Understanding the Benefits of Business Process Redesign (BPR)

Also known as business process reengineering, business process redesign (BPR) may seem like a daunting concept to new investors. Hearing that a company in which you are invested is undergoing redesign may raise concerns and a strong desire to sell of your shares. Don’t rush to judgment.

The goal of a business process redesign is to completely revamp a business process with the goal of achieving significant gains in performance and return on investment. Costs may be reduced while service improves. The process of redesign is intended not just to shake things up but to give the company an opportunity to take a look at every aspect of the corporate structure and make it better.

Critics of business process redesign express concerns that BPR may result in poor choices from two perspectives. First, the basic idea behind such an action is that the company’s problems stem from poor performance somewhere in the structure, not that the product itself is faulty or some other issue may be to blame. Second, the restructuring may result in many layoffs, or worse, create redundancy in the name of greater efficiency or improved monitoring.

While it is likely that some companies will indeed profit from a partial or full scale business redesign process (BRP), when performed unnecessarily it can create more problems than solutions. If you are holding stock in a company that has been doing poorly and they initiate the process it may be worth seeing what happens. If you are considering a stock and hear that a BRP is about to take place, you might just want to hold off on making the purchase.

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