School of Information Systems

BPR vs BPI

30 Jan 2023

Business Process

A business process is a set of actions several stakeholders take to accomplish a specific objective. A task is allocated to a participant at each stage of a business process. It is the essential building block for several related concepts, including process automation and business process management.

The need for and advantages of a business process is needed in large organizations. A process that forms a guide for any business and helps it streamline individual activities, making sure that resources are put to optimal use.

Any Business Process can be characterized by three major elements:

  • Inputs
  • Processing
  • Outcome

Key reasons to have well-defined business processes consist of:

  • Identify what tasks are essential to your larger business goals
  • Improve efficiency
  • Prevent problems that interrupt daily operations
  • Standardize a set of procedures to complete tasks

Business Process Reengineering

Business Process Reengineering means a fundamental rethinking and fundamental redesigning of business processes to achieve remarkable improvements in cost, quality, service, and speed.

Types of firms/Organizations that can implement a BPR

BPR could be implemented to all firms and public organizations that have the following criteria:

  • Minimum Number of employees: 20
  • Management Commitment to grow the company and exploring new ways of working and let go from its traditional style of work

Expected results on implementing BPR

The expected results on implementing BPR are the following:

  • Improve the efficiency of work and processes
  • Reorganizing the company’s structure
  • Jobs and processes become flexible

Stages

  • Prepare for Business Process Reengineering

Planning is a vital factor for any activity or event to be successful, and reengineering is no exception. It is important to understand for process improvement or implement any change in the company

  • Map and Analyze As-Is Process

Before continuing to Redesign the process, we should first understand the existing process and analyze all the flows in the current process. Mapping the processes first is essential. The main objective of this phase is to identify anything that prevents the current process from getting the wanted results. This first can be achieved by creating and documenting current activities and processes. Then that information is gathered and calculated through activity-based costing.

  • Design To-Be Process

This phase aims to develop one or more alternatives to the company’s existing course of action that meet the top management’s strategic objectives. No matter where they come from, innovative techniques can be implemented. The creation of the To-Be models is complete, and it is documented for use in the future after identifying potential enhancements to the current methods.

  • Implementation of Re-Engineered Process

A process cannot be reengineered overnight since more time and effort must be spent planning for process improvement, identifying GAPS in existing processes, and analyzing newly required procedures.

Business Process Improvement

Business process improvement (BPI) is a practice in which corporate leaders examine their business processes to find opportunities to increase accuracy, effectiveness, and efficiency. These opportunities are then identified, and adjustments are made to the processes to achieve these improvements.

Purpose of Business Process Improvements

  • Reduce Costs
  • Eliminate unnecessary efforts
  • Improve Quality of products and services
  • Reduce errors
  • Fasten Output

Steps of BPI

  • Create a Process Master

Taking stock of as many organizational processes as possible is the first stage in every process improvement endeavor. Why? Because everything in the value chain, from the concept to the client, is interconnected. The team will be forced to consider the interdependencies between people, departments, vendors, and customers, all of whom may influence the process, by considering all organizational processes.

  • Prioritize Processes

The next step is to identify the processes that, if changed, would have the biggest positive influence on the organization.

  • Make a Process Improvement Team

It’s crucial to incorporate individuals from every area of the business that might influence or be influenced in any way by the new process, as the biggest barrier to change is a lack of buy-in from those we hope will embrace it.

  • Create Process Models

There are many business reasons for which an insurance company should model its process. The departments, resources, activities, third parties, handoffs, and decision points are all represented in a well-developed process model graphically.

  • Perform Root Cause Analysis

This stage serves as the improvement effort’s first significant diagnostic component. Several methods from the Six Sigma toolkit, including brainstorming, cause-and-effect diagramming, affinity diagramming, discrete data collecting, and Pareto analysis, are used in the root-cause analysis technique that is the easiest to teach.

  • Re-Measure

Once the chosen improvement project is complete and the modified procedures are in place, it’s time to count the potential root causes discovered during the earlier stages of the improvement campaign.

Difference Between BPI and BPR

Now let’s get to the main point, just by looking at the words BPI and BPR has a difference on one word which is “Improvements” and “Reengineering”. Improvements has meaning on the act or process of making something better and Reengineering means redesigning the structure or business process. Business process reengineering involves completely changing the process for an overall different result, which is the opposite of incremental business process improvement. BPR aims at changing the way a process works while BPI is tweaking an existing process to optimize it. But the difference is in the depth of change. Business process Improvement has several main points which are:

  • On-Going Effort
  • Improvement of existing process
  • Limited Organizational change
  • Requires an incremental change in mind-set

But Business Process Reengineering are more serious process rather than BPI which are :

  • Project-based effort
  • Build process from scratch
  • Greater Organizational change
  • Requires a fundamental change in mind-set

REFERENCES:

Dharmesh Sheth, BUSINESS PROCESSRE-ENGINEERING(BPR) INITIATIVE- RESIGNING OF HUMAN RESOURCE DEVELOPMENT IN KUCB TO OPTIMIZE BANK ’SEFFICIENCY

https://kissflow.com/workflow/bpm/business-process/

https://www.visual-paradigm.com/guide/business-process-reengineering/bpi-vs-bpr/#:~:text=BPI%20vs%20BPR,-Both%20BPR%20and&text=Business%20process%20reengineering%20involves%20completely,existing%20process%20to%20optimize%20it.

Perr&Knight, Seven Steps To Operational Excellence

Raihan Mahardhika, Marisa Karsen