Business Process Reengineering

Business Process Reengineering (Literature Review)

Abdul Basit M. Faysal

MBA - MIS III

Business Process Reengineering is a management approach that examines a business, its interactions and its operations in attempt to improve the efficiency of the underlying processes. Thomas Davenport, a well-known BPR theorist, uses the term process innovation, which he says;

"Encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions".[1]

The first article being reviewed is a research report conducted to explore the success of IT enabled BPR projects [2]. The research divides all business processes into three categories; Intrafunctional (within a function), Interfunctional (encompassing several functions) and Interorganizational (crossing organizational boundaries). The study tries to find the industry trends for each category and also determines the dependence of success of BPR projects on the integration of IT strategy with the corporate strategy. The sample for the research comprised of three hundred vice presidents and IS executives. Findings of the research were:

 Proportion of Intrafunctional, Interfunctional and Interorganizational BPR projects were 28%, 49% and 23% respectively. The researchers inferred that intrafunctional BPR was given more consideration because of greater control over organization's internal processes, presence of poor interfaces among functions and similar factors and hence greater chance for improvement. Intrafunctional improvements are not that

substantial in terms of customer and business value because interfunctional inefficiencies are left intact. On the other hand, interorganizational changes lack the required feasibility because of absence of control over external parties (suppliers, customers etc.).

 43% of total projects involved radical change while the remaining 57% were just automation of existing processes. This phenomenon reflects the reluctance of organizations to go for a major change in their process and preference to stick with status quo because of the probability of project failure because of uncertainties, incomplete information and inefficient change management.

 Overdoing intrafunctional processes may lead to a slack of incompatible technologies and fragmented operational infrastructure. In contrast, interfunctional and interorganizational processes offer greatest opportunities for success. But they need to be sheltered by a tight IT integration. Without taking umbrage in a corporate strategy, they are subject to organizational politics and resistance - certain indicators of failure.

This research takes into consideration both the technical and behavioral aspects, or in other words, tangible and intangible factors that play a collective critical role in the success of such a project. [2], [3]. In the absence of IT integration, the change process becomes just an automation activity with all the deficiencies of existing project and very low commitment of employees to it. The second article considers this intangible facet of BPR.

Several researches in the fields of IS development found that the failure rate for IS development projects is around 70% [5]. This high rate of failure can be attributed to the absence of balance between the technical and social aspects of the project. This socio-technical nature of the organization, which comprises of hardware, software, people, rules, regulations, policies, attitudes, likes and dislikes, skills, politics, values etc. makes a BPR project very complex, and prone to failure because of these complexities. To maintain a balance between the social and technical aspects, the writers suggest the integration of BPR and Balanced Scorecard - a comprehensive management tool which relates the key areas of business performance with the long term strategies of the organization. It considers all the tangible and intangible factors, scores these components according to their contribution to business value (both in quantitative and qualitative terms) and attempts to clarify cause-and-effect relationships. The flaw with previous approaches was that they focused exclusively on the technical and financial aspects of change and overlooked behavioral aspects.

The approach starts with defining four performance perspectives; Future Readiness, Internal Process, User Orientation, and Business Value. Then it links short-term objectives with long term strategies and develops cause-and-effect relationships among them. This approach helps identify