Business process redesign (BPR) is about changing a company's important business processes completely. The goal is to perform better in areas like return on investment (ROI), lowering costs, and improving service quality. It covers all the main processes like making products, selling, and customer service. Often, businesses get outside experts to help or lead in making these changes.
KEY POINTS
BPR changes major business processes from start to finish.
It aims to make a company work better by getting rid of waste and improving how things are managed.
Success is usually measured by looking at profits.
BPR can be expensive, take a long time, and may cause people to lose their jobs or disrupt how work is done.
Understanding Business Process Redesign (BPR) BPR is also called business process reengineering or transformation. It became well-liked in the 1990s to help businesses adjust to new technology and changes in their market. This means checking and changing current ways of working to be more effective. This might need help from outside the company.
Companies might change their processes because of new industry needs. They might have to totally get rid of old ways and start new ones to stay competitive. For example, if there's a better way to make something, a company might need to change to keep up with others.
Changes in industry might force companies to make big changes to stay in the game. Sometimes, laws might make them change how they make things, like when lead was banned in paint and toys, so companies had to find other ways to make their products without lead.
Some businesses might need to cut back on things that don't make money. They might start BPR to spend less money by combining jobs, laying off workers, being stricter with money, selling parts that don't make money, or closing offices.
Special Considerations Before changing processes, companies should think about their operations, goals, and other important parts of their business. They might ask:
Who are our main customers?
How do we provide value?
Do we need a complete redesign or just some changes?
Do our goals match our mission?
If BPR is a good idea, a company should:
Have clear goals
Know what their main processes are
Find any weaknesses
Make and plan changes
Put in place and keep an eye on the changes
Limits of BPR BPR looks to cut out parts of the business that aren't useful and focus on what makes the most money. Sometimes, this only changes the parts that need it the most.
Other times, the change might be bigger and affect every part of the company, which can take longer and cause more trouble.
BPR can interrupt work and change who is in charge, combine divisions, or stop doing certain things. There are two big criticisms of BPR:
It can lead to many people losing their jobs.
It thinks that bad processes are the only reason a company is doing poorly, but other reasons might be involved too.
A conversation between Alex, a business owner, and Jamie, a business process consultant
Alex: Jamie, can you tell me what Business Process Redesign is all about?
Jamie: Of course, Alex. It's basically a complete change of a company's essential processes to improve key performance indicators like ROI, cost-cutting, and service quality.
Alex: So, what does it cover?
Jamie: It's about all the main processes a company has, from production to customer service. Many companies bring in outside experts to help guide the change.
Alex: Sounds serious. How do you know if it's successful?
Jamie: Success is typically measured in profit metrics. But keep in mind, it can be costly, time-consuming, and might lead to layoffs or workflow disruptions.
Alex: What exactly does the redesign involve?
Jamie: It's also known as business process reengineering. It became popular in the '90s to help businesses adapt to technological changes. It involves reviewing current workflows and making them more efficient, sometimes with the help of external parties.
Alex: What drives a company to do this?
Jamie: Changes in the industry that require new infrastructure to keep competitive. Like, if a new manufacturing method comes out, a company might need to scrap their old process and start a new one to stay relevant.
Alex: This sounds like it could be a huge shift.
Jamie: Exactly. Sometimes even regulations can force changes, like safety measures. For example, when lead got banned in paint, companies had to change their manufacturing processes.
Alex: I guess not all changes are about technology or laws?
Jamie: Right. Sometimes it's about cutting costs, like consolidating jobs or selling off unprofitable parts of the business.
Alex: What should a company consider before doing this?
Jamie: They need to review their operations, goals, customers, and how they deliver value. Then they need to set clear goals, identify key processes, pinpoint weaknesses, and plan and monitor changes.
Alex: And what are the limitations?
Jamie: It focuses on eliminating unproductive parts and maximizing revenue. But it might overlook other factors causing poor performance. And yes, it could lead to job losses.
Alex: That's a lot to consider. Thanks for breaking it down for me, Jamie.
Jamie: Anytime, Alex. It's a big decision, but with careful planning, it can lead to significant improvements.