Business process reengineering, business process management – it’s all the same, right?
These two terms sound similar, so understanding business process reengineering vs business process management is critical. Today, we’re breaking down the distinctions.
What is Business Process Reengineering?
Business process reengineering (BPR) centers around rebuilding a company process to make it stronger while reducing unnecessary long-term costs. Process reengineering is a critical part of digital transformation. It allows you to take a closer look at your day-to-day workflows to understand pain points for various stakeholders.
Once you’ve completed this step, you can more clearly see where operational inefficiencies exist and how technology can help address them. Operational inefficiencies might include redundancies, duplicate work, or organizational siloes that impede the flow of information from one department to the next.
It’s important for team members to decide what process changes will be the most impactful. Then, they can redesign the relevant processes.
Usually, companies perform business process reengineering at the start of a digital transformation. This means it should occur before ERP selection. You can’t truly understand what you need a new system to do until you know where your key issues are.
Basic Steps of Business Process Reengineering
Each company has its own unique way of approaching this phase of a project. However, there are a few basic steps to BPR that most teams follow. They include:
- Step 1: Identify and evaluate processes
- Step 2: Evaluate the current effectiveness of a process
- Step 3: Redesign the process with a new prototype (if required)
- Step 4: Incorporate the new process into your workflows and monitor the results
Note that when performing BPR, you don’t need to map all your current state processes. Instead, gather stakeholders from across departments and ask about pain points and opportunities for improvement. This will help you identify the processes to focus on when designing your future state.
When mapping your future state, there’s no need to define how you want each process to look within the software. By keeping your focus high level, you minimize your need to customize your chosen ERP solution for a process that could have been standardized. If it’s not a competitive differentiator, it can and should be standardized to fit the software.
Attention SAP, Oracle, Microsoft, and Infor Users!
Share your implementation story by taking our 7-minute survey. To show our appreciation, we'll send you a Starbucks gift card.
What is Business Process Management?
Business process management (BPM) is a method that companies use to manage their workflows. It’s the discipline of looking at how you do things from a process standpoint and using data to make process improvements.
Within this technique, there is one central goal: Find ways to improve business processes and company performance.
Unlike business process reengineering, this isn’t a technique your team will perform one time, such as at the beginning of a digital business transformation. Rather, it’s a collective, long-term process that serves as the foundation for all your organizational business activities.
Basic Steps of Business Process Management
As companies seek to manage and improve their enterprise-wide business operations, they might do so by following these basic BPM steps:
- Identify and create an ideal business model
- Put that model into action through core processes
- Routinely evaluate those processes to make sure they’re still effective
- Optimize those processes to enhance business value
As new data enters your company, you can use it to make incremental process improvements as required. However, you aren’t doing so with a specific timeline in mind, as you would be with an ERP implementation.
In fact, many improvements can be rolled out independent of an ERP system. For example, if a company decides it wants to incorporate a purchase order approval workflow to ensure tighter controls on procurement costs, it may decide to do so via email approvals until a robust ERP system is in place to further automate this change.
From an organizational change management perspective, “spoon feeding” changes to employees over time is more effective than waiting to implement a massive degree of change all at once during an ERP implementation.
Business Process Reengineering vs Business Process Management: 3 Differences
In some ways, BPR is a follow-up, or a subset, to BPM. Let’s look at a few of the main differences to know.
Single Task vs. Entire Strategy
With BPR, companies are looking for ways to increase the efficiency of a specific task or workflow step. For instance, they may dive into the communications that occur between the sales team and project management team when a lead converts into a customer.
On the other hand, BPM takes more of a long-term perspective. Instead of narrowing in on one isolated task, you’re looking for ways to improve your business processes overall. The impetus is more on observing and preserving the current state than reconstructing a given process flow.
Systematic vs. Managerial Outlook
A BPR approach seeks to be as lean and efficient as possible. The goal is to reduce any part of a task that doesn’t serve a valuable business purpose. Team members identify their desired future state and make the process changes required to get there.
With BPM, on the other hand, there isn’t an emphasis on rejecting functions, even if they aren’t considered valuable. This method doesn’t rebuild or reconstruct any of a company’s working processes or procedures. Rather, it takes a more managerial approach to ensure current practices are optimized as necessary.
Changeable vs. Static Process Flows
A BPM strategy only works with a process flow that has already been written out. This means it must operate under the constraints of any management strategies that are already established. With this strategy, you aren’t necessarily changing a process. You’re simply looking for ways to make it more effective.
In contrast, with BPR, you’re looking at the steps involved in each process and brainstorming ways to redesign them.
Optimize Both BPR and BPM
When seeking to understand business process reengineering vs business process management, it’s important to note that both methods are often required for long-term company success.
If you’re on the cusp of a digital transformation, then BPR is a critical first step. Over time, you can take a more comprehensive approach by focusing on BPM and to keep those new processes optimized.