Are Business Process Reengineering (BPR) and Business Process Management (BPM) Separate or Interwoven Concepts?

The often-discussed concepts of Business Process Reengineering (BPR) and Business Process Management (BPM) are frequently conflated. However, many businesses find themselves pondering the differences and relationships between these two quite distinct management strategies. This article aims to clarify the differences and interconnections between BPR and BPM and provides practical insights into how they can be effectively utilized in an organization.

Business Process Reengineering (BPR)

Business Process Reengineering (BPR) is a management strategy that strives for radical restructuring of business processes. Its primary objective is to make significant improvements in areas such as cost, quality, service, and speed. BPR typically involves a comprehensive analysis of current processes and workflows, identification of inefficiencies, and implementation of substantial changes to enhance performance.

Key Aspects of BPR:

Radical Redesign: BPR focuses on making drastic changes to processes, often involving a complete overhaul. Customer-Centric: A central goal is to align processes with customer needs and improve their experience. Risk of Short-Term Pain: Implementing BPR can be a costly and time-consuming process, often requiring significant investments in training, technology, and infrastructure. Thorough Analysis: BPR often entails a detailed examination of current practices before any changes are made.

Business Process Management (BPM)

Business Process Management (BPM) is a more comprehensive field that encompasses the systematic control and systematic improvement of business processes. It involves continuous optimization and enhancement of processes through various methodologies and tools. BPM is more about improving processes gradually and efficiently rather than instigating massive changes.

Key Aspects of BPM:

Continuous Improvement: BPM focuses on ongoing optimization of existing processes to increase efficiency and effectiveness. Automation: BPM often includes the use of technology to automate processes, thereby reducing human errors and increasing productivity. Process Modeling and Monitoring: BPM emphasizes detailed modeling and ongoing monitoring of processes to ensure they are running smoothly. Utility and Scalability: BPM is designed to be flexible and scalable, making it suitable for organizations of all sizes.

Relationship Between BPR and BPM

While BPR and BPM are distinct, they are also interconnected. BPR can often be seen as a subset of BPM when processes are in dire need of fundamental restructuring. However, BPM focuses more on continuous improvement over time.

BPR as a Subset of BPM:

Inclusion in BPM Framework: BPR can be a key component of BPM when a thorough overhaul of processes is necessary. Long-Term Vision: BPM can provide the necessary tools and strategies to support the implementation of radical changes proposed by BPR.

Practical Examples and Case Studies

Consider a scenario where an organization decides to adopt a new Business Process Reengineering strategy. For instance, a company utilizing an old-fashioned self-coded backend system will find it extremely challenging to make quick and drastic changes to its processes. Changing such a system entails significant pain and high costs, often requiring a complete overhaul of the backend infrastructure, which can be financially and operationally detrimental.

On the other hand, companies using advanced solutions such as Oracle may find it still challenging to implement changes without considerable delays and expenses. This often makes BPM the preferred approach, as it allows for more gradual improvements and allows the company to avoid the risks associated with extensive and rapid changes.

PrivatBank in Ukraine, for example, adopted the cloud OS Corezoid to manage business processes. Implementing changes in a few minutes, without the need for developers, has exponentially increased the speed of process adjustments. This approach allowed PrivatBank to modernize its backend processes without the need for extensive coding and infrastructure changes.

Conclusion

While BPR and BPM serve different purposes and can be used in tandem, understanding their unique strengths and how they can complement each other is crucial for effective process management. Identifying the need for fundamental changes (BPR) and continuously optimizing processes (BPM) can provide a comprehensive approach to improving overall business performance.

References:

ISO/IEC 11179-2:1999 Structure and rules of global interchange and use of information - Part 2: Concepts and principles Sirius Intelligence - Business Process Reengineering (BPR) vs Business Process Management (BPM) - Theory and Practice