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Business Process Reengineering: the what, the why and the how

| Product Lifecycle Management | Food & Beverage | Product Portfolio Management
Posted By: Hollie Farrahi

 This topic was first presented by Dr. Keith Smallwood during our 2016 North American User Conference

Business_Process_Reengineering

When an organization decides to invest in a major software solution like a product life cycle management (PLM) system, it’s crucial to properly and efficiently integrate the system with the organization’s existing business processes. However, not all existing business processes are created equally. In most cases, business processes require an overhaul in order to fully support and enhance the core purpose of the organization. 

What is business process reengineering (BPR)? 

As defined in Hammer & Champy’s 1993 “Reengineering the Corporation,” business process reengineering is defined as “…the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary modern measures of performance, such as cost, quality, service, and speed.”

Our Solution Director Dr. Keith Smallwood urges customers to above all else, consider the purpose of the organization and the evolution of its processes and tools. 

As companies acquire more digital tools and systems, they also must acquire each system’s unique organizational processes. Further, business processes are inter-dependent and flow through the organization with various creators and consumers of information and data to achieve a common purpose and goal. Therefore, deploying systems without consideration of ALL impacted business processes potentially results in a complex ecosystem of disconnected tools supporting business processes limited by scope and function.

Why do business process reengineering before implementation?

There are several reasons why undergoing BPR prior to implementation is most advantageous to an organization: 

  1. Keep what gives you your competitive edge

BPR enables you to wade through process disconnects to identify and maintain good practices that you want the system to support, not replace. 

  1. Flexibility of the system is good and bad

The number of configuration decisions involved in a major enterprise system implementation can be very significant. Without well-defined business processes, many of these decisions will be made in a system-centric, reactive mode during the build and deploy phase.

  1. Quickly realize process efficiency improvements

Some business process improvements can be identified and realized without the need for immediate (or even any) automation in a system. BPR typically conduct a rough cost-benefit analysis in order to classify the “automation sensitivity” of identified improvements, including the following areas:

  • Automation is critical
  • Automation will be beneficial but can wait
  • Automation is a nice-to-have
  • Automation insensitive
  1. Avoid the temptation to automate current processes!

Invest in business process analysis BEFORE you start to implement the system, as you must also keep in mind what will happen once the system deploy begins. Organizations tend to take the path of least resistance and attempt to automate the current processes. This undermines the point of maintaining flexibility within the system.

  1. But what about system-embedded “best practices?”

System-embedded best-practices are a good way to begin putting in place industry-proven processes that work; however, in some cases, these might only provide a starting point. It’s important to think about how such “standardized” practices may fit into your organization and culture, now and in the future. Will just deploying an essentially pre-configured system from one particular software solution magically solve all your problems? What about change management and user acceptance? Recall point one and your goal of being forward-thinking and innovative in order to maintain your competitive edge.

How to do business process reengineering 

Business process improvements are something everyone wants, but aren’t always sure how to achieve.

Dr. Smallwood recommends organizations follow the Lean Six Sigma methodology. This methodology relies on a collaborative team effort to improve performance by systematically removing waste, combining lean manufacturing/lean enterprise and Six Sigma to eliminate the eight kinds of waste: transportation, Inventory, motion, waiting, over production, over processing, defects, and skills (abbreviated as 'TIMWOODS'). 

Following this approach, organizations must define, measure, analyze, improve and control their business processes. This is best achieved by building a “Brown Paper” model of the end-to-end process under study. 

Executing the business process mapping – the Brown Paper model

The Brown Paper process model is a large-scale pictorial representation of the overall process, which details: 

  • Actual activities / steps in the process
  • All applicable functional connections and interfaces
  • Decisions points
  • Information sources
  • Inputs and outputs – overall and at activity level
  • Roles and responsibilities (RACI, as in Responsible, Accountable, Consulted and Informed)

The main objective of a Brown Paper model is to help the organization identify strengths and improvement opportunities to build into the future process (“to-be”). Other objectives include:

  • Describe the current process as it works today (“as-is”)
  • Show the overall end-to-end process (“big picture”)
  • Capture the complexity and disconnects of key operations
  • Promote common understanding within and across the various involved functions

So, why use the Brown Paper technique over others?

The Brown Paper method serves to capture all formal, informal and emotional processes. It’s self-explanatory, illustrative and engaging. It includes “live” documents and data, and also clearly identifies all possible end-to-end routes to help quantify the process. Additionally, this technique elicits high employee involvement and ownership while clearly highlighting the opportunities for improvement.

Download our Brown Paper methodology template

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Stay tuned for a follow-up post where we’ll delve deeper into how to do BPR.