Business Process Reengineering

Business Process Reengineering
Josephmary · CC BY-SA 4.0 · source
Name	Business Process Reengineering
Alt	BPR
Field	Management consulting, Information technology
Invented	1990s
Inventor	Michael Hammer, James Champy
Institutions	Harvard Business School, MIT, McKinsey & Company
Notable	Michael Hammer, James Champy, Tom Davenport

Business Process Reengineering is a management approach that seeks radical redesign of core operational processes to achieve dramatic improvements in productivity, cycle times, and quality. Originating in the early 1990s, it advocates starting from a clean slate to rethink workflows, roles, and information flows, often leveraging information technology and consulting interventions. The approach influenced corporate restructuring across sectors and intersected with practices at major corporations, consulting firms, and academic institutions.

Definition and Objectives

Business Process Reengineering aims to redesign fundamental business processes to achieve substantial performance gains in metrics such as cost, speed, quality, and customer service. Prominent proponents framed objectives as radical rather than incremental, encouraging firms to abandon legacy structures to pursue step-change outcomes for stakeholders such as shareholders and customers. Objectives commonly cited include streamlining operations at organizations like General Electric, reducing lead times at firms like Ford Motor Company, and improving service delivery in institutions such as Bank of America. Reengineering projects often set targets aligned with strategic initiatives championed by executives in corporations like IBM, AT&T, and Siemens AG.

Historical Development and Key Proponents

The concept emerged prominently with writings in the 1990s by management thinkers and consultants affiliated with institutions including Harvard Business School and MIT. Key proponents included Michael Hammer and James Champy, who popularized the approach through books and consulting engagements spanning clients like Citibank and Procter & Gamble. Other influential figures included Tom Davenport and consultants from firms such as McKinsey & Company, Bain & Company, and Boston Consulting Group. Governments and public sector organizations—examples include agencies in United Kingdom and United States Department of Defense contexts—also experimented with reengineering during reform waves, influenced by earlier organizational theorists and practitioners tied to places like Stanford University and University of Michigan.

Methodology and Phases

Reengineering typically unfolds through defined phases promoted by consulting methodologies used at firms like Accenture and Ernst & Young. Initial phases include strategic diagnosis, often drawing on analysis methods used by analysts at Goldman Sachs and Morgan Stanley, followed by process identification and mapping. Subsequent phases emphasize radical redesign, prototyping, and technology-enabled implementation, with project governance influenced by standards from organizations such as Project Management Institute and Institute of Electrical and Electronics Engineers. Final phases include deployment, performance measurement, and continuous monitoring, aligning with performance frameworks applied at companies like Toyota Motor Corporation and Siemens AG.

Tools and Techniques

Practitioners employ a suite of tools and techniques derived from fields and vendors associated with enterprise transformation. Process-mapping and modeling tools used in engagements at firms like Deloitte and KPMG draw upon software from companies including SAP SE, Oracle Corporation, and Microsoft Corporation. Techniques include value-stream mapping inspired by practices at Toyota Motor Corporation, workflow automation via platforms from IBM and ServiceNow, and data analytics approaches employed by teams at Google LLC and Amazon.com. Change-support techniques often rely on communication and training frameworks used by organizations such as McKinsey & Company and Bain & Company and governance controls referencing standards from ISO bodies.

Organizational Impact and Change Management

Reengineering initiatives can trigger large-scale organizational change, affecting structures at multinationals like General Motors and Royal Dutch Shell. Successful programs typically combine executive sponsorship—seen in leadership at GE under high-profile CEOs—and stakeholder engagement strategies similar to corporate transformations at Apple Inc. and Microsoft Corporation. Human-resource implications often involve role redesign, retraining, and workforce transitions resembling programs implemented at AT&T and Siemens AG. Effective change management in reengineering draws on frameworks and case experience from institutions including Harvard Business School and consultancy playbooks from McKinsey & Company.

Criticisms and Limitations

Critics pointed to high failure rates and social consequences observed in several high-profile reorganizations at companies like Kodak, Nortel Networks, and Enron-era restructurings. Limitations include overemphasis on radical change at the expense of incremental improvement, cultural resistance highlighted in studies from Stanford University and MIT Sloan School of Management, and risks of technology-driven simplification seen in IT projects at National Health Service (England) and large banks. Academic critics from institutions such as London School of Economics and Columbia University argued that reengineering underestimated human factors and governance complexity, and regulatory environments enforced by bodies like Securities and Exchange Commission can constrain radical redesigns. Subsequent management movements—examples include Total Quality Management reforms at W. Edwards Deming-influenced firms and Lean initiatives at Toyota Motor Corporation—have been offered as complementary or alternative approaches.

Category:Management