Business process
re-engineering is fundamental rethinking and radical redesign of business
processes, resulting from available organizational resources. It is defined by
Michael Hammer and James Champy. The examples of BPR are accounts payable and
mutual benefit life. All process in account payable process go to the account
payable. After that, the account payable follow up the payment to the vendor.

There are seven principles of
BPR. Organize the results, enable the output user to process, generate those
who process information, centralize and disseminate data, integrate parallel
activities, empower workers using internal controls and make organizational
structure more flat, and collect data on the spot.

The objectives of BPR is to
establish an efficient, healthy, and productive corporate infrastructure. Increase
the satisfaction of the goods or services so that the customer will choose the
goods or services of the company than the competitor. Make it easier and fun
for customers to do business with the company. Processing more customer demand
and increasing the volume of each customer. Improving the sharing and
usefulness of organizational knowledge so that the organization does not depend
on the expertise of just a few people.

There are ten steps in BPR. Bureaucratic
elimination, value added assessment, simplification, duplication elimination,
cycle time reduction, process upgrade, standardization, language
simplification, proofing error, supplier partnership.

Tools for analysing business
process are value chain, value stream map, workflow diagram, flowchart, system
matrix. It is good for knowing the best alternative with the KPI that already
decided before.

The concept of value chain
introduced by Michael Porter is a series of activities for the operations of a
company. Value chain includes all activities within the company with the aim
that each value chain is implemented effectively and efficiently.