Application 2 – Annotated Bibliography

int. j. prod. res., 15 June 2004, vol. 42, no. 12, 2357–2382

Correlating business process re-engineering with the information

systems department

V. S. LAIy* and R. K. MAHAPATRAz

Despite the widespread use of re-engineering to enhance organizational com- petitiveness, the role of an information systems department in business process re-engineering is not clearly understood. The role of an information systems department in the success of business process re-engineering projects was empiri- cally investigated. Structured interviews with 27 executives were initially con- ducted to identify critical information systems department roles in business process re-engineering. These roles were then empirically validated using survey research method to determine their extent of impact on business process re-engineering success. The results of hierarchical regression analysis show that support of top information system management, the existence of technology champion, the management of resistance to change, the quality of information system planning, the integration of an information system–business strategy, the sophistication of user’s computer skill and the extent of integration of the infor- mation architecture are the most critical information systems department roles in business process re-engineering success. Other roles of an information systems department that facilitate business process re-engineering success include the management of transition, the provision of information technology training, the competency of information system staff and the extent of computer use by users. The implications of these findings for information system researchers and practitioners are discussed.

1. Introduction

The information systems department (ISD) has served an increasingly important role in many organizations proactively to shape new competitive strategies that improve operational and managerial work processes (Saunders and Jones 1992). Successful management of ISD is inextricably linked with the effective management of a number of processes associated with the planning, development, acquisition, implementation and control of an organization’s information technology (IT). Management of ISD has received close scrutiny from Management Information System (MIS) scholars and practising managers because of its impact on an organization’s performance (Teng et al. 1998a). In fact, many research studies have suggested that an assessment of ISD’s performance is a critical issue facing information system (IS) executives (Saunders and Jones 1992).

However, the role of ISD in business process re-engineering (BPR) projects is a subject of considerable debate (Davenport and Stoddard 1994, Guha et al. 1997).

Revision received January 2003. yFaculty of Business Administration, The Chinese University of Hong Kong, Shatin,

Hong Kong. zDepartment of Information Systems and Operations Management, College of Business

Administration, The University of Texas at Arlington, Arlington, TX 76019, USA. *To whom correspondence should be addressed. e-mail: sklai@baf.msmail.cuhk.edu.hk

International Journal of Production Research ISSN 0020–7543 print/ISSN 1366–588X online # 2004 Taylor & Francis Ltd

http://www.tandf.co.uk/journals

DOI: 10.1080/00207540410001671633

Some researchers are of the opinion that ISD cannot provide leadership in a re-engineering project because its scope lacks a holistic vision of the organization. They consider IS only to be an enabler of business re-engineering. Other researchers contend that ISD should play a key role in each stage of the re-engineering process (Davenport and Stoddard 1994, Gunasekaran and Kobu 2002). Some even believe that ISD, a rich source of information about the organization’s business processes and data flows, should be the starting point in re-engineering. ISD, therefore, should be involved not only in the early stages of visioning, but also in subsequent stages of business process redesign and implementation. Early IS involvement can reduce animosity between line managers and line specialists, thus contributing to the suc- cess of BPR projects (Bashein et al. 1994). Despite these divergent perspectives, IS researchers tend to agree that the contributions of ISD are essential to the success of BPR. Davenport and Stoddard (1994) sum up this relationship succinctly by point- ing out that the establishment of a partnership between ISD and other managers is a major determinant of BPR success.

Clearly, the purpose of BPR is the transformation of business processes. Therefore, the strategic application of IT by ISD during such transformations can make a powerful impact on a business (Luftman et al. 1993). Hence, empirical studies that investigate BPR projects are necessary to guide the management, plan- ning and implementation of BPR. Such studies will also enlarge one’s understanding of how to organize ISDs so as to enable the success of BPR projects. The objective of this research was to derive a model empirically that specifies the roles of ISDs in determining the success of BPR.

2. Background

Traditionally, ISD has been responsible for the planning, management and oper- ation of information systems, networks, databases, end-user computing (EUC), and hardware and software acquisition (Miller 1980). It also provides relevant information for short- and long-term managerial decision-making, as well as for supporting the day-to-day operations of the organization (Saunders and Jones 1992). This view of ISD as the provider of tools and technologies that enhance the efficiency and effectiveness of business operations has evolved to include the strategic use of IT. With increasing competition in the market place, organizations have realized that harnessing IT in strategic applications is a core strategy to enhance their competitive advantages. Thus, in addition to its traditional role, ISD must seek opportunities to use IT to support the corporate strategy. As this new role of ISD matures, the strategic use of IT will become an integral part of an organization’s corporate strategy. This will lead to the strategic deployment of IT resources to create competitive advantages that can redraw the competitive patterns in an indus- try (Johnson and Carrico 1988, Teng et al. 1998b, Thong 2000).

Due to the pervasive character of new IS and the rapidly changing technologies that underlie these systems, many executives would have a concern about the effec- tiveness of their ISD in managing these systems. The question ‘how well does your ISD perform?’ actually has two parts. The first is the actual role of ISD. The second is how well this role is performed over time. Many research projects have been devoted over the years to answer these questions.

Anthony (1965), in his classic work on planning control systems, suggests that ISD needs to provide IS support to all levels of organizational activities, including

2358 V. S. Lai and R. K. Mahapatra

operational, managerial and strategic. Singleton et al. (1988) indicate that the success of ISD could be linked to four major aspects of the function: strategic planning, service level agreements, commitment planning, and performance appraisal and compensation. Saunders and Jones (1992) have systematically derived 10 important dimensions or roles that could be applied to measure the performance of ISD. They believe that for an ISD to excel, it should have good performance in strategic plan- ning, IS/business planning integration, information output quality, IS operational efficiency, user/management support, system integration, system development prac- tices, IS personnel, and financial contributions. While these research reports have broadened knowledge of the roles of ISD, more research is required to identify and understand the roles of ISD that contribute to BPR success.

3. Research model

The study began with a review of the IS and BPR literature to identify ISD roles relevant in the context of BPR. Structured interviews were then conducted with 27 executives from eight Business Week 1000 companies to further refine the list of ISD roles. The interviewees were drawn from three constituencies — eight general management executives, 10 IS executives and nine BPR professionals — keeping in mind the cross-functional nature of BPR. Such a mix of interviewees was expected to provide a holistic picture of the roles of ISD in BPR. Such an approach of exploring multiple perspectives has been effectively deployed in prior IS studies (Hamilton and Chervany 1981, Rainer and Watson 1995). All interviewees in the present study had a common interest in BPR due to their direct participation in BPR projects.

Eight interviews were conducted, one at each participating company. Each inter- view lasted for about 90 minutes. A group interview format was used because it provided better interaction among the interviewees and helped develop an integrated perspective. The interviewees were queried on ISD roles that were determinants of BPR success. Responses from the interviews were then analysed, tallied and catego- rized. The resulting list was forwarded to all interviewees and they were asked to identify top-10 ISD roles that are determinants of BPR success. The result yielded a list of 14 roles, which were grouped into six categories. This list (table 1) was then reviewed by three IS faculty members who agreed that the roles and their groupings were fair and reasonable. These role categories are explained as follows:

. Support of IS management: top management support is not only required for identifying strategic uses of IT, but is also necessary to manage resistance and change associated with the implementation of new IT. Many research studies have indicated that strong support from top IS executives is essential for IT implementation success.

. Support of change management: ISD can play a critical role in providing the support mechanism to manage IT-enabled change. Training and technical support are of prime importance in minimizing resistance to change as well as in facilitating adoption of new business processes by employees.

. Quality of IS planning: the focus of ISD in this role is to formulate IS strategies to improve the organizational use of computing resources. This requires the identification of strategic uses of IT and the integration of the IS plan with the corporate business plan.

. Competency of IS staff: in today’s dynamic IT environment, new technologies are introduced rapidly and technical skills become obsolete very quickly. This

2359Correlating business process re-engineering with information systems

is further exacerbated by the rapid turnover of IT personnel. Planning, staffing and retraining an IS team to maintain its competence in this dynamic environ- ment is an important task of ISD.

. Success of EUC: rapid proliferation of EUC requires ISD to formulate policies and standards to ensure the effective use of corporate IT resources. It also provides technical assistance to end-users. ISD must also enhance the IS–user relationship to create a better environment that will facilitate the organiza- tional learning of IT.

. Maturity of ISD: an ISD needs to monitor and maintain the operational efficiency and effectiveness of the company’s IT infrastructure, including the network, hardware and software. It also needs to upgrade and integrate its software and hardware systems to maintain the competitiveness of the corpo- rate IT architecture. Hence, the maturity and sophistication of the department will have a significant impact on organizational performance.

The second phase of the present research attempted to assess the impact of each ISD role on the success of BPR projects. Figure 1 shows the model that guided the present research in this phase.

4. Research hypotheses

4.1. Support of top information system management Successful re-engineering requires a high-performance ISD to create an environ-

ment conducive to BPR and to guide its implementation. This ISD has to be staffed with competent senior IS executives who could perform in the roles of opinion leaders, change agents and top management surrogates (Curley and Gremillion 1983). However, the cross-functional nature of BPR projects not only requires commitment from top IS management, but also needs such commitments from heads of other functional areas within the organization over an extended period (Fiedler et al. 1995). Therefore, the continuous support and involvement of the senior management team in the redesign process are critical for the success of BPR (Belmonte and Murray 1993, Hall et al. 1993, Bhatt and Stump 2001).

Grouping Significant ISD functions Responses

Support of IS management support of top IS management 18 existence of technology champion 4

Support of change management management of transition 9 management of resistance 11 technical support of ISD 10 provision of IT training 7

Quality of IS planning quality of IS planning 9 integration of IS–business strategy 9 control of IS resources for BPR 4

Competency of IS staff competency of IS staff 13

Success of end-user computing sophistication of user’s computer skill 9 extent of computer usage 10

Maturity of ISD sophistication of IA 9 extent of IA integration 12

Table 1. Roles of ISD significant to BPR success.

2360 V. S. Lai and R. K. Mahapatra

Management support from ISD provides an adequate level of technical subsistence

in the forms of a stable tool set, adequate computing power and IS consulting sup-

port. It can also play a vital role in dealing with uncooperative constituents and

seeking their collaboration by convincing them of the importance of BPR projects to

the organization. Although Davenport and Stoddard (1994) have attempted to

dispel the ‘myth’ of IS leadership in re-engineering initiatives, Teng et al. (1998b)

have empirically validated that input and expertise from ISD and management could

improve the overall BPR success. Their findings also suggest that the success of BPR

may be greater if the IS management Chief Information Officer (CIO) is ranked

higher and has more influence in the actual conduct of the BPR project. Given

the preceding considerations, a hypothesis is postulated as follows:

H1a: An ISD that provides stronger top IS management support in BPR projects

is more likely to achieve BPR success.

Lindsey et al. (1990) indicated that the presence of responsive and visionary

champions is critical to implementation success. These champions often play the

roles of opinion leader, change agent, or top management surrogate and set the

right technological policy for the creation of an environment conducive to technol-

ogy innovation. In the context of BPR, technology champions are also critical to

Competency of IS Staff

• IS Staff Competency

Support of Change Management

• Resistance management • Transition management • Technical support • IT training

Quality of IS Planning

• Planning quality • IS-business integration • IS resource control

Maturity of ISD

• IA sophistication • IA integration

Support of IS Management

• Top IS management support

• Existence of champion

Success of End-user Computing

• Users’ computer skills • Computer usage extent

BPR Success

Figure 1. Roles of an information systems (IS) department and business process re-engineering (BPR) success.

2361Correlating business process re-engineering with information systems

re-engineering success if they are provided with needed information, technical

resources and political support (Beath 1991). With the vision and technical expertise

of these champions, BPR initiatives could be actively and vigorously promoted,

perhaps even be pushed over or around many implementation hurdles. These cham-

pions are important in BPR success because re-engineering often requires adjust-

ments to reward systems, changes in authority or responsibility patterns, alteration

of business practices, or shifting of power centres, which are often met with some

resistance. Champions simply have the organizational power and expertise needed to

overcome resistance by resolving disputes, and overriding established norms to

ensure speedy BPR implementation and success. Hence:

H1b: The more the technology champions in an organization, the greater the

extent of BPR success.

4.2. Support of change management

In the context of BPR, ISD should provide the support mechanism to facilitate

the transition from current business processes to new processes. The effectiveness of

this support mechanism, to a great extent, will affect the success of any BPR project

(Marjanovic 2000). In general, BPR creates changes in two areas: the creation of new

business processes to replace older processes and the implementation of these pro-

cesses to attain business goals. ISD plays an active role in both phases, especially in

assisting the organization in establishing a strategy for change that anticipates likely

obstacles to effective re-engineering and that balances the forces favouring change

over forces that resist change.

Teng et al. (1998b) argue that resistance management, initiated and enabled by

ISD, could greatly enhance the performance of BPR. They suggest that IS executives

with transformational abilities were good candidates for leading the formulation of

resistance management strategies. Gunasekaren and Kobu (2002) also believe that

organizations with a greater capacity to encourage and support change were more

likely to succeed at BPR. Peppard (1996) indicates that ISD plays an important role

in supporting BPR changes. Its roles include the implementations of an employee

care programme, a training programme, quality control and project management.

As agreed by many other researchers (e.g. Belmonte and Murray 1993, Teng et al.

1995, Marjanovic 2000), a BPR implementation strategy without an integrated

plan for managing organizational change or without the involvement of ISD in

the change management process is likely to have a low probability of success.

Similarly, Heilpern and Nadler (1992) specified that the transition to new IT and

business processes must be sequenced and structured with regard to consistency and

completeness. It is suggested that a transition plan would be helpful to benchmark,

control and measure performance. Nilakanta and Scamell (1990) also suggested that

organizations with effective feedback mechanisms to control the transition process

would experience a greater chance of implementation success. Hence:

H2a: An ISD that provides more resistance management to ease BPR implemen-

tation is more likely to achieve BPR success.

H2b: An ISD that provides more transition management to ease BPR implemen-

tation is more likely to achieve BPR success.

2362 V. S. Lai and R. K. Mahapatra

In addition to resistance and transition management, many research studies have also suggested that technical support and IT training are critical to BPR success. In fact, different aspects of technical support and IT training, including support types, support approaches, training methods, training needs, learning styles and training arrangements, have been intensively investigated in different IT settings (Davis and Bostrom 1993, Compeau and Higgins 1995, Simon et al. 1996). The general consensus is that end-users need to be supported and reskilled to adapt to the re-engineered organization. Technical support and IT training enable corporate employees to be more intuitive and creative. They get involved in the re-engineering process and develop a better understanding of re-engineering (Khalil 1997). This is especially true when end-users are more IT competent. Such users usually demand better equipment, more training, coaching, consulting and technical support (Guimaraes et al. 1999). Hence:

H2c: An ISD that provides more technical support to ease BPR implementation is more likely to achieve BPR success.

H2d: An ISD that provides more IT training to ease BPR implementation is more likely to achieve BPR success.

4.3. Quality of information system planning Several studies have confirmed the importance of strategic planning in the success

of BPR projects (Hall et al. 1993, Teng and Kettinger 1995, Kwak and Lee 2002). This high-level vision of BPR provides guidance and motivation to management and project teams, and promotes a shared commitment to the project throughout the organization (Drew 1994). McLean and Soden (1977) suggest that the objectives, strategies and policies of organizational business plans influence, and are influenced by short-term, long-term and strategic IS plans. The core of IS planning, therefore, must support organizational goals and activities at every level by assessing the external IS environment and its internal requirements, identifying new IS applica- tions, and developing a set of strategic IS plans to support corporate business plans (King and Cleand 1978). The efficacy of the planning process can be evaluated by measuring the performance of IS planning and its impact on the organization. In the context of BPR, the characteristics of IS planning, which include the quality of planning and the planning time horizon (Premkumar and King 1992), play impor- tant roles in creating an environment conducive to the success of BPR implementa- tion. In other words, it can be expected that the quality of strategic IS planning will contribute significantly to the success of BPR. The following hypothesis was postu- lated based on this discussion:

H3a: An ISD with a higher IS planning quality is more likely to achieve BPR success.

Extant research (e.g. Lai 1992, Brancheau et al. 1996) clearly demonstrates the importance of coordinating IS plans with business plans. Such coordination facil- itates the identification of areas critical to the success of BPR. It also helps an organization to develop an IS strategy that is guided by its corporate strategy to ensure the optimal deployment of IT. BPR implementation stands a greater chance of achieving the desired benefits and success if the IS planning process is coordinated with the organization’s business planning process. Grover et al. (1994, p. 278)

2363Correlating business process re-engineering with information systems

expand on this when they state that ‘only through such IS-strategy integration can opportunity for BPR, whether intrafunctional, interfunctional or interorganiza- tional, be effectively identified and targeted’. Venkatraman et al. (1993) also advo- cate the importance of the continuous alignment of IS and business strategies in order to take the most advantage of BPR opportunities for competitive success. Along the same line of reasoning, Kuwaiti and Kay (2000) argue that there is a direct relationship between BPR performance and the concepts of integration and alignment of strategies. The following hypothesis is therefore proposed linking IS–business strategy integration with BPR success:

H3b: An ISD that advocates a greater extent of IS–business strategy integration is more likely to achieve BPR success.

BPR requires significant resource support. Therefore, an effective resource con- trol strategy that enables appropriate and timely mobilization of critical resources to achieve BPR goals is a key to BPR success. Although research efforts have been devoted to the investigation of resource control strategies and the success of IT implementation (Brancheau 1987, Lai 1992), no significant relationship has been found in this research context. As many of the respondents of this study emphasized the importance of resource control in their BPR efforts, it was decided to explore the correlation between IS resource control, as exercised by ISD, and BPR success:

H3c: An ISD that exercises more control on IS resources is more likely to achieve BPR success.

4.4. Competency of information system staff The competency of IS professionals in an organization has a significant influence

on the success of ISD (Guimaraes and Igbaria 1994). While in the past, technical competence was the primary criterion for judging IS professionals, lately, they require an expanded skill set to function effectively in the changing technical and business environment (Nelson 1991). In the context of BPR, IS professionals, besides being competent in IT, must also possess an in-depth understanding of business functions and have the ability to communicate effectively with their functional peers to define new ways to conduct business (Lee et al. 1995a). Launonen and Kess (2002) also find that for BPR to succeed, IS professionals need such skills as teamwork, organizing, finishing, meeting, project work, innovation and resource investigation. ISD, thus, has the responsibility to recruit and sustain an IS team with the knowledge and skill profile that is compatible with the dynamic expectations of the organization.

Teng et al. (1998b) demonstrate that IS competency, measured by the experience and the capability of IS personnel, was an essential enabler of BPR. They suggest that the likelihood of the successful launch and completion of re-engineering would diminish if ISD lacked maturity and if the IS personnel lacked technical competence. This view is also supported by Khalil (1997), who argues that a competent IS team possessing solid skills in business operations, management, technology and commu- nications was critical for the success of BPR projects. Martinez (1995) and Candler et al. (1996) find that an innovative, competent and visionary IS team capable of providing support and leadership in re-engineering was a key to successful BPR. The fact that IS team competency, which includes its experience, technical and

2364 V. S. Lai and R. K. Mahapatra

managerial competencies, and maturity, can increase the prospect of BPR success is further corroborated by Davenport and Stoddard (1994) and Teng et al. (1998a). Thus:

H4: An ISD with more competent IS staff is more likely to achieve BPR success.

4.5. Success of end-user computing End-users are well qualified to evaluate the appropriateness of the business pro-

cesses they perform. Thus, they are most suited to lead the re-engineering process (Kendall 1994). However, a thorough understanding of cutting-edge IT is also required to identify the best strategy to redesign a process. This is where ISD can play a leading role in educating end-users. An end-user community with good IT skills can be a great asset to re-engineering business processes (Nelson 1991). The importance of ISD in the success of EUC has been well documented in the IS literature (Guimaraes et al. 1992). Zinatelli et al. (1996) affirm that successful EUC could lead to successful BPR, resulting in the elimination of repetitive tasks, a reduction of staff, better control of business processes and a more efficient orga- nization. Thus, by building a successful EUC programme, ISD can better prepare an organization for IT-enabled BPR. There are a few ways to measure EUC success, whereby the sophistication and extent of computer use are two critical indicators (Raymond 1990). In many organizations, successful EUC has proven to be critical in reducing the backlog problem facing ISD (Guimaraes et al. 1999). As EUC becomes pervasive in organizations, end-users could then control their own working environ- ments and satisfy their own information requirements by developing their own applications. The roles of ISD in EUC would include, but not be restricted to, managing data, training users and managing EUC activities to deal with the risks and concerns associated with EUC (Guimaraes and Igbaria 1994, Igbaria et al. 1995). This is especially true when EUC becomes more sophisticated, whereby end-users strive to acquire new skills and solve problems by developing more com- plex and mature applications (Leitheiser and Wetherbe 1986, Huff et al. 1988). The success of EUC, as measured by its maturity and extent, could have significant implications for BPR, especially if the re-engineering initiatives are IT oriented, whereby end-users have to apply innovative IT in their new business processes. In such situations, successful and properly managed EUC could possibly alleviate dysfunctional consequences of BPR and improve organizational productivity. According to many IS researchers (e.g. Hammer 1993, Kettinger and Grover 1995), end-user’s IT competency is an organizational resource that provides the necessary means to accomplish required knowledge for re-engineering and, thereby, induce organizational change. This competency would have a positive impact on organizational culture and learning, which could translate into action that generates performance improvements and BPR success (Johnson and Carrico 1988). Consequently, EUC success is likely to influence BPR evolution through the various levels of computer usage and applications. Thus:

H5a: An ISD that supports a more sophisticated computer usage is more likely to achieve BPR success.

H5b: An ISD that supports a greater extent of computer usage is more likely to achieve BPR success.

2365Correlating business process re-engineering with information systems

4.6. Maturity of the information systems department

One of the most important roles performed by ISD is the creation and main-

tenance of the information architecture (IA). IA structures an organization’s IT

resources, such as computers, data, human resources, communication facilities and

software, to meet the speed, efficiency, cost, reliability and flexibility requirements of

the organization. IA is difficult to configure because it incorporates a diverse set of

complex IS questions such as: What data and applications must be distributed

company wide, and what should be managed locally? What standards should be

adopted for processing and communication? What data architecture should guide

future systems development efforts? How does one engineer a new process to take

advantage of shared databases that support the information requirements of current

business processes?

A number of researchers have explored conceptually the relationship between IA

and BPR, but no empirical evidence has been reported in the literature to support this

relationship. These studies suggest that IA can facilitate a variety of BPR endeavours

ranging from incremental process improvements to radical re-engineering (Teng and

Kettinger 1995). Davenport (1991) reports that cross-functional IA, as compared

with single-function IA, contributes more to the success of BPR since it supports the

ability of a firm to achieve significant process improvement through re-engineering.

Silvestro and Westley (2002) believe that cross-functional IA, which supports greater

extent of IA integration, could improve collaboration between functions and align-

ment of organizational objectives. Kim (1994) also suggests that a cross-functional

data-oriented IA should be the primary approach for implementing BPR. He argues

that such an IA would help an organization focus on its strategic goals and maintain

stability during the dramatic changes caused by BPR. Teng and Kettinger (1995)

also propose that IA can facilitate BPR to the extent that process definitions in IA

are linked to the firm’s strategic goals and objectives. They believe that BPR projects

might be negatively affected in the absence of a cross-functional IA. As Al-Mashari

and Zairi (2000) stated, there must be a fit between BPR and IT infrastructure for

effective BPR implementation. Thus, we propose:

H6a: An ISD that supports a greater extent of IA Integration is more likely to

achieve BPR success.

The effects of IA sophistication on system and organization performance have

also been investigated by researchers such as Martinez (1995), Raymond et al. (1994)

and Al-Mashari and Zairi (2000). IA sophistication refers to the nature, complexity,

maturity and interdependence of IT use in the organization (Raymond et al. 1994).

Raymond (1990) provides confirmatory evidence that a higher level of IA sophisti-

cation would positively influence the level of systems success within the organization.

He also demonstrates that greater sophistication in the use of IT (such as hard- and

software technology) would lead to significantly higher system and organizational

performance. Successful implementation of BPR projects requires an organization to

have a mature, well-developed and diverse IT infrastructure. Since ISD determines

the strategies, policies and technologies that dictate the deployment and use of IT

within an organization, the success of BPR implementation is likely to result from an

increasing sophistication of ISD. The following hypothesis that links the sophistica-

tion of IA with the success of BPR projects is therefore postulated:

H6b: An ISD with a more sophisticated IA is more likely to achieve BPR success.

2366 V. S. Lai and R. K. Mahapatra

5. Research method

5.1. Data collection Two questionnaires were developed for data collection: one to be completed by

IS internal auditors, the other by IS directors. IS auditors responded to questions measuring the extent of BPR success, while IS executives answered questions dealing with the extent of involvement by ISD in BPR. A concise definition of BPR was provided at the beginning of each questionnaire to ensure the respondents under- stood the concept. The questionnaires were evaluated by four faculty members with expertise in survey research. They were modified based on the comments of the faculty members. The modified questionnaires were pilot tested by administering them to 11 senior IS executives and nine IS auditors in 10 companies. The feedback from the pilot test was used to improve the readability and the quality of the questions in the instruments.

The questionnaires were mailed to the IS directors of all Business Week 1000 companies. Each director received two questionnaires, one for the IS executive and the other for the IS auditor. He/she was requested to invite an internal IS auditor of the company with significant experience in BPR projects to fill out the auditor questionnaire. One month later, reminder letters and additional copies of the ques- tionnaires were mailed to organizations that had not responded. We randomly called 200 IS directors who had not responded to encourage them to respond to the survey. Completed surveys were returned by 302 IS directors and 287 auditors. This resulted in 207 matched responses, where both the IS director and the auditor from the same organization had responded. Five of these 207 companies did not have any experi- ence with BPR and therefore their responses were rejected. Thus, the final data set included usable matched responses from 202 companies, which represented an overall response rate of 20.2%.

We randomly selected seven responding companies for follow-up interviews. The purpose of these interviews was to clarify issues arising out of the survey and to collect information relevant to this study. Twenty-one people from these companies were interviewed using a group interview format. All interviewees were experienced in BPR projects. Each interview lasted for about 2 hours, with the discussions confined mostly to the role of ISD in BPR implementation.

5.2. Operationalization of variables Data for this study were collected using seven-point Likert scale items. Each item

measured the extent of agreement or disagreement of the respondent on a specific issue related to the variable being measured. Aggregation of scores over all questions provided a composite score for that variable.

BPR success was measured by averaging the scores for two proxy variables: the improvement in work life (Hackman and Oldham 1980) and improvement in busi- ness process (McGrath 1986). Improvement in work life was used to assess the employee’s growth satisfaction, job satisfaction and internal motivation after the implementation of BPR. As for the improvement in business process, it was mea- sured by evaluating the effectiveness, efficiency and timeliness of the new business processes initiated by the re-engineering effort. Janz et al. (1997) adapted these two variables when studying the performance of ISDs after they re-engineered their system development process.

Management support was based on Premkumar and Ramamurthy’s (1995) four- item scale to determine the vision, leadership, commitment and support of top IS

2367Correlating business process re-engineering with information systems

management. A champion variable was measured by asking respondents about the existence and extent of participation of the BPR champion within their organiza- tions. Premkumar and Potter (1995) and Lai (1992) used the same measure in their study of computer-aided software engineering adoption and Integrated Services Digital Network (ISDN) implementation.

Transition management was measured by the effectiveness of communication systems, consistency of management, effectiveness of the feedback system and the existence of an interim structure. Resistance management was measured by the extent of user participation in change, adequacy of training and the existence of a reward system (Nadler 1981). Technical support was measured by the extent of support in the areas of application development, standard and guidelines, opera- tional support, BPR-related support and software support (Guimaraes et al. 1999). IT training was evaluated by the adequacy and diversity of training (Simon et al. 1996), fulfilment of training needs (Nelson 1991) and effectiveness of training (Lee et al. 1995b).

IS planning quality was assessed in terms of the extent of detailed analysis devoted to planning activities in the following areas: technology trends, IA, planning practice (Boynton and Zmud 1987, Premkumar and King 1992), and the extent of strategic planning (Grover 1993). IS–business strategy integration, which measures the extent to which an IS strategy is integrated with the overall organizational strategy, was assessed using four items based on guidelines provided by Fiedler et al. (1995) and Premkumar and King (1992). As for resource control, it was measured using Brancheau’s (1987) multiple item measures, which include acquisition constraints, cost charge-back and strict standards.

IS staff competency was based on the measures developed by Raymond and Pare (1992). These include technical competency, in-house development, number of specialists, use of consultants and ability to keep abreast of the latest technological development.

EUC sophistication was measured by the breadth of skills and knowledge (Blili 1992) and finesse (Marcolin et al. 1992) of end-users. Extent of computer usage was determined by the extent of computer utilization (Blili 1992) in the end-user’s busi- ness activities.

The extent of integration of IA was measured by using the construct developed by Fiedler et al. (1995) and Teng et al. (1995). They propose that the IA platform to support BPR could be either intrafunctional, interfunctional or interorganizational. The measures adopted include software integration, computing resources intercon- nection, interdepartmental software support and cross-functional software develop- ment. IA sophistication was captured using the construct developed by Raymond and Pare (1992). This is a multidimensional construct that measures aspects related to technological diversification, processing diversification, number of IS specialists and formality of planning. Raymond et al. (1994) later adapted this construct to study organizational performance.

5.3. Data analysis procedure Hierarchical regression analysis was performed to assess the incremental contri-

bution of the proposed independent variables to predict BPR success. This process required performing a series of regression analyses in a specific order, with one or more new independent variables added to the regression equation each time. In general, variables are entered in an order determined by theory or other prior con-

2368 V. S. Lai and R. K. Mahapatra

siderations. Nunnally and Bernstein (1994), based on the principle of parsimony, suggested that simple effects must be evaluated before more complex effects in determining the regression order. A hierarchical regression technique was preferred to multiple regression because advance specification of the order of entering depen- dent variables into the regression equation provided more accurate significance tests compared with the stepwise inclusion procedure.

In the present study, the BPR success factor was first regressed on IS manage- ment support due to the criticality of top management in BPR success. Change management variables were then added to the hierarchical model due to the stated importance of these variables in BPR literature. After that, IS planning variables, followed by IS staff competency, were added to the regression equation to assess their incremental contributions to the success factor. Subsequently, EUC success variables were entered. The ISD maturity variables were added to the regression equation at the very end. The usefulness of an antecedent variable in explaining variance in BPR success was determined by the increment in the correlation coeffi- cient (R

2 ), after the given variable was added to the regression equation (Guimaraes

et al. 1992).

6. Results

6.1. Response analysis A summary of the characteristics of respondents is shown in table 2. Respondents

came from a wide range of industries, with a predominance from manufacturing and finance firms (35.1%). The annual sales revenue was widely distributed in the range of below US$300 million and above US$10 billion. The responding companies represent a wide variance in employee numbers with 31 of them (15.3%) having more than 10 000 employees and 34 (16.8%) having less than 500 employees. Of all the 202 IS respondents, 141 (69.8%) held senior management positions (such as senior Vice-President, Vice-President, CIO and Director) in their respective organi- zations. A majority of the respondents (87.4%), including non-IS respondents, served at the level of a manager or above, thus enhancing the quality of the collected data.

A comparison of the demographic data from both mailings was performed to evaluate the possibility and extent of response bias in the survey. The results showed that the largest percentages of respondents in both mailings were from manufactur- ing, finance and insurance companies. Concerning the size of the organizations, the analysis result indicated almost equal distribution in both mailings, with the largest percentage coming from companies having sales of over US$300 million and over 1000 employees. Most respondents occupied senior positions in their respective organizations. As the analysis of the two mailings and non-respondents revealed similar backgrounds, the appropriateness of the sample was thus justified for further analysis.

6.2. Validity and reliability A number of measures were taken to ensure the validity and reliability of the

instrument. First, content validity was established through the careful selection and adaptation of items from previously validated instruments. Second, measurement reliability was checked by computing Cronbach’s alphas. Items with a low correla- tion were dropped. The results of this analysis are presented in table 3. The analysis showed that Cronbach’s alphas of almost all variables (except three) were >0.8, which were higher than the value suggested by Nunnally and Bernstein (1994) for

2369Correlating business process re-engineering with information systems

early stages of basic research. Third, factor analysis was performed to test the con- struct validity of the instrument. This determined whether the measurement items loaded in accordance with the a priori theoretical expectation. Principal component analysis was performed to identify factors underlying the observed data. Kaiser’s rule was then applied to remove those principal components that had eigen values of <1. Only those items that had factor loadings >0.5 were used in the study. The results of this analysis are shown in table 4.

6.3. Hypothesis testing Data analysis was conducted in two stages. In the first stage, the standard

assumptions of regression, including variance, outliers and normality, were verified

Frequency %

1. Industry Manufacturing 37 18.3 Finance 34 16.8 Insurance 27 13.4 Computer services 21 10.4 Wholesale/retail 18 8.9 Medical/health 16 7.9 Utility 14 6.9 Communication 10 4.9 Real estate 8 4.0 Transportation 7 3.5 Others 10 5.0

2. Annual sales (US$ million) <300 30 14.8 300–600 28 13.9 601–1000 14 6.9 1001–2000 17 8.4 2001–3000 22 10.9 3001–5000 23 11.4 5001–10 000 27 13.4 >10 000 23 11.4 Missing data 18 8.9

3. Number of employees <500 34 16.8 500–1000 27 13.4 1001–2000 26 12.9 2001–3000 22 10.9 3001–5000 25 12.4 5001–10 000 19 9.4 10 001–20 000 20 9.9 >20 000 11 5.4 Missing data 18 8.9

4. Respondent’s title Senior Vice-President or Vice-President 29 14.4 CIO 38 18.8 Director 74 36.6 Manager 47 23.3 Others 13 6.4 Missing data 1 0.5

Table 2. Characteristics of respondents.

2370 V. S. Lai and R. K. Mahapatra

using the following plots: residuals by predicted values, rankits plots of residuals, Cook’s distance and Shapiro–Wilk. Multicollinearity among variables was also investigated. No abnormality was found in these tests.

In the second stage, hierarchical regression analyses were performed to validate the postulated hypotheses. The results of these regression analyses are shown in table 5. The total R

2 of the model was 0.63, indicating its ability to explain 63%

of the total variance. The importance and usefulness of each independent variable as a predictor of BPR success was captured by a �R

2 symbol, which represents the

incremental variance explained by that variable. The �R 2 was also used to validate

the hypotheses. Of the 14 hypotheses postulated in this study, seven (H1a, H1b, H2a, H3a, H3b, H5a, H6a) were significant at p<0.01, and four more (H2b, H2d, H4, H5b) at p<0.05.

7. Discussion of the results

7.1. Support of information system management Among all of the predictor variables, IS management support by ISD showed

the strongest positive association with BPR success (�R 2 ¼0.18, p<0.001). This

demonstrates the critical influence of ISD on re-engineering. Interviews with the respondents indicated that top IS management support from ISD (�R

2 ¼0.09,

Variable Measure Alpha

Improvement of work life Growth satisfaction three-item scale 0.80 Job satisfaction four-item scale 0.89 Motivation five-item scale 0.82

Improvement of business process Effectiveness of process three-item scale 0.86 Efficiency of process three-item scale 0.81 Timeliness of process two-item scale 0.77

Support of IS management Support of Top IS management four-item scale 0.93 Existence of technology champion two-item scale 0.91

Support of change management Management of transition four-item scale 0.82 Management of resistance three-item scale 0.85 Technical support five-item scale 0.83 IT training four-item scale 0.90

Quality of IS planning Quality of IS planning three-item scale 0.87 Integration of IS–business strategy four-item scale 0.89 Control of IS resources three-item scale 0.81

Competency of IS staff Competency of IS staff six-item scale 0.84

Success of end-user computing Sophistication of user’s computer skill eight-item scale 0.81 Extent of computer usage four-item scale 0.78

Maturity of ISD Sophistication of IA four-item scale 0.86 Extent of IA integration four-item scale 0.83

Table 3. Cronbach’s alpha.

2371Correlating business process re-engineering with information systems

BPR success

Predictor variables � �R2 Total R2 Cum. R2

Support of IS management Support of top IS management 0.22 0.09** Existence of technology champion 0.21 0.09** 0.18** 0.18*

Support of change management Management of resistance 0.14 0.05** Management of transition 0.09 0.03* Technical support of ISD 0.02 0.00 Provision of IT training 0.13 0.04* 0.12** 0.30**

Quality of IS planning Quality of IS planning 0.15 0.05** Integration of IS–business strategy 0.19 0.08** Control of IS resources for BPR 0.05 0.01 0.14** 0.44**

Competency of IS staff Competency of IS staff 0.13 0.04* 0.04* 0.48**

Success of end-user computing Sophistication of user’s computer skill 0.16 0.06** Extent of computer usage 0.10 0.03* 0.09** 0.57**

Maturity of ISD Extent of IA integration 0.08 0.06** Sophistication of IA 0.05 0.00 0.06 0.63**

*p < 0.05, **p < 0.01.

Table 5. Results of the hierarchical regression analysis.

Variable Eigen value Loadings

(minimum–maximum)*

Support of top IS management 5.12 0.78–0.94 Existence of technology champion 5.01 0.80–0.93 IT training 4.89 0.83–0.86 Integration of IS–business strategy 4.81 0.82–0.87 Satisfaction of job 4.72 0.63–0.89 Competency of IS staff 3.21 0.82–0.90 Quality of IS planning 3.04 0.75–0.92 Sophistication of IA 2.85 0.77–0.94 Effectiveness of process 2.78 0.71–0.88 Extent of IA integration 2.68 0.68–0.81 Management of transition 2.53 0.74–0.85 Control of IS resources 2.31 0.66–0.88 Motivation 2.11 0.75–0.91 Efficiency of process 1.92 0.61–0.90 Sophistication of user’s computer skill 1.87 0.75–0.89 Growth satisfaction 1.77 0.77–0.90 Extent of computer usage 1.51 0.65–0.84 Timeliness of process 1.41 0.70–0.87 Management of resistance 1.37 0.71–0.91 Technical support 1.22 0.66–0.83

*Detailed loadings are not included as too many items were involved.

Table 4. Results of the factor analysis.

2372 V. S. Lai and R. K. Mahapatra

p<0.001) could contribute to BPR success in many different ways. The most direct impact of top IS management support includes improving the project’s visibility, securing funds for the IT resources, aligning IS directions with the business mission, and gaining IS staff commitment and support. These enable ISD in selecting appro- priate IT, developing a responsive IA, and recruiting a competent team to facilitate the implementation of BPR. Some of the interviewees strongly believed that senior IS managers, along with the heads of departments most affected by BPR projects, should take the lead in setting the stage for re-engineering. They perceived the role of ISD as that of a champion in steering BPR projects. They mentioned that top IS management should directly participate in all phases of the re-engineering process, starting from project initiation, to determination of the BPR team, and through every step of process design and implementation.

The positive relationship between champions and BPR success was supported at the p < 0.001 (�R

2 ¼0.09) level of significance, thereby providing further support

to the widespread agreement that champions are key actors in re-engineering efforts. In the follow-up interviews with the IS executives, it was interesting to discover that champions were much more involved in the initiation of BPR than the imple- mentation of BPR. According to the interviewees, there are several factors contrib- uting to these varied involvement levels. First, champions might not be competent or experienced enough to assist in BPR implementation. Second, champions tend to be senior executives with a market vision. In almost 80% of the cases, the champions were located within the senior general management, with a few coming from MIS departments. Such champions are more concerned in promoting strategies to actua- lize the organizational goals. Once the strategy is determined, the champion might delegate implementation authority to subordinates, thereby decreasing his/her influ- ence during implementation.

7.2. Support of change management This study confirms that management of transition (�R

2 ¼0.03, p < 0.05) is an

effective strategy to reduce uncertainty and confusion associated with BPR, thereby improving its chance of success. As revealed by the interviewees in follow-up inter- views, ISDs in their respective organizations assisted in implementing transition strategies that enhanced the likelihood of re-engineering success. Some organizations even formed task forces or advisory committees, frequently led by IS executives, to deal with organizational changes, especially those related to cross-functional issues. These committees served as the facilitators of change. They helped evolve strategies for managing change, resolved conflicts, and performed other activities to mitigate the chaos, doubt and fear associated with re-engineering.

In this study, management of resistance (�R 2 ¼0.05, p < 0.01) is also found to be

critical to BPR success. In recognition of the need to manage change, management should study different perspectives and approaches for understanding and managing the change process. Management should also view the dynamics of BPR implemen- tation as a political process, which implies that resistance to change and implemen- tation difficulties are caused by the conflicting interests of different user groups. A necessary first step for successful implementation of change management is to manage the perceptions of employees affected by re-engineering. Actions to improve users’ perceptions include the emphasis on learning new skills and the prestige associated with working in a state-of-the-art business environment, implementation of policies to praise and reward employees, and alleviate concerns about loss of

2373Correlating business process re-engineering with information systems

employment. Concurrently, users’ perceptions can also be improved with their increased participation in the BPR planning and implementation process. To com- plement the above strategies, organizations should promote change management by facilitating well-designed training programmes, effective communication systems, and fair bargaining procedures.

Technical support from ISD (�R 2 ¼0.00, p¼0.38), interestingly, is not found to

be a significant determinant of BPR success. However, during the follow up inter- views, many interviewees expressed firm belief in the importance of technical support in BPR success, especially to enhance communication. Respondents believed that open communication between senior management and employees about the change process, its impact on the organization, and the plan to rehabilitate displaced and/or affected employees will considerably reduce the level of distrust and lack of coopera- tion often caused by major organizational changes. Providing access to group dis- cussion and communications tools such as groupware, electronic bulletin boards, electronic mail, and electronic discussions can facilitate such communication and discussion. This will enable the employees and the management to brainstorm on benefits, challenges, grievances, suggestions and other issues associated with BPR related changes in a real-time, group-oriented environment.

IT training (�R 2 ¼0.04, p < 0.05) is also validated to be a significant factor of

BPR. As reported during the follow up interviews, BPR causes changes in the responsibilities and skills of many employees, thus forcing them to seek new IT and business skills. The respondents also suggested that ISD should collaborate with the human resources function to identify new IT skill requirements of employees and provide appropriate training to equip them with these new skills. Most commonly used training methods included formal training programmes in the form of seminars, on-the-job training and workshops. Additionally, many companies offered informal training to end-users through news updates, user manuals and interest-group flyers. Most interviewees believed that training should be provided on a need-to-enrich basis rather than a need-to-know basis. Only this approach will lead to a better chance of EUC-enabled BPR success.

7.3. Quality of information system planning The study found a strong positive association (�R

2 ¼0.05, p < 0.01) between the

quality of IS planning and BPR success. The interviewees in the follow-up interviews argued that an ISD that plans strategically could force the firm to institute long-term planning pertinent to sustaining organizational success through IT. However, they also indicated that rapid changes in technology and business environments make it very difficult to predict the future and sustain such long-term planning. They suggested that an ISD must temper its enthusiastic commitment to new technology with realistic cost and risk assessments. As the success of BPR is determined by the flexibility, efficiency and cost-effectiveness of business processes in a dynamic environment, the real challenge to ISD is not in developing a strategic IS plan, but in learning from this planning process.

The significant correlation between IS–business strategy integration and BPR success (�R

2 ¼0.08, p < 0.01) conveys a strong message to ISD that for BPR to

succeed, the IS strategy must be relevant to the firm’s strategic objectives. This strategic alignment is important to ensure that IS priorities are consistent with organizational priorities, resources are appropriately allocated and IT sophistication matches the organizational sophistication. In the context of BPR, IS–business

2374 V. S. Lai and R. K. Mahapatra

integration allows ISD to better identify candidate processes and IT enablers for

re-engineering. It also helps in the development of an information resource archi-

tecture that will facilitate BPR. As suggested by several respondents in the follow-up

interviews, most organizations today have well-defined business strategies but lack

coherent IT strategies. This is not surprising considering that historically, ISD has

been considered as a support function that has played a marginal role in strategy

formulation and execution. However, the importance of a strategic alignment

between IS and business planning requires that ISD be repositioned to play a

more strategic role in organizational development.

Although IS resource control is considered to be a critical determinant of BPR,

the present study did not find sufficient evidence to support this position (�R 2 ¼0.01,

p¼0.21). The post-survey interviews shed some light on this finding. Several inter-

viewees reported that their BPR did not require superfluous IS resources. In fact, the

philosophy of BPR is to redesign an organization to better fit the new reality. IS

resources perhaps are controlled to manage the challenges and risks associated with

large-scale BPR projects; however, this issue has not been on the top of the list. In

reality, the challenge of ISD in this aspect is the reallocation of IS resources to

redesign the new business processes and their supporting systems. Of all resource

control policies, information (which is a key organizational resource) control

received the highest emphasis. The interviewees believed that better information

could make processes more efficient and effective. They also believed that

the management of information flow within and between business processes is a

prerequisite to achieving BPR success.

7.4. Competency of information system staff

The results revealed that the competency of IS staff would significantly enhance

the chance of BPR success (�R 2 ¼0.04, p < 0.05). The follow-up interviews provided

further insight into the role of the IS staff in BPR. The IS team was involved in

all phases of the re-engineering cycle, including benchmarking the progress of the

project. It played an advisory role and provided technical expertise for BPR imple-

mentation. An incompetent IS team would provide substandard and inappropriate

advice that might adversely impact BPR success. Some interviewees indicated hiring

outside IT consultants to supplement the skill and expertise of the in-house IS team.

In general, the involvement of these consultants was limited to providing technical

advice, especially in the early stages of the BPR cycle.

This study also performed a correlation analysis between IS team competency

and IA sophistication. The result was significant ( p < 0.001), implying that ISD

must hire more competent and professional IS personnel if the organization is oper-

ating a complex, interdependent and mature IA infrastructure. The follow-up inter-

views with respondents from organizations that have sophisticated IA, as well as

competent IS teams, revealed that investment in IT resources could provide the

means to build a slimmer and healthier organization via IT-enabled BPR. They

believed that a sophisticated IA backed by a competent IS team would allow their

organizations to evolve into an information age structure that would promote flex-

ibility, creativity, and learning while continuing to streamline, integrate and control

the business processes. Some of the interviewees even stressed that the competence of

their IS teams had become a powerful source of competitive advantage.

2375Correlating business process re-engineering with information systems

7.5. Success of end-user computing As anticipated, EUC success (�R

2 ¼0.09, p < 0.01) played a significant role

in BPR success. Some of the follow-up interviewees suggested that when end-users are more IT competent and literate, their willingness to comply with business process changes will be stronger, thus reducing resistance caused by IT phobia. The interviewees believed that an IT-literate end-user group is capable of taking an active part in IT-enabled process redesign because of their knowledge of business processes and IT. They can also form a nucleus group of advocates to educate other end-users about BPR, and thus enhance the overall acceptance of re-engineering by all end-users. This will positively affect the success of BPR projects.

Both EUC sophistication (�R 2 ¼0.06, p < 0.001) and extent of computer usage

(�R 2 ¼0.03, p < 0.05) were found critical to BPR success. In general, the respondents

indicated that their end-users had at least 3 years of computer experience, mostly in the areas of spreadsheets, graphics, word processing and databases. In addition, a majority of the responding companies (93.7%) have developed in-house applications to support intra- and interfunctional business activities, with a significant portion (22.1%) of these applications developed and supported by end-users. In addition to applications, the interviewers also said that their employees were competent in the Internet and mailing technologies. In terms of the extent of usage, the Internet and other communication technologies were used on a daily basis by most end-users. They also used a database, Excel

�

and a word processor on a routine basis in their assigned duties.

7.6. Maturity of an information systems department Interestingly, IA sophistication was not found to be contributive to BPR success

(�R 2 ¼0.00, p¼0.31). The post-survey interviews with IS executives reaffirmed this

finding. They envisioned that IT infrastructure capabilities could assist in the sim- plification and streamlining of cross-functional and cross-business processes. However, they were also convinced that BPR success depended heavily on appro- priate process redesign and IA sophistication was not an important determinant of the redesign process. They felt that the contribution of a sophisticated IA would be marginal, at the most, to the success of BPR. They felt that more advanced IT would be harder to use because it would increase the complexity of implementing the re-engineered process.

The extent of IA integration was found to correlate significantly with BPR success (�R

2 ¼0.06, p<0.01). This suggests that a well-integrated IA is an

indispensable tool for effective re-engineering. In the follow-up interviews, many interviewees expressed that a major obstacle to re-engineering is the presence of islands of automation within the organization. Research studies have already confirmed that the absence of a well-integrated IA in an organization is a primary cause of the emergence of such islands of automation (Brancheau et al. 1996). These islands inhibit the design and implementation of cross-functional business processes and thus have an adverse effect on BPR success. An integrated IA results in better access to information across functional boundaries thus eliminat- ing these islands of automation. As expressed by the interviewees, such an inte- grated IA also helps in achieving the organizational goals of higher productivity and quality at reduced costs.

2376 V. S. Lai and R. K. Mahapatra

8. Implications and conclusion

The findings of this study have valuable implications for both IS practitioners and academics. Top IS management support and the existence of technology cham- pions are proved to be important to BPR. Technology champions and IS manage- ment should take leadership and a visionary role in devising ways to use IT in support of BPR. Management should understand that a lack of this technical leader- ship, the role of IT in enabling new work systems is inconceivable. After all, an organization needs someone capable of translating the re-engineered business vision into IT architecture. IS researchers can also contribute in this aspect by exploring possible ways IS management could capture business vision and transform it into executable IS plans.

ISD must also recognize the importance of change management support in enhancing the success of BPR projects. Additionally, IS professionals must realize that change management is not only the responsibility of human resources function. ISD also has an important role to play in managing change. Clearly, BPR change management must be strategy-driven, with visionary leadership from top manage- ment. The extent to which top management can sell the vision of BPR to all the stakeholders in the organization and manage the transition to new processes will determine whether or not the re-engineering phenomenon fulfils its true potential. The appointment of a Change Manager with a strong IT background can enhance the support mechanism associated with re-engineering. The rationale for such a selection is the ability of the Change Manager to enforce the effective use of advanced IT in implementing and supplementing change management strategies. Furthermore, the Change Manager could lead a central support group to assist and integrate change management efforts and build a technology framework to support improvement efforts. What is the role of IS researchers on this issue? At this stage, their immediate challenge is to discover an underlying theory for the BPR change management strategy that may guide future research and practice. Profiling successful BPR projects would also provide valuable insights for the development of change management strategies in re-engineering practices. Candler et al. (1996) and Teng et al. (1998b) attempt to address this issue to some extent.

With regard to IS planning, ISD must be repositioned to play a critical role in strategy formulation and implementation. The IS plan must include a high-level strategic perspective positively to impact business scope, governance, organiza- tion and competitive advantages by exploiting the resources available in ISD. IS managers must ensure the proper alignment of the IS strategy with the enterprise strategy. Although this principle might seem too obvious, it is frequently not done. This leads to many missed opportunities and improperly set priorities. Academic researchers have proposed several models and frameworks to support the strategic use of IT for competitive advantage. Unfortunately, empirically validated and proven IS–business strategic alignment frameworks are still lacking (Luftman et al. 1993). IS researchers need to investigate how ISD could contribute to building an information age organization that would reflect the interdependency of corporate strategies, business processes and IT capabilities.

Another important research area in IS strategy concerns the evolution of plan- ning over time. Although the findings of this study imply that the IS strategy should be aligned with the business strategy to enhance BPR success, it says little about how IS strategy should evolve over time as ISD becomes more experienced in strategic planning. Such research will contribute to one’s understanding of the evolution of

2377Correlating business process re-engineering with information systems

IS strategic planning. Issues of importance are duration and characteristics of dif- ferent stages in this evolution, motivations for moving from one stage to the next, and the planning strategies and types of IT adopted in different stages. It will also reveal the longitudinal development of the nature of alignment of the IS strategy with the business strategy and the changing role of ISD over time with regard to strategic IS planning. It is also necessary to identify the enablers and inhibitors of IS strategic planning, with respect to industry, time and executive position, that ISD can manipulate in order to assure successful IS–business alignment and BPR. Identification of such enablers and inhibitors will allow one to study their character- istics and develop mechanisms to control their effects in order to subdue their negative influence and enhance their positive impact on the IS strategic planning function.

The present findings have some very important implications with respect to the design and implementation of IA. BPR benefits most from the cross-functional integration of IA. Technological sophistication of IA is not a major contributor to BPR success. Consequently, when ISD plans and designs IA, its emphasis should be on building a responsive IT infrastructure to facilitate the integration and sharing of data across the organization. Such an IA is essential to BPR success as it provides an integrated view of the business-oriented uses of information in the organization. It can provide valuable information for process redesign. While the potential of such an integrated IA has been widely discussed, ISD must be aware of the difficulty in building and maintaining such an IA due to rapid changes in the technological and business environments. Several design and operational tradeoffs must be carefully considered in developing and maintaining an integrated IA. For example, the cost of a new IT must be balanced against the benefit that may accrue from its deployment. How much flexibility must the local units have and how much control can be exerted by the central administration in operational and design issues? How to protect data and processes from unauthorized access while providing transparent access to authorized users? These and other such important issues must be resolved by the IS managers to build and maintain an integrated IA that will enhance the organiza- tion’s ability to successfully re-engineer its business processes.

The people dimension of BPR also has significant implications for its success. IT competency of end-users and the IS team are critical to BPR success. Hence, ISD must plan effectively to build and sustain a culture that nurtures an IT-literate work- force and maintains a team of proficient IS professionals. To enhance end-user’s IT competence, ISD must develop a thorough understanding of EUC practice and formulate policies that help EUC success. Important issues in this area are selection of EUC tools, the evaluation of task–tool fit, identification of skill requirements, development of training programmes, and an effective support system for end-users. The IS team acts as the gatekeeper of tools (equipment, facilities and computers) and methods (procedures, programmes and software) that transform input to output in the re-engineering practice. ISD, thus, must ensure its staff’s sophistication level in terms of maturity, management ability, work experience, all-rounded knowledge and technical skills. In the context of BPR, IS professionals also need to develop skills in analysing the organization and interfacing with the corporate strategic function to enable them to play more effective and creative roles.

The present findings suggest that ISD plays a multifaceted role that has signifi- cant influence on the success of BPR. This study used a survey research method that captured re-engineering efforts in a large number of organizations. While this

2378 V. S. Lai and R. K. Mahapatra

strategy provided valuable information and enhanced one’s understanding of the

role of ISD in re-engineering, a logical extension of this research would be to conduct

a longitudinal study to understand the evolution of re-engineering efforts and the

evolutionary role of ISD in these efforts. The case study research method, which

enables the researcher to perform deep analysis of a phenomenon, is more appro-

priate for such a research project. Some reports, such as Teo and King (1997),

attempt to explore this research topic. However, more efforts are needed to build

a cumulative body of knowledge in this area. In the meantime, the findings of the

present study and their possible implications could form a backbone to guide ISD

in designing their strategies and deploying their resources to enhance the success of

BPR.

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