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Agile vs. Business Process Reengineering

I don’t want to build a better boat. I want a new kind of boat!

A colleague asked me an innocent question: “Why should we use Agile in the Financial Industry — isn’t it just a fancy name for BPR (Business Process Reengineering)”? I realized this question may be a reflection of the “innovation disconnect” we often see in the incumbent financial industry.

BPR aims to “help organizations fundamentally rethink how they do their work”.  The result should be to achieve the same outcome, “cheaper, better, faster”.

To contrast, the values of Agile are:

  • Individuals and Interactions more than processes and tools
  • Working Software more than comprehensive documentation
  • Customer Collaboration more than contract negotiation
  • Responding to Change more than following a plan

Use the example of an automobile production line.  You get immense returns on optimizing the assembly process from BPR. You might change how you manage your inventory, bring in a few robots, change the order in which you assemble the automobile, or reorganize team structure and coordination processes.  The end result is still an automobile – cheaper, better and faster.

If we only apply BPR without Agile in a bank, we will have a similar product set, delivered cheaper, better, faster.  Anyone who thinks this is sufficient these days might want to consider a career change.    When you are being fundamentally disrupted, “cheaper, better, faster” will rarely save you.

The purpose of applying Agile methods is to fundamentally change the product that you sell or create a new product. Agile provides the mindset and flexibility to change the outcome, not just the process.   Would Elon Musk be able to disrupt the automobile industry solely through BPR?   Never.

I wonder if some of my bank colleagues approach innovation with a BPR mindset, which is not the right ‘tool’ for product disruption, testing, learning and innovation.  Using BPR as your key innovation tool might be akin to rearranging the chairs on the Titanic. Let’s build a new boat, then call in the BPR guys to sort out the furniture.

I don’t want to build a better boat. I want a new kind of boat!

 

BankersLab AdminAgile vs. Business Process Reengineering

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