PROCESS REENGINEERING: TYPES, MODELS, PHASES AND EXAMPLES - DUDAS - 2025

The process reengineering is a business management strategy that focuses on the analysis of workflows and business processes of an organization in order to achieve substantial improvements in performance, productivity and quality.

It is the practice of rethinking and redesigning the way work is done, in order to better support an organization's mission and reduce costs. Business process refers to the set of interconnected tasks or activities performed to achieve a specific result.

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It begins with a high-level assessment of the organization's mission, strategic objectives, and customer needs. Fundamental questions are asked, such as Does the mission need to be redefined? Are the strategic objectives aligned with the mission? Who are the clients?

A company may find that it is operating under questionable assumptions, particularly in terms of the needs and wants of its customers. Only after the organization reconsiders what it should be doing does it decide how to do it better.

Focus on processes

Within the framework of the basic assessment of mission and objectives, reengineering focuses on the organization's processes, steps and procedures that govern the way resources are used to create products and services that meet customer needs. or particular markets.

Reengineering identifies, analyzes, and redesigns an organization's core business processes with the goal of achieving dramatic improvements in critical performance measures such as cost, quality, service, and speed.

Information technology is seen as acting as an enabler to create new forms of organization and collaboration, rather than supporting existing business functions.

Process reengineering derives its existence from different disciplines, and four main areas can be identified, which are subject to change: organization, technology, strategy and people. A process view is used as a common framework to consider these areas.

Types

There are three different types of process reengineering that any business can start:

Reengineering for cost improvement

This type of reengineering can lead a company to extraordinary reductions in the costs of non-critical processes, either radically changing these processes, or even eliminating them altogether.

It goes far beyond what can be achieved with the usual efforts to reduce costs.

Reengineering to be more competitive

With the effort of this type of reengineering, it seeks to delve into the main processes produced in the business.

This is intended to become the best in its class, at a world-class level, while achieving competitive equivalence with companies that in the past set the rules and established the industry standards.

Reengineering for a radical point of innovation

This type of reengineering seeks to locate and effect radical points of innovation, change existing rules and establish a new definition of the best in class for all companies that are trying to become one.

Models

ADKAR model

The model focuses on the element of change in people, specifically how to ensure that the employees involved support and believe in the change.

After doing this, the model moves to look at the business dimension, focusing on identifying the need for change, the goals that need to be met, how these goals will be met, and the time scale in which it will be completed.

Both the business and personal dimensions must be diligently cared for to implement a successful change strategy. There are five key steps to ensuring employee support.

Awareness

Employees must be aware of exactly what change is taking place and why it is necessary. If employees are not aware of these things, they can lose motivation and direction within the strategy.

Management plays a crucial role in ensuring that employees are fully aware of every element of the change process.

Wish

Support for the change strategy should come naturally from employees. Rather than forcing change on employees, including them in the project vision and development will ensure their support for the end result.

Knowledge

Reengineering will likely bring a change in the routine and skills of the employees, as well as a general change in the organization.

For this reason, employees must be fully supported to acquire and develop these skills.

Skill

This knowledge must be developed, but it can only happen if individuals have the necessary skill.

Reinforcement

The process of change and the rewards for individuals who change their methods should be reinforced after the change has occurred. This ensures that employees resist the temptation to slip back into old habits.

Bridges transition model

The main strength of the model is that it focuses on transition, not change. The difference between these is subtle, but important.

Change is something that happens to people, even if they don't agree with it. On the other hand, transition is what happens in people's minds as they go through change.

Change can happen very quickly, while transition usually happens more slowly.

The model highlights three stages of transition that people go through when they experience change. These are:

- Termination, loss and letting go.

- Neutral zone.

- New beginning.

Bridges says that people go through each stage at their own pace. For example, those who are comfortable with change will likely advance quickly to the third stage, while others will stay in the first or second stage.

Phases

Business process reengineering is not an easy task. Unless each phase is successfully completed, change attempts may fail.

Identify and communicate the need for change

An investigation must be done. What processes might not be working? Is the competition better or worse than the company in some respects?

After all the information is available, a very complete plan should be developed, with the participation of the leaders of the different departments.

Management will have to play the role of salesperson. You will need to convey the big vision of the change and show how it will positively affect even the lowest-skilled employees.

Assemble team of experts

As with any other project, process reengineering needs a team of highly trained and motivated people who will carry out the necessary steps. In most cases, the team consists of:

Senior manager

When it comes to making a major change, you need the supervision of someone who can make the decisions and who to contact directly.

COO

Someone who knows the complications of the process will be needed. There, the operations manager intervenes, having worked with the processes and being able to contribute his vast knowledge.

Reengineering experts

The right engineers will be needed. Reengineering processes may require expertise in several different fields, from IT to manufacturing.

Find inefficient processes and define key performance indicators (KPI)

The correct KPIs must be defined. KPIs typically vary depending on the process being optimized.

Then the processes must be followed individually. The easiest way to do this is by mapping your business processes.

It is much easier if you have everything in writing step by step. This is where the operational manager comes in handy, as it makes processes easier to define and analyze.

The most basic way to work with processes is through flow charts. Take a pencil and paper and write down the processes step by step.

If you have more knowledge of technology, using software for process analysis can make everything much easier.

Redesign processes and compare KPIs

At this point, there is not much to add. What now needs to be done is to keep putting the theories into practice and see how the KPIs are maintained.

If the KPIs show that the new solution works better, you can start to scale the solution slowly, putting it into action within more and more business processes.

Examples

Ford Motors

In the 1980s, the American auto industry was going through a recession. Seeking to reduce costs, Ford decided to thoroughly analyze the business processes of some of its departments, trying to find inefficient processes.

They noticed that more than 500 people worked in the accounting department. By way of comparison, about 100 people worked in the same department at its competitor Mazda.

Despite the fact that Ford was a larger company, it set a measurable goal which was to reduce the number of employees in that department to just 200 people.

They launched a process reengineering initiative to find out why the department had so many staff. They analyzed the current system and found that it worked as follows:

- When the purchasing department wrote a purchase order, it sent a copy to the accounts payable department.

- Then, the materials control department received the merchandise and sent a copy of the document related to accounts payable.

- At the same time, the supplier sent a receipt for the goods delivered to accounts payable.

Totally new process

The accounts payable clerk had to match the three orders, and by matching them, he issued the payment manually. This process required a lot of manpower in the department.

Instead of making minor changes, Ford developed an entirely new process. Information technology played an important role in this new process.

They developed a database to which a notification was sent when the purchasing department had placed an order.

When the materials were delivered, a warehouse employee entered them into the computer. This way he could immediately verify if the materials delivered were in order, so that they were paid automatically later.

In this way, accounts payable clerks from seeking to match orders were completely eliminated, reducing the number of clerical employees by 75%.

Taco bell

Taco Bell rebuilt its business, focusing more on the service aspect and centralizing its manufacturing area.

With the creation of the K-Minus program, meat, corn, beans, lettuce, cheese and tomatoes for their restaurants were now prepared outside of the restaurant. In restaurants, these prepared ingredients were only assembled when a customer requested them.

Some of the successes of this new way of working were increased employee motivation, better quality control, fewer accidents, greater savings, and more time to focus on customer service.

Advantages and disadvantages

-Advantage

Reduce costs and cycle times

Process reengineering reduces costs and cycle times by eliminating unproductive activities and the employees who perform them.

Team reorganization reduces the need for different levels of management, accelerates information flows, eliminates errors and rework caused by multiple transfers.

Improve quality

Process reengineering improves quality by reducing work fragmentation and establishing clear ownership of processes.

Workers take responsibility for their production and can measure their performance based on quick feedback.

Increase productivity

The goal of process reengineering is to modernize outdated processes and often produces time-saving results. For example, the organization may discover that a certain process can be carried out by two employees instead of four.

Customer orientation

By shifting from task-oriented to process-oriented, the focus is on the customer. This has the advantage that all irrelevant processes quickly come to the fore, after which they can be easily removed or modified.

Improve competitive position

Typically, the changes an organization makes are only gradually noticeable. However, to stay competitive and meet customer needs, you must act appropriately.

With process reengineering, radical changes are implemented in a relatively short period of time.

-Disadvantages

Staff adaptation

Some workers may not adapt to the changes, and new managers may feel overwhelmed. Other workers will become obsolete if their primary role is removed as part of the process review.

If an employee on Monday morning hears that their entire job description has been changed, this could seem distressing.

That is why it is very important that the changes that are implemented are well communicated to the employee.

Requires investment

Process reengineering typically requires investment, particularly in technology. Outdated methods, like doing a task manually, face being replaced by computer programs.

The programs improve efficiency and reduce errors, but the company must invest in software and training, an expensive option for companies looking to cut expenses immediately.

References

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6. Company Organization (2017). Types of Reengineering. Taken from: organizacionempresa.xyz.
7. Business Jargons (2019). Business Process Reengineering. Taken from: businessjargons.com.
8. Anna Assad (2017). The Disadvantages & Advantages of BPR. Bizfluent. Taken from: bizfluent.com.