Assessing_readiness (περιοδικό) BPR

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Assessing readiness for businessprocess reengineering

Neda Abdolvand, Amir Albadvi and Zahra FerdowsiIT Department, Engineering Faculty, Tarbiat Modares University, Tehran, Iran

Abstract

Purpose The purpose of this paper is to propose how to minimize the risks of implementingbusiness process reengineering (BPR) by measuring readiness. For this purpose, the paper proposes anassessment approach for readiness in BPR efforts based on the critical success and failure factors.

Design/methodology/approach A relevant literature review, which investigates success andfailure indicators in BPR efforts is carried out and a new categorized list of indicators are proposed.This is a base for conducting a survey to measure the BPR readiness, which has been run in twocompanies and compared based on a diamond model.

Findings In this research, readiness indicators are determined based on critical success and failurefactors. The readiness indicators include six categories. The first five categories, egalitarian leadership,collaborative working environment, top management commitment, supportive management, and use ofinformation technology are positive indicators. The sixth category, resistance to change has a negativerole. This paper reports survey results indicating BPR readiness in two Iranian companies. Aftercomparing the position of the two cases, the paper offers several guidelines for amplifying the successpoints and decreasing failure points and hence, increasing the rate of success.

Originality/value High-failure rate of BPR has been introduced as a main barrier in reengineeringprocesses. In addition, it makes a fear, which in turn can be a failure factor. This paper tries to fill thegap in the literature on decreasing risk in BPR projects by introducing a BPR readiness assessmentapproach. In addition, the proposed questionnaire is generic and can be utilized in a facilitated manner.

Keywords Businessprocess reengineering, Criticalsuccessfactors, Assessment, Organizational change,Iran

Paper type Research paper

1. IntroductionSince the 1990s, organizations have been focusing on the development of more flexible,coordinative, team- and communication-based capabilities (Al-Mashari et al., 2001;Attaran, 2003; Terziovski et al., 2003). Owing to this fact, most of the organizationshave paid special attention to processes in recent years (Valiris and Glykas, 2004).They have tried to be competitive in the global market by changing the way ofthinking about business processes (Adesola and Baines, 2005; Aversano et al., 2002).A collection of activities, which gets a set of input and raises a set of outputs, is referredto as a process (Temponi, 2006; Wu, 2003). In a business process, outputs shouldproduce values for the customers.

In the last decade, various techniques and tools have been exploited to speed up andenhance the process (Chan and Spedding, 2003; MacIntosh, 2003). Many researchersand enterprises believe that rethinking and redesigning business processes tend toobtain dramatic and sustainable improvements (Revere, 2004).

Business process reengineering (BPR) is a management tool, in which businessprocesses are examined and redesigned to improve cost efficiency and serviceeffectiveness (Lindsay et al., 2003; Vidovic and Vuhic, 2003). Development ofinter-organizational relationships and significant increases in the business integration

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Business processreengineering

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Business Process Management

Journal

Vol. 14 No. 4, 2008

pp. 497-511

q Emerald Group Publishing Limited

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DOI 10.1108/14637150810888046


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has made BPR even more important. In addition, as per latest concept of management,reengineering is necessary, firstly for facilitating processes across the boundaries ofthe two organizations and secondly for integrating back- and front-office processes(Fadel and Tanniru, 2005; Lin et al., 2002).

Besides, being costly and time-consuming, BPR is a risky operation. Varioussurveys and assessments reported as many as 60-80 per cent of BPR initiatives havingbeen unsuccessful (Chiplunkar et al., 2003; Dennis et al., 2003). The risky nature of BPRhas tended to detailed investigation of its critical success and failure factors (Adigunand Biyela, 2003; Reijers and Mansar, 2005).

This paper seeks readiness indicators by utilizing critical success and failure factors.The aggregated critical success factors are categorized in five groups as positivereadiness indicators. These groups are egalitarian leadership, collaborative workingenvironment, top management commitment, supportive management, and use ofinformation technology. The failure factor is resistance to change and is considered as anegative readiness indicator. Assessing these factors measures the readiness ofinitiating a BPR project. This research measures the readiness through conducting asurvey in two Iranian companies; Company A (transportation) and Company B (energy).After comparing the readiness of the two companies, the study presents the reasons whyone company is more successful than the other. This brings up some guidelines forenhancing the level of readiness in the unready case.

This research first reviews the critical factors. Then, the method section explainshow this study is directed. Next section describes the results of readiness assessmentssurveys. Last section presents the current status of the organization and discusses theways these organizations can strengthen their positions.

2. Background of BPR readinessIn BPR, large-scale radical redesign is considered to gain dramatic improvements

(Ranganathan and Dhaliwal, 2001; Schniederjans and Kim, 2003). Therefore, BPR isdefined as:

[. . .] total transformation of a business, an unconstrained reshaping of all business processes,technologies and management systems, as well as organizational structure and values, toachieve quantum leaps in performance throughout the business (Crowe et al., 2002).

However, BPR is a complex and difficult task and has a high-failure rate. Thus,organizations should not try the BPR before meticulous examination of all phases andstages of the project (Dennis et al., 2003; Schniederjans and Kim, 2003; Terziovski et al.,2003). These should include the process activities, peoples jobs and reward system, themanagement system performers and managers, the management system, and toolsand technologies. Moreover, it is necessary to investigate the underlying corporate

culture that holds the beliefs and values influencing everyones behavior andexpectations (Albano et al., 2001; Guimaraes, 1999; Mertins and Jochem, 2005). Each ofthese factors can be a reason of BPR failure.

2.1 BPR critical success and failure factorsThis paper is based on the researches of Crowe et al. (2002), Guimaraes (1999), Motwaniet al. (2005), and Terziovski et al. (2003). The research has conducted by Crowe et al.(2002) estimated risk level of BPR efforts by investigating success and failure factors.

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They have grouped the success factors in four main group and totally 17 sub-factors.Main groups are egalitarian leadership, working environment, top managementcommitment, and managerial support. The failure factor is introduced just asemployee resistance, which has four sub-factors. Guimaraes (1999), Motwani et al.

(2005), and Terziovski et al. (2003) has emphasized on change management, andexplained information technology as two more critical success factors. Reviewingother researchers approved these factors and sub-factors can cover all critical factors.The addressed factors and sub-factors are aggregated and categorized intuitively byauthors in new list, which been hierarchically shown in Figure 1. In addition, Tables Iand II clarify which research emphasizes on which factors and sub-factors. Each number

Figure 1.The critical: (a) success

and (b) failure factorsof BPR

BPR Success Factors

BPR Failure Factors

Resistance to change

1- Middle management fear oflosing authority

2- Employees fear of losing job

3- Skepticism about projectresult

4- Feeling uncomfortable withnew working environment

Egalitarianleadership

1- Shared vision/

information1- Friendly

interactions

1- Sufficient

knowledge about the

BPR projects

1- New reward

system 1- The role of IT

2- Use of up-to-date

communication

technology3- Employee

empowerment

4- Timely training

& education

3- Adoption of IT

3- Frequent

communication with

BPR team and users

2- Realistic

expectation of BPR

results

2- Confidence &

trust

2- Open

communication

3- Confidence &

trust in subordinates

4- Constructive use

of subordinates' idea

3- Teamwork

performance

4- Cooperative

environment

5- Recognition

among employees

(a)

(b)

2- Performance

measurement

Collaborative

working

environment

Top managementcommitment

Change in

management

systems

Use of

Information

Technology


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Successfactors

Egalitarian

leadership

Collaborativeworking

environment

Top

manag

ement

commitment

Supportive

management

UseofICT

References

1

2

3

4

1

2

3

4

5

1

2

3

1

2

3

4

1

2

3

Croweetal.(2002)

U

U

U

U

U

U

U

U

U

U

U

U

U

U

U

U

U

Dennisetal.(2003)

U

U

U

U

U

U

U

Grant(2002)

U

U

U

U

U

U

U

U

Guimaraes(1999)

U

U

U

U

U

U

U

U

U

U

Maulletal.(2003)

U

U

U

U

U

U

U

U

Motwanietal.(2005)

U

U

U

U

U

U

U

U

U

U

U

RanganathanandDhaliw

al(2001)

U

U

U

U

U

U

U

U

U

ReijersandMansar(2005

)

U

U

U

U

U

U

U

Terziovskietal.(2003)

U

U

U

U

U

U

U

U

U

U

U

Table I.BPR critical successfactors in literaturereview

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(under the factor) refers to a sub-factor, which has been specified with a number inFigure 1. Furthermore, factors are explained to make them clear.

2.1.1 Egalitarian leadership. Some key constructs in managements are employeeinvolvement, communication, and leadership nature (Motwani et al., 2005). Topmanagers should drive the changes by providing vision (shared vision). Employeesshould become more responsive. Other members in the BPR team should understand theprocess. Top management should provide employees with channels of communicationand improve their ability of understanding each other (open communication). Effectivecommunication is vital to organizational decision making (Grant, 2002; Tatsiopoulosand Panayiotou, 2000). To empower employee and cooperate in a new system, topmanagement should establish inter- and intra-organizational confidence and trust. Thechains interactions reflect the organizational ability in adapting changes (Crowe et al.,2002). In addition, groupware techniques significantly decrease the time required forperforming the analysis phases of BPR (effective use of subordinates idea). Involving

employees and effective use of their idea enable top management to achieve optimalprocess operation (Maull et al., 2003; Terziovski et al., 2003). Egalitarian culture makesthe positive changes take place with little resistance (Crowe et al., 2002).

2.1.2 Collaborative working environment. Closely related to the egalitarian culture,cooperation (cooperative environment) is one of the critical success factors in BPR projects(Crowe et al., 2002). Employees should work together in the same department/organizationand at the same time, and interact in a friendly way with each other (Tatsiopoulos andPanayiotou, 2000). In order to work in a cooperative environment, and interact in a friendlyway, employees should trust each other, and be assured that the top managementrecognizes their role (recognition among employees) (Croweet al., 2002; Maull et al., 2003). Acooperative environment with a friendly interaction, in which employees workin teams,hasa chance of improving performance (Green and Roseman, 2000; Marir and Mansar, 2004).

2.1.3 Top management commitment. A clearly defined strategic mission isnecessary for reengineering (Maull et al., 2003). Strategic management is the highestlevel of management where top officials determine the strategic direction of thecompany (Grant, 2002). Top management should have a clear knowledge about thecurrent situation of the organization. In addition, it is necessary to have a sufficientknowledge about the BPR projects and realistic expectation of BPR results. In orderto have a successful BPR, top management should communicate with employees inorder to motivate the movement, control the BPR team and users (Crowe et al., 2002).

Failure factorsResistance to change

References 1 2 3 4

Crowe et al. (2002) U U U UDennis et al. (2003) U U U UGrant (2002) U UGuimaraes (1999) U U U UMaull et al. (2003) U U UMotwani et al. (2005) U URanganathan and Dhaliwal (2001) U UReijers and Mansar (2005) U U UTerziovski et al. (2003) U U U U

Table II.BPR critical failurefactors in literature

review


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2.1.4 Supportive management. Human resources play a crucial role in organizationalprocess improvement. They are the primary decision makers and the essentialingredients of any human activity system (Grant, 2002). In performing reengineering,the human resources architecture should be reengineered to support information

sharing and decision making better (Mansar et al., 2003; Vakola and Rezgui, 2000).Finally, employees should be assisted in the transition period to new workingenvironment (Crowe et al., 2002).

2.1.5 Use of information technology. IT is introduced as a critical component andeven a natural partner of BPR, which has a continuous and important role in BPRprojects (Attaran, 2003; Vidovic and Vuhic, 2003). Many authors have described thatsuccessful application of IT is effective in BPR success. Contrarily, overlooking the roleof IT can result in failure (Motwani et al., 2005; Shin and Jemella, 2002).

IT covers the areas of hardware, information system, and communicationtechnology, which provide individuals with the required information (Al-Mashari andZairi, 2000; Attaran, 2003). These bring effectiveness in realizing the above-mentionedcritical success factors by pulling human, business, and organization together (Grant,2002; Motwani et al., 2005). For example, communication technology is to make opencommunication, share information, and create collaborative team working (Attaran,2003; Tatsiopoulos and Panayiotou, 2000).

2.1.6 Resistance to change. Naturally, BPR fosters change and human beingresists change. This resistance is the most common barrier of BPR and renderssuccess difficult (Guimaraes, 1999; Schniederjans and Kim, 2003). Employees resistchanges because of uncertain future initiated by BPR changes including job loss,authority loss, and getting anxious (Crowe et al., 2002; Palmer, 2004).

Authors believe critical success factors can be mapped to a positive readinessindicator,and the failure factor has mapped to unreadiness indicator. In fact, the hypothesis ismeasuring critical success and failure factors can clarify readiness/unreadiness level in

executing BPR project.

3. Research methodologyThis research seeks to evaluate the readiness for implementing a BPR projectsuccessfully in Companies A and B. The BPR has been considered as a solution forchanging the traditional behavior of Company A. Company B has considered BPR as asolution for improving its performance.

A questionnaire approach is considered to assess the readiness. As mentioned, a listof critical success and failure factors are extracted and mapped to readiness/unreadinessindicators in hypotheses. In the same way, proposed questionnaire by previousresearchers are reviewed and combined based on the new categories. Then each questionis mapped to each readiness/unreadiness indicator. The produced questionnaire is

presented in the Appendix. In the questionnaire, each indicator occupies a section, whichby itself contains several questions related to indicators variables. It was piloted in eachcompany with 12 persons, who were information technology analysts, mechanicalengineers, electronic engineers, senior managers, and ordinary employees. In each case,the questionnaire was modified based on the feedback.

The questionnaire was sent through the companies internal mail system to companiesmanagers, senior managers, consultants, and ordinary employees who are experts in theprocesses. In Company A, 770 persons received the questionnaire. After more than two

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months, 191 subjects filled the questionnaires. About 22 questionnaires were discardeddue to lack of data. The remaining 169 filled out questionnaires, namely 21.9 per centresponse rate was considered usable. For Company B, 540 subjects were identified andreceived the questionnaires. Approximately, after two months, 164 of subjects sent back

the filled out questionnaires out of which eight questionnaires were discarded because oflack of data. Then the remaining 156 filled out questionnaires, namely 28.9 per centresponse rate, were considered usable. Upon receiving the first survey reply, data entrywas started and compiled into a spreadsheet for further analysis.

The internal reliability for this scale has been computed by Cronbachsa coefficient.This measures the interrelationship between items in the questionnaire. A reliability of0.70 or higher is acceptable (Terziovski et al., 2003; Wu, 2002). In this research, theCronbach a is equal to 0.76 (all ranked higher than 0.70). This analysis indicates thatthe scales used in the study are reliable. A factor analysis test as a construct validitycomputing produced a single factor solution accounting for 63 per cent of the averageextracted variance.

The correlation analysis identified that there is strong relationships with all

measures of indicators. The correlation between the considered indicators had thehighest correlation at the strongest significance level (0.473 at p 0.001 in Company Aand 0.486 at p 0.001 in Company B).

The simple statistical calculations are used for evaluating the indicators. Elements arescored in the range of four (always) to zero (never). Each significant element had equalweights. Each indicator has been calculated by summation of its sub-components dividedby the number of its questions. The total readiness of the case will be calculated byaggregating all indicators, while the negative indicators carry a negative mark. That is:

Readiness total X

INi2 INj; for effect INi . 0 and effect INj , 0:

4. Survey analysis

In this survey, six indicators are investigated. The positive indicators are IN1-IN5 andnegative indicator is IN6. For each indicator, the minimum value is zero, and themaximum value is four. As shown in Table III, indicators value of Company A doesnot differ that much. In addition, all indicators value is under average. However, thestandard deviation of IN3 is greater than other indicators. This means that there aredifferent opinions about top management commitment (IN3). Moreover, results ofCompany B represent better readiness for the BPR project (Table III). Particularly,the respective employees show significantly less resistance to change.

StatisticsCompany A Company B

Indicators N (Qs) N Mean SD N Mean SD

IN1 4 169 1.7293 0.66672 156 2.2340 0.57057IN2 5 169 1.8651 0.64200 156 2.2141 0.57792IN3 3 169 1.6272 1.04389 156 2.3974 0.79705IN4 4 169 1.9379 0.81366 156 2.4631 0.65918IN5 3 169 1.9053 0.85153 156 2.5962 0.67522IN6 4 169 1.8491 0.85488 156 0.9145 0.52269Valid N (list-wise) 23 169 156

Table III.The result of indicators

from the survey


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Moreover, in order to analyze the level of BPR readiness in the Iranian companiesaccurately, the scores are dissected into five ranks. Those are Total unready, Unready,Moderate, Ready, and Absolutely ready for the range of 0-0.5, 0.51-1.5, 1.51-2.50,2.51-3.5, 3.51-4, respectively.

Table IV illustrates the rank distribution in the survey for every indicator in eachcase. For all indicators value in Company A, first and second highest responses refer tomoderate and unready ranks.

The results of Company B show that the highest results for three indicators are inthe moderate rank and for other three indicators in the ready rank. The former areegalitarian leadership (IN1), cooperative working environment (IN2) and supportivemanagement (IN4). The latter are in top management commitment (IN3), use ofinformation technology (IN5), and resistance to change (IN6).

4.1 Evaluation the BPR readinessIn Figure 2, a diamond model is pictured to highlight the position of Iranian companiesin the state space of BPR readiness. The diamond model is a polygon with five verticeseach referring to one of the five positive indicators. A vector will be derived from thepentagon centroid, if there is resistance to change. In the best case, the mean value ofeach positive indicator should be equal to four and each negative indicator should beequal to zero.

The results gained in Company A indicate that all positive and negative indicatorsreside in the moderate region. Consequently, this company is not ready for starting aBPR project, although it cannot be considered unready. Indeed, managers of CompanyA should have a detailed program for improving the acceptance level of changes.Detailed are described in the next section, Implication for management.

The most priority of Company B to Company A is its low resistance to change.This makes possible to accept improvement and changes, and hence ready for running

a BPR project, although four indicators are just near to ready. However, this companyshould evolve the business processes in a carefully developed detailed plan, whichparticularly equipped with improvement mentioned in next section.

5. Implications for managementBPR project has been continuously referred as risky effort since it brings radicalchanges in three main organizational areas including human, processes and technology(Crowe et al., 2002). The readiness measurement leads to an accurate percept in eacharea. This should be tended to anticipate and direct guidelines to guarantee the successof the project.

BPR needs to change the culture and behavior of human in each organizationallevel. As mentioned, management performance is a critical key in the success of BPR.

Managers should follow some directions to make organizational wide improvements.These include:

. Having an improvement strategy plan helps managers to know the currentsituation, have a clear perception of business processes, the future road map andhow the BPR can help. It needs a sufficient knowledge about BPR and makes realexpectations. In addition, an action plan can be extracted based on the strategyplan to specify required pre-executing phases to make a ready organization inaccepting radical changes.

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Indicator

CompanyA

SIN1

SIN2

SIN3

SIN4

SIN5

SIN6

Rank

Freq

uation

Per.

Frequation

Per.

Frequation

Per.

Frequation

Per.

Frequation

Per.

Frequation

Per.

Totalunready

10

5.9

2

1.2

30

17.8

4

2.4

6

3.6

11

6.5

Unready

61

36.1

51

30.2

53

31.4

65

38.5

54

32.0

61

36.1

Moderate

86

50.9

85

50.3

55

32.5

66

39.1

66

39.1

65

38.5

Ready

12

7.1

31

18.3

23

13.6

31

18.3

37

21.9

29

17.2

Absolutelyready

0.0

0.0

0.0

0.0

8

4.7

3

1.8

6

3.6

3

1.8

Total(percent)

169-1

00

CompanyB

Indicator

SIN1

SIN2

SIN3

SIN4

SIN5

SIN6

Rank

Freq

uation

Per.

Frequation

Per.

Frequation

Per.

Frequation

Per.

Frequation

Per.

Frequation

Per.

Totalunready

1

0.6

0.0

0.0

3

1.9

0.0

0.0

0.0

0.0

0.0

0.0

Unready

22

14.1

17

10.9

20

12.8

11

7.1

6

3.8

3

1.9

Moderate

94

60.3

86

55.1

56

35.9

78

50.0

64

41.0

8

5.1

Ready

38

24.4

51

32.7

63

40.4

59

37.8

67

42.9

103

66.0

Absolutelyready

1

0.6

2

1.3

14

9.0

8

5.1

19

12.2

42

26.9

Total(percent)

156-1

00

Table IV.The rank of readiness for

each indicator


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. Making egalitarian society, in which there is possible to share information,

democratically interact with employees, and increase confidence and creativity.. Involving interaction and cooperation in working places to collaborate team

working and increase trust. Working seminars in friendly and interesting places,and cultural training can facilitate the structural change.

. Creating measurement system makes possible to evaluate the efficiency ofprocesses, and involved employee and technologies. This can be lead to a rewardsystem to persuade employees, or training courses to empower employees andincrease the efficiency.

. Utilizing information and communication technologies to underpin businessprocesses, make open communication and interactive environment, and facilitateperformance measurement in an accurate way.

These actions could cause to have enough knowledge about current and expectedbusiness processes, make people ready in accepting behavioral and structural changes,and determining the role of technology. All of these tend to decrease risk and increasethe success rate.

In investigated companies, although Company B results describe a few degreebetter situation in compare with Company A, both of them have a lack of democraticsocieties. In fact there is a gap between employees and top managers, which makeemployees not able to work in a collaborative manner, share information, interact totop manager, and be confident about management support. Moreover, there is a weakfriendship and confidence among co-workers.

In order to enhance the readiness indicators, it is necessary to define new specific

team works and project environment based on the business process. It can be changedto process-based structure of organization in future. In these groups, technologiesshould be utilized to make an open communication between members. The creativelyresults of team-works should be purposed to solve problems and transferred to topmanagement to make decision. This enhances confidence and trust betweenco-workers and their managers. Moreover, some cultural entertainment and trainingprograms including seminars, workshops, and tours can be helpful, specifically indiminishing the resistance. Finally, companies should highlight the role of information

Figure 2.BPR readiness analysis

IN6

IN5 IN1

IN2

IN3

IN4

Company A

Total Unready

Unready

Moderate

Ready

Absolutely ReadyCompany B

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and communication technologies. Particularly, Company A needs to make an actionplan to utilize the technology in an efficient manner in the future.

6. ConclusionBPR has been addressed as a significant solution for radical improvement in theenterprises. However, the high-failure rate of BPR projects makes organizationsconsider all aspect of the project meticulously. This research explores a new area on BPRreadiness based on analyzing critical success and failure factors, which is referred to asreadiness positive and negative indicators. Assessing BPR readiness can address strongpoints, weak points and risks, and hence the rank of readiness in the organization. Inother words, as there is readiness, a BPR project can be initiated. Or else, it should bedelayed in order for an organization to get ready. Readiness guarantees the success ofBPR projects.

In this research, firstly, the positive and negative BPR readiness indicators arereviewed and six indicators are extracted. Egalitarian leadership, collaborative

working environment, top management commitment, supportive management, anduse of information technology have been known as positive factors that have a directrelation with readiness. Finally, resistance to change has been introduced as a negativefactor, which decreases the readiness.

Two Iranian companies, which have been eager to try BPR, are evaluated tomeasure the level of their readiness. The results imply that Company A is not ready. Infact, the company is placed in a moderate position. However, the high rate of resistanceto change addresses necessity of some kind of cultural, managerial, supportive andtechnological reform. This can lead to enhancement in positive indicators, as well.The results of Company B almost indicate the moderates and ready situation.Nevertheless, the low rate of resistance to change requires more accelerated andefficient programs to improve the situation and a successful BPR project. Both

companies, particularly Company A, can utilize the implication for managementguidelines, which are discusses, to increase the readiness level and hence success rate.

For further research, it is recommended to evaluate Company A, after some changesand compare it with the current situation. Moreover, after this research, Company Bhas started to run a BPR project. It is possible to run another survey in this companyafter accomplishing the project to measure the success. Then, it is possible to comparecritical success or failure factor to optimize readiness indicators.

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Appendix. The questionnaire(The Appendix follows overleaf.)


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Figure A1.

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Corresponding authorNeda Abdolvand can be contacted at: [email protected]

Figure A1.


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