I. Definition
Business process reengineering is the redesign of business processes and the associated systems and organizational structures to achieve a dramatic improvement in business performance. The business reasons for making such changes could include poor financial performance, external competition, and erosion of market share or emerging market opportunities. It is not downsizing, restructuring, reorganization, automation, new technology, etc. It is the examination and change of five components of the business:
1. Strategy
2. Processes
3. Technology
4. Organization
5. Culture
Business process reengineering is also referred to as BPR, Business Process Redesign, Business Transformation, or Business Process Change Management.
II. History
In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute of Technology (MIT), published an article in the Harvard Business Review, in which he claimed that the major challenge for managers is to obliterate non-value adding work, rather than using technology for automating it. This statement implicitly accused managers of having focused on the wrong issues, namely that technology in general, and more specifically information technology, has been used primarily for automating existing work rather than using it as an enabler for making non-value adding work obsolete.
Hammer's claim was simple: Most of the work being done does not add any value for customers, and this work should be removed, not accelerated through automation. Instead, companies should reconsider their processes in order to maximize customer value, while minimizing the consumption of resources required for delivering their product or service. A similar idea was advocated by Thom ...