Through the years, there have been many different notions about what business process reengineering (BPR) is and how successful it has been as a process improvement approach. In the early 1990s, Michael Hammer and James Champy authored a best-selling book, Reengineering the Corporation, in which they promoted that sometimes radical redesign and reorganization of a process by wiping the slate clean was necessary to lower costs and increase quality of service.
Hammer and Champy felt the design of workflow in most large corporations was based on no-longer-valid assumptions about technology, people and organizational goals. They also outlined seven reengineering principles to streamline the work process and thereby achieve significant levels of improvement in quality, time management and cost:
In evaluating Hammer and Champy’s principles of BPR, one must note that BPR is not reorganizing, restructuring, downsizing, automation or cost-cutting although these results are often part of a well thought-out, well planned, and well-executed reengineering project. A successful BPR project can be more identified with the following success factors identified in Prosci’s study “1998-1999 Reengineering Best Practices:”
Prosci’s success factors directly map to tenants of Six Sigma:
The essence of Six Sigma is found in the reality that business processes are inherently unpredictable. Six Sigma provides a way of measuring the variability in a process as it delivers services to an end-user or customer. When most people talk about Six Sigma, they are thinking about the DMAIC methodology. This method is used for improving an existing process when it is not meeting customer needs. Since BPR speaks to “radical redesign and wiping the slate clean,” the BPR approach would, from a purist’s standpoint, align more with Design for Six Sigma (DFSS) than it does with DMAIC. Design for Six Sigma is typically used for designing a new process or redesigning an existing one from scratch to better meet customer needs and reduce variability in the process.
Often in the real world it is impossible to start literally with a blank sheet even when Six Sigma capabilities reside in an organization. It is evident through mergers and cost-cutting activities, many companies have introduced complexity to processes without enabling technology to support the process. It is obvious to the naked business eye that the process is broken and the customer is not satisfied. Longer-term solutions may be gained through major technology upgrades and a blank-sheet BPR approach. However, when in survival mode, using Six Sigma DMAIC with traditional BPR efforts provides a customer-centric view of project identification within an organization. Six Sigma’s DMAIC problem-solving discipline within a BPR effort can provide:
A recent business process reengineering effort at a large financial institution saw the wisdom of leveraging DMAIC within the company’s BPR effort. The company had an existing DMAIC approach to project execution when the root cause is unknown and coupled that with the BPR principal of evaluating end-to-end key processes from the customer initiation point, through the organization. The organization made the following observations:
The primary definitions of success for this reengineering program were two-fold improve customer satisfaction performance and absorb business growth without a corresponding linear growth in expenses. BPR and Six Sigma would claim that improving customer satisfaction performance begins with measuring and meeting both customer- and market-driven service level agreements, including quality and timeliness. This requires the development and implementation of customer service metrics to measure the customer’s experience, risk and continuous process improvement. The reengineering process also should increase external customer satisfaction measurements through surveys and other feedback metrics.
The companies over-arching goal of absorbing business growth without a corresponding linear growth in expenses is accomplished through reengineering the process based on both voice of customer (VOC) and business strategy alignment service models. This includes implementing cross-organization initiatives to reduce group-wide expenses and assimilate technical changes into the new process design. Focus first on high-priority/high-impact change projects while planning for – and beginning to implement – longer-term change. Use current unit costs for benchmarking, and implement recommendations that lower those unit costs.
A proven approach to reengineering programs is conducting an assessment from the “customer inward,” bringing out things that are important for the organization to be doing from a customer perspective. Using the customer perspective, the company should conduct end-to-end process reviews, incorporating cross-discipline and cross-functional team perspectives. The teams can include:
Other process reengineering reviews also can include site analysis for potential consolidation opportunities; project management office/management process gap analysis; performance metrics baseline reviews, and additional technology reviews. The goal is to identify several quick hit/early win actions that can be taken while driving out future-state strategies and plans.
In summary, the approach to this program must be:
The company established these basic tenants for integrating the BPR effort with its existing Six Sigma DMAIC approach
Business process reengineering and Six Sigma deal with improving an organization’s process from the customer perspective. Process reengineering relates quality to the process, and so does Lean Six Sigma. They do so by recognizing that a process is a collection of activities that takes one or more kinds of input and creates output that is of value to the customer. Both process reengineering and Six Sigma relates quality to the process. Focusing on the process as opposed to the individual will lead to greatly improved quality. Leveraging Six Sigma within a holistic process reengineering effort leverages the best of both worlds. In the end, it is all about increasing quality to the customer by designing, measuring and improving the process.