods without IT. Ford was able to de-crease its headcount in the procurement department by 75percent by using IT in conjunction with BPR, in anotherwell-known example.[33] The IT infrastructure and BPRare interdependent in the sense that deciding the infor-mation requirements for the new business processes de-termines the IT infrastructure constituents, and a recogni-tion of IT capabilities provides alternatives for BPR.[32]Building a responsive IT infrastructure is highly depen-dent on an appropriate determination of business pro-cess information needs. This, in turn, is determined bythe types of activities embedded in a business process,and their sequencing and reliance on other organizationalprocesses.[37]

4.5 Effective change management

Al-Mashari and Zairi (2000) suggest that BPR involveschanges in people behavior and culture, processes, andtechnology. As a result, there are many factors that pre-vent the effective implementation of BPR and hence re-strict innovation and continuous improvement. Changemanagement, which involves all human and social relatedchanges and cultural adjustment techniques needed bymanagement to facilitate the insertion of newly designedprocesses and structures into working practice and to dealeffectively with resistance,[26] is considered by many re-searchers to be a crucial component of any BPR effort.[38]One of the most overlooked obstacles to successful BPRproject implementation is resistance from those whomimplementers believe will benefit the most. Most projectsunderestimate the cultural impact of major process andstructural change and as a result, do not achieve the fullpotential of their change effort. Many people fail to un-derstand that change is not an event, but rather a manage-ment technique.Change management is the discipline of managingchange as a process, with due consideration that employ-ees are people, not programmable machines.[16] Changeis implicitly driven by motivation which is fueled by therecognition of the need for change. An important step to-wards any successful reengineering effort is to convey anunderstanding of the necessity for change.[20] It is a well-known fact that organizations do not change unless people

change; the better change is managed, the less painful thetransition is.Organizational culture is a determining factor in success-ful BPR implementation.[39] Organizational culture influ-ences the organization’s ability to adapt to change. Cul-ture in an organization is a self-reinforcing set of beliefs,attitudes, and behavior. Culture is one of the most resis-tant elements of organizational behavior and is extremelydifficult to change. BPR must consider current culturein order to change these beliefs, attitudes, and behaviorseffectively. Messages conveyed from management in anorganization continually enforce current culture. Changeis implicitly driven by motivation which is fueled by therecognition of the need for change.The first step towards any successful transformation ef-fort is to convey an understanding of the necessity forchange.[20] Management rewards system, stories of com-pany origin and early successes of founders, physicalsymbols, and company icons constantly enforce the mes-sage of the current culture. Implementing BPR success-fully is dependent on how thoroughly management con-veys the new cultural messages to the organization.[19]These messages provide people in the organization with aguideline to predict the outcome of acceptable behaviorpatterns. People should be the focus for any successfulbusiness change.BPR is not a recipe for successful business transformationif it focuses on only computer technology and process re-design. In fact, many BPR projects have failed becausethey did not recognize the importance of the human ele-ment in implementing BPR. Understanding the people inorganizations, the current company culture, motivation,leadership, and past performance is essential to recog-nize, understand, and integrate into the vision and imple-mentation of BPR. If the human element is given equal orgreater emphasis in BPR, the odds of successful businesstransformation increase substantially.[19]

4.6 Ongoing Continuous Improvement

Many organizational change theorists hold a commonview of organizations adjusting gradually and incremen-tally and responding locally to individual crises as theyarise [20] Common elements are:

• BPR is a successive and ongoing process and shouldbe regarded as an improvement strategy that enablesan organization to make the move from traditionalfunctional orientation to one that aligns with strate-gic business processes.[30]

• Continuous improvement is defined as the propen-sity of the organization to pursue incremental andinnovative improvements in its processes, products,and services.[20] The incremental change is governedby the knowledge gained from each previous changecycle.

8 5 CRITIQUE

• It is essential that the automation infrastructure ofthe BPR activity provides for performance measure-ments in order to support continuous improvements.It will need to efficiently capture appropriate dataand allow access to appropriate individuals.

• To ensure that the process generates the desired ben-efits, it must be tested before it is deployed to theend users. If it does not perform satisfactorily, moretime should be taken to modify the process until itdoes.

• A fundamental concept for quality practitioners isthe use of feedback loops at every step of the processand an environment that encourages constant evalu-ation of results and individual efforts to improve.[40]

• At the end user’s level, there must be a proactivefeedback mechanism that provides for and facili-tates resolutions of problems and issues. This willalso contribute to a continuous risk assessment andevaluation which are needed throughout the imple-mentation process to deal with any risks at their ini-tial state and to ensure the success of the reengineer-ing efforts.

• Anticipating and planning for risk handling is im-portant for dealing effectively with any risk whenit first occurs and as early as possible in the BPRprocess.[41] It is interesting that many of the suc-cessful applications of reengineering described byits proponents are in organizations practicing con-tinuous improvement programs.

• Hammer and Champy (1993) use the IBM CreditCorporation as well as Ford and Kodak, as exam-ples of companies that carried out BPR successfullydue to the fact that they had long-running continuousimprovement programs.[40]

In conclusion, successful BPR can potentially create sub-stantial improvements in the way organizations do busi-ness and can actually produce fundamental improvementsfor business operations. However, in order to achievethat, there are some key success factors that must be takeninto consideration when performing BPR.BPR success factors are a collection of lessons learnedfrom reengineering projects and from these lessons com-mon themes have emerged. In addition, the ultimate suc-cess of BPR depends on the people who do it and on howwell they can be committed and motivated to be creativeand to apply their detailed knowledge to the reengineer-ing initiative. Organizations planning to undertake BPRmust take into consideration the success factors of BPRin order to ensure that their reengineering related changeefforts are comprehensive, well-implemented, and haveminimum chance of failure.

5 Critique

Many companies used reengineering as a pretext todownsizing, though this was not the intent of reengineer-ing’s proponents; consequently, reengineering earned areputation for being synonymous with downsizing andlayoffs.[42]

In many circumstances, reengineering has not alwayslived up to its expectations. Some prominent reasons in-clude:

• Reengineering assumes that the factor that limits anorganization’s performance is the ineffectiveness ofits processes (which may or may not be true) andoffers no means of validating that assumption.

• Reengineering assumes the need to start the processof performance improvement with a “clean slate,”i.e. totally disregard the status quo.

• According to Eliyahu M. Goldratt (and his Theoryof Constraints) reengineering does not provide aneffective way to focus improvement efforts on theorganization’s constraint.

Others have claimed that reengineering was a recycledbuzzword for commonly-held ideas. Abrahamson (1996)argued that fashionable management terms tend to fol-low a lifecycle, which for Reengineering peaked between1993 and 1996 (Ponzi and Koenig 2002). They arguethat Reengineering was in fact nothing new (as e.g. whenHenry Ford implemented the assembly line in 1908, hewas in fact reengineering, radically changing the way ofthinking in an organization).The most frequent critique against BPR concerns thestrict focus on efficiency and technology and the disre-gard of people in the organization that is subjected to areengineering initiative. Very often, the label BPR wasused for major workforce reductions. Thomas Daven-port, an early BPR proponent, stated that:

“When I wrote about “business process re-design” in 1990, I explicitly said that using itfor cost reduction alone was not a sensible goal.And consultants Michael Hammer and JamesChampy, the two names most closely associ-ated with reengineering, have insisted all alongthat layoffs shouldn't be the point. But the factis, once out of the bottle, the reengineering ge-nie quickly turned ugly.” [43]

Hammer similarly admitted that:

“I wasn't smart enough about that. I wasreflecting my engineering background and wasinsufficient appreciative of the human dimen-sion. I've learned that’s critical.” [44]

9

6 See also• Business process management

• Business process improvement

• Business Process Modeling Notation (BPMN)

• Kaizen

7 References

This article incorporates public domain material fromthe United States General Accounting Office document“Business Process Re-engineering Assessment Guide,May 1997”.

[1] Business Process Re-engineering Assessment Guide,United States General Accounting Office, May 1997.

[2] Hamscher, Walter: “AI in Business-Process Reengineer-ing”, AI Magazine Voume 15 Number 4, 1994

[3] Michael Hammer, “Reengineering Work: Don’t Auto-mate, Obliterate”, Hardvard Business Review, July, 1990

[4] Forbes: Reengineering, The Hot New Managing Tool,August 23, 1993

[5] (Greenbaum 1995, Industry Week 1994)

[6] Michael L. Dertouzos, Robert M. Solow and Richard K.Lester (1989)Made In America: Regaining the ProductiveEdge”. MIT press.

[7] Hammer and Champy (1993)

[8] Thomas H. Davenport (1993)

[9] Johansson et al. (1993): “Business Process Reengineer-ing, although a close relative, seeks radical rather thanmerely continuous improvement. It escalates the effortsof JIT and TQM to make process orientation a strategictool and a core competence of the organization. BPR con-centrates on core business processes, and uses the specifictechniques within the JIT and TQM ”toolboxes” as en-ablers, while broadening the process vision.”

[10] Business efficiency: IT can help paint a bigger picture, Fi-nancial Times, featuring Ian Manocha, Lynne Munns andAndy Cross

[11] e.g. Hammer & Champy (1993),

[12] Guha et al. (1993)

[13] Lon Roberts (1994) Process reengineering: the key toachieving breakthrough success.

[14] A set of short papers, outlining and comparing some ofthem can be found here, followed by some guidelines forcompanies considering to contract a consultancy for a BPRinitiative:

• Overview

• Andersen Consulting (now Accenture)• Bain & Co.• Boston Consulting Group• McKinsey & Co.• Comparison• Guidelines for BPR consulting clients

[15] (Motwani, et al., 1998)

[16] (Covert, 1997)

[17] (Galliers, 1998)

[18] (Berman, 1994)

[19] (Campbell & Kleiner, 1997)

[20] (Dooley & Johnson, 2001)

[21] (Jackson, 1997)

[22] (Al-Mashari & Zairi, 1999)

[23] (King, 1994)

[24] (Rastogi, 1994)

[25] (Barrett, 1994)

[26] (Carr, 1993)

[27] (Berrington & Oblich, 1995)

[28] (Guha, et al., 1993)

[29] (Katzenbach & Smith, 1993)

[30] (Vakola & Rezgui, 2000)

[31] (Malhotra, 1998)

[32] (Ross, 1998)

[33] (Weicher, et al., 1995)

[34] (Broadbent & Weill, 1997)

[35] (Kayworth, et al., 1997)

[36] (Malhotra, 1996)

[37] (Sabherwal & King, 1991)

[38] (Towers, 1996)

[39] (Zairi & Sinclair, 1995)

[40] (Gore, 1999)

[41] (Clemons, 1995)

[42]

[43] (Davenport, 1995)

[44] (White, 1996)

10 9 EXTERNAL LINKS

8 Further reading• Abrahamson, E. (1996). Management fashion,Academy of Management Review, 21, 254-285.

• Champy, J. (1995). Reengineering Management,Harper Business Books, New York.

• Davenport, Thomas & Short, J. (1990), “The NewIndustrial Engineering: Information Technologyand Business Process Redesign”, in: Sloan Manage-ment Review, Summer 1990, pp 11–27

• Davenport, Thomas (1993), Process Innovation:Reengineering work through information technology,Harvard Business School Press, Boston

• Davenport, Thomas (1995), Reengineering - TheFad That Forgot People, Fast Company, November1995.

• Drucker, Peter (1972), “Work and Tools”, in: W.Kranzberg and W.H. Davenport (eds), Technologyand Culture, New York

• Dubois, H. F. W. (2002). “Harmonization of theEuropean vaccination policy and the role TQM andreengineering could play”, Quality Management inHealth Care, 10(2): pp. 47–57. “PDF”

• Greenbaum, Joan (1995), Windows on the work-place, Cornerstone

• Guha, S.; Kettinger, W.J. & Teng, T.C., BusinessProcess Reengineering: Building a ComprehensiveMethodology, Information Systems Management,Summer 1993

• Hammer, M., (1990). “Reengineering Work: Don'tAutomate, Obliterate”, Harvard Business Review,July/August, pp. 104–112.

• Hammer, M. and Champy, J. A.: (1993) Reengi-neering the Corporation: A Manifesto for BusinessRevolution, Harper Business Books, New York,1993. ISBN 0-06-662112-7.

• Hammer, M. and Stanton, S. (1995). “The Reengi-neering Revolution”, Harper Collins, London, 1995.

• Hansen, Gregory (1993) “Automating Business Pro-cess Reengineering”, Prentice Hall.

• Hussein, Bassam (2008), PRISM: Process Re-engineering Integrated Spiral Model, VDM Verlag

• Industry Week (1994), “De-engineering the corpo-ration”, Industry Week article, 4/18/94

• Johansson, Henry J. et al. (1993), Business Pro-cess Reengineering: BreakPoint Strategies for MarketDominance, John Wiley & Sons

• Leavitt, H.J. (1965), “Applied OrganizationalChange in Industry: Structural, Technologicaland Humanistic Approaches”, in: James March(ed.), Handbook of Organizations, Rand McNally,Chicago

• Loyd, Tom (1994), “Giants with Feet of Clay”, Fi-nancial Times, Dec 5 1994, p 8

• Malhotra, Yogesh (1998), "Business Process Re-design: An Overview", IEEE Engineering Manage-ment Review, vol. 26, no. 3, Fall 1998.

• Ponzi, L. and Koenig, M. (2002). “Knowledge man-agement: another management fad?", InformationResearch, 8(1).

• “Reengineering Reviewed”, (1994). The Economist,2 July 1994, pp 66.

• Roberts, Lon (1994), Process Reengineering: TheKey To Achieving Breakthrough Success, QualityPress, Milwaukee.

• Rummler, Geary A. and Brache, Alan P. ImprovingPerformance: How to Manage the White Space in theOrganization Chart, ISBN 0-7879-0090-7.

• Taylor (1911), Frederick, The principles of scientificmanagement, Harper & Row, New York]

• Thompson, James D. (1969), Organizations in Ac-tion, MacGraw-Hill, New York

• White, JB (1996), Wall Street Journal. New York,N.Y.: Nov 26, 1996. pg. A.1

• Business Process Redesign: An Overview, IEEE En-gineering Management Review

9 External links• BPR Articles

• Reengineering relationship of Mission and WorkProcesses to Information Technology.

• BPR : Decision engineering in a strained industrialand business environment

• Business Process Requirement Proactive Approach:

11

10 Text and image sources, contributors, and licenses

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