Re-engineering offers massive rewards for success; massive losses for failure. The oods on the latter appear short. Judith Oliver examines an idea whose time has come. Experts give views; Sun Life, a success story.
There is a new-look menu over at The Consultants' Cafe. Good old soupe du TQM and change management pate are off. Perhaps you would care to try some business process re-engineering (BPR) instead? Corporate diners beware. BPR, that nouvellest of consultant cuisine, bears no resemblance to a standard Saturday night take-away. Except in one respect. Like the curry house special, no one knows exactly what it is.
Re-engineering is all to do with radically reviewing how a business works in order to achieve dramatic performance improvement. Grasping that much puts you in the right ballpark - only to discover vast confusion about the game in progress. Is business process re-engineering the same as business process improvement, redesign and management? How close are they to incremental process improvement, business transformation or core process redesign? The range of offerings riding the re-engineering ticket is so vast and bewildering that a little demystification and debunking would not go amiss.
The sheer inelegance of the term itself is enough to chill most arts graduate managerial veins. Consultant Michael Hammer, author of a clear, cogent article in the Harvard Business Review three years ago is to blame. Some say Hammer loaded the BPR bandwagon, attached the horses and set it rolling. Others argue it had been trotting along nicely for several years when he merely leapt aboard, grabbed the reins and provided some clear direction. Either way, Hammer, a former professor of computer science at the Massachusetts Institute of Technology, coined an expression drawn from his world of systems-orientated change management programmes and committed it to print. Scientifically-challenged others are now saddled with it.
When Hammer defined re-engineering as a 'fundamental rethink and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service and speed', whoops of delight from business hungry consultants and IT systems dealers rang out world-wide. Consultants and companies already working along similar lines discovered that they had been re-engineering all along, others quickly joined the party: some wearing whole new outfits, others, their old favourites re-patched. This haphazard start is responsible for BPR's differing guises, terms, methods and meanings.
A messy start and glut of labels is not in itself the problem: rather, Hammer's estimate that 70% of organisations fail to achieve any results from their re-engineering efforts. Purists are concerned that exciting theory must increasingly meet ignominious practical demise if those buying-in to BPR continue to misinterpret the nature of a powerful but difficult beast. 'The word re-engineering is so overused, misused and abused that it is already a bit passe,' says one consultant. Everyone agrees that re-engineering is about an organisation's processes 'any activity or group of activities that takes an input, adds value to it and provides an output to an internal or external customer'. That much is certain. Then the ground begins to shift. Some argue that rethinking one small process in a business, such as a system for paying accounts, is not the real McCoy - it is not fundamental enough. Re-engineering should entail the radical rethink of the whole business, not parts of it. Others say BPR requires new information systems. Not at all, the non-techies reply. Even Hammer gets hammered. 'He's IT driven. Where is strategy in his picture. He has missed the point'.
Last year, Chris Skinner, of Highams Systems and John Pearson of Bristol University, fed up with all the confusion, surveyed 85 retail financial services firms or consultants to discover what BPR meant to those actually involved in a BPR programme. 'Every company has its own understanding of what BPR is and each consultancy company has their own unique approach,' they conclude. But some clear definitions emerged. 'BPR is a conscious reshaping of an organisation behind a new corporate vision, the marketplace and customer. Using a holistic, "fresh start" approach, BPR reviews all business activities from "end to end". This may result in a redefinition of processes, organisational structures and technology, to allow the company to streamline, delete or change the way in which work is done. BPR's ultimate objective is to yield sustainable improvements in profitability, productivity, service and quality, while maximising the potential of the individual and the team.'
In other words, a purist's BPR spells trouble, massive trouble. Change, upheaval, expenditure, revisiting, revising, rebuilding, restructuring, re-skilling, reorganing and, another unpleasant 're' word, redundancy. In fairness, BPR does not necessarily mean downsizing: in practice it often does. Hammer says those who seriously adopt re-engineering techniques find that they can do the same work with 40-80% fewer employees. One survey respondent admitted the greatest barrier to BPR in his company was 'getting the turkeys to vote for Christmas.'
Don't underestimate BPR, says Rohit Talwar, head of business re-engineering at BMS Bossard and chairman of The Strategic Planning Society's BPR special interest group. 'There are almost obscene levels of hype and false expectations being generated. As a result, some firms are being seduced into expensive and disastrous initiatives. Radical, step-change improvements in service, efficiency and quality can be achieved - but you have to be prepared for a great deal of pain to get them. Why? Because re-engineering means fundamentally changing the "way we do things" and that means changing the culture.'
Re-engineering may not be rocket science but it does require a clear sense of strategic direction and priorities, genuine chief executive and top management commitment and a massive investment in training. Turkeys often drag their feet, but without their vote any BPR effort is doomed. The scale of a purist's re-engineering effort is so vast that many organisations opt for a watered-down version. Re-engineering should not then be blamed if they are disappointed with the results, argues Skinner who draws a distinction between BPR (directed at individual processes in an ad hoc fashion) and business re-engineering (BR, a total big-bang business rethink). 'Many firms jump in at the pragmatic level of BPR and change some of their simple, low level processes, without doing anything fundamental to the business. It's like improving the design of your car's hub cap or door. They are components of the car but not the whole car.
Business re-engineering means rethinking the entire business. It means starting with a vision of a whole new car.' So defined, BPR is clearly easier to set in motion than business re-engineering, as it can be organised at a departmental level without the company-wide commitment required for a full-scale re-engineering effort. Even so, big bang or piecemeal, seat of the pants or soundly-based, re-engineering can go awry. On the next two pages, leading consultants suggest what can go wrong. They also answer the questions: why engineer, why now and how they can help. There are several powerful success stories: Sun Life Assurance reveals the gain beyond the pain on page 22.
Tales of astonishing gain (Hammer insists BPR is about quantum leaps in performance, not paltry 10% or 20% improvements) imply that re-engineering is new. As one manager says, 'If there is nothing new, why haven't we done it before?' But the novelty of re-engineering, like its definition, meaning and methods, is debatable. An accusation already raised is that BPR is just organisation and methods (O and M), or change management re-packaged and re-named for the '90s. On the other hand, 42% of respondents to the Bristol University/Highams survey insisted it was something new. One manager with BPR experience gives a definition to smooth feathers all round: 'Using tried and tested management techniques, with a healthy dose of common sense, BPR reviews all aspects of people, process and technology in a single co-ordinated approach. Hence, BPR becomes much greater than the sum of its parts. It's emphasis on moving management control to the point of execution, directly linking organisational strategy and individual behaviour, embracing new enabling technologies, and replacing functional departments with multi-disciplined individuals and teams, is perceived as radical and new.' If you are re-engineering and all that doesn't strike a chord then perhaps it is time for a rethink. If you were considering re-engineering and it sounds too dreadful then don't bother. BPR is not for the faint-hearted. Wait for next week's menu. You might find something on it which appeals more.