Great Business Ideas: Business process redesign

Great Small Business Ideas to Start: Business process redesign

Rethinking and overhauling your business processes can lead to increases in revenue, reliability, cost efficiency, and quality.

The idea

Michael Hammer and James Champy, who helped introduce business process redesign (BPR), described it as “the analysis and design of workflow and processes within and between organizations.” When an organization is facing difficulties or simply not operating at maximum efficiency, BPR can help it regain a competitive edge.

General Motors, one of the world’s largest car manufacturers, underwent a three-year BPR program to consolidate its multiple desktop systems into one efficient system. Donald G. Hedeen, director of desktops and deployment at GM and manager of the upgrade program, stated that the BPR “laid the foundation for the implementation of a common business communication strategy across General Motors.” Although it was not cheap—technology companies Lotus and Hewlett-Packard received their largest non-governmental orders ever from GM during the process—it yielded significant benefits, with supposed savings of 10 percent to 25 percent on support costs, 3 percent to 5 percent on hardware, and 40 percent to 60 percent on software licensing fees. GM also gained heightened efficiency by overcoming incompatibility issues by using only one platform throughout the entire company.

Although BPR processes have yielded significant results for leading companies, including Procter & Gamble, Southwest Airlines, and Dell, certain businesses have used the term BPR to explain and excuse large-scale and unpopular job cuts. This has resulted in a negative reputation among some, but it is possible to carry out a BPR program that is sensitive to employee needs and effective for the business.

After the primary targets and areas of focus for your organization have been decided, key areas for consideration when designing BPR include how to reach maximum efficiency, achieve the intended results of the redesign, measure performance, and reward employees.

In practice

  • Successful BPR typically includes five stages:
  1. Determining whether a BPR is actually necessary. Analyze the scope and resources that a redesign requires, and the structural and organizational challenges that are likely to be encountered, to decide whether a redesign is appropriate and viable.
  2. Creating a comprehensive and structured strategy for your BPR before undertaking it.
  3. Redesigning the structure of your primary processes, with a focus on efficiency.
  4. Putting in place a management team to direct the process, oversee the transition, and measure success.
  5. Implementing and integrating the BPR, successfully managing the changes that result.
  • Effectively manage all people involved with, and affected by, your BPR. They are in charge of the success of the project and are the most unpredictable factor.
  • Avoid being tempted to focus too heavily on automation—this can be unpopular and deprive your business of the “human factor.”
  • Create contingency plans should the BPR have unintended consequences.
  • Avoid common BPR pitfalls, such as problems with managerial incompetence, lack of support, and offloading the entire restructuring process to the IT department.
  • Do not create unrealistic expectations—be practical about what BPR can accomplish.