Business Process Reengineering

by Phil Cohen

Business Process Reengineering (BPR) was developed by former MIT professor Michael Hammer, whose original Harvard Business Review article gave examples of the application of his technique. The article: "Reengineering work: don't automate: obliterate" gave the example of Ford, which reduced its accounts payable staff by 75% as a result of re-engineering.

The ideas in the article were expanded by Dr Hammer and James Champy into the book "Reengineering the Corporation" (HarperCollins, 1993). The book starts by pointing out the failings of production-line techniques (for manufacturing and clerical operations) in modern responsive enterprises.

The basis of quality assurance and TQM is the understanding of business processes, and their formalisation (QA) and improvement (TQM). BPR is about completely re-thinking processes without too much analysis of the old version (for fear of limiting the breadth of the redesign). BPR is high-risk, but can also bring very high rewards.

BPR is accomplished by setting up a reengineering team, comprising a number of people who know the process to be reengineered, and a number who don't. There is no formal methodology for running a reengineering session, but Hammer cites a number of recurring themes of reengineered processes:





•several jobs are combined into one: the process changes from an assembly line model to a process team or case-manager one

•the steps in the process are performed in a natural order, and work is performed where it makes the most sense

•processes have multiple versions: Hammer uses the term 'triage' to describe the splitting of processes into more specialised processes - for example, a large insurance claims process and a small insurance claim process

•checks, controls and reconciliations are minimised, because the quality of work improves, and because the number of external contact points are reduced

•hybrid centralised/decentralised operations are prevalent, and often made possible by the use of information technology

•information technology is heavily used: shared databases, expert systems, decision-support tools, interactive videodisk, automated parts tracking, telecommunications

•workers are empowered to make decisions, and their jobs are enriched because they deal with multiple tasks instead of single ones; broader education replaces simple task training

•people performance is measured more in terms of results, instead of level of activity; yet advancement comes to be based more on ability than on performance

•management style changes from supervision to coaching, and from scorekeeping to leading; organisational structures become flatter



As well as a reengineering team, Hammer sets out a number of other roles in the reengineering process. A senior executive must authorise and motivate the overall effort, and appoints the owner of the process (the manager responsible for the process to be reengineered) to convene the reengineering team. A steering committee at a higher level sets policy and strategy, and monitors progress. A 'reengineering czar' provides expertise in reengineering tools and techniques.


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This is one of a series of articles written by Phil Cohen and Onno van Ewyk, HCi . Most of the articles were also published in the Australian Financial Review. This article may be reproduced only with the permission of HCi Consulting (email HCi ). Copyright HCi, 1993-1998.