7 Principles of Business Process Reengineering (BPR)

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Framework Primer
7 Principles of Business Process
Reengineering (BPR)
Presentation created by
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Be outcome-oriented
Have those who use process's output perform the process
Incorporate data processing into the process
Aim to centralize resources
Link parallel activities
Build decision making into the process
Capture data only once, at the source

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Contents
 Overview
 Essence of Reengineering
 Principles of BPR
 Templates
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This framework deliberates on the 7 core principles of BPR that firms can
employ to transform their dated processes, structures, and values
Presentation Overview
Reengineering warrants changing everything associated with processes—job designs,
hierarchies, management systems etc.—in an integrated manner.
With the advancement in technology, the usual emphasis on cost, growth, and control has been replaced
by a laser focus on innovation, customer service, quality, and employee empowerment. Obsolete
business processes, disjointed organizations, fragmented work routines, and complex performance
management mechanisms in traditional firms aren’t able to cope with the revolutionary business models
and practices that startups are employing to disrupt established players.
For the established organizations to compete against lean startups necessitates rapid transformation
and breakthrough improvement using new rules, conceptualization of efficient processes, and
generating creative ideas.
This framework provides a detailed overview of the 7 core principles of Business Process Reengineering
that organizations need to focus on to overhaul their ways of doing business, existing processes, and
work routines:
The slide deck also includes some slide templates for you to use in your own business presentations.
1 Be outcome-oriented
2 Have those who use process's output
perform the process
3 Incorporate data processing into the process
4 Aim to centralize resources
5 Link parallel activities
6 Build decision making into the process
7 Capture data only once, at the source

BPR is a Business Management Strategy focused on the analysis and
design of workflows and business processes within an organization
Business Process Reengineering (BPR) is also known as Business Process Redesign,
Business Transformation, or Business Process Change Management.
Business Process Reengineering (BPR)
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.
Companies direct Process Reengineering
initiative on 2 key areas of business.

Help organizations fundamentally rethink
how work must be done to improve
customer service, cut operational costs,
and become world class competitors.

Help companies radically restructure their
organizations by focusing on the ground-
up design of their business processes.

Encourages full scale recreation of
processes rather than iterative
optimization of sub-processes.
BPR can impact the organization through a few
primary ways:
Use of modern technology to enhance
data dissemination and decision-
making process.
Alteration of functional organizations to
form functional teams.
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Contents
 Overview
 Templates

Archaic structures, systems, processes, and beliefs are the basis of
sluggish operations and performance—to fix these, we need to reengineer
A BPR initiative must tackle the limitations of organizational boundaries and should utilize
technology to create innovative processes rather than automating the existing ones.
Essence of Reengineering – Overview
With the advancement in technology, the usual emphasis on cost, growth, and control has been replaced by a
laser focus on innovation, customer service, quality, and employee empowerment.
 Obsolete business processes, disjointed organizations, fragmented work routines, and
complex performance management mechanisms in traditional firms aren’t able to cope
with the revolutionary business models and practices that startups are employing to
disrupt established players.
 Automation of existing processes alone to achieve productivity gains isn’t going to benefit
without overhauling the systems and policies—that are the chief reasons for sub-
standard performance against competition. These work routines have now become deep
rooted and hard to be challenged despite their significant flaws. These fragmented
conventional processes and disjointed structures are typically the key sources of
bureaucratic red tapes, slipups, cost inefficiencies, and unclear roles and responsibilities.
 Business Process Reengineering (BPR) helps disentangle the organizations from
outmoded business processes, fundamental beliefs and values, and replace them
altogether. BPR necessitates examining the businesses processes from a holistic and
cross-departmental perspective, which can be ensured by deploying a cross-functional
team of people to carefully examine the existing processes, their purpose and objective.
 The BPR team dissects every step of the existing processes in terms of the value it adds,
finds novel methods to accomplish goals, and strives for breakthrough improvements.

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Be outcome-oriented
Have those who use process's output perform the
process
 A gradual management of all
these issues does not help large
enterprises much in competing
against lean startups. They need
rapid transformation and
breakthrough improvement—
using new rules, conceptualization
of efficient processes, and
generating creative ideas.
 Organizations need to focus on
the following 7 core principles of
Business Process Reengineering
while overhauling their ways of
doing business, existing
processes, and work routines:.
The sluggishness of traditional processes and structures in many
organizations calls for implementing a reengineering initiative
Intense competition forces the organizations to revolutionize their business models,
structures, values, processes, and behaviors.
Essence of Reengineering – Core Principles
The reengineering effort holds numerous opportunities—especially for established companies, as they are
typically fraught with redundant layers of management and workforce as well as ineffective overhead costs.
Source: Reengineering Work: Don't Automate, Obliterate; Hammer; Harvard Business Review; 1990

Contents
 Overview
 Templates

Reengineering abolishes the assembly-line approach, squeezes
responsibility for the various steps, and delegates it to one person
Business Process Reengineering expedites organizational processes and offers the
customer a single point of contact.
Core Principle 1
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 The centuries-old philosophy of specialized
departments dedicated to deal with a certain
type of work serially—having teams possessing
a specific skill-set—has become obsolete.
 This way of doing business had various
issues—e.g.:
– Numerous handoffs
– Delays
– Lack of proper communication
– Misinterpretation of information
– Rework.
 BPR calls for elimination of these multiple
handoffs, reduction of redundant steps, and
allocation of responsibilities judiciously to the
right persons, who supervise the entire
process.
– For instance, from order entry, to product
delivery, through to installation.
DETAILS
PRINCIPLE
Be outcome-
oriented
 Reengineering begins by
redesigning all jobs with a
focus on outcomes rather
than tasks.
 It is better that a team is
assigned to perform all the
steps in a process instead of
discrete units performing
individual steps.
– For instance, in selling air-
conditioning units and
installing them.
DESCRIPTION

Automation offers process optimization opportunities to teams who are
the owner of a process
It is important that the people that own a process perform it—this aids in getting rid of a
number of liaisons and planning capacity for the process performers appropriately.
Core Principle 2
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 Automation presents numerous benefits—e.g.:
– Enhanced productivity
– Better quality
– Robust processes
– Increased consistency of output
 Through automation and process reengineering
individual units can bypass the typical
cumbersome processes. For instance, to
procure something specific units can place their
order themselves and purchase what they need
from pre-approved vendors through credit
cards.
 This way they avoid too many handoffs and
uncalled-for delays, saving precious time and
expenditure on nonstrategic purchases.
 Specialized purchasers should only be used for
strategic and expensive items—e.g., raw
materials and high-end equipment.
DETAILS
PRINCIPLE
Have those
who use
process's
output perform
the process
 Specialized departments
handling specialized
processes are slow to react
and marred with red tapes.
 With this type of structure,
even to get new paper clips,
a department formally
requests the procurement
department, which contacts
the vendors, places orders,
makes payment, eventually
gets the paper clips, and
delivers to the department
that requested the item.
DESCRIPTION

Leadership needs to believe in, coach, and encourage their people in the
lower ranks to make sound decisions
Utilizing technology, organizations have now developed and deployed systems capable of
comparing and processing data received from different units and initiate suitable action.
Core Principle 3
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 Traditionally, most leaders believed that
workforce at the lower organizational tiers is
incapable of taking any action on the
information they produce.
– For instance, the Accounts Payable
department gathers information from
Procurement and reconciles it with the info
that the vendor submits.
DETAILS
PRINCIPLE
Incorporate
data
processing
into the
process
 The people who produce
information should be
capable of processing it.
 Most organizations create
specialized teams and units
to do that, as the people who
produce the information
often do not have the time
and capabilities to process
that.
DESCRIPTION

Advancement in technology has made it easy for the enterprises to
decide on whether to centralize or decentralize their resources
Setting up a centralized corporate unit assists in improving on-time deliveries, reducing
lead times, minimizing failure rates, and lowering purchasing costs.
Core Principle 4
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 Decentralizing resources (i.e., people, equipment,
or inventory) offers better service to users, but
triggers redundancy, bureaucracy, and missed
economies of scale.
 Organizations can have a centralized system yet
still get the benefits of flexibility, service quality,
economies of scale, and coordination by utilizing
databases, networks, and standardized systems.
 Some large manufacturers have several
manufacturing units with separate purchasing units
that offer responsiveness and service to the plants,
but inhibits scaling options and quantity discounts.
 A better option is to maintain discrete purchasing
units—that issue their own purchase orders and
have access to a shared database of vendors
containing their performance data—but establish a
corporate unit to coordinate all procurement.
 The corporate unit takes care of the database,
negotiates all contracts, and evaluates the
procurement data.
DETAILS
PRINCIPLE
Aim to
centralize
resources
 Deciding on whether to
centralize or decentralize
resources is critical for an
organization. Both offer certain
pros and cons.
 Treating physically dispersed
resources as centralized
resources presents various
benefits that organizational
leadership should carefully
think about and plan.
DESCRIPTION
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An important principle of reengineering is to foster partnerships among
the various units to link up parallel processes
Organizations can cut their product development cycle significantly by developing strong
linkages between independent units.
Core Principle 5
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 Different sections of, let’s say, a photocopier
are developed by individual units—one creates
optics, another is responsible for power supply,
and so on.
– This parallel processing is time efficient but
can become a nightmare during the
integration and testing stage, and can cost
expensive revisions.
 Fostering strong coordination and collaboration
between different units—for example, by using
videoconferencing, shared databases, and
communication networks—while they are
performing their individual tasks (rather than
after completion) saves companies from costly
rework.
DETAILS
PRINCIPLE
Link parallel
activities
 It is useful to link parallel
activities together.
– For instance,
decentralized purchasing
units in different
geographies performing
the same function.
 Product development where
separate units undertake
different activities that
eventually converge is a
simple example of parallel
processing.
DESCRIPTION
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Decision making and controls should be handed over to the teams that
are actually responsible for a process
Building decision making into the process compresses the linear sequence of processes
and eliminates the need for layers of managers.
Core Principle 6
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 Today’s flat organizations, on the other hand,
work without too many management layers and
empower the workforce to make their own
calculated decisions and build control
mechanisms inside the processes.
– They have managers who provide end-to-
end management of the process, and are
facilitators rather than supervisors.
 To empower the workforce and enable them to
make decisions, organizations can utilize
technology and systems to gather and analyze
data and develop key insights necessary for
decision making.
 Empowering people challenges bureaucracy
and hierarchies, and assists in developing an
agile culture.
DETAILS
PRINCIPLE
Build decision
making into
the process
 At most organizations, the
workforce is clearly
distinguished from the ones
who make decisions.
 The traditional hierarchical
structure is based on the
erroneous assumption that
the workforce lack the time,
knowledge, and motivation
to make decisions and to
analyze and manage their
own work. For this, they
have the management layer.
DESCRIPTION
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Gathering information at multiple instances is a source of delays and
costly overheads
Data capture at the source helps in reducing redundant data entry time, errors,
and resource utilization.
Core Principle 7
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 In this age of technological disruption, there is
no need for repeated information gathering
when we can actually store it in online
databases, where it is easily accessible to all
those who need it.
 Likewise, discrete applications being utilized by
different departments can be easily integrated
and interlinked across the various geographies
of the organization.
DETAILS
PRINCIPLE
Capture data
only once, at
the source
 Gone are the days when
information was difficult to
communicate, and had to be
collected continually.
 In those days, each position
and unit had its own
requirements and forms to
gather information, and this
was associated with long
delays, erroneous entries,
and inflated costs.
DESCRIPTION
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Contents
 Overview
 Templates

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Be outcome-oriented
Have those who use process's output perform the process
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Principles of Business Process Reengineering (BPR) – TEMPLATE
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5 Link parallel activities
6 Build decision making into the process
7 Capture data only once, at the source
1 Be outcome-oriented
2 Have those who use process's output perform the process
3 Incorporate data processing into the process
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Insert headline
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Principles of Business Process Reengineering (BPR) – TEMPLATE ALTERNATE
Be outcome-oriented.
Have those who use process's output perform the process.
Incorporate data processing into the process.
Aim to centralize resources.
Link parallel activities.
Build decision making into the process.
Capture data only once, at the source.
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filler text, filler text, filler
text, filler text.
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