What Is Business Process Redesign (BPR)?
A business process redesign (also known as business process reengineering) is 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.
Business consultants may be called in to direct or assist with a business process redesign.
How Business Process Redesign Works
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 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 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 and the closure of offices and other facilities. Executive positions and layers of management may be eliminated to narrow the channels of authority.
- Business process redesign (BPR) is a complete overhaul of a company's key business processes.
- The goal is to make the business the most efficient by cutting slack and excess, reducing costs, and sharpening management.
- The success of a BPR is often measured using profitability metrics such as return on investment.
- Because it is a complete overhauling, a business may experience layoffs, may disrupt the workflow of those who remain, and may be costly and time consuming before seeing any results.
Limitations of Business Process Redesign
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 needs it. 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 disrupt a business for a period of time and alter who employees report to, realign and consolidate divisions, or eliminate aspects of the business. Two major criticisms of business process redesign are as follows:
- It may entail a large number of job redundancies or layoffs.
- 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.