Is the business process reengineering boom over? The answer is: "Not really." The first wave of reengineering has passed its peak, but is still strong; the second wave has already begun.

The first wave of business process reengineering was predominantly focused on cost reduction, notwithstanding the rhetoric of business process reengineering and its goals to improve service levels and cycle times. The pressure of global competition and the predatory efficiency of the capital markets - especially the American capital markets with their hostile takeovers, buyouts, venture-capital-for-greenfield competitors and the like - forced many companies to implement one-time cost realignments to stay in the game.

This cost-focused wave has now moved into its maturity, at least in North America (some surveys suggest that it peaked in 1993), but it is still a powerful force. Based on what we see in working with major companies, we would estimate that the majority of companies - about 60 percent - have already passed through the first wave. Though this number may sound high, it suggests that a significant number of companies have yet to begin reengineering their basic cost structures. It also means that a large number of companies have yet to address costs in major parts of their businesses.

B.P.R's second wave has already started to gather momentum. This generation is more actively focused on value creation than on cost reduction. It is also concerned with reengineering "knowledgework" as well as physical labor. The focus includes strengthening those very processes that are critical to enabling growth: product and service innovation; organizational learning and knowledge management. It also includes strengthening the marketing and engineering functions, increasing sales effectiveness and customer care. In many cases, this new wave of B.P.R. is focused on optimally leveraging information technology as a core element of these processes.