Business process reengineering: The quest for efficiency

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  Quantumrun Foresight
• December 12, 2024

Insight summary

Business process reengineering (BPR) pushes organizations to rethink outdated workflows, leading to greater efficiency and smoother operations through digital and automated tools. However, it presents challenges like potential job shifts or job loss, requiring workers to adopt new skills. Additionally, governments and companies might need to bolster digital infrastructure and cybersecurity, creating a competitive landscape that favors agile, tech-enabled organizations.

Business process reengineering context

BPR is a management approach focused on radically redesigning business processes to enhance organizational efficiency and effectiveness. Originating in the early 1990s with insights from management theorist Michael Hammer, BPR challenges companies to rethink outdated workflows that may be hindering productivity and growth. Hammer's influential 1993 article, "Reengineering Work: Don't Automate, Obliterate," highlighted how companies like Ford Motor Company transformed their operations by eliminating redundant steps and incorporating technology. Ford drastically reduced costs and improved efficiency in its accounts payable department by digitizing processes and reducing unnecessary staffing. 

Implementing BPR generally follows several key steps: assessing the current state of workflows, identifying inefficiencies, and designing future-oriented processes that better align with company objectives. Tools like process mapping help organizations visualize the flow of tasks and determine where adjustments are needed to meet goals, whether by reducing cycle times or minimizing unnecessary handoffs. For example, a government agency might streamline license issuance by implementing online validation and payment systems, cutting down waiting times and manual interventions. However, Deloitte estimates that up to 70 percent of digital transformations fail due to resistance and inadequate management support, indicating that BPR requires strong leadership and well-planned change management to mitigate risks.

BPR has evolved to incorporate advanced digital tools and practices that facilitate continuous process optimization, keeping organizations responsive in dynamic markets. While traditional BPR focuses on immediate, large-scale overhauls, modern implementations often use ongoing evaluations to fine-tune processes continuously. Companies now turn to innovations such as artificial intelligence (AI)-powered process mining, which helps identify areas for improvement by analyzing system data for patterns. Research from Bain & Company suggests that while BPR's popularity has waned since its peak in the 1990s, satisfaction with its outcomes remains steady, reflecting its relevance in promoting agile, efficient organizations.

Disruptive impact

BPR may change how customers interact with services and products, mainly through digital self-service options. Increasing automation in service industries, such as banking and healthcare, could mean faster, more convenient access but might reduce human interactions that some people value. For example, a government agency that reengineers its customer service may shift from in-person services to online platforms, making it easier for people to renew licenses or apply for permits. However, there could be challenges for those less familiar with digital tools, such as older adults or individuals in areas with limited internet access. Additionally, workers in sectors undergoing automation or restructuring may face shifts in job responsibilities or even job loss.

For companies, the shift driven by business process reengineering can lead to substantial efficiency gains but also demands strategic adjustments in workforce management and technology investments. Many organizations may consider adopting AI and machine learning for tasks that require data analysis. However, integrating these technologies may come with upfront costs and require training employees to manage or collaborate with digital systems. To stay competitive, some companies may explore new business models, such as “as-a-service” models, where they can offer solutions or expertise in process reengineering to other companies lacking the resources to implement changes independently.

Meanwhile, as more public services go digital, governments may invest in robust cybersecurity measures and data protection to protect sensitive information. Furthermore, policies that encourage skill development in digital fields may become essential as traditional jobs evolve, aiming to prepare the workforce for an increasingly automated environment. For example, governments could offer grants or incentives for companies that prioritize retraining programs for employees affected by automation. Meanwhile, countries may compete to attract companies by creating business-friendly environments that support digital transformation, such as promoting tech hubs through tax breaks and infrastructure investments.

Implications of business process reengineering

Wider implications of BPRmay include: 

• Increased investments in cybersecurity to safeguard public services, leading to better data protection for citizens.
• Small businesses pooling resources to implement reengineering strategies, creating local networks that boost regional economic stability.
• Schools adding digital and analytical skills training in curricula to prepare younger generations for an increasingly automated job market.
• The automation of repetitive tasks causing a shift in workforce demographics, with younger, tech-savvy workers filling roles in digital transformation projects.
• Technology companies expanding product lines to offer specialized software for process reengineering, driving growth in the business technology sector.
• Businesses seeking sustainable process changes to minimize waste and energy use, contributing to a decrease in their environmental footprint.
• Public health organizations using reengineered digital platforms to improve service access and response times, especially in rural or underserved areas.
• Companies reducing dependency on centralized offices due to automated workflows, allowing a more flexible, remote workforce and lower real estate demands.
• Increased demand for digital tools and platforms fostering a growing ecosystem of tech startups focused on reengineering solutions.
• Social shifts toward prioritizing digital literacy as citizens adapt to new self-service public platforms, enhancing community engagement in digital transformation efforts.

Questions to consider

• How might reengineered digital services impact how you interact with government or healthcare services in the future?
• How could the shift toward automation in the workplace change the skills you might need?