Application 1 – Analysis and Synthesis of Prior Research

Delvin Grant

Technology

alone does

not enable

organizationai

change.

View of Business Process Reengineering T H E SUCCESSES OF BUSINESS PROCESS reengineering (BPR) have been well pub- licized [7]; the failures have been much less publicized [5, 10, 11]. Approxi- mately 70% of BPR projects fail [1] and some believe thar Figure may be even higher. Severai obstacles to BPR have been documented [1, 2, 8, 9]. They include the lack of sustained manage- ment commitment and leadership, unclear definition of BPR projects, unre- alistic scope and expectations, resistance to change, and inadequate resources. Another obstacle and a possible source of failure, often overlooked, is the narrow view resulting from the existing defini- tion of BPR [4], BPR is defined as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of perfor- mance, such as cost, quality, service, and speed [7]. The view depicted in this definition is too narrow because it focuses on processes and ignores other important aspects of institutions such as organizational structure, people, communication, and technology.

The principal claim of this article is that the views of BPR subscribing to Hammers well-known definition are too limited because they suggest BPR is about making changes to processes, and that technology plays only an enabling role. This is inconsistent with the wider views exhibited in industry practice. Evidence for these claims is given here through analysis of published BPR cases of industry practice. The danger of adopting too narrow a view is that it misdirects developers to focus exclu- sively on processes while ignoring a vari- ety of other possible reengineering opportunities that may result from a wider view. This has consequences for industry practice because the view developers take ofa particular organiza- tioniil reality strongly influences how they approach their work,

THIL PUBLISHED CASKS usi-n IN THIS research serve as a reality substitute for industry practice, which is a widely accepted research practice. The logic of this research approach is summarized in terms of Toulmins Uses of Arguments

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[12] by applying his concepts of claim, warrant, evi- dence, rebuttal, and backing. Warrants are laws for claims about nature, values, norms, and regularities for claims about human aflairs. Backing is the body of knowledge tbat is used to justify the warrant if challenged [12]—see the accompanying figure. The body of knowledge used here comes from case stud- ies and the BPR methods literature.

The Reengineering Problem Space Successful reengineering requires a good understand- ing of the problem space to define the scope of the project, the areas of the organization most affected, and the complexity of the problem. A typical reengi- neering problem space (see Table 1) comprises five interrelated factors (processes, technology, people.

Application of Toulmin's Schema.

Evidence: Industry view of BPR as discussed in the case analysis section is wider and richer than the view implied is Hammer's definition. Processes are not always the primary targecs of reengineering and the role of technology changes from project to project.

Claim: BPR assumes a much wider view in practice than is presumed in the literature on BPR methods.The role of technology is not necessaril/ limited to that of a change enabler as projected ir the BPR methods literature.

Rebuttal: See Mrs. Fields and

Warrant: The view and definition of BPR that exist In the case study literature are inconsistent with descriptions of BPR that have been heavily influenced by Hammer

Backing: The use of case studies as a realic/ substitute is a widely used and accepted practice.

communication, and organizational structure) and three managerial levels (strategic, managerial, and operational).

Organizations may be viewed as collections of interrelated processes. Guha et al. [6] defined three types of processes engineers should be concerned with: interorgani7^tional processes are the means by which companies along the same value chain interact; interfunctional processes that overlap functional boundaries in the organization; interpersonal processes occur between people within one function group. To analyze a process we ask several questions: Is the process needed? Can and should it be

redesigned? What purpose does it serve? Who is responsible for it? What competencies are required for someone to successfully complete it? Value chain analysis, business systems planning, and critical suc- cess factors may provide a context for tbese questions.

Technology is an essential component of modern businesses and is vital to most reengineering undertak- ings [7]. It creates barriers to entry and has become the basis for competition in industries such as banking, travel, and high-tech manufacturing. In understanding the technology, we try to determine if the business has the right amount, type, and mix of technologies. Local-area networks, intranets, client/server architec- tures, electronic data interchange, and executive sup- port systems technologies allow companies to achieve performance gains [6]. Technology is not limited to

hardware; it includes tools, tech- niques, and methods such as BPR, information engineering, joint application design, prototyping, computer-aided support systems, structured methods of develop- ment, and object orientation.

People—the human resources architecture—play an important role in the daily operations of companies. They ate the primary decision-makers and the essential ingredient any human activity system. In redesigning the human resources architecture, we are try- ing to determine if the company has the right mix and quantity of human experts to achieve its goals. In performing reengineer- ing we must redesign the human resource architecture to better support information sharing and decision-making [6]. Items for redesign in the people domain include: job titles and positions;

team-based management techniques; team-based performance evaluation; individual and team com- pensation and reward; and individual and team authority and responsibility.

In redesigning the human architecture, effective communication is vital to organizational decision- making from the perspectives of technical communi- cation and social communication. Technical communication concerns the ability of different types of technology (email, Internet, intranet) to effectively communicate. Social communication con- cerns the ability of people to understand each other. Consequently, reengineering must be concerned with

rebuttal sections for Xerox cases

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the redesign of the communication channels for mutual understanding to improve decision-making, collaboration, and the free exchange of information. This should include improving the communication channels inside and outside the organization.

Structure defines the relationship between people and technology. It plays an important role in orga- nizing people, technology, decision-making, control, and management. Poor organizational structure can diminish the success of the reengineering effort. Therefore, it should always be considered during reengineering [6]. Structural changes may include cross-functional teams, product teams, and the flat- tening of the management hierarchy. From a tech- nology point of view it may include the relationships and controls between various technologies and should also support effective communication, deci-

Table 1. BPR framework of the problem space [3].

Strategic

Managerial

Operational

Process Technology Communication People Structure

companies has not been fully exploited: a wider view or expanded definition of reengineering is necessary.

If the argument for a wider view has merit, we would expect that in practice not all of the interde- pendencies could have been ignored. Reality is indi- visible and so we would expect to find industry practice is much broader and richer than the theories that inspired it. By applying the framework to ana- lyze BPR projects we hope to reveal the breadth of reengineering practice reflected in industry.

Illustrative Case Analysis This study is an illustrative case analysis. Any claims about the broader view of BPR being typical and beneficial to industry should not be taken as statisti- cally significant or empirically substantive. To make such claims would require empirical research where

data is collected from a represen- tative sample of many compa- nies. The results of this study provide anecdotal evidence for the plausibility of our claims and serve to illustrate the application of the framework. This makes it

Table 2. Project mapping [3].

Strategic

Managerial

Operational

Process

Cigna-1

Ford

Technology

Xerox

Cigna-1 Mrs. Fields Cigna-2

C o m m u n i c a t i o n

Xerox Mrs. Fields

People

Xerox

Cigna 4 Cigna-2 Cigna-3

Structure

Xerox

Xerox Cigna-1 C(gna-2 Cigna-3 Cigna-4

Mrs. Fields

sion-making, organization cul- ture, shared sense-making, and congeniality.

Strategic management is the highest level of management where top officials determine the strategic direction of the com- pany. Managerial management is where middle managers responsi- ble for setting company policies and procedures necessary for accomplishing the corporate objectives set by the strategic management reside, similar to an exploratory study prior to the data col- Operational is the lowest level of management and is lection effort ofa major study.

responsible for carrying out the daily operations of Evidence of Industry Practice. A total of seven the company. projects were analyzed. They were selected because

While it may be appropriate for reengineering to they are classics that are widely published in the case concentrate its effort on one or more of the five fac- literature; are widely read by students, faculty, and tors, it must not be at the expense of the others. This practitioners; and illustrate different views of the would be a mistake because it would ignore impor- overall inherent complexity of BPR. Space limita- tant interdependencies among the factors. For exam- tions prevent detailed discussion of the Cigna case pie, major changes in technology that are ill here, nevertheless, the results have been included to supported by the organizational structure, people, provide a more complete picture. Table 2 is used to and process are likely to fail. Kodak, recognizing this map the seven projects to the framework. An entry fact, decided to postpone all BPR projects until its was made in the matrix shown in the table to signify ERP systems were implemented. It felt that BPR the factor chat was the primary focus of the reengi- projects were at risk if the technology infrastructure neering effort and the organizational level that was was not in place. The use of technology in reengi- most affected by the redesign. While the redesign neering non-manufacturing and manufacturing may have caused secondary changes in the company,

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they are not shown for two reasons—they are not the primary focus here anti would unnecessarily clutter the table. For example, in the Mrs. Fields case, even though changes in technology occurred primarily at the operational level, secondary changes occurring at the upper levels ofthe company are not shown. Some cells of the mattix are blank because no primary changes were reported for diat factor.

In-Depth Case Analysis. The case analyses tJiat follow will be evaluated usitig Hammers definition of BPR. This would disqualify projects that have technology, structure, people, or communication as the primary target of redesign. Nevertheless, these projects would qualify as BPR projects in industry. This helps to explain why we believe industry prac- tice is mucb broader than the literature on BPR methods suggests.

Ford. This case provides strong evidence for the concept of BPR as defined by Hammer because the procurement function underwent major process changes. Prior to reengineering, the procurement functioti operated by sending a purchase order (PO) to a vendor, and a copy to the accounts payable department. When the goods arrived at Ford, the clerk completed a form describing the goods and sent a copy to the accounts payable department (A/P); the vendor meanwhile sent A/P an invoice. A/P com- pared all three documents (PO, receiving document, and invoice) atid issued payment when they matched. A/P spent most of its time dealing with exceptions that took weeks to resolve. The function was reengineered so the need to match documents was eliminated. When the purchasing department issues a PO to a vendor, the information is simulta- neously entered into an online database (DB). When goods arrive at Ford someone cbecks a DB for tbe corresponditig invoice. If invoice and shipment are identical, the system automatically sends payment to the vendor, otherwise, the goods are returned.

It is very clear the procurement function was redesigned and that technology was the change enabler. The redesign focused primarily on the busi- ness procedures and practices of procurement to reduce tbe paperwork and cycle time. The number of procurement processes and the number of people involved were significantly reduced. The business assutnptions, upon which the old procurement process functioned, were radically changed. Two of these assumptions were that procurement was so complex it required several people to perform it. and Ford paid when three related documents matched. These assumptions provided the impetus for the redesign ofthe procurement function. In this exam- ple three important criteria of BPR consistent with

Hammer's defmition are evident. First, there is con- vincing evidence that significant process or proce- dure changes occurred. Second, processes were the primary targets ofthe redesign effort. Finally, tech- nology served as the enabler. This is classical BPR according to Hammer. When we apply the same strict standards to the other projects they fail the "Hammer test."

Mrs. Fields Cookies. In Mrs. Fields case, evidence of process or procedure changes is missing and hence it does not fit Hammers definition of BPR. Inherent in Mrs. Fields' management style were a nutnber of objectives she wanted to fulfill, incltiding a non- bureaucratic and informal management structure, a flat otganizational structure, tight control of daily operations even in her absence, and litde delegation of authority. To achieve these objectives she decided to reengineer techncilogy, t)rganizational structure, and communication.

T H I ; COMPANY UNDHRWI-NT MAJOR lECHNOLOGY changes. After the redesign, technology was perva- sive, affecting such things as scheduling, product mix, sales, hiring, communication, and product fore- casting. The focus was on technolog)' and it was the primary target of the change process. It opened new communication channels between employees and Mrs. Fields, and it enhaticed the way she ran the business. Technology facilitated a flatter organiza- tional structure, reducing bureaucracy and providing better control over the daily operations. A Hat orga- nizational structure meant managers would be closer to customers and could spend more time selling cookies. For this to happen, she had to find a way to perform the management ftinctions ot the business while managers spent more time selling cookies. A flat tnanagemcnt structure was desirable because it reduced the amount of management required. It may be argued tbat getting managers to spend more time selling cookies to customers is a form of process reengineeritig. This is a weak argumctit because man- agers were already selling cookies and so the changes are insignificant such tbat Hammer would not con- sider them BPR.

It can also be argued that communication was reengineered because, in her attempt to be omnipresent, she needed a communication infra- structure to accomplish her objective. It can be argued that better communication was a primary dri- ver for a flatter organizational structure. A flatter organization leads to more effective and efficient communication and management. Effective commu- nication, even in flat organizations, is only possible with the appropriate technology. In this case study

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technology served as an enabler of change. Rebuttal. One can argue that management is a

business process and so it was being redesigned. If this were true we should see convincing evidence of radical changes to fundamental management prac- tices and procedures that resulted from such change. We should also see evidence of significant changes to Mrs. Fields management style after reengineering. We see no evidence of change to either the manage- ment practices ofthe business or to her management style. Even if there were minor changes to either, according to Hammer, this would not qualify as reengineering but instead as continuous improve- ment. It her management stvie or the manaijemenr practices had changed significantly, we would have seen major changes to the management function. It is somewhat evident the reengineering of technology served only to reinforce her management style and to support the business practices by allowing her to bet- ter communicate and maintain tighter control ofthe business. In summary, the case was about satisfying several management goals of Mrs. Fields through the use of technology.

Xerox. This case does not fit Hammers definition because it is a good example of organizational struc- ture, people, and technology BPR. The organiza- tional structure was redesigned to facilitate the reorganization of the Corporate Information Man- agement (CIM) Function. This was a response to the expiration of patents and increased competition from Fuji and Canon. AJso at stake was the question of how should Xerox restructure itself to better deal with external treats and better satisfy its customers. In addition, it wanted to improve return on assets, and to increase market share. The redesign of structure focused on four major areas: corporate strategies and programs (CSP); corporate technology strategies (CTS); corporate telecommunication strategies (CTeS); and executive and office information systems (OIS). CSP was responsible for the transfer of tech- nology from Palo /Mto. CTS was responsible for cre- ating the company's information systems infrastructure. The CTeS function was responsible for ensuring effective communication inside and out- side of Xerox and included customers, suppliers, and industrial partners. OIS was responsible for applica- tion development of corporate ftmctions.

K NIZW STRUCTURi; CAtJSUD MAJOR Ri-SHUFFLING of leadership (people). An inside candidate was cho- sen as CIO for her IT experience, her politic;U influ- ence, and her familiarity with Xerox. These were important leadership characteristics for the job. One of her primary objectives was to educate and hire the

right people for CIM. She also defined roles and responsibilities for the centralized CIM group and for the decentralized btisiness units. Changes to the orga- nizational structure were accompanied by changes in technology. A three-level architecture was developed and implemented. It included general data process- ing, distributed processing, workstations, and OIS. These were necessary to better support the new orga- nizational arrangements. For example, an effective telecommunications infrastructure was reqtiired to better inform employees about the availability' of new technologies and their use.

We see no evidence of major changes in business practices or procedtires as we did in the Ford case. The primary focus was the redesign ofthe organiza- tional structure. For the successful restructuring, changes in people and technology were necessary. We conclude that this was an example where both people and technology served to enable successful corporate restructuring.

Rebuttal. It may be argued that process and struc- ture are somewhat interdependent and by changing the structure we automatically change the business processes. Ib rebut this argument, the case stated that Xerox wanted to reorganize the CIM function to address the issues discussed earlier. There was no mention or evidence of changes to the busines.s prac- tices or procedures of the company. It is likely that the new structure and the new leadership brought about by the redesign led to business practice changes. However, the primary target ofthe redesign was undoubtedly the organizational structure. There- fore, people, technology, and processes served as enablers of organizational change. This is further supported by the lack of evidence suggesting process changes occurred after the redesign. If the case were about process changes we would have found ample evidence of this after reengineering as we did in the Ford case. This was clearly not the case.

Conclusion This study raises questions about what is the correct or appropriate view of BPR and argues in favor of a broader view for the following reasons: narrow views of BPR inhibit progress and contribute to BPR f;iii- ures; wider views will advance academic research and industry practice. According to Hammer. BPR is concerned with making changes to business processes to bring about organizational improvements. This notion misdirects developers to focus exclusively on processes while other equally Important factors (tech- nology, structure, communication, and people) go unnoticed, are taken for granted, or are deemed external to the project scope. This leads to fewer BPR

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opportunities and successes. Our analysis of industry practice challenges the notion that processes are always the primary focus of redesign. It turns out that communication, people, processes, and struc- ture have been reengineered, thus supporting our argument for a wider view of BPR. Therefore, we need ro be conscious ofthe sources and the impact of our belief systems on industry practice.

In addition, we need to expand our view of BPR to consider the other factors as being equal players. This provides additional opportunities that will translate into project success. A surprising result is that processes were the least reengineered factor. They were the primary targets of redesign in two of the seven projects. We expected them to dominate because the word "process" is synonymous with BPR. Interest- ingly, the results show that only when processes are the primary targets of reengineering they fit Hammer's definition of BPR. We believe the leaders of these proj- ects were probably heavily influenced by Hammer's work. The literature on BPR methods suggests that technology serves only to enable change, but we ques- tion conventional wisdom because we have seen exam- ples where technology and other factors were the primary focus of redesign. The factor that is chosen as the primary target of redesign depends on the project objectives, the organization's mission and goal. It changes from project to project and is situation- dependent. As praaitioners, we ought to recognize that inherent in every methodology is a prescribed view of the world that is not always correct or shared by those who use it, and we make conscious and sub- conscious assumptions that have profound effects on our work.

The empty cells in Table 2 may be explained by the small number of cases analyzed. All four cases can be found at the operational level ofthe organization. As we move up to the managerial and the strategic levels we find only two cases at each level. This sug- gests BPR may have a greater change impact at the operational level than at the managerial or strategic levels. This may be further explained by the project objectives because the Xerox case dealt with a strate- gic problem and ended up at the strategic level. Ford and Mrs. Fields dealt with operational issues and ended up at the bottom. The anecdotal evidence sug- gests the problem to be solved determines where the impact of redesign is felt and consequently the posi- tion ofthe project within Table 2.

Some readers may partially disagree with our interpretation ofthe cases. The fact that alternative interpretations are possible and have not been con- sidered in the discussion of BPR sheds considerable doubt on the adequacy of Hammers narrow BPR

definition and the subsequent literature that uncriti- cally builds on it. More research is needed to deter- mine how industry actually handles BPR and whether BPR approaches adopting a broader view have a better chance of success than those following the narrow view.

It was not our intention to develop a complete BPR methodology, but instead to focus on a key shortcoming of current methodologies: a view of BPR that is too restrictive. A complete methodology needs to embrace additional concerns not addressed here. Reengineering may differ greatly depending on a company's strategic direction. Price leadership, sup- ply chain, high-quality production, and micromar- keting require different reengineering strategies with different outcomes. We recommend that after reengineering opportunities have been identified, steps should be taken to ensure they are in keeping with the company strategy, goal, and objective. D

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D E L V I N G R A N T (dgrant2i?>wppost.dcpaul.edu) is an associate

professor of MiS in the School of Commerce at Depaiil University, Chicago, IL.

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