The best businesses are always looking for ways to improve, whether that’s developing flawless communication between employees or providing the kind of customer service that keeps people coming back.
Our experience has taught us that businesses that create efficient and cost-effective processes can increase their business performance dramatically – but we also know that it can be tricky figuring out where to start.
Enter business process engineering.
What is business process engineering?
Business process engineering is a business management strategy that analyses everyday workflows within a company and improves any activities that are slow or inefficient. For many businesses, processes are unconsciously grown over the years; passed down through staff members or constantly adapted to fit day to day business needs.
Rules like “merchandising decisions must be made at headquarters” or “all forms must be filled in and checked by HR” are used every day, without anyone really realising that the processes are long and unnecessary!
The beauty of business process engineering is that it gives you the know-how to redesign a business’s core processes and improve the quality of each task in your business. Handy, eh?
Where did business process engineering come from?
Business process engineering first became popular in the 1990s, when Michael Hammer published Reengineering Work: Don’t Automate, Obliterate in the Harvard Business Review. In the article, Hammer criticised the “glacial pace” of product development, high error rates in order fulfilment and the unanswered customer inquiries that he saw in many businesses at the time.
As a former professor of computer science, Hammer especially didn’t agree with how companies were using technology to boost performance. Despite the fact that the way companies worked and the environment they worked in had all been changed with the invention of the computer, many companies were using technology to try and speed up the old ways of doing business.
Hammer wanted companies to start “obliterating” processes that were tired or slow, and the rest is history – business process engineering was created!
As Hammer said,
“Instead of embedding outdated processes in silicon and software, we should obliterate them and start over. We should “reengineer” our businesses: use the power of modern information technology to radically redesign our business processes in order to achieve dramatic improvements in their performance.”
Hammer’s ideas still make up a lot of the business process engineering model today: that by challenging old assumptions in a business, you can get rid of the old rules that made the business underperform in the first place.
So what does successful business process engineering look like?
Successful business process engineering starts with an analysis of what your business looks like already. Or, by simply asking yourself, are there processes that seem slower than others? Comparing yourself to your competitors can also give you a bit of a benchmark on how efficient your business workings should be.
One of the most famous examples of successful business process engineering comes from Ford. In the early 1980s, with the American car industry in the middle of a depression, Ford was looking to cut costs across the business. Their accounts office employed more than 500 people, while the same department in Mazda employed less than 100.
When managers looked into the existing process, the accounts department had to match 14 data items between the receipt record, the purchase order, and the invoice before it could hand over a payment to a vendor. The department spent most of its time working through mismatches between the different documents, where all inconsistencies had to be investigated. Payment would be held up and more documents would have to be generated. Something had to be done.
And do something they did! Ford landed themselves in the business process engineering history books by creating invoiceless processing. Rather than producing huge numbers of documents, details would be entered into an online database. Now, all anyone had to do to complete their task was to check the database.
Ford proved that radical change is what’s key to successful business process engineering. They got rid of old habits and bogged down processes, and revolutionised their business. As a result, they reduced their headcount by a staggering 75%, improving their efficiency for both customers and employees.
The latest developments in business process engineering
Business process engineering is still firmly rooted in Michael Hammer’s original idea, but, like the process itself, it has evolved to fit with modern day businesses.
Hammer was originally worried about companies using technology to speed up slow processes, but the latest technology has helped businesses to become more efficient. Workflow management systems use automation to cut down on slow processes and manage employee responsibilities, and enterprise software like SAP can help to keep accounting, sales and human resources all in one place.
Thanks to the growth in popularity of social collaboration tools, there’s no need for paper documents that detail strategies or processes. Not only do these tools make project management more efficient (the key goal in business process engineering!) but it means that staff, clients and managers can all be kept up to date with the latest progress on a project. It’s also easy to flag last minute changes to something, preventing confusion or delays later down the line.
Learning through doing
There’s a focus on making sure business processes are efficient themselves. Early business process engineering could easily get swept up in big projects that could take a long time to work through. In the last few years, business process engineering has re-engineered itself into something that’s fast and agile. Now, processes are tested early to learn through doing, and they deliver results quickly.
Infinity Loop Consulting is the right choice for Business Process Engineering
Business process engineering isn’t easy. It involves tearing down something that people are used to, and creating something totally different. Choosing a team of highly experienced consultants as a partner for your business process engineering initiatives can make the whole experience much smoother.
At Infinity Loop Consulting, all our consultants are experienced entrepreneurs and leaders, so we understand what it takes to succeed in the business world. We have a proven record of success, working with everyone from small local businesses to large international enterprises. Whether you’re looking to transform your business or you’d like to improve a specific area, we can help you achieve the change you need.
To learn more about how Infinity Loop Consulting can help your business stay one step ahead, get in touch today.