W5 - Business Process Reengineering BPR

Reference:

Crowe, T.J., Fong, P.M. and Zayas-Castro, J.L. (2002),

“Quantative risk level estimation of business process reengineering efforts”, Business Process Management Journal, Vol. 8 No. 5,

pp. 490-511.

Neda Abdolvand, Amir Albadvi and Zahra Ferdowsi (2008), “Assessing readiness for business process reengineering”,

        Business Process Management Journal, Vol. 14 No. 4, 2008, pp. 497-511

Varun Gover, Manoj K. Malhotra (1996)

“Business process reengineering: A tutorial on the concept, evolution, method, technology and application”

        Journal of Operations Management 15 (1997) 193-213

Valimaki, J. and Tissari, T. (1997) “Risk management focus in business reengineering initiatives”,

Proceeding of the IPMA Symposium on Project Management: Managing Risks in Projects,

        E & FN Spon, London, pp. 232-42

Grant, D.(2002), “A wider view of business process reengineering”,

Communications of the ACM, Vol. 45 No.2, pp. 84-92

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The critical factors that cause high failure rate of BPR

Background

The seemingly high failure rate of BPR has always been one of the major obstacles in convincing organization to commit to BPR effort (Crowe, 2002). According to a 1995 study bu the Standish Group International (USA) consisting of 8380 BPR projects at 365 companies, projects failure rate is 84 percent and most of them at least experienced some major problems (Valimaki and Tissari, 1997). As a top-manager of an organization with decreasing profit rate, implementing BPR is a difficult and unconvinced decision when facing such a high-failure-rate figure.

Scope

Hence, it is worthy to have an in-depth analysis for critical factors that caused failure of BPR so that managers could be more vigilant when making BPR-related decisions. Many scholars conceived different perspectives and LEE’s conclusion was widely accepted and quoted. He finalized 4 components that measure the level of employee resistance (Lee, 1995):

1.      Middle management fear of losing authority;

2.      Employees’ fear of losing job;

3.      Skepticism about project results; and

4.      Feeling uncomfortable with new working environment.

Middle management fear of losing authority

        Human resources are the primary decision makers and essential ingredients of all human activity system (Grant, 2002). Without the commitment of top and middle management, any organizational strategies would not be successfully implemented. Radical change for business processes is an inevitable step and minimizing the number of processes is always the scene. As a result, conflict of interest between managers exists since that reducing processes leads to demotion or even termination of some managers. This resistance is especially familiar in family-based enterprise. Managers are always the family members and stabilizing the organizational structure is the scene they desire to see.

Employees’ fear of losing job

        To obtaining quantum leap improvements demands from BPR efforts, it demands radical changes in employees’ behavior at work. It is instinctive reaction to resist changes instituted by BPR efforts because of the human nature to develop inertia. The level of resistance is especially high among employees who are directly affected by the changes. Uncertain future initiated by BPR changes would also leads the increase of anxiety level of employees.

Skepticism about project results

        No one could guarantee the success of BPR. Imagine that you are the general manager of an organization; serious hand-off problem and low knowledge-creating capacity jeopardize the future of the company. You propose a huge reform project to the board of directors. The most probable response would be: could you guarantee the changes are profitable? If not, just put it aside and this would not be the first priority in our agenda.

Feeling uncomfortable with new working environment

        Employees are unfamiliar with the radical changes made by BPR efforts. New education and training programs, new empowerment structure and reward systems lead employees feel hard and stressful to follow. Poor performance and low morale among the employees are expected.