Business Process Reengineering (BPR) is an approach that recommends going through business processes to reengineer them and improve them. To reduce useless steps that might be in the process that does not add any value or benefit to the business or process. The entire technological, human, and organizational dimensions may be changed in BPR. Information Technology plays a major role in BPR as it provides office automation; it allows the business to be conducted in different locations, provides flexibility in manufacturing, permits quicker delivery to customers and supports rapid and paperless transactions. In general it allows an efficient and effective change in the manner in which work is performed.
BPR involves the radical redesign of core business processes to achieve improvements in productivity, cycle times and quality. In BPR, Catalyst team will start rethink on existing processes to deliver more value to the customer. BPR can:
Reduce costs and cycle time. Business Process Reengineering reduces costs and cycle times by eliminating unproductive activities and the employees who perform them. Reorganization by teams decreases the need for management layers, accelerates information flows, and eliminates the errors and rework caused by multiple handoffs.
Improve quality. Business Process Reengineering improves quality by reducing the fragmentation of work and establishing clear ownership of processes. Workers gain responsibility for their output and can measure their performance based on prompt feedback.
Why BPR is important before implementing an ERP system
- Company should work on improving its processes before implementing an ERP system, so that when it starts searching for a proper ERP system, it is possible to find an ERP system that works well with the improved business processes.
- Sometime companies should not work on BPR and start doing that after implementing an ERP System, because ERP systems could be used as a base starting point for improving processes and that sometimes people do not realize how to work with processes until they have worked with a system such as the ERP which enables them to see a bigger picture and help them with understanding and possible improving business processes.
The issue about this option is also clear as it is possible that the company go on with BPR to improve and reengineer the processes to a level where the system can not reflect these changes which requires the company to customize the ERP system if they want to work with the improved version of the business processes which will cost the company money that might be required by the system vendor or any consultants to change the ERP system or customize to adopt the new changes to the processes.
How Business Process Reengineering works:
Business Process Reengineering is a dramatic change initiative that contains five major steps. Managers should:
Refocus company values on customer needs
Redesign core processes, often using information technology to enable improvements
Reorganize a business into cross-functional teams with end-to-end responsibility for a process
Rethink basic organizational and people issues
Improve business processes across the organization