Business process redesign (Hammer and Champy)

Business process redesign (BPR), also called business process reengineering, asks an organisation to reconstruct important end-to-end processes from first principles. The approach became a defining management movement of the 1990s because it promised dramatic gains in cost, quality, service and speed rather than another round of marginal improvement.

When to use it

• Use BPR when benchmarking reveals a serious disadvantage in cost, quality, service or speed and incremental process improvement is unlikely to close it.
• It is most appropriate for strategically important processes burdened by fragmented ownership, serial hand-offs, duplication, delay or rules designed for conditions that no longer exist.
• Because radical redesign affects jobs, authority and systems, apply it only when the potential gain justifies the disruption and leadership is prepared to implement the result.

Origins

Business process redesign emerged around nineteen ninety through parallel work by Michael Hammer and by Thomas Davenport and James Short. Hammer’s Harvard Business Review article “Reengineering Work: Don’t Automate, Obliterate” argued that organisations should challenge obsolete processes instead of using technology merely to accelerate them. Davenport and Short similarly connected information technology with end-to-end process design. Hammer and James Champy’s 1993 book Reengineering the Corporation then popularised radical cross-functional redesign as a route to major gains in cost, quality, service and speed.

What it is

BPR offered an alternative to the conventional response to the 1989–92 recession: repeatedly cutting people and organisational units while leaving the work itself largely unchanged. Hammer and Champy proposed reinventing the processes through which a product or service is created, seeking lower unit cost and better service at the same time.

Their provocation was directed especially at the misuse of information technology. Automating every inherited task could make a poor process run faster without making it valuable—a practice they compared to paving over cowpaths. The better question was whether each activity, control and hand-off should exist at all.

A process is therefore reconsidered from a zero base. Its purpose must be justified, its contribution to customer value made explicit and its design reconstructed around the desired outcome. Activities that add no necessary value are removed rather than polished.

How to use it

Hammer and Champy define BPR as fundamental rethinking and radical redesign directed at dramatic performance improvement. Their principles can be translated into nine design tests:

Combine jobs. Give one role or team responsibility for a meaningful result instead of fragmenting work among narrow tasks. Move decisions into the work. Equip the people performing the process with the information and authority to decide, reducing escalations and delay. Use the natural sequence. Arrange steps according to real dependencies and allow parallel work where activities need not wait for one another. Create multiple process versions. Design variants for genuinely different cases rather than forcing every request through one cumbersome path. Perform work where it makes most sense. Allocate an activity by capability, information and economics, not inherited departmental ownership. Use economically justified controls. Remove checks whose cost and delay exceed the losses they prevent. Minimise reconciliation. Reduce the separate records and interfaces that create disagreement and later correction. Provide a case manager. Where processes remain complex, give the customer one accountable point of contact across internal boundaries. Combine centralisation with decentralisation. Use shared information and standards to obtain scale while allowing local decisions close to the work.

Run redesign as a cycle. Begin by aligning the project with the organisation’s strategy and defining the customer outcome and performance gap. Identify the operational processes that influence that outcome and challenge them from first principles:

• What purpose does each process serve?
• Why and under what conditions did it develop?
• What value does it add now?

Business process redesign

Implement and monitor processes

Align project with strategy

Defne improved processes

Rethink processes as is

BuSINESS p ROCESS REdESIgN ( ha MMER a Nd ChaMpy) 223

Next ask how each process could create more value and whether its outcome would improve if it were removed, combined or relocated. Define a coherent set of future processes that add value individually and reinforce one another as a system.

Implement the new design with clear ownership, decision rights, technology, measures and transition support. Monitor cost, quality, service and speed against the baseline. Once conditions or performance requirements change, repeat the cycle rather than treating the redesign as permanent.

Top practical tip

Redesign around a customer outcome, not the current organisation chart. Baseline cost, quality, service and speed so the promised dramatic improvement can be tested.

Top pitfall

Do not disguise a predetermined redundancy programme as process redesign. That association damaged BPR and encourages cost cutting without the customer and workflow improvements the method requires.

Further reading

Hammer, M. (nineteen ninety) “Reengineering Work: Don’t Automate, Obliterate.” Harvard Business Review, July–August.

Hammer, M. and Champy, J. (nineteen ninety-three) Reengineering the Corporation: A Manifesto for Business Revolution. New York: HarperBusiness.