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Assessing readiness for business process reengineering

Neda Abdolvand, Amir Albadvi and Zahra Ferdowsi
IT Department, Engineering Faculty, Tarbiat Modares University, Tehran, Iran
Abstract
Purpose The purpose of this paper is to propose how to minimize the risks of implementing business process reengineering (BPR) by measuring readiness. For this purpose, the paper proposes an assessment approach for readiness in BPR efforts based on the critical success and failure factors. Design/methodology/approach A relevant literature review, which investigates success and failure indicators in BPR efforts is carried out and a new categorized list of indicators are proposed. This is a base for conducting a survey to measure the BPR readiness, which has been run in two companies and compared based on a diamond model. Findings In this research, readiness indicators are determined based on critical success and failure factors. The readiness indicators include six categories. The rst ve categories, egalitarian leadership, collaborative working environment, top management commitment, supportive management, and use of information technology are positive indicators. The sixth category, resistance to change has a negative role. This paper reports survey results indicating BPR readiness in two Iranian companies. After comparing the position of the two cases, the paper offers several guidelines for amplifying the success points and decreasing failure points and hence, increasing the rate of success. Originality/value High-failure rate of BPR has been introduced as a main barrier in reengineering processes. In addition, it makes a fear, which in turn can be a failure factor. This paper tries to ll the gap in the literature on decreasing risk in BPR projects by introducing a BPR readiness assessment approach. In addition, the proposed questionnaire is generic and can be utilized in a facilitated manner. Keywords Business process reengineering, Critical success factors, Assessment, Organizational change, Iran Paper type Research paper

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1. Introduction Since the 1990s, organizations have been focusing on the development of more exible, coordinative, team- and communication-based capabilities (Al-Mashari et al., 2001; Attaran, 2003; Terziovski et al., 2003). Owing to this fact, most of the organizations have paid special attention to processes in recent years (Valiris and Glykas, 2004). They have tried to be competitive in the global market by changing the way of thinking about business processes (Adesola and Baines, 2005; Aversano et al., 2002). A collection of activities, which gets a set of input and raises a set of outputs, is referred to as a process (Temponi, 2006; Wu, 2003). In a business process, outputs should produce values for the customers. In the last decade, various techniques and tools have been exploited to speed up and enhance the process (Chan and Spedding, 2003; MacIntosh, 2003). Many researchers and enterprises believe that rethinking and redesigning business processes tend to obtain dramatic and sustainable improvements (Revere, 2004). Business process reengineering (BPR) is a management tool, in which business processes are examined and redesigned to improve cost efciency and service effectiveness (Lindsay et al., 2003; Vidovic and Vuhic, 2003). Development of inter-organizational relationships and signicant increases in the business integration

Business Process Management Journal Vol. 14 No. 4, 2008 pp. 497-511 q Emerald Group Publishing Limited 1463-7154 DOI 10.1108/14637150810888046

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has made BPR even more important. In addition, as per latest concept of management, reengineering is necessary, rstly for facilitating processes across the boundaries of the two organizations and secondly for integrating back- and front-ofce processes (Fadel and Tanniru, 2005; Lin et al., 2002). Besides, being costly and time-consuming, BPR is a risky operation. Various surveys and assessments reported as many as 60-80 per cent of BPR initiatives having been unsuccessful (Chiplunkar et al., 2003; Dennis et al., 2003). The risky nature of BPR has tended to detailed investigation of its critical success and failure factors (Adigun and Biyela, 2003; Reijers and Mansar, 2005). This paper seeks readiness indicators by utilizing critical success and failure factors. The aggregated critical success factors are categorized in ve groups as positive readiness indicators. These groups are egalitarian leadership, collaborative working environment, top management commitment, supportive management, and use of information technology. The failure factor is resistance to change and is considered as a negative readiness indicator. Assessing these factors measures the readiness of initiating a BPR project. This research measures the readiness through conducting a survey in two Iranian companies; Company A (transportation) and Company B (energy). After comparing the readiness of the two companies, the study presents the reasons why one company is more successful than the other. This brings up some guidelines for enhancing the level of readiness in the unready case. This research rst reviews the critical factors. Then, the method section explains how this study is directed. Next section describes the results of readiness assessments surveys. Last section presents the current status of the organization and discusses the ways these organizations can strengthen their positions. 2. Background of BPR readiness In BPR, large-scale radical redesign is considered to gain dramatic improvements (Ranganathan and Dhaliwal, 2001; Schniederjans and Kim, 2003). Therefore, BPR is dened as:
[. . .] total transformation of a business, an unconstrained reshaping of all business processes, technologies and management systems, as well as organizational structure and values, to achieve quantum leaps in performance throughout the business (Crowe et al., 2002).

However, BPR is a complex and difcult task and has a high-failure rate. Thus, organizations should not try the BPR before meticulous examination of all phases and stages of the project (Dennis et al., 2003; Schniederjans and Kim, 2003; Terziovski et al., 2003). These should include the process activities, peoples jobs and reward system, the management system performers and managers, the management system, and tools and technologies. Moreover, it is necessary to investigate the underlying corporate culture that holds the beliefs and values inuencing everyones behavior and expectations (Albano et al., 2001; Guimaraes, 1999; Mertins and Jochem, 2005). Each of these factors can be a reason of BPR failure. 2.1 BPR critical success and failure factors This paper is based on the researches of Crowe et al. (2002), Guimaraes (1999), Motwani et al. (2005), and Terziovski et al. (2003). The research has conducted by Crowe et al. (2002) estimated risk level of BPR efforts by investigating success and failure factors.

They have grouped the success factors in four main group and totally 17 sub-factors. Main groups are egalitarian leadership, working environment, top management commitment, and managerial support. The failure factor is introduced just as employee resistance, which has four sub-factors. Guimaraes (1999), Motwani et al. (2005), and Terziovski et al. (2003) has emphasized on change management, and explained information technology as two more critical success factors. Reviewing other researchers approved these factors and sub-factors can cover all critical factors. The addressed factors and sub-factors are aggregated and categorized intuitively by authors in new list, which been hierarchically shown in Figure 1. In addition, Tables I and II clarify which research emphasizes on which factors and sub-factors. Each number
BPR Success Factors

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Egalitarian leadership

Collaborative working environment

Top management commitment

Change in management systems 1- New reward system 2- Performance measurement 3- Employee empowerment 4- Timely training & education

Use of Information Technology

1- Shared vision/ information 2- Open communication 3- Confidence & trust in subordinates 4- Constructive use of subordinates' idea

1- Friendly interactions 2- Confidence & trust 3- Teamwork performance 4- Cooperative environment 5- Recognition among employees

1- Sufficient knowledge about the BPR projects 2- Realistic expectation of BPR results 3- Frequent communication with BPR team and users

1- The role of IT

2- Use of up-to-date communication technology

3- Adoption of IT

(a)

BPR Failure Factors

Resistance to change 1- Middle management fear of losing authority 2- Employees fear of losing job 3- Skepticism about project result 4- Feeling uncomfortable with new working environment

(b)

Figure 1. The critical: (a) success and (b) failure factors of BPR

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References U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U

Crowe et al. (2002) Dennis et al. (2003) Grant (2002) Guimaraes (1999) Maull et al. (2003) Motwani et al. (2005) Ranganathan and Dhaliwal (2001) Reijers and Mansar (2005) Terziovski et al. (2003) U U U U U

Table I. BPR critical success factors in literature review 1 Egalitarian leadership 2 3 4 Success factors Top management Collaborative working commitment environment 1 2 3 4 5 1 2 3 U U U Supportive management 1 2 3 4 U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U 1 Use of ICT 2 3 U U U U U U U U U U U U U U U U

References Crowe et al. (2002) Dennis et al. (2003) Grant (2002) Guimaraes (1999) Maull et al. (2003) Motwani et al. (2005) Ranganathan and Dhaliwal (2001) Reijers and Mansar (2005) Terziovski et al. (2003)

1 U U U U U U U

Failure factors Resistance to change 2 3 U U U U U U U U U U U U

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501
Table II. BPR critical failure factors in literature review

U U

(under the factor) refers to a sub-factor, which has been specied with a number in Figure 1. Furthermore, factors are explained to make them clear. 2.1.1 Egalitarian leadership. Some key constructs in managements are employee involvement, communication, and leadership nature (Motwani et al., 2005). Top managers should drive the changes by providing vision (shared vision). Employees should become more responsive. Other members in the BPR team should understand the process. Top management should provide employees with channels of communication and improve their ability of understanding each other (open communication). Effective communication is vital to organizational decision making (Grant, 2002; Tatsiopoulos and Panayiotou, 2000). To empower employee and cooperate in a new system, top management should establish inter- and intra-organizational condence and trust. The chains interactions reect the organizational ability in adapting changes (Crowe et al., 2002). In addition, groupware techniques signicantly decrease the time required for performing the analysis phases of BPR (effective use of subordinates idea). Involving employees and effective use of their idea enable top management to achieve optimal process operation (Maull et al., 2003; Terziovski et al., 2003). Egalitarian culture makes the positive changes take place with little resistance (Crowe et al., 2002). 2.1.2 Collaborative working environment. Closely related to the egalitarian culture, cooperation (cooperative environment) is one of the critical success factors in BPR projects (Crowe et al., 2002). Employees should work together in the same department/organization and at the same time, and interact in a friendly way with each other (Tatsiopoulos and Panayiotou, 2000). In order to work in a cooperative environment, and interact in a friendly way, employees should trust each other, and be assured that the top management recognizes their role (recognition among employees) (Crowe et al., 2002; Maull et al., 2003). A cooperative environment with a friendly interaction, in which employees work in teams, has a chance of improving performance (Green and Roseman, 2000; Marir and Mansar, 2004). 2.1.3 Top management commitment. A clearly dened strategic mission is necessary for reengineering (Maull et al., 2003). Strategic management is the highest level of management where top ofcials determine the strategic direction of the company (Grant, 2002). Top management should have a clear knowledge about the current situation of the organization. In addition, it is necessary to have a sufcient knowledge about the BPR projects and realistic expectation of BPR results. In order to have a successful BPR, top management should communicate with employees in order to motivate the movement, control the BPR team and users (Crowe et al., 2002).

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2.1.4 Supportive management. Human resources play a crucial role in organizational process improvement. They are the primary decision makers and the essential ingredients of any human activity system (Grant, 2002). In performing reengineering, the human resources architecture should be reengineered to support information sharing and decision making better (Mansar et al., 2003; Vakola and Rezgui, 2000). Finally, employees should be assisted in the transition period to new working environment (Crowe et al., 2002). 2.1.5 Use of information technology. IT is introduced as a critical component and even a natural partner of BPR, which has a continuous and important role in BPR projects (Attaran, 2003; Vidovic and Vuhic, 2003). Many authors have described that successful application of IT is effective in BPR success. Contrarily, overlooking the role of IT can result in failure (Motwani et al., 2005; Shin and Jemella, 2002). IT covers the areas of hardware, information system, and communication technology, which provide individuals with the required information (Al-Mashari and Zairi, 2000; Attaran, 2003). These bring effectiveness in realizing the above-mentioned critical success factors by pulling human, business, and organization together (Grant, 2002; Motwani et al., 2005). For example, communication technology is to make open communication, share information, and create collaborative team working (Attaran, 2003; Tatsiopoulos and Panayiotou, 2000). 2.1.6 Resistance to change. Naturally, BPR fosters change and human being resists change. This resistance is the most common barrier of BPR and renders success difcult (Guimaraes, 1999; Schniederjans and Kim, 2003). Employees resist changes because of uncertain future initiated by BPR changes including job loss, authority loss, and getting anxious (Crowe et al., 2002; Palmer, 2004). Authors believe critical success factors can be mapped to a positive readiness indicator, and the failure factor has mapped to unreadiness indicator. In fact, the hypothesis is measuring critical success and failure factors can clarify readiness/unreadiness level in executing BPR project. 3. Research methodology This research seeks to evaluate the readiness for implementing a BPR project successfully in Companies A and B. The BPR has been considered as a solution for changing the traditional behavior of Company A. Company B has considered BPR as a solution for improving its performance. A questionnaire approach is considered to assess the readiness. As mentioned, a list of critical success and failure factors are extracted and mapped to readiness/unreadiness indicators in hypotheses. In the same way, proposed questionnaire by previous researchers are reviewed and combined based on the new categories. Then each question is mapped to each readiness/unreadiness indicator. The produced questionnaire is presented in the Appendix. In the questionnaire, each indicator occupies a section, which by itself contains several questions related to indicators variables. It was piloted in each company with 12 persons, who were information technology analysts, mechanical engineers, electronic engineers, senior managers, and ordinary employees. In each case, the questionnaire was modied based on the feedback. The questionnaire was sent through the companies internal mail system to companies managers, senior managers, consultants, and ordinary employees who are experts in the processes. In Company A, 770 persons received the questionnaire. After more than two

months, 191 subjects lled the questionnaires. About 22 questionnaires were discarded due to lack of data. The remaining 169 lled out questionnaires, namely 21.9 per cent response rate was considered usable. For Company B, 540 subjects were identied and received the questionnaires. Approximately, after two months, 164 of subjects sent back the lled out questionnaires out of which eight questionnaires were discarded because of lack of data. Then the remaining 156 lled out questionnaires, namely 28.9 per cent response rate, were considered usable. Upon receiving the rst survey reply, data entry was started and compiled into a spreadsheet for further analysis. The internal reliability for this scale has been computed by Cronbachs a coefcient. This measures the interrelationship between items in the questionnaire. A reliability of 0.70 or higher is acceptable (Terziovski et al., 2003; Wu, 2002). In this research, the Cronbach a is equal to 0.76 (all ranked higher than 0.70). This analysis indicates that the scales used in the study are reliable. A factor analysis test as a construct validity computing produced a single factor solution accounting for 63 per cent of the average extracted variance. The correlation analysis identied that there is strong relationships with all measures of indicators. The correlation between the considered indicators had the highest correlation at the strongest signicance level (0.473 at p 0.001 in Company A and 0.486 at p 0.001 in Company B). The simple statistical calculations are used for evaluating the indicators. Elements are scored in the range of four (always) to zero (never). Each signicant element had equal weights. Each indicator has been calculated by summation of its sub-components divided by the number of its questions. The total readiness of the case will be calculated by aggregating all indicators, Xwhile the negative indicators carry a negative mark. That is: Readiness total INi 2 INj ; for effect INi . 0 and effect INj , 0: 4. Survey analysis In this survey, six indicators are investigated. The positive indicators are IN1-IN5 and negative indicator is IN6. For each indicator, the minimum value is zero, and the maximum value is four. As shown in Table III, indicators value of Company A does not differ that much. In addition, all indicators value is under average. However, the standard deviation of IN3 is greater than other indicators. This means that there are different opinions about top management commitment (IN3). Moreover, results of Company B represent better readiness for the BPR project (Table III). Particularly, the respective employees show signicantly less resistance to change.
Statistics Indicators IN1 IN2 IN3 IN4 IN5 IN6 Valid N (list-wise) N (Qs) 4 5 3 4 3 4 23 N 169 169 169 169 169 169 169 Company A Mean 1.7293 1.8651 1.6272 1.9379 1.9053 1.8491 SD 0.66672 0.64200 1.04389 0.81366 0.85153 0.85488 N 156 156 156 156 156 156 156 Company B Mean 2.2340 2.2141 2.3974 2.4631 2.5962 0.9145 SD 0.57057 0.57792 0.79705 0.65918 0.67522 0.52269

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Table III. The result of indicators from the survey

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Moreover, in order to analyze the level of BPR readiness in the Iranian companies accurately, the scores are dissected into ve ranks. Those are Total unready, Unready, Moderate, Ready, and Absolutely ready for the range of 0-0.5, 0.51-1.5, 1.51-2.50, 2.51-3.5, 3.51-4, respectively. Table IV illustrates the rank distribution in the survey for every indicator in each case. For all indicators value in Company A, rst and second highest responses refer to moderate and unready ranks. The results of Company B show that the highest results for three indicators are in the moderate rank and for other three indicators in the ready rank. The former are egalitarian leadership (IN1), cooperative working environment (IN2) and supportive management (IN4). The latter are in top management commitment (IN3), use of information technology (IN5), and resistance to change (IN6). 4.1 Evaluation the BPR readiness In Figure 2, a diamond model is pictured to highlight the position of Iranian companies in the state space of BPR readiness. The diamond model is a polygon with ve vertices each referring to one of the ve positive indicators. A vector will be derived from the pentagon centroid, if there is resistance to change. In the best case, the mean value of each positive indicator should be equal to four and each negative indicator should be equal to zero. The results gained in Company A indicate that all positive and negative indicators reside in the moderate region. Consequently, this company is not ready for starting a BPR project, although it cannot be considered unready. Indeed, managers of Company A should have a detailed program for improving the acceptance level of changes. Detailed are described in the next section, Implication for management. The most priority of Company B to Company A is its low resistance to change. This makes possible to accept improvement and changes, and hence ready for running a BPR project, although four indicators are just near to ready. However, this company should evolve the business processes in a carefully developed detailed plan, which particularly equipped with improvement mentioned in next section. 5. Implications for management BPR project has been continuously referred as risky effort since it brings radical changes in three main organizational areas including human, processes and technology (Crowe et al., 2002). The readiness measurement leads to an accurate percept in each area. This should be tended to anticipate and direct guidelines to guarantee the success of the project. BPR needs to change the culture and behavior of human in each organizational level. As mentioned, management performance is a critical key in the success of BPR. Managers should follow some directions to make organizational wide improvements. These include: . Having an improvement strategy plan helps managers to know the current situation, have a clear perception of business processes, the future road map and how the BPR can help. It needs a sufcient knowledge about BPR and makes real expectations. In addition, an action plan can be extracted based on the strategy plan to specify required pre-executing phases to make a ready organization in accepting radical changes.

Indicator Company A Per. 5.9 36.1 50.9 7.1 0.0 Company B Per. 0.6 14.1 60.3 24.4 0.6

Rank Total unready Unready Moderate Ready Absolutely ready Total (percent)

SIN1 Frequation 10 61 86 12 0.0 169-100

Per. 1.2 30.2 50.3 18.3 0.0 Per. 17.8 31.4 32.5 13.6 4.7 Per. 2.4 38.5 39.1 18.3 1.8 Per. 3.6 32.0 39.1 21.9 3.6

SIN2 Frequation 2 51 85 31 0.0 SIN2 Frequation 0.0 17 86 51 2

Per. 0.0 10.9 55.1 32.7 1.3 Per. 1.9 12.8 35.9 40.4 9.0

SIN3 Frequation 30 53 55 23 8 SIN3 Frequation 3 20 56 63 14 SIN4 Frequation 0.0 11 78 59 8

SIN4 Frequation 4 65 66 31 3

SIN5 Frequation 6 54 66 37 6

SIN6 Frequation 11 61 65 29 3

Per. 6.5 36.1 38.5 17.2 1.8

Indicator Rank Total unready Unready Moderate Ready Absolutely ready Total (percent)

SIN1 Frequation 1 22 94 38 1 156-100

Per. 0.0 7.1 50.0 37.8 5.1

SIN5 Frequation 0.0 6 64 67 19

Per. 0.0 3.8 41.0 42.9 12.2

SIN6 Frequation 0.0 3 8 103 42

Per. 0.0 1.9 5.1 66.0 26.9

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Table IV. The rank of readiness for each indicator

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IN6 IN5 IN1

506

IN4

IN2 Total Unready Unready Moderate Ready Absolutely Ready

Figure 2. BPR readiness analysis

Company A Company B

IN3

Making egalitarian society, in which there is possible to share information, democratically interact with employees, and increase condence and creativity. Involving interaction and cooperation in working places to collaborate team working and increase trust. Working seminars in friendly and interesting places, and cultural training can facilitate the structural change. Creating measurement system makes possible to evaluate the efciency of processes, and involved employee and technologies. This can be lead to a reward system to persuade employees, or training courses to empower employees and increase the efciency. Utilizing information and communication technologies to underpin business processes, make open communication and interactive environment, and facilitate performance measurement in an accurate way.

These actions could cause to have enough knowledge about current and expected business processes, make people ready in accepting behavioral and structural changes, and determining the role of technology. All of these tend to decrease risk and increase the success rate. In investigated companies, although Company B results describe a few degree better situation in compare with Company A, both of them have a lack of democratic societies. In fact there is a gap between employees and top managers, which make employees not able to work in a collaborative manner, share information, interact to top manager, and be condent about management support. Moreover, there is a weak friendship and condence among co-workers. In order to enhance the readiness indicators, it is necessary to dene new specic team works and project environment based on the business process. It can be changed to process-based structure of organization in future. In these groups, technologies should be utilized to make an open communication between members. The creatively results of team-works should be purposed to solve problems and transferred to top management to make decision. This enhances condence and trust between co-workers and their managers. Moreover, some cultural entertainment and training programs including seminars, workshops, and tours can be helpful, specically in diminishing the resistance. Finally, companies should highlight the role of information

and communication technologies. Particularly, Company A needs to make an action plan to utilize the technology in an efcient manner in the future. 6. Conclusion BPR has been addressed as a signicant solution for radical improvement in the enterprises. However, the high-failure rate of BPR projects makes organizations consider all aspect of the project meticulously. This research explores a new area on BPR readiness based on analyzing critical success and failure factors, which is referred to as readiness positive and negative indicators. Assessing BPR readiness can address strong points, weak points and risks, and hence the rank of readiness in the organization. In other words, as there is readiness, a BPR project can be initiated. Or else, it should be delayed in order for an organization to get ready. Readiness guarantees the success of BPR projects. In this research, rstly, the positive and negative BPR readiness indicators are reviewed and six indicators are extracted. Egalitarian leadership, collaborative working environment, top management commitment, supportive management, and use of information technology have been known as positive factors that have a direct relation with readiness. Finally, resistance to change has been introduced as a negative factor, which decreases the readiness. Two Iranian companies, which have been eager to try BPR, are evaluated to measure the level of their readiness. The results imply that Company A is not ready. In fact, the company is placed in a moderate position. However, the high rate of resistance to change addresses necessity of some kind of cultural, managerial, supportive and technological reform. This can lead to enhancement in positive indicators, as well. The results of Company B almost indicate the moderates and ready situation. Nevertheless, the low rate of resistance to change requires more accelerated and efcient programs to improve the situation and a successful BPR project. Both companies, particularly Company A, can utilize the implication for management guidelines, which are discusses, to increase the readiness level and hence success rate. For further research, it is recommended to evaluate Company A, after some changes and compare it with the current situation. Moreover, after this research, Company B has started to run a BPR project. It is possible to run another survey in this company after accomplishing the project to measure the success. Then, it is possible to compare critical success or failure factor to optimize readiness indicators.
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Corresponding author Neda Abdolvand can be contacted at: info@abdolvand.com

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