Management Notes

Reference Notes for Management

Which of the following best describes business process reengineering?

Which of the following best describes business process reengineering?


A. Redesigning the organizational structure of a business
B. Redesigning workflow
C. Redesigning products
D. Transformation of business processes for more effective achievement of business goals

Answer Explanation

Answer Explanation

The Correct Answer forthe given question is Option D. Transformation of business processes for more effective achievement of business goals.

Business Process Reengineering

Business Process Reengineering

In business process reengineering, fundamental business processes are radically redesigned, resulting in dramatic improvements in productivity, cycle times and quality. Companies rethink existing processes to deliver more value to customers through Business Process Reengineering. Customer needs are often emphasized in a new value system they adopt. In two key areas, companies eliminate unproductive activities and reduce organizational layers. In the first place, functional organizations are transformed into cross-functional teams. In the second place, technology is used to improve data dissemination.


During the mid-1980s and mid-1990s, BPR was an important management concept. Michael Hammer of MIT and Thomas Davenport of Babson College are generally acknowledged as the creators of the concept. Davenport and Hammer were colleagues working on PRISM (Partnership for Research in Information Systems Management). During their time of research, sponsored by some of the most powerful companies, they developed an architectural model to help large companies take advantage of new technologies such as personal computers (PCs) and the internet.

Importance of Business Process Reengineering

Importance of Business Process Reengineering

a) Clear Purpose:

The vast majority of organizations cannot describe their processes from start to finish, and only a few have documented them end-to-end. A successful BPR implementation starts with a solid understanding of your current business processes so that you can automate what needs to be automated, while at the same time reducing risk for future costly mistakes.

b) Operation simplified and streamlined:

After this entire project is completed, the company is left with streamlined operations that have eliminated superfluous processes (or steps in a process that are not necessary) that slow down operations. Then efforts can be directed more towards organizational objectives, employees can see what needs to be done, and customers will be happier with the service they receive.

c) Enhanced Efficiency:

By reducing redundancies in the process and revising processes, you will be able to move things through the process more smoothly and faster, increasing overall efficiency.

d) Improved Results and Products:

Streamlined, digitized processes enable you and your employees to put more effort into building relationships with your customers. As a result of improving communication between cross-functional teams, information passes through channels faster, making your business more resistant to market changes.

e) Optimized return on investment:

Investing in automation can maximize your ROI by providing all of the above benefits.

Principles of Business Process Reengineering

Principles of Business Process Reengineering

  • Organize around outcomes instead of tasks.
  • In an organization, identify all processes and rank them according to their urgency for redesign.
  • Integrate the processing of information into the actual work that generates information.
  • Resources that are dispersed geographically should be treated like centralized resources.
  • Instead of just integrating the results of parallel activities, connect them in the workflow.
  • Control should be built into the process where the work is performed.
  • Information should be captured once and at the source.

Steps in Business Process Reengineering

Steps in Business Process Reengineering

a) Decide what you want

After executing a certain business process, what are you expecting to see? As soon as you understand how you want your business outcomes to work, you can figure out why they don’t. Consider, for example, ways to speed up getting items out of warehouses and on to delivery trucks if you need to deliver items within a certain timeframe.

b) Describe the current situation

Describe the steps involved in completing a work process. Check for instances where a logjam could cause efficiency to suffer and costs to rise.

c) Gaps should be identified

Create key performance indicators (KPIs) that show how close or far you are from reaching your business goals. Look at the cycle time, the production process, or how long it takes to load trucks at the warehouse.

d) Choose a test case

Your organization’s effectiveness is impacted by at least one essential process. Developing a future state that supports your company’s strategic goals is the next step.

e) Your hypothesis should be developed and tested

Prepare new workflows and procedures, then communicate them to stakeholders. Whenever you introduce new or enhanced features to your revamped process, develop test scenarios.

f) New process to be implemented

Ensure you have the resources and dependencies in place to successfully implement your changes.

g) Perform a performance evaluation

Analyze the performance of the new process and compare it to the original business workflow using your KPIs.


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