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Proceedings of

The 4

h

Annual International Conference on

ndustrial Engineering Theory, Applications and Practice

November 17-20, 1999, San Antonio, Texas, USA

* Corresponding author

BUSINESS PROCESS REENGINEERING: A CONSOLIDATED

METHODOLOGY

Subramanian Muthu, Larry Whitman, and S. Hossein Cheraghi

Dept. of Industrial and Manufacturing Engineering

Wichita State University Wichita, KS-67260 0035, USA

.

Abstract

Business Process Reengineering is a discipline in which extensive research has been carried out and

numerous methodologies churned out. But what seems to be lacking is a structured approach. In this paper we

rovide a review of BPR and present best of breed methodologies from contemporary literature and introduce a

onsolidated, systematic approach to the redesign of a business enterprise. The methodology includes the five

ctivities: Prepare for reengineering, Map and Analyze As-Is process, Design To-be process, Implement

eengineered process and Improve continuously.

Keywords: Business Process Reengineering, Methodology, Improvement

.0 Introduction:

In todays ever-changing world, the only thing that doesnt change is change itself. In a world

ncreasingly driven by the three Cs: Customer, Competition and Change, companies are on the lookout for new

olutions for their business problems[4]. Recently, some of the more successful business corporations in the world

eem to have hit upon an incredible solution: Business Process Reengineering (BPR).

Some of the recent headlines in the popular press read, Wal-Mart reduces restocking time from six weeks

o thirty-six hours. Hewlett Packards assembly time for server computers touches new low- four minutes.

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Taco Bells sales soars from $500 million to $3 billion[3]. The reason behind these success stories: Business

Process Reengineering!

.0 What is reengineering?

Reengineering is the fundamental rethinking and radical redesign of business processes to achieve

dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and

peed[4]. The key words in the preceding definition are the italicized ones.

BPR advocates that enterprises go back to the basics and reexamine their very roots. It doesnt believe in

mall improvements. Rather it aims at total reinvention. As for results: BPR is clearly not for companies who want a

0% improvement. It is for the ones that need a ten-fold increase. According to Hammer and Champy [4], the last

but the most important of the four key words is the word-process. BPR focuses on processes and not on tasks, jobs

r people. It endeavors to redesign the strategic and value added processes that transcend organizational boundaries.

.0 What to reengineer? :

According to many in the BPR field reengineering should focus on processes and not be limited to

hinking about the organizations. After all the organization is only as effective as its processes[4,6] So, what is a

rocess? A business process is a series of steps designed to produce a product or a service. It includes all the

ctivities that deliver particular results for a given customer(external or internal)[9]. Processes are currently

nvisible and unnamed because people think about the individual departments more often than the process with

which all of them are involved. So companies that are currently used to talking in terms of departments such as

marketing and manufacturing must switch to giving names to the processes that they do such that they express the

beginning and end states. These names should imply all the work that gets done between the start and finish. For

xample, order fulfillment can be called order to payment process [4].

Talking about the importance of processes just as companies have organization charts, they

hould also have what are called process maps to give a picture of how work flows through the company. Process

mapping provides tools and a proven methodology for identifying your current As-Is business processes and can be

used to provide a To-Be roadmap for reengineering your product and service business enterprise functions. It is the

ritical link that your reengineering team can apply to better understand and significantly improve your business

rocesses and bottom-line performance[4,6].

Having identified and mapped the processes, deciding which ones need to be reengineered and in what

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rder is the million-dollar question. No company can take up the unenviable task of reengineering all the processes

imultaneously. Generally they make there choices based on three criteria:- dysfunction: which processes are

unctioning the worst?; importance: which are the most critical and influential in terms of customer satisfaction;

easibility: which are the processes that are most likely to be successfully reengineered[4].

.0 How to reengineer?

With an understanding of the basics of BPR, five methodologies are summarized in Table 1.

Table 1. A few BPR methodologies from contemporary literature

Activity# Methodology #1 [11] Methodology #2 [5]

Develop vision & strategy Determine Customer Requirements &Goals for the Process

Create desired culture Map and Measure the Existing Process

Integrate & Improve enterprise Analyze and Modify Existing Process

Develop technology solutions Design a Reengineered Process:

Implement the Reengineered Process

Activity# Methodology#3 [2] Methodology #4 [9] Methodology #5 [7]

Set Direction Motivating Reengineering Preparation

Baseline and Benchmark Justifying Reengineering Identification

Create the Vision Planning Reengineering Vision

Launch Problem Solving Projects Setting up for Reengineering Technical & Social design

Design Improvements As Is Description & Analysis: Transformation

Implement Change To-Be Design and Validation

Embed Continuous Improvement Implementation

.1 Consolidated Methodology:

A consolidated methodology has been developed from the five methodologies previously presented and an

DEF0 model was developed to provide a structured approach and to facilitate understanding. But for the sake of

brevity, we have shown only the major activities in the IDEF0 model in Figure 1. In the ensuing section, we deal

with the details of our methodology.

.1.1 Activity #1: Prepare for Reengineering:

If you fail to plan, you plan to fail. Planning and Preparation are vital factors for any activity or event to

e successful, and reengineering is no exception. Before attempting reengineering, the question Is BPR necessary?

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hould be asked? There should be a significant need for the process to be reengineered. The justification of this need

marks the beginning of the Preparation activity[9].

Figure 1 BPR: The surest way to the Top!

This activity begins with the development of executive consensus on the importance of reengineering and

he link between breakthrough business goals and reengineering projects. A mandate for change is produced and a

ross-functional team is established with a game plan for the process of reengineering. While forming the crossfunctional teamteps should be taken to ensure that the organization continues to function in the absence of several

key players[5]. As typical BPR projects involve cross-functional cooperation and significant changes to the status

quo, the planning for organizational changes is difficult to conduct without strategic direction from the top. The

mpact of the environmental changes that serve as the impetus for the reengineering effort must also be considered

n establishing guidelines for the reengineering project. Another important factor to be considered while establishing

he strategic goals for the reengineering effort, is to make it your first priority to understand the expectations of your

ustomers and where your existing process falls short of meeting those requirements. Having identified the customer

driven objectives, the mission or vision statement is formulated. The vision is what a company believes it wants to

chieve when it is done, and a well-defined vision will sustain a companys resolve through the stress of the

eengineering process. It can act as the flag around which to rally the troops when the morale begins to sag and it

rovides the yard stick for measuring the companys progress[4, 9].

.1.2 Activity #2: Map and Analyze As-Is Process:

Before the reengineering team can proceed to redesign the process, they should understand the existing

rocess. Although some BPR proponents (in particular Hammer and Champy) argue against analyzing the current

nterprise, saying that it inhibits the creative process, that might not always hold true[1]. It varies from case to case.

While some organizations which are in dire straits might go the Hammer and Champy way (attempt a new process

design while totally ignoring the existing processes) most organizations need to map the existing processes first,

nalyze and improve on it to design new processes. The important aspect of BPR (what makes BPR, BPR) is that the

mprovement should provide dramatic results. Many people do not understand the value of an As-Is analysis and

ather prefer to spend a larger chunk of their valuable time on designing the To-Be model directly. What follows is

n illustration that illustrates this fallacy.

A large manufacturer spent six million dollars over a period of one year in a bid to develop a parts-tracking

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ystem and was all set to go online. Only then did he realize that he had totally overlooked a small piece of

nformation the mode of transmission of information between the scheduling staff and the shop floor was through

Prepare for

BPR

Build Cross

unctional

eam

Identify

Customer

driven objective

Develop

Strategic

Purpose

Map & Analyze As-Is

Process

Create Activity

Models

Create Process

Models

Simulate &

Perform ABC

Identify

disconnects &

value adding

rocesses

Design To-Be

Processes

Benchmark

rocesses

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Design To-Be

rocesses

Validate To-Be

rocesses

Perform Trade-off

Analysis

mplement

Reengineered

rocesses

Evolve

mplementation

lan

Prototype &

imulate

ransition plans.

Initiate training

rograms

Implement

ransition plan

mprove

Continuously

Initiate Ongoing

measurement

Review

erformance

gainst target

Improve process

ontinuously

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phone call. But just because this small yet vital information had not been documented all his efforts added up to

naught and the whole system that he had so painstakingly developed had to be scrapped. Alas! He had recognized

he need for an As-Is analysis, way too late[1].

The main objective of this phase is to identify disconnects (anything that prevents the process from

chieving desired results and in particular information transfer between organizations or people) and value adding

processes[9]. This is initiated by first creation and documentation of Activity and Process models making use of the

various modeling methods available. Then, the amount of time that each activity takes and the cost that each activity

equires in terms of resources is calculated through simulation and activity based costing(ABC). All the groundwork

equired having been completed, the processes that need to be reengineered are identified.

.1.3 Activity #3: Design To-Be process:

The objective of this phase is to produce one or more alternatives to the current situation, which satisfy the

trategic goals of the enterprise. The first step in this phase is benchmarking. Benchmarking is the comparing of

both the performance of the organizations processes and the way those processes are conducted with those relevant

eer organizations to obtain ideas for improvement[7]. The peer organizations need not be competitors or even

rom the same industry. Innovative practices can be adopted from anywhere, no matter what their source.

Having identified the potential improvements to the existing processes, the development of the To-Be

models is done using the various modeling methods available, bearing in mind the principles of process design.

Then, similar to the As-Is model, we perform simulation and ABC to analyze factors like the time and cost involved.

t should be noted that this activity is an iterative process and cannot be done overnight. The several To-Be models

hat are finally arrived at are validated. By performing Trade off Analysis the best possible To-Be scenarios are

elected for implementation.

.1.4 Activity #4:Implement Reengineered Process:

The implementation stage is where reengineering efforts meet the most resistance and hence it is by far the

most difficult one[2]. If we expect that the environment would be conducive to the reengineering effort we are sadly

mistaken. The question that confronts us would be, If BPR promises such breath taking results then why wasnt it

dopted much earlier? We could expect to face all kinds of opposition - from blatantly hostile antagonists to passive

dversaries: all of them determined to kill the effort. When so much time and effort is spent on analyzing the current

rocesses, redesigning them and planning the migration, it would indeed be prudent to run a culture change program

imultaneously with all the planning and preparation. This would enable the organization to undergo a much more

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acile transition. But whatever may be the juncture in time that the culture change program may be initiated, it

hould be rooted in our minds that winning the hearts and minds of everyone involved in the BPR effort is most

vital for the success of the effort[10]. Once this has been done, the next step is to develop a transition plan from the

As-Is to the redesigned process. This plan must align the organizational structure, information systems, and the

usiness policies and procedures with the redesigned processes. Rapid implementation of the information system

hat is required to support a reengineered business process is critical to the success of the BPR project. The IDEF

models that were created in the As-Is can be mapped to those created during the To-Be and an initial list of change

equirements generated. Additional requirements for the construction of the To-Be components can be added and the

esult organized into a Work Breakdown Structure (WBS). Recent developments in BPR software technologies

nable automatic migration of these WBS activity/relationships into a process modeling environment. The benefit

here is that we can now define the causal and time sequential relationships between the activities planned[9]. Using

prototyping and simulation techniques, the transition plan is validated and its pilot versions are designed and

demonstrated. Training programs for the workers are initiated and the plan is executed in full scale.

.1.5 Activity #5: Improve Process Continuously:

A process cannot be reengineered overnight. A very vital part in the success of every reengineering effort

ies in improving the reengineered process continuously. The first step in this activity is monitoring. Two things

have to be monitored the progress of action and the results. The progress of action is measured by seeing how

much more informed the people feel, how much more commitment the management shows and how well the change

eams are accepted in the broader perspective of the organization. This can be achieved by conducting attitude

urveys and discrete fireside chats with those initially not directly involved with the change. As for monitoring the

esults, the monitoring should include such measures as employee attitudes, customer perceptions, supplier

esponsiveness etc[12]. Communication is strengthened throughout the organization, ongoing measurement is

nitiated, team reviewing of performance against clearly defined targets is done and a feedback loop is set up

wherein the process is remapped, reanalyzed and redesigned. Thereby continuous improvement of performance is

nsured through a performance tracking system and application of problem solving skills. Continuous improvement

TQM) and BPR have always been considered mutually exclusive to each other. But on the contrary, if performed

imultaneously they would complement each other wonderfully well. In fact TQM can be used as a tool to handle

he various problems encountered during the BPR effort and to continuously improve the process. In corporations

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hat have not adopted the TQM culture as yet, application of TQM to the newly designed processes should be

undertaken as a part of the reengineering effort[8].

5.0 Conclusion:

An intense customer focus, superior process design and a strong and motivated leadership are vital

ngredients to the recipe for the success of any business corporation. Reengineering is

he key that every organization should possess to attain these prerequisites to success. BPR doesnt offer a miracle

ure on a platter. Nor does it provide a painless quick fix. Rather it advocates strenuous hard work and instigates the

people involved to not only to change what they do but targets at altering their basic way of thinking itself. In this

aper we have attempted in evolving a structured approach to reengineering.

50 to 70 percent of reengineering efforts fail to deliver the intended dramatic results[4]. Those who are

tanding in the wings afraid to take the plunge must remember just this: A BPR effort has been considered a failure

ust because it doesnt provide the dramatic results it promised to deliver. But on after thoughts hasnt there been a

ignificant improvement in the companys performance? A 200 % increase in output may not match the 300 %

redicted. It may be a failure according to the high standards set by preceding BPR efforts. But if the question is

Are the results good enough for pursuing the BPR effort? The answer is a resounding YES!!!

One more very critical factor to be noted is that the statement says- 50 to 70 % efforts have failed and not

hat they will fail. There is a monumental difference between the two. We can track down all these failures to the

ommon trivial mistakes that these corporations commit. Once these mistakes are identified and overcome, the

uccessful completion of the BPR effort is very much possible. Moreover failure doesnt mean that reengineering

tops forever. It usually stalls and then restarts as the company gets itself refocused and remobilized. It cannot stop.

The business imperative is just too great[4] !

.0 Future Research:

An IDEF0 model for Transforming the Enterprise is being developed and will be published on the web

hortly.

References

. Feldmann Clarence.G, (1998),The Practical Guide to Business Process Reengineering using IDEF0., Dorset

House Publishing, New York.

. Furey, Timothy.R., (1993), A Six Step Guide to Process Reengineering., Planning Review 21 (2), 20-23

. Grover,Varun., Malhotra, Manoj.K.,(1995), Business Process Reengineering: A tutorial on the concept,

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volution, method, technology and application., Journal of Operations Management 15 (1997) 193-213

. Hammer,M., Champy.J., (1993), Reengineering the Corporation: A Manifesto for Business Revolution., Harper

Collins, London.

. Harrison, Brian.D., Pratt, Maurice.D., (1993), A methodology for Reengineering Business., Planning Review 21

2), 6-11.

. Hunt, Daniel.V., (1996), Process Mapping: How to Reengineer your Business Process., John Wiley and Sons

nc, New York.

. Manganelli, Raymond.L., Klein, Mark.M., (1994), The Reengineering Handbook: A Step-by-Step Guide to

Business Transformation., American Management Association, New York.

. Martin, James., (1995),The Great Transition: Using the Seven Disciplines of Enterprise Engineering to Align

People, Technology, and Strategy., American Management Association, New York.

. Mayer, Richard.J., Dewitte, Paula.S., (1998), Delivering Results: Evolving BPR from art to engineering.,

0. Obolensky, Nick., (1994)., Practical Business Reengineering., Gulf Publishing Company, Houston.

1. Underdown, D. R.,(1997), Transform Enterprise Methodology. Unpublished Paper

www.mrc.twsu.edu/enteng/tem.html

Business Process Reengineering

Business process reengineering (often referred to by the acronym BPR) is the main way in which organizations become more efficient and

modernize. Business process reengineering transforms an organization in ways that directly affect performance.

he Impact Of BPR On Organizational Performancehe two cornerstones of any organization are the people and the processes. If individuals are motivated and working hard, yet the business

rocesses are cumbersome and non-essential activities remain, organizational performance will be poor. Business Process Reengineering is the k

o transforming how people work. What appear to be minor changes in processes can have dramatic effects on cash flow, service delivery and

ustomer satisfaction. Even the act of documenting business processes alone will typically improve organizational efficiency by 10%.

How To Implement A BPR Projecthe best way to map and improve the organization's procedures is to take a top down approach, and not undertake a project in isolation. That

means:

Starting with mission statements that define the purpose of the organization and describe what sets it apart from others in its sector or industry.

Producing vision statements which define where the organization is going, to provide a clear picture of the desired future position.

Build these into a clear business strategy thereby deriving the project objectives.

Defining behaviours that will enable the organization to achieve its' aims.

Producing key performance measures to track progress.

Relating efficiency improvements to the culture of the organization

Identifying initiatives that will improve performance.

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Once these building blocks are in place, the BPR exercise can begin.

ools To Support BPRWhen a BPR project is undertaken across the organization, it can require managing a massive amount of information about the processes, data an

ystems. If you don't have an excellent tool to support BPR, the management of this information can become an impossible task. The use of a good

BPR/documentation tool is vital in any BPR project.

he types of attributes you should look for in BPR software are:

Graphical interface for fast documentation

"Object oriented" technology, so that changes to data (eg: job titles) only need to be made in one place, and the change automatically appears

throughout all the organization's procedures and documentation.

Drag and drop facility so you can easily relate organizational and data objects to each step in the process

Customizable meta data fields, so that you can include information relating to your industry, business sector or organization in your documentation

Analysis, such as swim-lanes to show visually how responsibilities in a process are transferred between different roles, or where data items or

computer applications are used.

Support for Value Stream mapping.

CRUD or RACI reports, to provide evidence for process improvement.

The ability to assess the processes against agreed international standards

Simulation software to support 'what-if' analyses during the design phase of the project to develop LEAN processes

The production of word documents or web site versions of the procedures at the touch of a single button, so that the information can be easily

maintained and updated.

he software we use by choice is 2c8, a very comprehensive Swedish system that has been translated into English. 2c8 meets all the aboveequirements, and many more, and is better than any system originated in English that we have seen.

Conclusiono be successful, business process reengineering projects need to be top down, taking in the complete organization, and the full end to end

rocesses. It needs to be supported by tools that make processes easy to track and analyze. If you would like help with your BPR project,

What is Business Process Redesign?

Business Process Redesign is "the analysis and design of workflows and processes within andbetween organizations" (Davenport & Short 1990). Teng et al. (1994) define BPR as "the criticalanalysis and radical redesign of existing business processes to achieve breakthrough improvements in

performance measures."

How Does BPR Differ from TQM?

Teng et al. (1994) note that in recent years, increased attention to business processes is largelydue to the TQM (Total Quality Movement). They conclude that TQM and BPR share a cross-unctional orientation. Davenport observed that quality specialists tend to focus onncremental change and gradual improvement of processes, while proponents ofeengineering often seek radical redesign and drastic improvement of processes.

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Davenport (1993) notes that Quality management, often referred to as total quality managemenTQM) or continuous improvement, refers to programs and initiatives that emphasizencremental improvement in work processes and outputs over an open-ended period of time.n contrast, Reengineering, also known as business process redesign or process innovation,

efers to discrete initiatives that are intended to achieve radically redesigned and improvedwork processes in a bounded time frame. Contrast between the two is provided by Davenpor1993):

Process Improvement (TQM) versus Process Innovation (BPR)From Davenport (1993, p. 11)

Improvement Innovation

Level of Change Incremental RadicalStarting Point Existing Process Clean SlateFrequency of Change One-time/Continuous One-timeTime Required Short LongParticipation Bottom-Up Top-DownTypical Scope Narrow, within functions Broad, cross-functionalRisk Moderate HighPrimary Enabler Statistical Control Information TechnologyType of Change Cultural Cultural/Structural

What is a Business Process?

Davenport & Short (1990) define business process as "a set of logically related tasks performedo achieve a defined business outcome." A process is "a structured, measured set of activities

designed to produce a specified output for a particular customer or market. It implies a strongemphasis on how work is done within an organization" (Davenport 1993). In theirviewprocesses have two important characteristics: (i) They have customers (internal or external),ii) They cross organizational boundaries, i.e., they occur across or between organizationalubunits. One technique for identifying business processes in an organization is the value

chain method proposed by Porter and Millar (1985).

Processes are generally identified in terms of beginning and end points, interfaces, andorganization units involved,particularly the customer unit. High Impact processes shouldhaveprocess owners. Examples of processes include: developing a new product; ordering goodrom a supplier; creating a marketing plan; processing and paying an insurance claim; etc.

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Processes may be defined based on three dimensions (Davenport & Short 1990):

Entities: Processes take place between organizational entities. They could benterorganizational (e.g. EDI, i.e., Electronic Data Interchange), Interfunctional or Interperson

e.g. CSCW, i.e., Computer Supported Cooperative Work).Objects: Processes result in manipulation of objects. These objects could be Physical ornformational.

Activities: Processes could involve two types of activities: Managerial (e.g. develop a budget)and Operational (e.g. fill a customer order).

What are the Myths about BPR Created by the Popular Literature?

The popular management literature has created more myth than practical methodologyeengineering. The concept of BPR has been with us since about 1990, however it is widelymisunderstood and has been equated to downsizing, client/server computing, quality, ABC,and several other management nostrums of the past several years. Based on interviews andconversations with more than 200 companies, and 35 reengineering initiatives, Davenport &Stoddard (1994) identify seven reengineering myths.

The Myth of Reengineering Novelty: Reengineering, although about familiar concepts, is new inhat these concepts are combined in a new synthesis. These key components have never beenogether before.

The Myth of the Clean Slate: Regardless of Hammer's (1990) exhortation: "Don't automate,obliterate!" clean slate change is rarely found in practice. Or, as Davenport and Stoddard1994) state: A "blank sheet of paper" used in design usually requires a "blank check" formplementation. Hence, a more affordable approach for most companies is to use Clean Slate

Design which entails a detailed vision for a process without concern for the existingenvironment. However, the implementation is done over several phased projects. Alsoupported by preliminary findings of Stoddard & Jarvenpaa 1995: their findings ran contraryo Hammer (1990): "although reengineering can deliver radical designs, it does not necessarily

promise a revolutionary approach to change. Moreover, a revolutionary change process might nobe feasible given the risk and cost of revolutionary tactics."

The Myth of Information Systems Leadership: In contrast to the much touted leadership role,nformation Systems (IS) is generally viewed as a partner within a cross- functional team that

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s generally headed by a non-IS project leader and a non-IS business sponsor who have bettercontrol over the processes that are being redesigned.

The Myth of Reengineering vs. Quality: Unlike Hammer & Champy's (1993) call for all out

radical change," most companies have a portfolio of approaches to organizational changencluding reengineering, continuous improvement, incremental approaches, and restructurinechniques.

The Myth ofTop-Down Design: The implementation and execution of the redesigned processedepends upon those who do the work. Hence, the participation, and more importantly,acceptance and ownership, at the grass roots level is essential for successful BPR.

The Myth of Reengineering vs. Transformation: BPR is a process that contributes toorganizational transformation (OT), however it is not synonymous with transformation. OT is

defined as, "Profound, fundamental changes in thought and actions, which create anrreversible discontinuity in the experience of a system" (Adams 1984). OT is generally abouthe emergence of a new belief system and necessarily involves reframing, which is a

discontinuous change in the organization's or group's shared meaning or culture. It alsonvolves broad changes in other organizational dimensions besides the work processes: such

as organizational structure, strategy, and business capabilities.

The Myth of Reengineering's Permanence: Davenport & Stoddard (1994) speculate thateengineering has peaked in the US in 1994 and would probably become integrated with muc

broader organizational phenomena: such as another synthesis of ideas that includes theprecepts of reengineering; its integration into existing change methods; or its combination witquality and other process-oriented improvement approaches into an integrated processmanagement approach.

What is the Relation between BPR & Information Technology?

Hammer (1990) considers information technology (IT) as the key enabler of BPR which heconsiders as "radical change." He prescribes the use of IT to challenge the assumptionsnherent in the work processes that have existed since long before the advent of modern

computer and communications technology. He argues that at the heart of reengineering is thenotion of "discontinuous thinking -- or recognizing and breaking away from the outdated ruleand fundamental assumptions underlying operations... These rules of work design are basedon assumptions about technology, people, and organizational goals that no longer hold." Heuggests the following "principles of reengineering": (a) Organize around outcomes, not tasksb) Have those who use the output of the process perform the process; (c) Subsume

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nformation processing work into the real work that produces the information; (d) Treatgeographically dispersed resources as though they were centralized; (e) Link parallel activitienstead of integrating their results; (f) Put the decision point where the work is performed, an

build control into the process; and (g) Capture information once and at the source.

Davenport & Short (1990) argue that BPR requires taking a broader view of both IT andbusiness activity, and of the relationships between them. IT should be viewed as more than anautomating or mechanizing force: to fundamentally reshape the way business is done.

Business activities should be viewed as more than a collection of individual or even functionaasks: in a process view for maximizing effectiveness. IT and BPR have recursive relationshipT capabilities should support business processes, and business processes should be in terms

of the capabilities IT can provide. Davenport & Short (1990) refer tothis broadened, recursive vieof ITand BPR as the new industrial engineering.

Business processes represent a new approach to coordination across the firm; IT's promise --and its ultimate impact -- is to be the most powerful tool for reducing the costs of coordinatioDavenport & Short 1990). Davenport & Short (1990) outline the following capabilities thateflect the roles that IT can play in BPR: Transactional, Geographical, Automatical, Analyticalnformational, Sequential, Knowledge Management, Tracking, and Disintermediation.

Teng et al. (1994) argue that the way related functions participate in a process - - i.e.,hefunctional coupling of a process -- can be differentiated along two dimensions: degree of

mediation and degree of collaboration. They define the Degree of Mediation of the process as theextent of sequential flow of input and output among participating functions. They define theDegree of Collaboration of the process is the extent of information exchange and mutualadjustment among functions when participating in the same process. In their framework,nformation technology is instrumental in Reducing the Degree of Mediation and Enhancinghe Degree of Collaboration. Also, innovative uses of IT would inevitably lead many firms to

develop new, coordination-intensive structures, enabling them to coordinate their activities inways that were not possible before. Such coordination-intensive structures may raise theorganization's capabilities and responsiveness, leading to potential strategic advantages.

What is the Role of the IS Function in BPR?

Although, BPR has its roots in IT management, it is primarily a Business Initiative that hasbroad consequences in terms of satisfying the needs of customers and the firm's otherconstituents (Davenport & Stoddard 1994). The IS group may need to play a behind-the-sceneadvocacy role, convincing senior management of the power offered by IT and process

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edesign. It would also need to incorporate the skills of process measurement, analysis, andedesign. The CIGNA IS group had to develop a new set of basic values that reflected a changn focus from technology to a focus on business processes and results (Caron et al. 1994). Thepecific business divisions led the BPR initiatives; IS groups served as partners in enabling the

adical changes.

s there a BPR Methodology?

Davenport and Short (1990) prescribe a five-step approach to BPR:

Develop the Business Vision and Process Objectives: BPR is driven by a business vision whichmplies specific business objectives such as Cost Reduction, Time Reduction, Output Qualitymprovement, QWL (Quality of Work Life)/Learning/Empowerment. (cf: Shared Vision of

Senge 1990, Ikujiro & Nonaka 1995).

Identify the Processes to be Redesigned: Most firms use the High- Impact approach which focuseson the most important processes or those that conflict most with the business vision. Lessernumber of firms use the Exhaustive approach that attempts to identify all the processes withinan organization and then prioritize them in order of redesign urgency.

Understand and Measure the Existing Processes: For avoiding the repeating of old mistakes andor providing a baseline for future improvements.

Identify ITLevers: Awareness of IT capabilities can and should influence process design.

Design and Build a Prototype of the New Process: The actual design should not be viewed as theend of the BPR process. Rather, it should be viewed as a prototype, with successive iterationsThe metaphor of prototype aligns the BPR approach with quick delivery of results, and thenvolvement and satisfaction of customers.

BPR: All or Nothing?: Insights from CIGNA

At CIGNA BPR meant "breakthrough innovation focused on customer needs" (Caron et al.

1994). BPR was essentially driven by the senior management's strategic planning process thathad concluded that the mix of business in its portfolio needed to change. It was viewed as avehicle to realign strategy, operations, and systems to deliver significantly increased financialesults. Caron et al. (1994) argue that the real life story of BPR at CIGNA represents a contrasto the general prescriptions of "radical" "all-or-nothing" organizational transformation. At

CIGNA, BPR started out as an experimental pilot. The knowledge from the success of thisnitiative was disseminated for implementing other BPR projects. The BPR initiative was

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ustained "from the bottom up, with learning transferred "across."" At CIGNA, the prerequisior BPR success was a corporate environment that promotes learning, especially learning fromailure. Although, the process was initiated from the top, the ownership was moved down tohe people who actually had to implement the changes and were affected by those changes.

The BPR effort took into consideration the differences in management cultures in differentcountries. The BPR initiative started at the operational levels and was later moved to "higherorms" (strategic) of reengineering over time.

Why BPR Projects Fail? What Can be Done about it?

70% of the BPR projects fail. Biggest obstacles that reengineering faces are: (i) Lack of sustainemanagement commitment and leadership; (ii) Unrealistic scope and expectations; and (iii)Resistance to Change.

Based on the BPR consultants' interviews, Bashein et al. (1994) outline the positivepreconditions for BPR success as: Senior Management Commitment and Sponsorship; RealistExpectations; Empowered and Collaborative Workers; Strategic Context of Growth andExpansion; Shared Vision; Sound Management Practices; Appropriate People ParticipatingFull-Time (cf: CIGNA: BPR as a way of life); and Sufficient Budget. They also identify negativpreconditions related to BPR as: The Wrong Sponsor; A "Do It to Me" Attitude; Cost-CuttingFocus; and, Narrow Technical Focus. The negative preconditions relating to the Organizationnclude: Unsound Financial Condition; Too Many Projects Under Way; Fear and Lack of

Optimism; and, Animosity Toward and By IS and Human Resource (HR) Specialists. To turn

around negative conditions, firms should: Do Something Smaller First (CIGNA's pilot);Conduct Personal Transformation (CIGNA's change of mindset); and Get IS and HR InvolvedCIGNA's CIO initiated the change and HR factors were given due emphasis).

King (1994) views the primary reason of BPR failure as overemphasis on the tactical aspectsand the strategic dimensions being compromised. He notes that most failures of reengineerinare attributable to the process being viewed and applied at a tactical, rather than strategic,evels. He discusses that there are important strategic dimensions to BPR, notably, Developin

and Prioritizing Objectives; Defining the Process Structure and Assumptions; Identifying

Trade-Offs Between Processes; Identifying New Product and Market Opportunities;Coordinating the Reengineering Effort; and, Developing a Human Resources Strategy. Heconcludes that the ultimate success of BPR depends on the people who do it and on how wellhey can be motivated to be creative and to apply their detailed knowledge to the redesign of

business processes (cf: Davenport & Stoddard 1994, Markus et al. 1994).

Where is BPR Headed?

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Over the last few years, the reengineering concept has evolved from a "radical change" toaccount for the contextual realism (Caron et. al 1994, Earl 1994), and to reconcile with morencremental process change methods such as TQM, towards a broader, yet more

comprehensive process management concept (Davenport 1995).

Based upon a theoretical analysis and survey of literature relevant to reengineering, Kettinger& Grover (1995) outline some propositions to guide future inquiry into the phenomenon ofBPR. Their propositions center around the concepts of knowledge management, employeeempowerment, adoption of new IT's, and a shared vision. Earl et al. (1995) have proposed aprocess alignment model" that comprises four lenses of enquiry: process, strategy, MISManagement Information Systems, and change management and control, and used it for

developing an inductive taxonomy of BPR strategies. Malhotra (1996) has developed the keyemphasis on these issues based primarily on an integrative synthesis of the recent literaturerom organization theory, organization control, strategy, and MIS.

King (1994) believes that although the current fadism of BPR may end, however, processeengineering, in some form or known by some other name (cf: Davenport & Stoddard 1994)

would be of enduring importance.