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Contributed on June 29, 2015

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Business Process Reengineering Vs Business Process Optimisation

Blog: Business Analyst Learnings Blog

There are lots of process improvement methodologies that can be applied in process improvement projects. While some are universally known, most are variations on a theme. The 2 most common are 1) Business Process Optimisation (BPO), also known as Streamlining and 2) Business Process Reengineering (BPR).

BPO and BPR are two separate approaches to achieving process improvement and they need to be understood within the context of improving business processes in order to identify which approach is best for your business.

Business Process Reengineering (BPR) is usually done to identify and eliminate the organizational barriers impeding the flow of processes to create “drastic” changes while BPO is more subtle in its approach. BPR has faced a significant amount of criticism over the years since it often leads to lowered employee morale and lay-offs in light of the significant number of changes that comes with it. Two early proponents of BPR are Michael Hammer & James Champy, who published a book, “Reengineering the Corporation” in the 90s. They emphasised that in some cases, radical design and reorganisation is the only way to reduce cost and improve quality.

Here are some key differences between BPO and BPR:

1. While BPO or streamlining is done to improve processes within the existing organizational structure, BPR is done to create dramatic improvements to enable the organisation break away from conventional wisdom and approaches, thereby creating widespread change. 

2. BPO is a preventive technique that should be applied as a principle across the business, whether or not there are problems while BPR is often applied to fend off impending disasters. Some however argue that whether or not BPO is implemented within the organisation, BPR may still be necessary in response to changes in the legal/political environment.

3. BPO is often seen as running repairs/maintenance and can be used to achieve quick wins while BPR focuses more on the improvement of organisational operations enterprise-wide, which takes a significant amount of time to accomplish.

Here’s a quick guide for deciding whether to apply BPO/BPR:

Use Business Process Optimisation when:

1. Existing process is already mapped/documented
2. Existing process fundamentally works but not well enough with some areas in need of improvement
3. Your focus is the process – not on implementing an overarching business strategy.

Use Business Process Reengineering when:

1. Existing process is redundant or in need of a rethink and major improvements
2. The process fundamentally no longer works and a major overhaul is required. Everyone agrees that the current process is useless and needs to be changed.
3. Your focus is the overall strategy and not a particular task

Which approach is better? 

It depends on the circumstances facing the business. While process improvement efforts should be guided by organisational efforts, it is important to put these approaches in context to determine which is suitable.

Picture Attribution: “House And Earth On Scales” by jscreationzs/Freedigitalphotos.net