Originally, improvement activities were actively carried out in the manufacturing industry, but it is safe to say that there is no Japanese company today that does not carry out “business improvement. ” In addition to this, in recent years, attention has also been focused on the construction of new business processes through “business reform.” In this article, we will explain the basics of business reform, the difference between business improvement, and the key points of reform. Business people who are not involved in the manufacturing industry should also refer to it.
Table of contents
- What is business reform?
- Difference between business reform and business improvement
- Changes made to business processes
- Opposition to business process changes
- Sustainability of business process changes
- Effects of business process changes
- Difficulty of changing business processes
- Key points for implementing business reforms
- Point 1. Identifying business processes
- Point 2. Visualize connections between business processes
- Point 3: Identifying problems that cause business stagnation
- Point 4. Restructuring of business processes
- Point 5. Implementation and monitoring of business reforms
What is business reform?
Business reform , expressed as “ BPR (Business Process Re-engineering)’ ‘ in English-speaking countries , is a term that refers to the creation of business processes that are in line with the times by rearranging existing business processes. This is a general term for initiatives aimed at “securing a high level of flexibility.”
Companies have a number of business processes that can be called “tradition” that have been passed down since their establishment, and when these processes accumulate, they form a large business. However, there are many changes in the business environment between when the company was founded and now, and traditional business processes are not necessarily the best solution for the company. In fact, in some cases, companies place too much value on tradition and find it difficult to keep up with modern business.
BPR first attracted serious attention in the early 1990s, and was seen as a fundamental reform to rebuild corporate management that had been exhausted by the long-term recession in the United States. Dr. Michael Hammer, a former professor at the Massachusetts Institute of Technology, and management consultant James Champey proposed a concept that can be called the prototype of BPR. After their co-authored book “The Reengineering Revolution” became a bestseller, BPR received increased attention.
At that time, the idea of BPR became widely accepted in Japan due to the collapse of the bubble economy, and many companies and organizations started to fundamentally reform their management itself.
By the way, BPR has a background in that American companies took inspiration from the business processes of Japanese companies in the 1980s, and it includes much of the Kaizen concept from the aforementioned Toyota Production System – Aiming for management that moves beyond scale. It is. In other words, business reform and BPR are the prototype of business improvement that was imported back into Japan and spread to industries other than manufacturing.
Difference between business reform and business improvement
Many companies are working on business improvement on a daily basis, but it is said that there are few companies that are working on business reform. Business improvement has become so commonplace that some companies impose quotas such as “submitting at least one business improvement proposal every month.” So, what is the difference between business reform and business improvement? I have summarized the differences below.
Changes made to business processes
Business reform: destroy all or part of a business process and build a new one
Business improvement: Increase efficiency by repeating ingenuity and ingenuity in daily business processes
Opposition to business process changes
Business reform: There are those who oppose or show resistance.
Business improvement: Few people actively oppose it.
Sustainability of business process changes
Business reform: Often a one-off project
Business improvement: Continuously run the PDCA cycle
Effects of business process changes
Business reform: The very structure of business processes is reformed, so once successful, high effects can be obtained.
Business improvement: Since it is a continuous activity, the effectiveness will decrease if you stop working on it.
Difficulty of changing business processes
Business reform: The level of difficulty is high, and a leader and team are required to carry out the project.
Business improvement: Anyone can improve results by following certain steps
Among the above, what I would like you to pay particular attention to is the presence or absence of opponents. Business improvement is an ingenuity in everyday life, and because it is based on the idea of “making what we currently have even better,” almost no one opposes business improvement itself, even if there are debates over detailed measures.
On the other hand, opponents emerge because business reform involves fundamental reforms that involve destroying existing business processes and building new ones. Since business reforms have an immeasurable impact on individuals within their own business, it is natural that there will be many opposing opinions. It is no exaggeration to say that the success or failure of business reform depends on whether or not a company understands this.
Key points for implementing business reforms
Finally, I would like to briefly introduce the key points for implementing business reforms.
Point 1. Identifying business processes
The first thing to do is to identify the business processes that form your business. By organizing business processes that cannot be fully organized in daily operations, we will create a foundation for implementing business reforms.
Point 2. Visualize connections between business processes
In addition to identifying business processes, create model diagrams to visualize the connections between business processes. The quality of business reform will change depending on whether this exists or not.
Point 3: Identifying problems that cause business stagnation
Next, we identify problems (bottlenecks) in business processes that cause business stagnation. Discover problems while looking at the business process from the model diagram you created earlier.
Point 4. Restructuring of business processes
Once you have identified a problem, you can restructure the business process (such as reordering or abolishing it) to resolve it. In that case, rebuild it while paying attention to the connection with other business processes and checking the scope of the impact of the change.
Point 5. Implementation and monitoring of business reforms
Once business reforms have been implemented, rather than stopping there, we regularly monitor them to determine whether they are producing the expected effects.
As mentioned above, there are five main points for business reform. Although it is difficult to put it into practice, it is not impossible if you keep the key points firmly in mind and work on business reform. We also provide tools to support business reform practices, so please take this opportunity to work on business reform at your company.