1. A Strategic Approach to
Business Process Redesign

2. Executive Summary
To successfully reengineer a business process,
there is a lot of work that must be completed
before the actual process is modified. First, the
problem must be defined to set the course for the
optimal solution. Once the problem is understood,
the current state must be assessed, taking into
account the three key business components:
people, process, and tools. After establishing a
baseline, comparing the current state to peers will
help benchmark your position, and may provide
insight to revolutionary improvements. This holistic
approach to analyzing the current state will help
ensure all variables of the business are taken into
account, minimizing the likelihood of failure.
When the problem and current business
environment are understood, outlining the goals
and scope of the initiative and ensuring the
project’s ambitions align with the corporate vision
will provide the initial boundaries for the project.
Once the project is scoped, an execution plan
should be constructed to get an understanding
of the proposed timeline and its relation with cost
and extent of the initiative. After the scope and
execution plan are completed, the work should
be sequenced according to the business vision,
culminating in a strategic roadmap.
A successful outcome is not guaranteed. If
management support is not strong or the project
is mismanaged, the likelihood of success is
severely diminished. Similarly, if the redesign is
thrust upon staff or their management without
their support, gaining adoption will not only be
difficult, but it could cause failure. Furthermore, if
the solution does not adequately fulfill the business
requirements or the technology does not integrate
or strategically align with the current enterprise
architecture, a win is unlikely.
A successful BPR project must have a strong
champion, strong management team, a thorough
current-state assessment, and strict adherence to a
redesign methodology, all while being cognizant of
potential pitfalls.
Problem Definition
When reengineering business processes,
generally the goal is to decrease operational
costs and/or improve customer service. Many
firms take a reactive approach to decreasing
operational costs by reducing headcount without
improved processes or technology. This creates
a one-time, unsustainable savings that leads to
employees working as efficiently as possible, but
unable to improve productivity. In fact, unless
there is a corresponding reduction in workload,
this can sometimes leads to further deterioration
of performance due to the enormous burden left
to a smaller pool of remaining employees. All of
the employees’ effort is consumed by executing
inefficient processes with bare-bones staff and
inadequate tools, which has a significant negative
impact on customer service and employee
welfare. The stress on employees, often high-
performing employees striving to maintain quality
levels, may cause increased incidents of burnout,
which may lead to abnormally high attrition rates.
Although reducing headcount is never easy, the
tangible savings are immediately realized, so it is
often a go-to method to reduce operating costs.
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On the surface, if an area can operate with the
decreased headcount, the workforce is more
optimal than it was before the staff reduction.
The problem is there are overt and hidden risks
and opportunity costs associated with reducing
headcount without improving processes and tools.
When every employee is fully utilized by ‘Business
as Usual’ operations, there is no flexibility to
handle volume or staff fluctuations. An increase
in business volume can only be addressed by
increasing headcount, potentially exceeding
the operating budget and eroding any cost
savings. Something as simple a thing as several
employees being sick simultaneously can severely
impact productivity.
In addition to productivity goals, customer
service (external customers, internal customers,
or both) will suffer when staff is inadequate.
When employees are working beyond their
capacity, performance quality is at risk. Reduced
quality can manifest itself in final outputs to
external customers or a slippage in Service Level
Agreements with internal customers. Delivering
unacceptable products to external or internal
customers can result in increased downstream
costs due to increased customer service after the
process is complete. Not only is the customer
service an additional burden on the operating
cost of the organization, but employees and
customers also suffer, potentially driving long-
term damage to the company brand.
Aside from performing additional customer service
activities, the opportunity cost of having every
employee fully engaged in ‘Lights On, Doors
Open’ activities is that staff cannot be reallocated.
When the staff is fully consumed with day-to-day
operations, the ability to use team members for
improvements or special projects is eliminated.
The inability to re-invest in the business and
its employees will directly impact the ability to
implement strategic initiatives, which may erode
market share and overall shareholder value.
When implementing cost-cutting measures,
a deliberate business process redesign effort
should be considered. Although quick reductions
in cost are achievable without process redesign,
to achieve sustainable efficiencies and maintain
competitive positioning, organizations must invest
in the tools and technologies to drive success.
Before You Start
A variant of a famous quote by George Santayana
states, “You can’t know where you’re going until
you know where you’ve been.” This idea is a
fundamental principal when doing a Business
Process Redesign initiative. Before embarking
on an organizational improvement project, you
must understand your current state, and to take
it a step further, document your current-state
understanding. Documenting the current state
will increase the odds of success by helping
communicate issues and provide a concrete
baseline to measure strategic improvements.
When documenting the current state, there
are three key areas that must be looked at:
the people, the processes, and the tools (or
technology). Once the current state is understood,
comparing your findings with those of your peers
through a benchmarking exercise will help identify

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your business’ strengths as well as shortcomings
and allow you to set a clear path forward for
improvement. The benchmarking exercise should
be done in a measurable, attainable, realistic,
and time-bound manner, which will not only aid in
defining where to devote your efforts, but will also
reveal the potential benefits to be rendered from
the endeavor.
People
When understanding the ‘people’ impact of any
reengineering effort, you should focus on the
structural, functional, and cultural aspects of the
organization. From a structural standpoint, you
should ask yourself, will this reengineering effort
allow me to streamline or consolidate the structure
of an organization? An example of this type of
restructuring is consolidating once-disparate
groups of resources performing the same function
into a single, shared-services organizational
structure. These types of transformations not
only have a sizeable impact of benefit to an
organization, but also require an equally sizable
change program to ensure success.
Most every reengineering effort will impact the
organization at a functional level in some form
or another. For instance, initiatives involving the
implementation or enhancement of technology
to automate processes often eliminate one or
more functions from a process end to end,
thereby impacting the resources performing those
functions. These impacts, designed to improve
quality or productivity, require change programs
that are tailored to the impacted area to extract
the highest benefit.
The cultural nature of an organization, its reaction
to change and the way in which it is delivered
are often the most critical elements and must not
be overlooked or miscalculated. For example, in
global initiatives, the way in which you approach
implementing and communicating a large-
scale reengineering effort in western cultures is
considerably different than how to best approach
eastern cultures. Our customs and norms of
society are such that, if not accounted for
carefully, they can have a devastating effect on
the success of the effort.
In the end, people are people with lives outside
of work. Taking stock in the value of the people
involved in any effort and the impact initiatives
have on the lives of those in the organization
is the key. Conduct a deliberate approach to
evaluating the impact a reengineering effort
has on its people through understanding the
organizational structure roles, responsibilities,
the attitude toward change, and the overall
culture. This will go a long way toward ensuring
you build a future-proof transformation strategy.
Process
To improve operations, you need to thoroughly
understand the ‘Business as Usual’ environment.
To gain consensus on business as unusual,
processes need to be documented and reviewed.
The best medium to document business
processes when analyzing them for a redesign is
to use business process maps. Business process
maps are graphical, step-by-step depictions of
an end-to-end process expressing the workflow,

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routing rules, and tasks involved. Often these
are completed through interviews with process
associates or through process shadowing. Also
known as conducting a time and motion study,
this exercise captures the process, the time to
complete a task, and the ‘at rest’ time of the
process end to end. Once the maps are created,
they should be circulated amongst process owners
and actors for review to ensure consensus.
When creating process maps, it is good practice
to create a master map that shows the entire
business process end to end to put individual
functions in perspective with the overall operation.
Creating a master map will also help drive out any
dependencies and interdepartmental relationships
that will need to be considered during any
improvement initiative. The master map should
be detailed enough to understand the processes
and their relationships, but simple enough that the
entire business can be understood.
After the master map is created, the core
processes should then be elaborated. Because
this step is pre-work to help decide where to start
the redesign effort, it is important that a minimum
set of data is captured about each process and
sub-process. A process improvement initiative
is generally time sensitive, so over-engineering
the current-state discovery and trying to capture
every nuance and insignificant detail can stall the
project. Instead, focus on making sure activities
are captured in the proper sequence, as well as the
actors who perform them and the time and effort
associated with the process or task. Additional
details like pain points, functional technology gaps,
workarounds, and other relevant attributes should
also be captured, without going overboard. This
will provide the basis for identifying and prioritizing
areas of high impact. Leveraging Pareto’s Principle
or the law of diminishing returns are useful tools
in this type of exercise. Leave capturing the
task-level details of the process to the detailed
requirements phase after you have prioritized the
likely candidates for reengineering.
Tools
Another area important to any business
process that must be evaluated is the tools
and technology required to execute business
processes. In today’s rapidly evolving world
of digital connectivity, technology capabilities
are more critical than ever before. Whether
you are introducing new disruptive technology,
modernizing existing assets, or simply broadening
the use of existing technologies, evaluating
the impact a new technology may have in
improving overall business performance is
critical. Conducting a thorough assessment of
the technology landscape of an organization in
the context of the desired future state business
model and IT Roadmap can mean the difference
between evolutionary and revolutionary gains
in business performance. Identifying what
activities require what technology will help
determine what technology should be replaced,
improved, or eliminated. Mission critical attributes
of the desired future state and the functional
capabilities the reengineering effort will demand
of technology solutions will need to be captured.
Whether the key requirements exist in the
environment, need to be augmented, or will need
to be procured are just some of the questions that
should be asked when documenting the current
technology landscape.
Peers
When the current state is well understood and
documented, it is potentially enlightening to
compare your business to your industry peers.
A benchmarking activity can be performed across
functions, activities, and technology to help
gain objective insight into where you stand with
your peers regarding best practices, process

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maturity, or performance metrics. Benchmarking
can span all functions, or if trouble areas have
been identified, it can be a concentrated effort. If
you find you are leading the pack relative to your
peers, or for additional insight, benchmarking
yourself against leaders in other industries may be
worthwhile to sustain your competitive advantage,
a goal of business strategy. Regardless of whom
you choose to compare yourself to, the exercise
will help determine what areas need improvement,
and how much improvement is required to either
achieve parity or potentially surpass your industry
peer group.
The current-state discovery helps you understand
where your company ranks, and creates an
indisputable record documenting your current
situation. Once the current-state assessment is
complete, and you have compared yourself with
your industry, it is time to answer the difficult
questions of why and how fast you need to
change, what goals you wish to achieve, and how
to get there. To maintain a long-term competitive
differentiation, the following methodology should
help you realize your business vision.
Methodology
Scoping
Once the current state is complete, it is time
put your hard work to use and formulate your
reengineering priorities. When selecting the
scope and the sequencing of the redesign, use
the business vision as the overarching selection
criteria. With that in mind, the primary decision
is which processes must be addressed, would be
nice to address, and are not worth the effort. The
‘High Impact’ approach is the most prolific guide
to making scoping and sequencing decisions. To
apply the ‘High Impact’ approach, you look at the
potential processes, and select those that are the
most important, generate the most revenue, or that
best fit with the business vision. As an alternative,
the ‘Exhaustive’ approach may be used. To apply
the ‘Exhaustive’ approach, all the processes in
an organization are identified, and then ranked
by priority or urgency with the expectation that
all processes will be addressed to some degree
over the life of the program. Depending on the
thoroughness of the current-state assessment, a
‘Pseudo-Exhaustive’ approach may be performed
by informally noting which processes need to be
taken care of first, and then triaging that list using
a ‘High Impact’ approach.
Planning
Once the scope is established, it is time to
create an execution plan. The execution plan
should address all the processes that are to
be remediated and in what order. The plan
should be created outlining key milestones and
toll gates that must be accomplished for each
step in the plan, including project-level goals
and dependencies, as well as other initiatives
in flight that require integration or, at minimum,
coordination. After an execution plan is created,
project timelines, cost, and resource demand
forecasting can begin. The scope of the project,
the time to complete, and the cost all must be
examined concurrently in accordance with the
‘Triple Constraint Theory.’ The ‘Triple Constraint
Theory’ states that a project’s scope, schedule,
and budget are interrelated and changing one

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constraint must impact at least one of the
others. To make these decisions digestible,
it is recommended that the most important
component of the triple constraint (cost, scope,
or schedule) be identified, and that constraint
held near constant. Then the other two variables
can be adjusted to maximize the success of the
project with respect to your business goals. The
planning exercise will help solidify where you
want to be and to understand how to get there.
An implementation roadmap is the next step.
Roadmap
The implementation ‘Roadmap’ should be a
high-level Gantt chart that depicts the activitie
that need to be accomplished to successfully
complete each phase of the initiative. It should
depict the order in which tasks, projects, or groups
of projects (i.e. programs) should be accomplished,
how long they should last, and general resource
requirements. The Roadmap must take the business
vision and objectives into account, as well as
the decisions made in the scoping and planning
activities, but should also incorporate quick wins not
only to enable (if possible) a self-sustaining funding
mechanism or ROI, but also to provide the fuel for
enabling a sustainable transformation program.
Often the most difficult task in any multi-year initiative
is not simply maintaining the original scope and
budget, but sustaining the energy created.
The initial hope generated by the mere thought
of change through the inevitable ebb and flow of
the program must be capitalized on by continued
successful execution.
Reasons for Failure
While laying the groundwork for a business process
redesign, potential pitfalls must be identified
and addressed beginning as early in the process
as possible. Whether creating the current-state
assessment or engaged in planning and road-
mapping activities, reasons for failure should be
identified, documented, and managed as early in
the project as possible.
Lack of Executive Support
Because the project will at times lose steam, new
initiatives will take priority, resources may change
roles or leave, or the effort may turn out greater
than initially envisioned, a management ‘Champion’
is an absolute requirement. Executive-level support
must not be fleeting; management’s drive through
the duration of the project will motivate the team
and ensure the project retains the momentum
required for success.
Mismanagement
Beyond the obvious pitfalls of scope creep,
delivery delays, and cost overages, poor
project management can sink a project for
a myriad of unforeseen reasons. To ensure
project management isn’t a reason for failure,
the management must be selected based on
skills, experience, familiarity with approach or
methodology, and proven ability, not purely
availability or eagerness.
Lack of Employee Support
When key players and their management cannot
adapt to a new way of doing business, or refuse to
accept and embrace the change, the redesign is
doomed to failure. The current-state organizational
analysis helps quantify and identify the ‘People’
who will make the initiative successful, and the
change management plan should leverage those
people to help champion the project.
Wrong Candidate
Attacking the ‘wrong’ problem can cause a project
to self-destruct. A process that is inefficient
because a technology will not be enhanced, or will
require organization or logistical changes that are
impossible, will be a no-win proposition, and even

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if it is perfectly redesigned, insurmountable hurdles
will cause the project to fail.
Wrong Technology
Misunderstanding solutions capabilities or how
a solution functions, or selecting a solution that
doesn’t align with the enterprise’s technology
strategy, may lead to the implementation of
technology that cannot satisfy the business
needs and will exacerbate the problem. Just
because a sales team says a product can satisfy
a requirement doesn’t necessarily mean it will,
and if it can, it may not be in the manner you are
expecting. Always do your homework!
In Conclusion
Large or small, reengineering efforts are not simple.
The foundation of a successful initiative is a complete
understanding of your current state. Arrive at a
solution that solves a business problem by analyzing
the people, processes, and tools that are impacted.
After the solution is defined, plan the approach
based on a tested methodology, and implement
the plan with discipline to make sure momentum is
maintained and expected gains are realized quickly
and maintained to sustain momentum.
To avoid failure, support at all levels, from
executives to line managers, is required, but
ultimately the employees will dictate success.
A strong change management plan will help
engage and motivate your employees, and robust
communication updating the company of the
project’s wins will go a long way to promote the
awareness and drive required for a successful
reengineering effort.
About Paragon Solutions:
Paragon Solutions is an advisory consulting
and systems integration firm that specializes in
enterprise information management to help clients
leverage information assets for better business
results. The company does this through its industry
practices, solution accelerators and specialized
technology competencies that help clients achieve
operational efficiency, business scalability, and
regulatory compliance.
Paragon works with businesses that are focused
in a few key industries − communications, financial
services, healthcare, insurance, and life sciences.
The industry-focused practices work with Paragon’s
competency groups to address today’s client
concerns in Process Optimization, Information
Management, and Information Insight.
For more information, please visit the Paragon
website at www.consultparagon.com, or call
1.800.462.5582.
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