Key Generic Factors that can Impact on Successful Implementation of Business Process Reengineering - Literature review Example

TABLE OF CONTENTS KEY GENERIC FACTORS...2 Introduction................2 Factors of Success...........2 Factors of Risk.................4 Resistance to Change......4 Conclusion........................5 INDENTIFYING THE METHODOLOGY......6 Designing the Methodology.......6 Davenport and Short.................6 Caterpillar Model......................7 Agent Relationship Morphism Analysis...8 Implementing the SME.............8 Conclusion......................9 Summary........................9 References....................10 WHAT ARE THE KEY GENERIC FACTORS THAT CAN IMPACT ON SUCCESSFUL IMPLEMENTATION OF BUSINESS PROCESS REENGINEERING Introduction Reengineering the business process is a relatively new concept that has had some measure of success. Critics have also pointed to its low success rate and asked why it isn't more successful more often. According to Spencer (1999 p.312), "Reengineering, a new organisational concept based on technological advances, is better suited to today's global challenges than traditional systems". Reengineering Business Process (BPR) is more conducive to large scale, radical change. Yet, it can still be fraught with failure. There are some commonalties among the literature that points to the necessary factors of successful change. There are also warnings of potential failure. When implemented with these elements in mind, BPR can be successful and may be absolutely vital to the health of an organisation. Factors for Success The factors that impact a successful Business Process Reengineering (BPR) fall into the categories of implementation and environmental. The first factor to consider in the implementation is the design of the project. The project should be visionary and realistic. The design of the BPR needs to take into account the strategic goals of the business and consider the direction of the organisation. Timeframes must be adequate to allow for the team to accomplish its goals. There are key questions to be asked during project design phase. Will it provide any competitive advantage Will it remain competitive in the long term These questions require knowledge of the business environment. Grover et al. (1995 p. 112) asserts that " A major finding of the planned change approach indicates that implementation success occurs when commitment to change exists; commitment to the project exists; and the project is well defined and plans are clearly specified". The design team will need to know the product, the market, and the customers to complete a successful design. The redesign phase is one of the most important factors in any methodology. To be of any value, the redesign needs to be accompanied by a cost/benefit analysis. Is the redesign worth the cost of reengineering What are the risks involved with the redesign Radical change involves cost cutting measures that may impact vendors, suppliers, and employees. Stoddard & Jarvenpaa (1995 p.105) warns that, "... revolutionary change process might not be feasible given the risk and cost of revolutionary tactics". Companies need to assess the risk and evaluate the degree of change tolerance that they may be subjected to. Communication is another key factor to aid in the success of BPR. Management needs to communicate with the staff the scope and the motivation of the project. Communication is also essential to get employees to think about the new way of doing business. If the project involves downsizing, the workforce needs to be aware of the plans and the alternatives that will be provided. The design phase should include a Human Resources strategy. The major threads that run throughout the successful implementation of BPR are, "...communication, empowerment, people involvement, training and education, creating a culture for change, and stimulating receptivity of the organisation to change are the most important factors related to change management and culture" (Al-Mashari & Zairi, 1999 p.88). These issues revolve around the human resource issue. It is imperative that communication with the employees be proactive and thorough. Bashien and Marcus also write of the critical nature of involving the employees in the change. According to Bashein & Marcus 1994, "BPR projects that are viewed by managers and employees in terms of growth and expansion, rather than in terms of downsizing and cost cutting, have a higher chance of success because they generate more enthusiasm and less resistance". Commitment with little resistance is a plan for the successful implementation of BPR. Factors of Risk Resources will have to be dedicated to the process for a considerable length of time. Muthu, Whitman, and Cheraghi (1999 p.4) state that, "A process cannot be reengineered overnight. A very vital part in the success of every reengineering effort lies in improving the reengineered process continuously". Failure to realise the length of time involved can result in failure. A successful BPR will involve taking the extended time necessary and having the resources to devote to the project. Organisations that do not have the time, money, and resources available will certainly risk failure. The risk of expecting short-term results can lead to failure. Kotter (2007 p.102) reports, " Managers often complain about being forced to produce short-term wins, .... When it becomes clear to people that major change will take a long time, urgency levels can drop". The pressure to succeed in the short term can be a distraction to the management team and commitment to the project may recede. Resistance to Change Resistance to change is inevitable and may be a healthy sign of change. According to Hammer (1994), "In our experience with companies struggling to implement reengineering, the No. 1 source of their difficulties has been in this area of coping with the reactions of the people to the enormousness of the change. Resistance to change is natural and inevitable. In fact, resistance to reengineering change is a sign that something significant is happening". The important factor is the ability to cope with the change. The successful methodology will incorporate an education and communication phase to inform the workforce that this is an expansion and not a downsizing. Another key element is the commitment over the life of the project. Paper (2004 p.47) points out that, "Patience is another key aspect. BPR initiatives can lose momentum as managers face limited resources, slow pay-off, diminished employee enthusiasm, and increased resistance to change". Management's commitment must be total and not suffer from a lack of will if results are slow to be forthcoming. Management will also need to overcome any resistance to change within the employees and the workforce. King (1994) also notes that human interaction and the aversion to change. He writes, "Because most individuals have a basic aversion to radical change, and because all of us probably want our own employment to continue, a reengineering effort can be perceived as something that is counter to the most basic motivations of employees". However, if management is committed and willing to communicate, this drastic aversion can be minimised. Conclusion The factors that impact the successful implementation of Business Process Reengineering are both resource and human based elements. Analysing and designing the process is critical. Management support is necessary to communicate the direction of the project and to educate the workforce. There needs to be a long-term commitment to the change as well as adequate financial resources. Patience, communication, and time can overcome employee aversion to radical change. These factors are necessary for any successful implementation of BPR IDENTIFY A MTHODOLOGY THAT INCORPORATES THE FACTORS Designing the Methodology Having looked at the causes of failure and the ingredients for success, we can begin to look for a methodology that incorporates these elements. Hackney (2004 p.148) asserts, "A BPR project should get highest priority among corporate agenda. If it is prioritised less than that, the problem is bound to ensue as the very definition of BPR indicates its revolutionary effect on every aspect of an organization". Critical to success of any methodology is the total backing and commitment by management. Any successful BPR methodology that requires the total support of management to be successful also requires a long-term commitment to the project. Enthusiasm may wane as the project fails to generate quick results. It may fall out of favour due to negative attitudes among the employees. Management's commitment can bring the project forward through these difficult times. Davenport and Short (1990) describe a BPR methodology that consists of developing a vision, identifying the process, identifying IT capabilities and designing and building a prototype. They also suggest measuring and mapping the existing process to avoid making the same mistakes again. They recommend that the BPR be viewed as a prototype and Malhotra (1998) suggests, "The actual design should not be viewed as the end of the BPR process. Rather, it should be viewed as a prototype, with successive iterations. This allows for open ended of future improvements". To determine the best methodology for implementation of BPR, it is helpful to understand the weaknesses in certain BPR processes and eliminate or accommodate them. Vakola and Rezgui (2000 pp. 240-241) describe a methodology called SPARKS. It is a simplified, bare bones approach to BPR. It calls for specifying the current process, analyse the current process, test alternatives, and implement the process. This methodology expends too many resources analysing the existing process and too few resources evaluating the environment that the reengineering will take place in. Another key to success is project analysation and defining the process before beginning. Maddern and Maull (n.d. p.11) report on a large UK bank that had success with second generation BPR methodology. According to their report, "This emphasis on 'end to end' process thinking was both a critical consideration in the literature and a cornerstone of the Bank's process thinking". This methodology relied on a system of identification, measurement, management, improvement, and strategy. Reviewing the existing process was critical to ascertaining the possibility of success with a BPR program. The Caterpillar Model At Caterpillar USA, they went through a process called Business Simplification Process (BSP). Paper (1999 p.6) documents the steps and notes, "Simplification involves streamlining the existing process. If analysis of the process calls for removal of one or more steps, simplification is being used. Smallest in scope is process correction. Correction involves returning the process back to traditional levels of performance". The key factor of BSP is the correction phase where measurement is made and corrections applied. It is an understanding that the process is ongoing. However, even noting Caterpillar's success with BPS, it should also be noted that it is a simplification process. Often, more radical change is required to revamp the system. The National Research Council Staff (1997 p.57) states, "Reengineering is not incremental change or small alteration. It is an activity that emphasises reinventing, or radically changing, the processes in the organisation that are directly connected to producing an output". BPR is a far more radical change than simply streamlining or simplifying in an effort to cut costs. Agent Relationship Morphism Analysis One of the systems that combine most of the favourable elements is the "Agent Relationship Morphism Analysis (ARMA) Methodology" (Valaris & Glykis 1999 p.76). ARMA is a BPR methodology that takes a total view of the process from the elements of efficiency, effectiveness, and cost through reorganisation of accounting principles. It further considers the human aspect as Valaris and Glykis (1999 p.77) report, "It views the organisation from both an individualistic (employee level) and a holistic (business process level) view and integrates both static and dynamic aspects of the organisation". It considers the overall picture and the wide-ranging effects of BPR. Implementing the SME What works for a large corporation may be inappropriate for the small and medium sized enterprise (SME). The change process could be significantly different and the outcome will not be as easily defined. According to McAdam (2002), "SMEs are by nature resource limited in comparison to larger organizations". An SME may not have the patience or the long-term outlook required for a successful BPR. "Barrier (1994) and Kinni (1995) define the resource limitations for effective reengineering implementation as human, material and financial. Such a drain on resources could hinder the SMEs' ability to function" (as cited in McAdam 2002). Another key to success for the successful implementation of BPR is resource availability in the long run. Conclusion BPR can be a radical undertaking and can be risky if the environment is not carefully considered. The successful methodology will incorporate a thorough evaluation phase of design and a cost benefit analysis. The methodology will consider and educate the workforce about potential aversions and misinformation. The implementation phase will be rapid and measured. Any shortcomings will be able to be corrected. The efficient methodology will be an ongoing process that is designed to grow the existing enterprise. BPR is not solely a cost cutting method of retooling; it is an evolutionary change. Summary BPR has the potential to be a cost cutting and streamlining approach to changing the way a firm does business. Yet, it needs to be more than that to be successful. BPR needs to consider the human factors of resistance and commitment along with the material and financial requirements for a long-term implementation. The successful methodologies take these factors into account and do not seek short cuts to efficiency. Everyone involved, management and employees, need to realise that this is a radical change that is a necessary part of the global world of technology. References Al-Mashari, M & Zairi, M. 1999. 'BPR implementation process: An analysis of key success and failure factors'. 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