(BMB OM02) Unit 3: BPR Life Cycle and Methodology

BPR Life Cycle

The BPR Life Cycle refers to the step-by-step stages an organization follows to redesign its business processes from start to finish.

Stages of the BPR Life Cycl

Stage	Description (in Simple Words)
1. Identify Processes for Re-engineering	Select key or core processes that are critical to business success (e.g., order processing, customer service).
2. Analyze Existing Processes	Study how work is done currently. Identify bottlenecks, delays, and waste in the process.
3. Identify Opportunities for Improvement	Decide which parts of the process can be simplified, automated, or eliminated.
4. Design the New Process	Create a new process design using modern tools (ERP, automation, AI) to improve cost, quality, speed, and flexibility.
5. Implement the Re-engineered Process	Put the new process into action. Train employees and align systems and structures.
6. Monitor and Review Performance	Continuously check performance metrics (time, cost, quality, customer satisfaction) and make adjustments if needed.

Goal: To achieve dramatic improvements in performance by fundamentally rethinking how work is done.

Methodologies and Approaches to BPR

Different scholars have proposed structured methodologies for BPR. Let’s understand the two most famous ones:

(A) Hammer & Champy Approach

Proposed by Michael Hammer and James Champy in their book “Reengineering the Corporation” (1993).

Key Ideas

• Focus on radical redesign rather than small improvements.
• Technology is an enabler, not the main driver.
• The aim is dramatic improvement in performance — cost, quality, service, and speed.

Steps:

Step	Description
1. Identify processes to be re-engineered	Choose high-impact or broken processes.
2. Understand and analyze existing processes	Find inefficiencies and customer pain points.
3. Identify enabling technologies	Use IT (e.g., ERP, AI, automation) to support new designs.
4. Design the new process	Start from scratch and redesign workflows for maximum efficiency.
5. Implement and evaluate	Apply the new design, monitor results, and refine continuously.

Focus: “Don’t automate the old process – eliminate it and start fresh.”

(B) Davenport Approach

Proposed by Thomas H. Davenport in his book “Process Innovation: Reengineering Work through Information Technology” (1993).

Key Ideas:

• Focuses on the role of information and technology in redesigning processes.
• BPR should be data-driven and information-centric.
• Emphasizes continuous improvement after redesign.

Steps:

Step	Description
1. Develop Business Vision and Process Objectives	Define what the company wants to achieve (cost, quality, service, or speed).
2. Identify the Processes to be Redesigned	Select high-impact or problem-prone processes.
3. Understand and Measure Existing Processes	Map current processes and collect data on performance.
4. Identify IT Levers	Determine which technologies can enable new ways of working.
5. Design and Build a Prototype of the New Process	Create, test, and refine the redesigned process.
6. Implement and Continuously Improve	Roll out the process and improve it over time.

Focus: Information and technology as key enablers of process innovation.

Other Approaches to BPR

Approach	Focus Area
Kodak Approach	Emphasizes customer needs and employee involvement in BPR.
IBM Approach	Focuses on aligning BPR with corporate strategy and IT systems.
Teng et al. Approach	Suggests using BPR for gaining competitive advantage and organizational learning.

Strategic Alignment and Process Prioritization

(A) Strategic Alignment

Strategic alignment in BPR means ensuring that re-engineering efforts support the overall business goals and strategy of the organization.

Aspect	Explanation
Purpose	To ensure the new processes contribute directly to achieving strategic goals (like cost leadership, customer satisfaction, or innovation).
How to Achieve	- Identify business strategy first. - Select processes that most impact strategic success. - Align people, technology, and processes with strategy.
Example	If the company’s goal is customer satisfaction, re-engineer customer service and delivery processes first.

Key Point: BPR should serve the strategy, not the other way around.

(B) Process Prioritization

Since re-engineering all processes at once is not practical, organizations must prioritize which processes to re-engineer first.

Criteria for Process Prioritization

Criterion	Explanation
Strategic Importance	Processes directly linked to organizational goals.
Customer Impact	Processes that affect customer satisfaction the most.
Performance Gap	Processes with large differences between actual and desired performance.
Feasibility and Cost	Processes that are easier and more cost-effective to redesign first.
Technology Readiness	Processes that can quickly benefit from new IT tools.

Example: A bank may first prioritize re-engineering its loan approval process (high customer impact, high performance gap) before working on internal HR processes.

Summary Table

Concept	Key Idea
BPR Life Cycle	Step-by-step stages from identifying, analyzing, designing, implementing, and reviewing processes.
Hammer & Champy Approach	Radical redesign focused on results and process elimination.
Davenport Approach	Information-driven, IT-based process innovation.
Strategic Alignment	Aligning BPR goals with overall business strategy.
Process Prioritization	Choosing the most critical processes to re-engineer first for maximum impact.

Role of IT in Business Process Re-engineering (BPR)

Information Technology (IT) plays a central role in Business Process Re-engineering. It is not just a support system — it is a driver and enabler of major process changes.

In Simple Words: IT helps organizations redesign their processes to be faster, more accurate, cost-effective, and customer-friendly.

Why IT is Important in BPR

Reason	Explanation (in Simple Terms)
1. Automates Repetitive Work	IT tools help reduce manual work and increase speed.
2. Improves Information Flow	Systems share data in real time, improving decision-making.
3. Enhances Coordination	IT connects departments, suppliers, and customers.
4. Supports Innovation	Enables new ways of doing business (online services, AI chatbots, etc.).
5. Improves Quality & Accuracy	Reduces errors and improves performance consistency.
6. Enables Data-Driven Decisions	IT provides insights from data for better strategic planning.

Enterprise Resource Planning (ERP) and BPR

ERP (Enterprise Resource Planning) is a software system that integrates all major business functions — finance, HR, production, marketing, supply chain — into a single platform.

Role of ERP in BPR

Role	Explanation
Integration of Processes	ERP links all departments so that data flows smoothly across the organization.
Process Standardization	Helps create uniform and efficient business processes.
Real-time Data Access	Provides instant information to managers for better decision-making.
Support for Process Redesign	ERP acts as the backbone for implementing redesigned processes.
Cost and Time Savings	Reduces duplication of work, improves efficiency, and lowers costs.

Example: Before ERP: Each department (sales, inventory, finance) had its own system. After ERP: All departments share one system — when a sale is made, inventory and billing update automatically.

Artificial Intelligence (AI) and BPR

Artificial Intelligence (AI) refers to the ability of machines and software to think, learn, and make decisions like humans.

Role of AI in BPR

Role	Explanation (Simple)
1. Process Optimization	AI identifies inefficiencies and suggests improvements in workflows.
2. Predictive Analysis	Helps forecast demand, customer behavior, and maintenance needs.
3. Intelligent Decision-Making	AI systems analyze large data sets to support management decisions.
4. Customer Service Automation	Chatbots and virtual assistants handle customer queries 24/7.
5. Personalized Marketing	AI helps businesses design personalized offers and campaigns.
6. Error Reduction	AI tools ensure higher accuracy in data processing and documentation.

Example: An insurance company using AI to automate claim approvals — speeding up the process from days to minutes.

Process Automation and BPR

Process Automation means using technology to perform routine tasks with little or no human involvement. Common tools include Robotic Process Automation (RPA), workflow software, and bots.

Role of Automation in BPR

Role	Explanation
1. Increases Efficiency	Automates manual and repetitive tasks like data entry, billing, or reporting.
2. Reduces Cost and Time	Tasks that took hours can now be done in minutes by robots.
3. Improves Accuracy	Minimizes human errors in operations.
4. Enhances Employee Productivity	Employees can focus on creative and strategic tasks.
5. Enables Real-Time Monitoring	Automated systems track performance and alert when issues arise.

Example: Banks using RPA bots to process loan applications, verify documents, and update databases automatically.

Combined Impact of IT, ERP, AI, and Automation on BPR

Aspect	Impact
Speed	Faster processing and communication.
Accuracy	Less human error through automation.
Integration	All functions connected via ERP and IT systems.
Decision-Making	Data analytics and AI support better business decisions.
Customer Experience	Personalization and 24/7 digital support.
Cost Reduction	Lower operational cost through automation.

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Summary Table

Technology	Role in BPR	Example
ERP	Integrates departments, standardizes processes, and enables real-time data flow.	SAP, Oracle ERP in manufacturing firms.
AI	Improves decision-making, automates smart tasks, predicts trends.	Chatbots, demand forecasting.
Automation (RPA)	Executes repetitive tasks quickly and accurately.	Invoice processing, payroll automation.

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In Short: IT is the engine of BPR — it connects people, processes, and data to create faster, smarter, and more efficient organizations.

Introduction: Tools Supporting BPR

In Business Process Re-engineering (BPR), technology plays a vital role in analyzing, redesigning, automating, and monitoring business processes.
To achieve this, organizations use specific IT tools and software that make the process smoother and more effective.

Two of the most important tools supporting BPR are:

• Business Process Management Systems (BPMS)
• Workflow Automation Tools

Business Process Management Systems (BPMS)

A Business Process Management System (BPMS) is a software platform that helps organizations design, execute, monitor, and improve their business processes in a systematic way.

In simple words —

BPMS helps a company manage all its business processes digitally and ensures that work flows smoothly between people, systems, and departments.

Key Functions of BPMS

Function	Explanation (in Simple Terms)
1. Process Modeling	Allows users to design and visualize business processes using flowcharts.
2. Process Execution	Automates and runs the designed processes step-by-step.
3. Process Monitoring	Tracks performance and status of ongoing processes.
4. Process Optimization	Identifies bottlenecks and suggests improvements.
5. Integration	Connects with other systems like ERP, CRM, and databases.

Benefits of Using BPMS in BPR

Benefit	Explanation
Improves Efficiency	Streamlines and automates repetitive processes.
Enhances Visibility	Managers can monitor real-time progress and performance.
Enables Flexibility	Easy to modify or redesign processes when business needs change.
Supports Continuous Improvement	Provides performance data for ongoing optimization.
Improves Collaboration	Connects employees, departments, and systems seamlessly.

Examples of Popular BPMS Tools

• IBM Business Process Manager
• Appian BPM Suite
• Pega BPM
• Bizagi Modeler
• Kissflow
• Oracle BPM Suite

Example  - A bank uses BPMS to automate its loan approval process 

• When a customer applies for a loan, the system automatically routes the application to the verification team, then to the manager for approval, and finally updates the customer via email — all tracked in real time.

Workflow Automation Tools

Workflow Automation Tools are software solutions that automate repetitive, rule-based business tasks and ensure that work moves automatically from one person to another without manual intervention.

In simple words - Workflow automation means “the computer takes care of the routine work, so employees can focus on important tasks.”

Key Functions

Function	Explanation
1. Task Automation	Automatically performs routine activities (e.g., sending emails, approvals).
2. Task Routing	Sends tasks to the right person or department at the right time.
3. Notifications & Alerts	Reminds employees about pending or delayed tasks.
4. Document Management	Tracks and stores digital files automatically.
5. Performance Tracking	Measures task completion time, accuracy, and efficiency.

Benefits of Workflow Automation Tools

Benefit	Explanation
Increases Productivity	Reduces manual paperwork and saves time.
Reduces Errors	Ensures tasks are performed consistently.
Improves Accountability	Tracks who did what and when.
Enhances Speed of Operations	Eliminates unnecessary approvals or delays.
Supports Compliance	Automatically follows organizational policies and audit trails.

Examples of Popular Workflow Automation Tools

• Zapier
• Microsoft Power Automate
• Nintex Workflow
• Kissflow Workflow
• Monday.com Automations
• Asana Workflow
• Trello Automation

Example: In an HR department, a workflow automation tool can:

• Automatically send offer letters to selected candidates.
• Notify the IT team to create employee accounts.
• Update the HR system — without any manual steps.

BPMS vs. Workflow Automation Tools

Basis	BPMS	Workflow Automation Tools
Scope	End-to-end management of all business processes.	Focuses on automating specific workflows.
Complexity	Suitable for large and complex processes.	Suitable for simpler, rule-based tasks.
Integration	Integrates multiple systems and departments.	Works mostly within a specific area or department.
Example Use	Automating supply chain and finance processes.	Automating leave approval or data entry tasks.
Examples	Pega, IBM BPM, Appian.	Zapier, Power Automate, Kissflow.

Role of BPMS and Workflow Tools in BPR

Role	Explanation
1. Process Visualization	Helps organizations clearly see their process flow.
2. Automation	Reduces manual effort and human error.
3. Monitoring & Control	Tracks performance metrics and identifies delays.
4. Flexibility for Redesign	Makes it easy to test and modify processes digitally.
5. Data Collection for Improvement	Captures data to support BPR decisions and performance measurement.

Summary Table

Tool	Purpose	Key Benefit	Example
BPMS	Manage, automate, and optimize entire business processes.	Improves efficiency and integration across departments.	IBM BPM, Pega, Appian
Workflow Automation Tool	Automate repetitive, routine tasks and approvals.	Saves time and reduces human errors.	Zapier, Power Automate, Kissflow

In Short

BPMS gives an overall digital framework for managing processes,
while workflow automation tools handle specific task-level automation within those processes. Together, they form the backbone of modern BPR initiatives.

Cost-Benefit Analysis of BPR Initiatives

Cost-Benefit Analysis (CBA) in Business Process Re-engineering (BPR) helps organizations evaluate whether the potential benefits of process redesign justify the costs and risks involved. It provides a financial and strategic justification before implementing BPR initiatives.

Key Components

Components	Description
Costs	Includes investment in new technology, software (ERP, BPMS), employee training, consultancy fees, and temporary productivity loss during change.
Benefits	Includes cost reduction, faster process cycle time, better customer service, improved quality, and increased profitability.
Intangible Benefits	Employee satisfaction, innovation culture, better decision-making, improved brand image.
Risks	Resistance to change, implementation failure, cost overruns, and data migration issues.

Steps in Cost-Benefit Analysis

• Identify all costs and benefits (direct & indirect).
• Quantify them in monetary terms wherever possible.
• Calculate Net Benefit:  Net Benefit = Total Benefits − Total Costs
• Evaluate ROI and Payback Period for financial justification.
• Assess qualitative factors like morale, reputation, and learning.
• Make decision based on feasibility and alignment with strategy.

Example: If a company spends ₹20 lakh on ERP-based BPR implementation and saves ₹8 lakh annually through efficiency gains — Payback Period = ₹20 lakh ÷ ₹8 lakh = 2.5 years

Managing BPR Implementation Projects

1. Planning Stage

• Define objectives and scope of BPR.
• Select processes for reengineering based on impact and feasibility.
• Form a BPR team including top management, IT experts, and process owners.

2. Design Stage

• Map current (As-Is) and future (To-Be) processes.
• Use simulation and modeling tools to visualize improvements.
• Ensure alignment with business strategy and customer needs.

3. Implementation Stage

• Introduce new processes and technologies (ERP, AI, automation).
• Provide training and communication to reduce resistance.
• Monitor pilot results and refine processes.

4. Monitoring & Evaluation

• Track performance indicators (time, cost, quality, customer satisfaction).
• Conduct post-implementation review to ensure goals are met.
• Establish a continuous improvement culture to sustain results.

5. Change Management

• Ensure top management support and clear communication.
• Handle employee resistance with participation and incentives.
• Create a learning environment for adaptability.

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Key Success Factors

• Strong leadership support
• Effective IT integration
• Employee involvement
• Realistic goals & timelines
• Continuous performance tracking

Conclusion

A successful BPR project requires balancing costs with long-term strategic gains. Systematic cost-benefit analysis ensures the investment is worthwhile, while structured implementation and monitoring guarantee sustainable competitive advantage.