Michael Porter said:

The literature on re-engineering employs the term processes. Sometimes it is a synonym for activities. Sometimes it refers to activities or sets of activities that cut across organizational units. In any case, however, the essential notion is the same—both strategic and operational issues are best understood at the activity level.

Process Innovation requires fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service and speed.

You've got to streamline your factories, systems and organizations, and open up lines of communication. You've got to break down barriers between departments and put an end to the "we've always done it this way" argument. You've got to get your employees highly involved in assuming new responsibilities if you're going to compete in the global markets in the next decade.

Key to the success of an organization is the speed and flexibility with which business processes can be accomplished. Achieving this capability requires all physical and logical events within the supply chain to be enacted swiftly, accurately, and effectively. The faster parts, information, and decisions flow through an organization, the faster it can respond to customer needs.

The information chain must be streamlined and electronically linked at every point, so that information flow is direct- -without interruptions and delays. Business cycle times must be reduced to the time it actually takes to effectively process information.
A five step approach to Process Innovation:

	Develop the business vision and process objectives: The Process Innovation  method is driven by a business vision which implies specific business objectives such as cost reduction, time reduction, output quality improvement.
	Identify the business processes to be redesigned: most firms use the 'high-impact' approach which focuses on the most important processes or those that conflict most with the business vision. A lesser number of firms use the 'exhaustive approach' that attempts to identify all the processes within an organization and then prioritize them in order of redesign urgency.
	Understand and measure the existing processes: to avoid the repeating of old mistakes and to provide a baseline for future improvements. Compare: Scientific Management
	Identify IT levers: awareness of IT capabilities can and should influence Process Innovation.
	Design and build a prototype of the new process: the actual design should not be viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with successive iterations. The metaphor of prototype aligns the Business Process Reengineering approach with quick delivery of results, and the involvement and satisfaction of customers.
	Adapt the organizational structure, and the governance model, towards the newly designed primary process.