Business Process Re-engineering In A Nutshell

Business Process Reengineering became popular in the 1990s after the publishing of a Harvard Business School article titled Reengineering Work: Don’t Automate, Obliterate. Business Process Reengineering (BPR) describes the redesign of core business processes to improve productivity, quality, cost reduction, or cycle times.

Understanding Business Process Reengineering

The HBR article asserted that many businesses use new technology to automate ineffective processes. However, author Michael Hammer notes that a more efficient approach is to simply re-design the process itself.

This can be achieved through the systematic and disciplined nature of BPR. 

Both human and automated workflows can be analyzed to identify process improvements. Some common scenarios where BPR may be useful include:

  • Rising inventory levels.
  • A lack of corporate governance.
  • High employee conflict, stress, or turnover.
  • Cash flow problems.
  • An inability to fulfill customer orders promptly.

The six key steps of BPR

Six key steps encourage a fair, transparent, and efficient BPR process.

Here is a look at each.

Define business processes

Start by mapping the current state of affairs (workflows, activities, roles and reporting, business rules, supporting technology, and so forth).

Analyze business processes

Then, identify any elements that contribute to organizational inefficiency or prevent a goal or objective from being realized.

This may encompass gaps, root causes, or strategic disconnects.

Identify and analyze improvement opportunities

How can the elements identified in the previous step be addressed? Often these initiatives will be innovative and forward-facing.

That is, they are not associated with current processes.

Design future state processes

In this step, select the improvement opportunity deemed to have the greatest impact on organizational efficiency.

Here, the business should ensure that it has sufficient resources. Time, capital, and talent are the most crucial.

Complete this step by creating a future state map outlining the selected opportunities.

Develop future state changes

It’s important to realize that a new opportunity is only as robust as the processes that underpin it.

Each process needs to be designed from the ground up and communicated to relevant staff.

The new functionality must also be rigorously tested before becoming operationalized. 

Implement future state changes

Once implemented, the change must be evaluated for effectiveness through performance monitoring. Is the new opportunity meeting KPIs?

When should Business Process Reengineering be used?

One drawback of BPR is that the larger a business is, the more expensive it will be to implement. 

Indeed, a start-up with only a few months of operating experience will find it much more cost-effective to pivot to a new opportunity.

Nevertheless, the ability to respond to unforeseen circumstances is important in all businesses – regardless of size. BPR is also well suited to any business that wants to break free of the status quo and achieve goals once thought too ambitious.

If a business is still unsure of BPR, it should ask itself the following questions:

  • Who are our customers and what values are we offering them?
  • Are current operations delivering these values?
  • If not, do some operations need to be reconfigured?
  • Do our processes reflect our strategic objectives or long-term mission?
  • How would these operations be implemented if we were a new company?

Business process reengineering examples

While BPR has existed for around three decades now, how are modern, twenty-first-century businesses initiating process design transformations?

Let’s have a look at two examples.


Airbnb is a platform business model making money by charging guests a service fee between 5% and 15% of the reservation, while the commission from hosts is generally 3%. For instance, on a $100 booking per night set by a host, Airbnb might make as much as $15, split between host and guest fees. 

At some point in its recent history, Airbnb wanted to create a sustainable, efficient, product development process.

The only problem was that the company’s designers, engineers, and researchers were only involved in the process at specific times.

For example, designers were forced to wait for engineers to write the code before a model could be visualized.

Engineers themselves also had to wait for researchers to validate product ideas in a process that routinely resulted in incorrect project assumptions.

To foster deeper and more consistent engagement between its various teams, Airbnb used BPR to develop three solutions:

  1. Treat dispersed resources as if they were centralized – a single, digital environment was created where both designers and engineers could collaborate. This eliminated countless rounds of quasi-prototypes and enabled files to reflect real-time updates and data. Even if Airbnb staff could not interact in the same physical space, they needed to have access to the same product information at the same time.
  2. Organize around outcomes instead of tasks – product teams were then organized around outcomes to avoid wasting time on irrelevant features. This encouraged teams to use emotion when talking about outcomes in addition to the logical, detail-oriented perspective of writing code.
  3. Link parallel activities – instead of researchers becoming involved at the end of the process, they now participate across the entire product development process to ensure that the voice of Airbnb’s hosts and guests are heard and incorporated throughout. This allows teams to validate developmental stages and reduce instances of backtracking.


Mobile telecommunications company T-Mobile outwardly preached that happy customers were its main priority.

But internally, the company based customer success and indeed staff remuneration on two metrics: Average Handling Time (AHT) and First Response Time (FRT).

The problem for T-Mobile was two-fold. For one, its KPIs were not reflective of satisfied customers, while the second problem was more complex.

Thanks to the introduction of self-serve portals, customers no longer contacted the company’s call centers with basic problems such as a change of address request.

Instead, there was a clear shift toward them requiring assistance with far more complex issues that customer support personnel were unable or unwilling to solve.

Here are two ways the company used business process reengineering to improve its customer service standards across the board:

1 – Ensure those who output processes perform those processes 

To start, T-Mobile untethered itself from its archaic AHT and FRT metrics and redesigned its team structure to fundamentally shift the way customer service is delivered.

The company instituted the Team of Experts (TEX) model where cross-functional teams of 47 people each serve a dedicated geographical market. 

Instead of handing off an issue to someone else, the team structure now empowers individuals to stick with the same customer from start to finish and solve their problem.

In rare cases where a hand-off is necessary, the rep stays on the line while the customer speaks with a tech specialist to learn how to address a similar question in the future.

Customer service KPIs are now connected to profit and loss, and reps are invested in each outcome because they handle the entire customer service process.

2 – Build control into the process and place decision points where work is performed

It was also important that T-Mobile shifted decision points and authority under the new TEX model.

Previously, managers were called into the process over superficial details that only just exceeded the role responsibilities of a low-level rep.

This increased customer wait times and rendered these reps powerless in many situations.

Using BPR, the decision point was shifted to afford them more responsibility and, by extension, the capacity to impact customer service outcomes.

Customer wait times were also reduced since trivial details did not need to be clarified with a superior.

The results of T-Mobiles initiatives have been profound since they were introduced. In 2018, the company reported a 31% decrease in calls escalated to superiors and an impressive 71% decrease in transferred calls.

There was also a significant impact on customer churn (down 25%) and Net Promoter Score (up 56%).

Key takeaways

  • Business Process Reengineering is the redesigning of business operations to facilitate improvements in quality, cost, service, or alignment.
  • Business Process Reengineering is underpinned by six key steps that are fair, transparent, and efficient.
  • Business Process Reengineering can be an expensive undertaking for large companies. To ensure that BPR is money well spent, a business should consider some guiding questions to determine if operations are in alignment with broader strategies.

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Connected Agile Frameworks


AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.


AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Bimodal Portfolio Management

Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.


DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

Feature-Driven Development

Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

eXtreme Programming

eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

ICE Scoring

The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.


Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.

Rapid Application Development

RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Scaled Agile

Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.

Spotify Model

The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.


Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.


Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.


Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Stretch Objectives

Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.


The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

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Read Also: Business Models Guide, Sumo Logic Business Model, Snowflake

InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

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