BP1 – Week 1 - Business Process Reengineering (BPR)

Business process reengineering (BPR) is a management approach to improve the efficiency and effectiveness of processes within and across the organization through evaluation.

In 1990 the market competition increased suddenly by the entrance of foreign competitors. To deal with this increased competition the business organizations started thinking to reduce their cost, increase productivity and to satisfy the needs of their customers promptly. For that reason they started using technology and specially the information technology to automate their work. At that time “Michael Hammer” who was the former professor to computer sciences at MIT gave a new concept. He said instead of using information technology to automat the existing work use it as a tool to improve business processes by evaluating and eliminating non-value adding work. This will improve the efficiency and effectiveness of the business processes and will help in minimizing the consumption of resources required for delivering the product or services. This concept (BPR) was rapidly adopted by a huge number of firm to remain in global competition by improving customer satisfaction and reducing cost of their product or service by using the BPR.

After few years the idea of BPR was criticized on the grounds that it is focused on the efficiency and technology and do not consider the human factor. Due to huge lay-off of employees BPR became a symbol of major work force reduction which really gave it a bad name. Other reasons include the criticism on over reliance on technology, under estimation of resistance of change, exaggerated expectations regarding the potential benefits from BPR and also the critique articles published by Hammer and Thomas Davenport who were the former supporter of BPR.

Although after the publication of critiques by some of its former supporters and misuse of its concept BPR has lost its popularity but it is still widely recognized for considering business processes as starting point for business analysis and redesign and is a standard part of change methodology portfolio but not as vital as it was before.

Recently Business Process Management (BPM) has taken the place of (BPR). It is a systematic approach for improving the business processes of an organization’s. BPM activities seek to make business process more effective, more efficient, and more capable of adapting to an ever-changing environment. BPM is a subset of infrastructure management, the administrative area of concern dealing with maintenance and optimization of an organization’s equipment and core operations.

BPM differs from BPR. Conceptually it is more flexible. Unlike BPR which focuses end-to-end process by radically redesigning it, BPM tools can be applied part by part to the whole enterprise at a time by adopting much more manageable and smaller changes in the process. This way the investment, risk and amount of change are minimized but at the same time the tangible impact is much more modest than what was possibility with BPR.


References:

http://en.wikipedia.org/wiki/Business_process_reengineering

http://www.alagse.com/pm/p14.php