Why Companies Go for Business Process Reengineering (BPR)?

Business process reengineering (BPR), as the word suggests, is the re-engineering of business processes to make them better or more efficient. Reengineering here primarily means examining and redesigning the key business processes and workflows. In simple words, we can say that management reexamines the current processes to determine if they could be made better. If not, they move to more advanced processes. The primary objective of BPR is to achieve greater organizational effectiveness or efficiency. There could, however, be secondary objectives for businesses using BPR. In this article, we will discuss the reasons why companies go for Business process reengineering (BPR).

Why companies go for Business process reengineering (BPR)?

Many people believe that BPR is only for big businesses. This, however, isn’t true. BPR doesn’t depend on the size of the company. Rather, if a business has systems and processes that it uses regularly, it can gain from adopting business process reengineering. Let’s look at the reasons why companies go for Business process reengineering:

Thorough Analysis of Business Processes

Most businesses don’t make many changes to their business processes. Or, we can say that their processes remain the same over the years even when the business grows. A pre-requisite for BPR is that you need to carry out a thorough analysis of the current business processes. A thorough analysis will help to locate the processes that are still vital. Also, it helps to identify those processes that a company can scrap or need re-engineering. It would eventually help to make business more efficient.

Improve Processing Time/ Streamlined Operations

A thorough analysis of business processes makes it easier to locate processes that are vital but are marred by delays and waste of time. BPR helps to identify the issues that are restricting in delivering value to customers, as well as find ways to address those issues. Also, we can say that BPR assists in improving the turnaround time. This would eventually allow the company to serve more customers and boost its revenue.

Boosts Productivity and Efficiency

Once the business processes get smooth and simple, it would have a positive impact on the people using those processes. The positive impact is that their job gets easier than before, and now they have to take less stress. It would eventually boost employee morale and productivity.

Better Customer Service

Happy customers are the key to achieve to business growth. And, the best way to make customers happy is by offering the highest quality customer service to them. BPR allow businesses to focus more on customer needs, as well as come up with ways to address those needs quickly and efficiently. Also, since employees are happy, they will work harder to ensure customers are happy too.

Why Companies go for business process restructuring

Reducing Cost and Increasing Profit

From the above reasons, it is clear that business process reengineering helps to significantly reduce costs by eliminating unnecessary and time-consuming processes. The end result of all this is that it results in more profit.  

Make Business Flexible

The majority of organizations are rigid with their processes. Business process reengineering, however, helps them to re-plan or reorganize their processes. Moreover, the new processes are planned in such a way that they can be easily altered if there is a need in the future.     

Better Working Environment

Along with business processes, BPR helps to transform the work environment as well. BPR has a lasting positive impact on the morale of the employees. And, in turn, helps to create a better working environment.

Maintaining Competitive Advantage         

Your current business processes may be giving you a competitive edge over rivals. But it is likely that those processes are plagued with complications, such as manual work, and unnecessary paperwork. In such a case, you might think of implementing ERP straightaway. However, it may not give the best results. Using BPR before ERP implementation will help to maximize the results and maintain, or even gain, a competitive edge.

Implementing Lean Six Sigma

Lean six sigma is a tool that helps in explaining the best practices in a business. Moreover, it also highlights the efficiencies and competitive edge of businesses. In other words, we can also say that this tool assists in locating the challenges and providing the best possible solutions for them. This Lean Six Sigma is a crucial part of business process reengineering (BPR). Thus, using BPR gives businesses all the benefits of lean six sigma.

Makes ERP Implementation More Effective

Understanding business processes is important before implementing the ERP. Businesses that are unable to define their processes usually prefer simple automation with ERP implementation. Such businesses may end up with software that is highly customized so as to meet the demand of complicated processes. This eventually results in more costs. On the other hand, businesses that adopt well-planned BPR before implementing ERP are able to save costs and resources.

Clarity of Purpose

Every company should have a very good understanding of all aspects of its business. It is not uncommon to find businesses with a lack of understanding about their processes, structures, etc. BPR, however, gives companies a chance to re-familiarize themselves with their businesses. This, in turn, helps to ensure that all business actions are coordinated and are directed towards achieving common goals.  

Sanjay Borad

Sanjay Bulaki Borad

MBA-Finance, CMA, CS, Insolvency Professional, B'Com

Sanjay Borad, Founder of eFinanceManagement, is a Management Consultant with 7 years of MNC experience and 11 years in Consultancy. He caters to clients with turnovers from 200 Million to 12,000 Million, including listed entities, and has vast industry experience in over 20 sectors. Additionally, he serves as a visiting faculty for Finance and Costing in MBA Colleges and CA, CMA Coaching Classes.

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