SOPs

Business Process Reengineering: How to Make Your Company More Efficient

The purpose of business process reengineering is to wholly redesign business processes for maximum results. Here's how to get started.

Introduction

Traditional and manual processes are mostly a thing of the past. In this era of quickly evolving technologies, many firms will are automating processes in light of digital transformation.

That’s where business process reengineering comes in.

Starting an entirely new process from scratch is no easy feat, but it can work wonders to boost revenue and spur growth when done correctly. 

Although this may be a new concept to some, business process reengineering became popular in the 1990s, inspired by an article published in the Harvard Business review by Michael Hammer. 

With its relevance growing, it’s become increasingly important that businesses know how to implement it.

What is business process reengineering, and & how does it work?

As described by Michael Hammer:

“Business Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed” 

In layman’s terms, it is the method used to eliminate unnecessary workflows and improve existing ones.

Often, this may require an entire overhaul of the current system. It can streamline the number of steps needed to complete a particular task.

To increase communication and efficiency between two processes, business reengineering can be used to optimize their interaction. It can assist the company by enhancing its products' quality or controlling costs.

The main purpose of the process is to enable new software adoption to bring about improvements.

It also comes down to organizing cross-functional teams, so there’s end-to-end responsibility for any process. This also means allowing there to be zero to negligible friction among employees in all aspects.

All in all, it must be in line with existing organizational goals to produce the greatest results. 

Benefits of successfully implementing a business process reengineering program

When re-engineering any process, you should consider whether the current workflow is broken or underperforming. The management may see it as a solution for improving the business.

Regardless of what the reason is, implementing a business process re-engineering program does prove to be useful in many ways.

Clarity of purpose

Most companies have no idea what their business process looks like. There are cases when there’s no proper documentation outlining these processes as well. When implementing a re-engineering program allows you to have an overview of existing processes and evaluate any changes or if any are needed. This means it can help prevent any future mishaps.

Reduced operational costs

Eliminating unnecessary tasks can save you time and resources which can be utilized elsewhere.

Overall, this decreases overbearing expenses, which can later increase your revenue. Although introducing new methods or technology might seem quite expensive, the cost is justified. In the long run, the organization operates much more smoothly. No documentation.

Better quality of products or services

Re-engineering the company's workflow means that employees can focus more energy on their own work.

There are no other extra steps leading to completion either. By streamlining operations, overall, it is easier to stay one step ahead of the competition as well.

Fosters a culture of innovation

When looking at processes, teams usually spend a lot of time brainstorming. This leads to being on top of their game all the time. Companies and employees can identify new ways of finishing a task that might even increase their capacity shortly.

Greater ROI

Obviously, reorganizing your processes means your company becomes more efficient over time. Even cutting costs affects this. Since there’s no more redundancy, tasks are completed faster, which translates to more profits in the long run.

Improved customer service

Ramping up the process can reduce customer wait time. With employees having set goals, they can also cater to their customers properly.

Moreover, allowing that cross-functional collaboration reduces miscommunication, which means customers receive the right kind of information.

Despite how old its inception is, business process re-engineering is still quite relevant in the modern workplace. Now that the benefits are obvious, it is time to consider whether you want to lead the pack or be left behind.

Steps for business process reengineering — what to keep in mind

Reorganizing an organization’s processes isn’t really straightforward. There are many factors you need to take into account since any business has multiple working parts.

So what are the key steps to properly set up a business re-engineering program?

Step #1: Clearly define business processes

According to a BPTrends survey, only four percent of companies document their processes. This means that most organizations have no proper view of day-to-day tasks.

In that case, let's start from the top. Ask yourself and your team what the organizational mission is, whether you’re reaching that goal and how you are doing so.

Even consider what the new process will look like and whether it will benefit you. Map out each task in every workflow and see whether it’s necessary to get rid of any steps.

Introducing process standardization in your organization will enable you to ensure all tasks are properly executed. This means writing problem descriptions, researching dependencies and consulting other teammates. 

Step #2: Identify where improvements are needed

Once you decide it's time to change, think about what you need to change. 

After looking at current processes, you should identify the bottlenecks in each workflow.

Choosing the right process for reengineering requires understanding what the process is trying to accomplish.

You should also analyze what’s taking most of your employee’s time or what’s eating up most of your resources.

Pinpoint those specific instances to either bring in process transformation or eliminate the workflow altogether. In that case, the analysis must be done carefully.

You can even perform the same process multiple times to check its efficiency.

Step #3:  Create an internal team to facilitate the process

No one knows how well a business works better than the people involved. It’s important to include them in the reengineering process from start to finish. 

You can appoint a senior manager to supervise employees' top-level communication and workload. An operations manager usually has deeper insight into each process as a whole. 

A team solely dedicated to re-engineering efforts, like training employees on new technology, can be done better than before.

With so many internal teams working together, there should be an overlooking committee whose purpose would be to ensure that everything runs smoothly.

You can even bring in a process expert to provide more insight into how things should be run.

Step #4: Determine the KPIs for the new processes

Before implementing your new process, use quantifiable measures used to evaluate the performance of business processes.

Establishing KPIs is important because they are the basis for evaluating and correcting business processes.

Taking the time to develop a comprehensive list of KPIs will ensure a successful reengineering process.

Appropriate KPIs depend on the business process you develop. Ensure the KPIs reflect your need for more efficient workflows and higher ROI.

Step #5: Brainstorm & outline re-engineered processes

Once you have all your ducks in a row, it’s time to get down to business.

Your internal committee can hold meetings to discuss different strategies and assess their feasibility.

This can also be on a trial-and-error basis to observe your solution's effectiveness. Don’t only focus on one process, eventually, you should be able to scale this into other business areas. 

But you must see how each process affects the other and if these new implementations are working well enough.

Here’s an example that can help. Go through our Scribe for creating a joined report on Salesforce.

Step #6: Take feedback into account

Once your new re-engineered process is rolled out, you shouldn’t just stop making improvements.

Be sure to collect feedback from employees and department heads and record it for future reengineering purposes. After each round of feedback, you should keep going until you reach a point where you’re reaching your goals.

Otherwise, it can happen that you are feeding into the inefficiencies and problems in the system. Then what would be the point of performing such a detailed process if there’s nothing to show for it?

You may have to face many other digital transformation challenges due to a lack of enthusiasm from your employees. That’s not all — many more issues can arise.

Challenges of business process reengineering — how to tackle them

Time and time again, it’s been stated that implementing a process reengineering strategy is difficult. So what are the issues you might face when kickstarting the process?

  • Lack of knowledge: In any large or medium-sized organization, information is spread out between various departments. Bringing that together under one single documented process and sharing that among employees often goes wrong. Most of the time, there’s a gap that can be solved if everyone is clear on what is needed to be done and how it should be implemented.
  • Inadequate use of resources and training: Lacking the resources needed for reengineering business processes definitely delays implementation. Qualified employees, an appropriate budget, proper BPR tools, and documentation are all needed to carry out this restructuring properly. Cutting corners isn’t going to cut it.
  • Difficulty in accepting organizational change: Any time you change employee processes, expect some hesitation or resistance. Employees are used to certain ways of working, and suddenly learning a new process can be challenging. In that case, having an SOP can prove to be quite useful.
  • Having no set future outcomes or goals: When reengineering a process, it’s important to know what the organization should look like in the long run. If you’re only working on what’s happening now, you’ll miss out on important changes that may occur in the future. At that time, it’ll require more time and resources to get back on track.

The business must be committed to the process and know how to prioritize time and methods.

You shouldn’t see only what obstacles you can face, you should also focus on how well your new process is working.

How to measure the success of business process reengineering

Revamping your business processes is only the start. You’ll have to keep track of how they’re performing. Otherwise, all your effort will go to waste.

By taking the time to evaluate your current processes and redesigning them to be as efficient and customer-centric as possible, you can set your project for long-term success.

In that case, what sort of data points should an organization focus on?

  • Process Effectiveness: How well the new process caters to the employee’s demands, (i.e., how easily it allows them to finish their tasks or how fast they can complete their work.)
  • Improved Cycle Times: The amount of time it takes the organization to churn out its product or service. Usually, the time reduces when a business process is re-engineered.
  • Process Efficiency: Measures the input of time and resources compared to the delivery of products or services. 
  • Improved Customer Feedback: Customer testimonials on how customer service or experience has improved or more interaction from a customer perspective.

Other than these, a business should consider how well technology is being integrated into its system, such as HR digital transformation procedures. This is to make processes much easier and further improve process adoption across the board.

Build strong, healthy processes using Scribe as your tool

The foundation of any successful business process re-engineering strategy has proper documentation. Most of the time, employees face disruption when these strategies are integrated. 

To reduce any time lost, use Scribe as a documentation tool for your processes. It captures any workflow to generates a step-by-step guide with text instructions, links and annotated screenshots.

You can even link one Scribe with another, and combine them with video and images with Scribe Pages.

The possibilities are endless, and you can share or embed via any platform you prefer.

Worried if Scribe is the right tool for your organization? (Would we ever lead you astray?)

Read a review from trusted customers to see how Scribe really works:

So, make your life easier by using Scribe to automate your documentation process!