Business Process Re-engineering (BPR): The REBUS Approach
V.Hlupic, J. Choudrie, and N.Patel
Department of Information Systems and Computing, Brunel University,
Uxbridge, Middlesex. UB8 3PH. United Kingdom.
Tel: +44 (0) 1895 203259
Fax: +44 (0) 1895 251686
{Vlatka.Hlupic, Jyoti.Choudrie and Nayna.Patel@brunel.ac.uk}
Abstract: Many organisations undertake Business Process Re-engineering (BPR)
projects in order to improve efficiency and reduce costs. Although this approach can
result in significant improvements and benefits, there are high risks associated with
radical changes of business processes and the failure rate of BPR projects is reported to
be as high as 70%. The Centre for Re-engineering Business Processes (REBUS) was
established at Brunel University to provide a multidisciplinary environment for research
into BPR and its success factors. This paper describes the REBUS approach to research
concerning the success of business process re-engineering projects and presents
examples of some of the projects carried out.
Keywords: business process re-engineering, success, human factors; information
systems; business process modelling
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1.0 Introduction
Organisations are continuously seeking for innovative ways to operate in order to
survive in a competitive business environment. Management approaches such as
Business Process Re-engineering (BPR) are adopted by many organisations in order to
achieve a dramatic increase in performance and cost reduction. As the risks involved
and failure rates associated with BPR projects are very high, it is important to
investigate the reasons for failures in a systematic and multidisciplinary approach.
The Centre for Re-engineering Business Processes (REBUS) was established in 1997
within the Department of Information Systems and Computing at Brunel University.
The researchers working within the centre include academic staff and research students
who have a broad range of diverse skills from backgrounds including business,
economics, information systems and engineering.
It is argued that such diversity
supports innovative and interdisciplinary approaches to business process re-engineering
(BPR). The research group also includes several academics from institutions in various
countries such as Canada, Croatia, Germany and Holland. The primary aim of the
Centre is to investigate how the success rate of business process re-engineering can be
improved.
It is our view that this could be achieved by, for example, reducing
resistance to change by considering human and organisational aspects of BPR
(Choudrie et al., 1999; Irani and Sharp, 1997; Irani et al., 1997a; Irani et al., 1997b), by
reducing the risks of re-engineering by developing models of processes prior to their
change (Giaglis et al., 1999c; Hlupic, 1998; Ray et al., ????), and by understanding the
role of information technology in BPR (Giaglis and Doukidis, 1998; Giaglis et al.,
1999b; Giaglis et al., 1999d). Considering all of these factors in a systematic manner
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can, we suggest, boost the success rate of BPR projects as present literature reports BPR
failure rates to be over 50% (Hammer and Champy, 1995).
In the next section, the management concept of BPR is briefly introduced and the
problems associated with this approach are outlined. The REBUS approach to research
in BPR is then presented, together with a selection of examples of research projects
carried out within the Centre. The paper concludes with the experiences and future
anticipated research of members of the research Centre.
2.0 Business process re-engineering (BPR)
The increasing competitive pressure that organisations currently face forces them to find
ways of minimising the time it takes to develop the product, bring products to the
market and offer efficient and effective service to customers whilst at the same time
maximising profits. This pressure has made Business Process Re-engineering (BPR)
one of the most popular topics in organisational management and has created new ways
of doing business (Tumay, 1995). BPR relates to the fundamental rethinking and
radical redesign of an entire business system to achieve significant improvements in
performance of the company.
Many leading organisations have conducted BPR in order to improve productivity and
gain competitive advantage. For example, a survey of 180 US and 100 European
companies found that 75% of these companies had engaged in significant reengineering efforts in the past three years (Jackson, 1996).
Amongst the reasons
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leading to the success of BPR is an emphasis on a top-down approach, empowerment,
team working and flattening of hierarchies. Nevertheless, despite the success stories
associated with BPR, there are high failure rates associated with it. Hammer and
Champy (1995) noted that failure rates as high as 70 per cent can be observed as a result
of BPR. However presently, data to support this claim is limited.
Research in the area has tried to provide reasons for this high failure rate. Amongst
these are: trying to do too much, not appreciating the risk factors (communications,
measures, accountability), and not putting the most appropriate people on the project.
However, amongst the top five reasons leading to the failure of BPR, the one that
concerned people was prominent. In this, ‘middle management resistance’ was cited as
the most common cause for failure. Other reasons contributing to BPR failure were
top/senior management, the prevailing culture and political culture, as well as employee
fear and resistance to change (Oram and Wellins, 1996).
Other frequently cited
problems related to business process re-engineering include the inability to predict the
outcome of radical change, difficulty in capturing existing processes in a way that can
be seen by multidisciplinary team members, a lack of creativity in process redesign, cost
of implementing the new process, or inability to recognise the dynamic nature of the
processes. It is often argued that one of the major problems that contribute to the failure
of BPR projects is a lack of tools for evaluating the effects of designed solutions before
implementation (Paolucci et al., 1997; Tumay, 1995).
Mistakes as a result of BPR can only be recognised once the redesigned processes are
implemented. This raises important issues, as it is particularly expensive and difficult
to attempt the task of correcting earlier mistakes at this point. Although the evaluation
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of alternative solutions might be difficult, it is imperative that the risks associated with
BPR projects are minimised. The following section describes the approach that the
Centre has adopted to investigate the aforementioned issues.
3.0 The REBUS approach to BPR
The Centre for Re-engineering Business Processes at Brunel University aims to
investigate how the success rate of business process re-engineering can be improved.
We suggest that this can only be achieved by considering all the relevant factors in a
systematic manner. Some of these factors include the role of Information Technology
in business process change as enabler and implementers, human and organisational
factors related to, for example, resistance to change or motivation of teams involved in
BPR, and the importance of using dynamic modelling techniques to develop models of
processes prior to their change.
Some of the current areas of our research are
summarised and described in Figure 1 and Table 1 below.
BPR SUCCESS
THE ROLE OF
INFORMATION
TECHNOLOGY
EXPERIENCE
OF OTHER
ORGANISATIONS
DEVELOPING
BUSINESS
PROCESS MODELS
BUSINESS
PROCESS
CHANGE
BPR
METHODOLOGY
USED
HUMAN ASPECTS
ORGANISATIONAL
ASPECTS
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Figure 1 : REBUS Objectives
Figure 1 illustrates the REBUS approach to the success of BPR projects, emphasising
factors that have to be considered in order to achieve successful BPR projects. For
instance, appropriate BPR methodologies have to be applied. A methodology that
includes a structured approach to BPR and emphasises a need to develop a model of
business processes to be changed (so that the impact of changes and associated risks can
be evaluated using this model) can improve the success of BPR projects. Experiences
from other similar organisations that undertook BPR, investigating cases of BPR
success and failure and learning lessons from other BPR projects represent another
important area to be considered.
Additional factors that are vitally important to BPR projects are the human aspects.
These factors could determine how the resistance to change could be reduced and how
teams involved in BPR projects could be better motivated which eventually leads to
better performance within the team and better results for the BPR project. Within the
organisational aspects, a corporate climate, removals of hierarchical structures and
different management styles have been foreseen as important factors crucial to the
success of BPR projects. The REBUS approach to BPR success is distinctive in
comparison to other approaches as it provides a systematic and interdisciplinary view of
factors important for the success of BPR projects. A majority of other approaches focus
on specific aspects of BPR such as organisational issues, the role of Information
Technology or BPR methodology.
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Human factors in Business Process Re-engineering
The aim here is to investigate how human factors and the appropriate change
management strategies can contribute to the success of BPR projects. Specific issues
investigated include the motivation, commitment and training of human resources.
Business process simulation
The Centre investigates the suitability of simulation for modelling business processes
in order to reduce the potential risks associated with BPR. Evaluating alternative
processes using computer models before implementing the change in a real system
does this.
Cases of BPR success and failure
This is related to investigating cases of BPR success and failure in order to identify
common contributory factors to different project outcomes.
Results from this
research should assist in providing appropriate methods for undertaking BPR projects
that will improve the chances for success.
The role of Information Technology in BPR
In order to improve work efficiency, the capabilities of Information Technology (IT)
have to be applied to redesign business processes. It is apparent that there has been
little uncovered about the relationship between IT and BPR, and so the Centre has
targeted its efforts in this area.
Knowledge Management and BPR
Effective management of knowledge within organisations (including knowledge
generation, codification and transfer) can have significant impact on business
processes. Some projects related to this area have been carried out by the members of
this Centre.
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Table 1: The main areas of research in REBUS
Table 1 illustrates the main areas of research within REBUS and the focus is on the
particular factors that need to be considered for the successful implementation of any
BPR project. For example, research into the human factors is important to determine
how the resistance to change can be reduced and how teams involved in BPR can be
better motivated. Organisational aspects would determine a corporate climate,
hierarchical structure and management style, which are all important for BPR success.
Business Process modelling is investigated with the aim of reducing risks associated
with BPR projects. Cases of BPR success and failure are investigated in order to
determine common problems that contribute to project failure. The role of Information
Technology as a BPR enabler or implementor is another important area that is being
investigated by the members of REBUS. It has been perceived that knowledge
management is becoming increasingly important for organisations. Capturing tacit
knowledge and disseminating it amongst employees has significant impact on business
processes, organisational culture and general performance of a company. This is one of
new areas being researched within the Centre,
Other research areas being investigated include: the study of interorganisational system
stakeholders and the role of stakeholders in business process re-engineering (Pouloudi
and Whitley, 1997), business process modelling, IS-enabled change management
(Giaglis et al., 1999a) the success and failure of business reengineering in developing
and industrial countries, the coherence of business process changes and Information
Technology (Choudrie et al., 1998) and management innovation and change panaceas
(Currie, ????).
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The following two sections provide examples of projects carried out by REBUS
members. The first project relates to human and organisational aspects of BPR, where,
in particular, the motivation of teams undertaking BPR is investigated. The second
example relates to the business process-modelling project, where models of business
processes were developed prior to change in order to reduce risks associated with
change.
4.0 Researching the human and organisational factors of BPR
Analysis of the literature showed that the engineering aspects of BPR are well
researched, but the human side of BPR has been virtually ignored (Oram and Wellins,
1996), a view supported by Corrigan (1996), who emphasises the importance of the role
that people play in ensuring the success of BPR projects. Human factors such as
empowerment, communication, and the selection criteria employed when forming the
team can be seen as essential for the successful adoption and implementation of BPR
initiatives. When an organisation undertakes BPR, radical changes in work areas, job
preparation, peoples' roles, values and work units are apparent. As well as individuals,
teams of people are viewed as important in the development and implementation of
BPR. Without the reengineering teams, organisations would not be aware of the views
and opinions held by members of the organisation regarding change, and would not
know how to bring about the process change (Zuboff, 1998). Additionally, since teams
rely on interdependence and synergy in order to function, increased productivity,
contribution, learning and growth are all facilitated (Covey, 1997). The teams are also
considered beneficial as they bring various stakeholders within an organisation together
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(Pouloudi and Whitley, 1997).
Stakeholders have their own interests, and by
committing themselves to the team, these can be reconciled. For instance, a case team
could consist of technicians, managers, or consultants, each having experience and
knowledge of different areas of expertise. Different areas can thus be reconciled by
bringing them together as a team, and in doing so, enabling them to work towards a
common goal.
There are many challenges involved in forming teams. One such challenge is that of
team composition. Carr et al. (1996) suggest that a reengineering team must consist of
the best people in the organisation. This is not altogether unsurprising, given that when
putting together any team, whether for the next football match, or a project, a manager
would be keen to choose the best people for the task. However, one of the difficulties in
doing in such an instance is the selection of candidates when composing the team. There
are instruments such as psychometric tests that have been developed or the traditional
knowledge skills and attributes methods that could be utilised. Psychometric tests have
been subjects of research for some time but the knowledge, skills and attributes area is
still new (Hammer and Stanton, 1996), therefore, until then a large gap remains unfilled
and the selection of teams remains an area that still requires the utmost attention.
Theorists in the reengineering area, Hammer and Stanton (1996) suggest that a team
member could be one who is dedicated to reengineering the process, to the needs of the
customer, and to the team itself. However, the question that remains to be determined
then is how would the dedication of the individuals be measured. If this is established,
then the needs of the customer and team have to be recognised and according to them
the selection process is undertaken. The biggest disadvantage in this case is whether the
team member is suitable according to the selection methods utilised. Ultimately, the
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selected person has to function within a team and without a selection process, this
weakness may go undeterred and ultimately, the required task may be unfinished and
could lead to a failure within the BPR project.
Organisations also face resistance when forming teams. For example, Hammer and
Stanton (1996), and Bennis and Mische (1995) found that employees are often resistant
to change, and may act as a barrier to it. Interestingly enough, some individuals
perceive a team environment as a demotion in job title (Kennedy, 1994). It was found
that managers have conflicts with those at lower levels. With the hierarchical structure
firmly embedded in their thinking, the managers were not willing to compromise their
positions and work collaboratively and collectively as a team and thus conflicts arose.
Conflicts in turn have a negative impact upon the motivation of the various individuals
and this could affect the performance of the team and eventually the task at hand.
Another challenge is that of motivation.
Some members of a team could be so
dedicated to the team that their own daily tasks could be neglected (Hammer and
Champy, 1995) and this might be detrimental to the success of the organisation. Since
teams are composed of different individuals, varying motivating factors exist. For
instance, a manager could be motivated by the possibility of promotion, or recognition
amongst his/her peers, which may follow as a result of the success of a BPR project.
On the other hand, a technician brought in to assist with the analysis of the process may
not be rewarded as much as the manager, resulting in a loss of dedication to the project.
In this case, the issue of motivation then depends upon the dedication of the individuals.
However, even though the right incentives may exist, some teams still do not function
effectively in the work environment. In such situations, organisations may form skunk
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workgroups (Harris, 1997) to spend time in external environments. These environments
are meant to bring collectivism, concentration and commitment to the project within an
isolated environment.
Another issue when forming teams is that of the type and amount of information
available to team members (Oram and Wellins, 1996). Team members are receptive to
change if information about the strategy or change is available. If organisations venture
into the application of a strategy without full knowledge of the concept, this may cause
problems, as further explanations to team members and management during progress
meetings will not be provided and could demotivate team members.
By providing this normative information about the research area, it has been
demonstrated that several factors including the selection process utilised in forming the
teams, the type of information provided to the team and motivation are crucial for the
success of a BPR project. Within a climate of high failure rates, it is important to glean
insights into this vital area. However, the main question to be answered is what specific
human factors will lead to the success of BPR projects, and this underpins much of the
work done by the Centre.
5.0 An example of the business process modelling project
The objective of this project was to identify and re-engineer the processes that exist
within the Telephony System of a large multi-national company. This was achieved by
conducting surveys and interviews with key people within the system. The data
gathered during this procedure was integrated in the form of Data Flow Diagrams that
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detailed the processes within the system and the information flowing between each. A
number of processes along with the problems associated with each were identified.
These include Service Request/Enquiry (processes related to requests for a new services
from employees), New Starter (processes ensuring that all required services are in place
when the new employee joins the company), Paying for services (payment to providers
of telephony services), Cost Centre (all employees belong to a Cost Centre according to
the location they work in) and Write-off cars (processes in place when a car containing
a car-phone has been written off). Analysis of these processes revealed that various
problem areas existed. For example, it was found that Service Request/Enquiry process
had too many groups involved - it was possible for three different groups to be involved
when a request or enquiry was made, which was potentially confusing for the users
unsure about whom to contact. Another problem was the lack of a standard order form,
as the Information Systems Department (ISD) used a different order form to the
Helpdesk when a service was requested. The result of this was the need for the
Helpdesk to transfer relevant information from the ISD form to their form.
An additional problem that was identified was the deficiency of a clear understanding of
the ownership of any process. Many groups were involved and it was unclear who
owned and was responsible for the process. The process was also too complicated and
lengthy.
Once a process was selected for re-engineering, in this case, Service
Request/Enquiry, a model was developed using Process Charter (Scitor Corporation,
1995) a business process modelling package. Figure 2 shows the resulting model. It is
outside the scope of this paper to provide a detailed explanation of models developed,
but is rather intended to illustrate the concept of business process modelling
investigated by members of REBUS. Once the model was complete it was essential to
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ensure that it was a fair representation of the real process. This was accomplished by
comparing the values obtained during observation and participation in the process and
the values obtained from the model. The model was set-up to complete a cycle for one
working day and executed five times with a different set of random numbers each time.
In both cases, the model and real process, the average time per call was calculated and it
was apparent that results from the model were relatively close to the real process.
However, it was deemed necessary to evaluate the standard deviation which indicates
just how close, to the average figure, each of the values actually were. Using these
values it was possible to calculate a percentage which represents how close the calls
from the model were to the calls from the real process. The results demonstrated that for
each type of call the percentage ranges from 89% to 97%.
1
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Figure 2 : Original model of the telephony system
After further analysis of the model and the results produced it was noticed that
particular areas of the process were causing huge delays. For instance, contacting the
user for further information could take any length of time, from 10 minutes up to 2 days,
stalling the completion of the service request.
Various experiments were conducted
using this model in order to find out how the process could be made simpler and more
efficient. Three alternative processes were proposed:
1. A Service Request/Enquiry was handled by the Helpdesk only, that is, no other
groups were involved
2. A Service Request was handled by the Helpdesk and the Service Representatives
Group was responsible for Service Enquiries
Page 15
3. The final alternative process ensured that when an order form entered the system, it
had to be complete and therefore no contact with users was required – the Helpdesk
controlled both Service Requests and Enquiries.
Models representing each alternative were produced and tested using the same test data
used for the original model. Figure 3 shows models of the recommended alternative
processes. The results from each model representing the alternative process along with
the results from the model representing the original process were compared.
Results of the alternative process 1, where the Helpdesk was responsible for dealing
with all calls entering the system, demonstrated that there were significant
improvements compared to the results from the original model and to the results from
the other suggested recommendations. The models developed provided a better
understanding of the processes involved and consequences of changes that the BPR
approach would initiate.
Figure 3: Alternative processes
Re-engineered Process 2
Re-engineered Process 1
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= Helpdesk (HD)
= Services Representatives Group (SRG)
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= Information Systems Department (ISD)
TC = Telephone Company
6.0 Experiences and conclusions
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The systematic and multidisciplinary approach to research in business process reengineering appears to be beneficial in improving the rate of success of BPR projects.
When BPR projects are undertaken, various factors have to be considered such as the
role of Information Technology in business process change, as well as human and
organisational factors. The latter relate to, for example, resistance to change or
motivation, and to company culture and management styles. Other important issues
identified and requiring consideration is the utilisation of dynamic modelling techniques
to develop models of processes prior to their change in order to evaluate risks and
consequences of changes.
One of the future areas of REBUS research is likely to be in the area of integrating
project management issues with BPR. In a report by ProSci (1997), investigators felt
that education about project planning should be provided, such that those involved in
the project would have something to look forward to rather than it being seen as a daily
'drudge'.
It was also felt that projects would not have been abandoned or been
condemned as 'failures' in such instances.
If further investigation into integrating
project management in BPR is carried out, such consequences might be avoided, and
fewer costs forborne by organisations.
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