What Is Business Process Redesign (BPR)?

The term business process redesign refers to a complete overhaul of a company's key business process with the objective of achieving a quantum jump in performance measures such as return on investment (ROI), 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. Businesses may call in consultants to direct or assist with the redesign.

Key Takeaways

  • Business process redesign is a complete overhaul of a company's key business processes.
  • A BPR improves efficiency by cutting slack and excess, reducing costs, and sharpening management.
  • Success is often measured using profitability metrics.
  • BPRs may be costly and time-consuming, and may also lead to layoffs and the disruption of workflow.

Understanding Business Process Redesign (BPR)

The term business process redesign is also referred to as business process reengineering or business process transformation. Redesigning became popular in the 1990s as a way for business leaders to focus on adapting to changing technology and other forces in their industries. This requires a review of the company's current workflow and process structure and overhauling it to make it more efficient. Because they require a certain degree of expertise, some companies may require external parties to review, design, and implement any changes.

Many companies undergo business process redesigns because of changes in the industry that require new infrastructure to remain competitive. In some cases, companies may be required to make radical changes by completely scrapping their processes and adopting new ones. For example, if a more efficient way of manufacturing a product or accessing a resource is developed, a business may be compelled to abandon its processes and adopt new ones in order to remain abreast of its peers.

Industry forces may require companies to undergo business process redesigns in order to remain competitive—some may be more radical than others.

A regulatory mandate might require new safety measures to be included in a manufacturing process—a step that forces the company to 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 their products had to rework their processes to cease using it and to find ways to replace it as an ingredient.

Some companies may need to consider eliminating parts of their business that hurt their profit. A process redesign could be launched to reduce costs. This may involve consolidation, staff reductions, tighter budgeting, selling unprofitable operations, and closing offices and other facilities. Executive positions and layers of management may be eliminated to narrow the channels of authority.

Special Considerations

It's important for companies to review their operations, mission statements, and other key components before undergoing any changes in their business processes. For instance, they may consider:

  • Identifying their key customers
  • Determining how the business delivers value
  • Asking themselves if they need a redesign or just redefine themselves as a whole
  • Comparing their mission to their long-term goals

If a redesign makes sense, it's essential for a business to consider going through a series of steps including:

  • Setting up clear goals and intentions
  • Identifying core business processes
  • Determining any gaps or areas that require improvement
  • Designing and developing changes
  • Implementing and monitoring changes

Limitations of Business Process Redesign (BPR)

After assessing and mapping the processes that currently drive the business, the redesign often aims to eliminate unproductive departments or layers and any redundancies 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 the neediest parts of the company.

In some cases, the redesign may take a more expansive approach, reaching into every department and division. Extensive redesigns may be more time-consuming and cause more disruption.

The redesign can disrupt operations for a period of time and alter who employees report to, realign and consolidate divisions, or eliminate certain aspects of the business. Two major criticisms of business process redesign are as follows:

  1. It may entail a large number of job redundancies or layoffs.
  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.