Demystifying business process re-engineering

Perhaps you have an issue with customer shipments, receivables, or forecasting accuracy. Or, your business strategy is shifting to add importing, challenging your current approach to procurement and warehousing.

In these types of situations, the first instinct is to “adapt” the department’s current way of doing things without taking into account the big picture. Looking at business processes (i.e., the way an organization does things) before making re-organization changes or systems decisions usually produces the best business results—often at a lower cost.

What is business process re-engineering?

Every organization executes several key processes every day. These processes link organizational departments and can create a very complex web of interdependencies, both formal and informal. As in any integrated system, inefficiency in one area can (and often does) lead to problems in others.

Analyzing and improving these processes can help make business more efficient, linear, cheaper, and faster. But, the term “business process re-engineering” means different things to different people. To some, it is downright intimidating. It should not be.

Engineering of business processes (or business process re-engineering) simply means to create—by design—processes that satisfy business demands. It utilizes engineering principles to analyze and change the way we do something in order to achieve the results we want. 

Engineering processes should be a pivotal aspect of any strategy. In order to change an effect, you first must change the causes of that effect. Thus, a business result can only be improved upon by changing the business processes that produced the result in the first place.

In order to effectively design a process, the analysis must consider multiple dimensions:

• Strategy: what is the company’s direction?
• People: what skills and number of resources are required to achieve the strategy?
• Processes: how does the company work?
• Technology: what types of systems support the business?

What does business process re-engineering do?

Business process re-engineering studies take a look at how a company works—the steps that it takes to create a good or provide a service—and find ways to do it better.

A typical study will:

• Assess your current state, including all of the steps, people, and technologies involved in completing the process.
• Identify and eliminate waste. This analysis looks at factors such as numbers of people involved, how hand-offs occur, and the time required to complete each activity—with the end goal of determining the value or necessity of each part of the process.
• Re-design the process by removing unnecessary or redundant steps, automating certain activities where possible, and reducing the number of hand-offs.
• Identify the tools, systems and people to support the re-engineered process.

It is important that the study not just looks at a process in isolation, but also across traditional organizational boundaries. For example, a company uses and produces certain information within its operations. But, for managers to use that information to achieve corporate-wide results, they will need to integrate it with information from other parts of the company.

When can business process re-engineering help?

There are a variety of situations or indicators that suggest opportunities to re-examine and optimize business processes. These include:

• Changes in business strategy
• Mergers or acquisitions
• Organizational re-alignment
• Evolving reporting needs
• Delayed decision making due to coordination among departments
• Excessive levels of manual work-arounds or re-work
• Workload imbalances
• Excessive set-up times or costs
• Inefficient space utilization

When organizations seek better results, they often look first for ways to do things faster. In many cases, what they really need is to do things differently. Business process re-engineering provides the discipline to ensure that critical processes truly support business needs, in a manner that is as efficient as possible.

West Monroe Partners helps organizations analyze and improve business processes to achieve a variety of business goals. For more information, please contact Javier Garcia, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it  or John Abernathy, This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

In this issue:

• Business process management: Does your bank have opportunities to improve branch or back-office operations?
• Green IT: Have you considered the impact of your IT operations on the environment?
• Addressing supply chain risks can yield top-line growth