As per Hammer and Champy (1993): “Business Process Re-Engineering (BPR) is the fundamental rethinking and radical redesign of business processes aimed at achieving radical improvements in essential contemporary measures of performance, such as cost, quality, service, and speed.”
Hammer and Champy (1993) further stress “Re-engineering is about business reinvention- not a business improvement, business enhancement, or business modification. ”Business process is another core concept in BPR which discards Adam Smith’s notion of division of labor and specialization as applied in the form of breaking work into its simplest tasks and assigning each task to a specialist. Instead, Hammer and Champy (1993) define a business process as “a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer”.
Thus, reengineering should not be about making marginal changes but ensuring quantum leaps in performance. In other words, BPR is another form of process innovation because it attempts to re-create processes.
Business process re-engineering became popular in the business world in the 1990s, inspired by an article called Reengineering Work: Don’t Automate, Obliterate, an article in Harvard Business Review (in July–August 1990) which was published in the Harvard Business Review by Michael Hammer, the then professor of Computer Science at MIT. Hammer tested BPR as an examination of the manner Information Technology was having an impact on business processes (the Economist, 2009).
The underlying principle of BPR is that the managers must demolish such components of work that do not make any value addition and further automating it if possible. At the core of BPR was viewed as a revolutionary, FastTrack and drastic change process (rather than incremental one) that could trigger fundamental changes in the business process itself such as job design, organizational structures, or management systems (Hammer and Champy, 1993).
After the evolution of the concept, BPR was successfully implemented by a few high-profile organizations such as Hallmark, a famous greeting card company. Hallmark completely re-engineered its new product process. Similarly, the popular company Kodak also re-engineered its black-and-white film manufacturing process and cut the firm’s response time of new orders to the tune of fifty percent. Furthermore, with the advent of enterprise resource planning (ERP) which enabled electronic communications across company business processes, BPR got more popularity (The Economist, 2009).
Objectives of Business Process Reengineering
The following are the objectives for entities to opt for BPR:
- Boost effectiveness and produce higher quality products for the end customer
- Improve efficiency in the production processes
- Cost-saving in the long run
- Providing more meaningful work to employees
- To be more adaptable and flexible towards future changes
- Enable new business growth and expansion