Business Process Redesign - BPR

DEFINITION of 'Business Process Redesign - BPR'

Business process redesign is the complete overhaul of a key business process with the objective of achieving a quantum jump in performance measures such as return on investment, cost reduction and quality of service. Business processes that can be redesigned encompass the complete range of critical processes, from manufacturing and production, to sales and customer service. Also known as business process reengineering.

BREAKING DOWN 'Business Process Redesign - BPR'

Two criticisms of business process redesign are - (1) it may entail a large number of job redundancies or layoffs, and (2) it assumes that faulty business processes are the main reason for the company's poor performance, when other factors may also be responsible for under-performance.

How a Business Process Redesign is Used

The motivation for a business process redesign may come from industry changes that require new infrastructure to remain competitive. For example, if a more efficient way of manufacturing a product or accessing a resource is developed, a business may be compelled to overhaul its processes to remain abreast of its peers. A regulatory mandate might require new safety measures to be included in a manufacturing process, a step that forces the company rearrange its workflow. For instance, lead was banned from being used in the production of household paints, as well as in the manufacture of toys and other items. Companies that used lead in such products had to rework their processes to not only cease the use of lead but to find ways to replace it as an ingredient.

A company may need to eliminate areas of the business that hurt its profits. A process redesign could be launched to reduce costs, which may include consolidation, staff reductions, tighter budgeting, and the sale of operations, closure of offices and other facilities. Executive positions and layers of management may be eliminated to narrow the channels of authority.

After assessing and mapping the processes that currently drive the business, the redesign often aims to eliminate unproductive departments or layers of the operation. The focus of the redesign can be to maximize aspects of the business that can generate the greatest revenue and returns for the organization. That may mean the changes follow a narrow path, only repositioning parts of the company that are required. However, the redesign may take a more expansive approach, reaching into every department and division. Such an extensive redesign may be more time-consuming and cause more disruption.

The redesign can alter who employees report to, realign and consolidate divisions, or eliminate aspects of the business.