Business Process Reengineering

What is Business

Process

Reengineering?

• A business process is:• a set of work activities that are

carried out by employees to achieve business objectives

• integral to maintaining sustainable growth because it allows a company to operate consistently from one location to another as it expands

What is a business process?

Example: Coffee shop with franchise locations

• When a franchise location is established, the franchise owner must adhere to strict guidelines in relation to:• Appearance, Branding, Recipes, etc.

• These guidelines are business processes which allow for customers to have a consistent experience from one location to another

What is a business process?

A “good” business process must have three elements:

1. Purposeful Goals2. Quantifiable and Controllable

Elements3. Consistent Outcomes

What defines a “good” business process?

• Business processes must take into account the needs of the company, the employees, and the customer

• Example: Coffee Shop• a business process that the company may

create would be the process by which employees make coffee

• a specific measure of coffee grounds must be used in order to produce the coffee

1. Purposeful Goals

• The goals of this process include:• Corporate goal: minimize the amount of

waste produced during the brewing process thus increasing the profit margin of a cup of coffee

• Employee goal: teachable process that allows employees to make the coffee correctly

• Customer goal: ensure a consistent customer experience in terms of the coffee’s taste

1. Purposeful Goals

• While establishing a business process, companies should make the process as specific as possible

• Example: Coffee Shop• Good: Add x tablespoons of coffee

grounds to the coffee machine and brew for x minutes to make x amount of coffee.

• Bad: Add coffee grounds to the coffee machine and brew the coffee.

2. Quantifiable and Controllable

• The “bad” process does not specify the:

• exact amount of coffee grounds

• length of brewing time

• amount of resulting coffee

• When these amounts are specified, the process is both quantifiable and controllable making it a “good” business process

2. Quantifiable and Controllable

• While developing a business process, a company must test it to ensure that the outcome is consistent each time the process is completed

• Example: Coffee Shop• the outcome of the coffee making process is

freshly brewed coffee• the coffee should look and taste the same each

time it is brewed in order for it to meet this criterion

3. Consistent Outcomes

• Business process reengineering: • the redesign of core business processes

to improve employee productivity and product/service quality

• The goal is to make a business more efficient for all stakeholders involved• Stakeholders: the company, the

customers, and the employees

What is business process reengineering?

• A couple of examples of changes that the internal stakeholders must be willing to make are:• Shifting the emphasis from managing activities to

delivering results

• Getting rid of overly complex processes in favor of simpler ones

• Streamlining the organizational hierarchy

• Developing new processes that will help the company work towards the future rather than simply carrying on with what has always been done

What is business process reengineering?

• Companies should engage in business process reengineering in order to increase their efficiency and consistency

• When a company has efficient business processes, it reduces its expenses because less resources (materials or time) are wasted during the production process

Why engage in business process reengineering?

• Consistent business processes allow companies to create a more reliable product/service which will likely lead to increase customer loyalty• Loyal customers make repeat purchases

which increases revenue

• With revenue up and expenses down, the company’s profitability increases

Why engage in business process reengineering?

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