I am reading Hammer & Champy's "Reengineering the Corporation" these days and found more historical contexts about BPR. My first contact with BPR was during my doctoral study from those academic papers. The missing part is why BPR was needed or
why corporations were not optimizing their business process from the very beginning. It turns out they did but later they failed to adapt the process to changing environment.
Hammer and Champy's seminar HBR article ("Reengineering Work: Don't automate, Obliterate," which led the latter book) revealed this a little bit via a fictional example:
"... Many of our procedures were not designed at all, they just happened. The company founder one day recognized that he didn't have time to handle a chore, so he delegated it to Smith, smith improvised... business grew, Smith hired his entire clan to help him cope with the work volume. They all improvised...The hodge-podge of special cases and quick fixes was passed from one generation of workers to the next...institutionalized teh ad hoc and enshrined the temporary...Why do we send foreign accounts to the corner desk? Because 20 years ago, Mary spoke French and Mary had the corner desk. Today Mary is long gone, and we no longer do business in France, but we still send foreign accounts to the corner desk..."
Later in their book, the historical context was explained in more details. According to their view, the existing business processes in American corporations in 80s were originated from 50s and 60s, a time of mass production. At that time, the market was so good that customers will buy whatever produced thus the main goal for a corporation was producing as many products as possible to grab the market share. Thus a division of labor, hierarchical style corporation management structure was scalable and preferred (need 1000 products? Add 100 more workers, 5 more managers, and 2 more human resources staff).
However, when market power shifts from producer to consumer and the choice of products are increasingly abundant, which is the situation in 80s, such style and structure was no longer effective. Even from departmental perspective, the highest efficiency could be achieved, the overall efficiency of the corporation can not be guaranteed because there was no alignment between the departmental goal and corporation goal. A good example cited in the book is the purchasing department. A company may spend $100 internal cost to buy a $3 battery! Also, in terms of customer experience, it may took six days for IBM credit to finance a customer purchase though the actual process took only 90 minutes! Most of the time was wasted in the transition of documents among departments.
The reengineering thus called the efforts to focus on business process intead of steps in the process because if the process is wrong, even each step of the process is efficient, the whole would still be inefficient. By reengineering the process, critical elements like customers and suppliers could be brought into the focus and being organically linked with business processes within the enterprise. This is in contrast with the previous view that the internal process of an enterprise is separated from customers and suppliers for mere efficiency goal.
The negative influence of division of labor on current corporation behavior was especially illustrated in the book and argued by the authors to be the main cause of current problems of American corporations.