Broadbent ImplicationsInformationTechnology 1999

The Implications of Information Technology Infrastructure for Business Process
Redesign
Author(s): Marianne Broadbent, Peter Weill and Don St. Clair
Source: MIS Quarterly , Jun., 1999, Vol. 23, No. 2 (Jun., 1999), pp. 159-182
Published by: Management Information Systems Research Center, University of
Minnesota
Stable URL: https://www.jstor.org/stable/249750
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Broadbent, Weill, & St. Clair/IT Infrastructure
_ tta: = rl. La r to 0
THE IMPLICATIONS OF INFORMATION TECHNOLOGY

INFRASTRUCTURE FOR BUSINESS PROCESS REDESIGN1
By:
By: Marianne
Marianne Broadbent
Broadbent Exploratory case analysis of four firms (two in
Gartner
Gartner Group
GroupPacific
Pacific retail and two in petroleum) was used to under-
620 Bourke St stand the ways IT infrastructure contributes to
Melbourne VIC 3000 success in implementing BPR. The finding was
AUSTRALIA that all firms needed a basic level of IT infra-
marianne.broadbent@gartner.com structure capability to implement BPR. The firms
firms
that had developed a higher level of IT infra-
Peter Weill structure capabilities, before or concurrent with
Melbourne Business School undertaking business process redesign, were able
University of Melbourne to implement extensive changes to their business
200 Leicester Street, Carlton VIC 3053 processes over relatively short time frames. The
AUSTRALIA
higher level of infrastructure capability was pro-
p.weill@mbs.unimelb.edu.au vided in the form of (1) a set of infrastructure ser-
ser-
vices that spanned organizational boundaries
Don St.Clair such as those between functions, business units,
A.T. Kearney or firms, and (2) the ability of the infrastructure
infrastructure to
to
HONG KONG reach particular constituencies inside and out-
side the firm to transfer information and process
process
complex transactions.
Abstract
The more extensive business process changes
Business process redesign (BPR) is a pervasive but
were more innovative and radical, crossing busi-
challenging tool for transforming organizations.
ness and functional unit boundaries, and resulted
Information technology plays an important role by
in more significant business impact. The practi-
eitherenablingorconstrainingsuccessful BPR. This
paperexplores the links between firm-wide ITinfra-
cal implication of the study is that before
embarking on any form of BPR, managers should
should
structure and business process change. IT infra-
complete a business audit of their IT infrastruc-
structure is the base foundation of the ITportfolio,
ture capabilities, as these capabilities have an
which is shared throughout the firm in the form of
important impact on the speed and nature of
reliable services, and is usually coordinated by the
business process change.
IS group. IT infrastructure capability includes both
the technical and managerial expertise required to
Keywords: IT infrastructure, IT services, busi-
provide reliable physical services and extensive
electronic connectivity within andoutside the firm. ness process redesign and reengineering,
business strategy, IT alignment, exploratory
case analysis
'Allen Lee was the accepting senior editor for this ISRL Categories: AF0401.02, BA0208, DB01,
paper. DD0402, DD05, UF, EG
MIS Quarterly Vol. 23 No. 2, pp. 159-182/June 1999 159

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
Introduction
Introduction (BU), and
and firms
firms provided
providedthe
thebasis
basisfor
forfaster
fasterand
and
more extensive
extensive changes
changesin
inbusiness
businessprocesses.
processes.
Business
Business process
processredesign
redesign(BPR)
(BPR)
is is
a pervasive
a pervasive
Table 11 lists
lists the
the set
set of
of IT
ITinfrastructure
infrastructureservices
services
tool
tool for
for transforming
transformingorganizations
organizations(Grover
(Grover
et al.
et al.
identified
identified in
in the
the four
four firms,
firms,derived
derivedfrom
froma alist
listofof
1993)
1993) and
and ranked
rankedasasone
oneofofthe
the
most
most important
important
services
services developed
developed in
in earlier
earlierresearch
research(Broadbent
(Broadbent
issues
issues for
for information
informationsystems
systems (IS)(IS)
executives
executives
et al. 1996).
1996). The
The core
core services
services(1(1through10)
through10)
since
since the
the early
early1990s
1990s(Brancheau
(Brancheau
et et
al. al.
1996;
1996;
were provided
provided by by all
all four
fourfirms,
firms,and
andthe
theaddi-
addi-
Index
Index Group
Group1994;
1994;Watson
Watsonetet al.al.
1996).
1996).
In In
1994,
1994,
tional
tional services
services (11
(11 through
through23)23)were
wereprovided
providedby
by
nearly
nearly two
two thirds
thirds(63%)
(63%)ofofISIS
executives
executivesindicat-
indicat-
at least
least one
one of
of the
the four
fourfirms.
firms.The
Theseven
sevenservices
services
ed that
that their
theircompanies
companieshad
hadactive
active
process
process
highlighted
highlighted in
in bold
bold are
are those
thosethat
thatspan
spanorganiza-
organiza-
redesign
redesign projects;
projects;inin70%
70%ofofthese,
these,
the
the
IS IS
organi-
organi-
tional boundaries.
zation
zation was
was part
partof
ofthe
theredesign
redesignteam
team
(Index
(Index
Group
Group 1994).
1994).Over
Overhalf
halfofofthe
theIS IS
executives
executivesindi-
indi- The paper demonstrates that two of the four firms
cated
cated that
that they
theywere
weredeveloping
developing systems
systemsforfor had all seven of these boundary-spanning ser-
redesigned
redesigned processes.
processes.However,
However, BPRBPR is is
often
often
dif-
dif- vices (the others had only three), which enabled
ficult
ficult toto implement,
implement,withwith68% 68% ofofcompanies
companies them to implement more extensive process
encountering
encounteringunanticipated
unanticipatedproblems
problems and
and
obsta-
obsta- changes more quickly. The extensive process
cles
cles (Snell
(Snell 1994).
1994). changes were more innovative and radical,
crossed business unit boundaries and had more
According
According to towriters
writersononthe thepotential
potential effects
effectsof of
significant business impact.
BPR,
BPR, information
informationtechnology
technology (IT)
(IT)
is is
fundamental
fundamental
in enabling
enabling the
theinnovative
innovativeredesign
redesign of of
core
corebusi-
busi- In the remainder of the paper, the literature on
ness
ness processes
processes(Brancheau
(Brancheauetetal.al. 1996;
1996; Hammer
Hammer the relationship between BPR and IT infrastruc-
and
and Champy
Champy1993).
1993).ITITcan
canbebea stimulus
a stimulus forforBPR,
BPR, ture is considered first. A discussion is then pre-
allowing
allowing firms
firmsto tobreak
breaklong-standing
long-standing business
business sented on how IT infrastructure capabilities were
rules
rules (Hammer
(Hammerand andChampy
Champy1993; 1993; Wastell
Wastell et et
al. al. assessed. The four firms' business environment
1994;
1994; Yetton
Yettonet etal.
al.1993).
1993).New
New ITITsystems
systems cancan and drivers, process changes, major IT infrastruc-
directly
directly contribute
contributetotoreducing
reducing the
thecosts
costsof of
pro-
pro- ture investments, and IT infrastructure capabili-
duction,
duction, coordination,
coordination,and andinformation
information (Earl
(Earl
andand ties are described. The role of IT infrastructure in
Kuan
Kuan 1994,
1994, p.p.26).
26). BPR is then analyzed followed by a discussion of
how infrastructure enabled or constrained BPR in
There
There is
is aa well-accepted
well-acceptediterative
iterative relationship
relationship
each firm. The paper closes with an examination
between
between thethestrategic
strategiccontext
context ofofthe
thefirm,
firm,
thethe
of the underlying relationship between IT infra-
nature
nature ofof business
businessprocesses,
processes,andandthe
thesignifi-
signifi-
structure and BPR, the implications for manage-
cance
cance of
of ITIT investments,
investments,both
bothas as
barriers
barriersto to
andand
ment, and conclusions from the research.
enablers
enablers for
forchanging
changingbusiness
businessprocesses
processes
(Bashein et al. 1994; Coulson-Thomas 1994;
Stoddard and Jarvenpaa 1993). While IT is a
potential enabler of change it is also a potential
Business Process Redesign and
constraint or inhibitor (Benjamin 1993;
IT Infrastructure
Broadbent and Butler 1995; Davenport 1993;
Earl 1994; Earl and Kuan 1994), particularly Documented examples of BPR implementations
when the firm's IT infrastructure is inappropriate
indicate that the degree of business transforma-
or inflexible (Brancheau et al. 1996; Wastell et
tion varies significantly between firms and
al. 1994).
between different parts of the same firm (see, for
This paper explores the nature of the linkage example, Butler 1994, 1996; Caron et al. 1994;
between business process redesign and IT infra- Hall et al. 1993; Stafford 1993). Improving
structure. It demonstrates that all four firms need- processes usually involves implementing systems
ed a basic level of IT infrastructure capability to and process management across business func-
tion boundaries rather than within functions.
implement BPR. The paper also shows that those
infrastructure services that spanned organization- Information technology, in the form of communi-
al boundaries between functions, business units cations networks and shared databases, often
160 MIS Quarterly Vol. 23 No. 2/June 1999

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*es~~~~~~~~~~~ I!a WN!8W|1|l11laB E!818

MaTrlmwrlk a~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Core
CoreInformation
Information
Technology
Technology
Infrastructure
Infrastructure
Services Services
1.
1.Manage
Managefirm-wide
firm-wide
communication
communication
network services
network services
2.
2.Manage
Managegroup-wide
group-wide
or firm-wide
or firm-wide
messaging services
messaging services
3.
3.Recommended
Recommended standards
standards
for at least
forone
atcomponent
least oneofcomponent
IT architectureof(e.g.,
IT hardware,
architecture (e.g., hardw
operating
operating systems,
systems,
data, communications)
4.
4.Implement
Implement security,
security,
disasterdisaster
planning, planning,
and business recovery
and business
servicesrecovery
for firm-wide
services for firm-w
installations
installations and and
applications
applications
5.
5.Provide
Providetechnology
technology
advice and
advice
support
andservices
support services
6.
6.Manage,
Manage,maintain,
maintain,
supportsupport
large-scalelarge-scale
data processing
data
facilities
processing
(e.g., mainframe
facilities (e.g., mainfram
operations)
operations)
7. Manage firm-wide or business-unit applications and databases
8. Perform IS project management
9. Provide data management advice and consultancy services
10. Perform IS planning for business units
Additional Information Technology Infrastructure Services
11. Enforce IT architecture and standards

12. Manage firm-wide or business-unit workstation networks (e.g., LANs, POS)
13. Manage and negotiate with suppliers and outsourcers
14. Identify and test new technologies for business purposes
15. Develop business-unit specific applications (usually on a chargeback or contrac
basis)
16. Implement security, disaster planning, and recovery for business units
17. Electronically provide management information (e.g., EIS)
18. Manage business-unit-specific applications
19. Provide firm-wide or business-unit data management, including standards
20. Develop and manage electronic linkages to suppliers or customers
21. Develop a common systems development environment
22. Provide technology education services (e.g., training)
23. Provide multimedia operations and development (e.g., video-conferencing)
*The bold face services are boundary crossing where they are clearly and actively integr
supporting information flows beyond one functional area. The generic list of IT infrastruct
services was developed by Broadbent et al. (1996).
underpins the "architecture" of business process

tion systems executives (Brancheau et al. 1996).
redesign (Earl and Kuan 1994, p. 22). In exam-
An analysis of 23 redesign projects in manufac-
ples such as Wal-Mart (Furey and Diorio turing
1994) firms identified infrastructure as providing
and Xerox (Ramcharamdas 1994), the role of
increased flexibility, improved communication,
enabling technologies was identified as integral
and integration of different functions and organi-
to the successful implementation of business
zations (Dixon et al. 1994). The availability of
process redesign. appropriate infrastructure capability was a key
factor preceding the successful implementation
The practical options available in planning and
changing processes in a BPR effort areof redesigned business processes (Caron et al.
con-
1994).
strained or enabled by IT infrastructure (Grover et
IT infrastructure
al. 1993). The capability of the IT infrastructure is investments can be a constraint
one of the most important issues facing informa-
where systems are not compatible, or where
MIS Quarterly Vol. 23 No. 2/June 1999 161

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
inconsistent data models have been used in dif- The

The major
majorresearch
researchquestions
questions
were:
were:
ferent parts of the business. Many firms already
have very significant investments in systems that 1.
1. How
Howdid didITITinfrastructure
infrastructure
capabilities
capabilities
facili-
facili-
are based on old or inappropriate processes, tate
tate the
theimplementation
implementation of of
BPR?
BPR?
business design, or structure assumptions. Data
and systems architectures (Keen 1995) built to 2.
2. How
Howdid
didITITinfrastructure
infrastructure
capabilities
capabilities
con- con-
serve local, functional needs may put limits on strain
strain the
theimplementation
implementationof of
BPR?
BPR?
process integration (Earl 1994). The process-
3.
3. Which
WhichITITinfrastructure
infrastructure
capabilities
capabilities
havehave
the the
oriented architectures necessary for business
largest
largestimpact
impactinin
implementing
implementing
BPR? BPR?
process redesign emphasize "lateral data models,
interfacing systems, integrating communications
. . . and these can take time to build" (Earl and Selection of the Firms
Kuan 1994, p. 26). The capabilities of IT infra- Two firms in each of two industry areas were
structure required to support these integrating chosen, thereby providing four organizational
capabilities crossing business and functional unit settings for study but limiting the influence of
boundaries are a specific focus of this paper. A industry effects. A multisite case approach was
typical boundary-crossing infrastructure service chosen in order to understand the nature and
is centrally coordinated and mandatory. An complexity of the processes taking place
example of a boundary crossing service, where (Benbasat et al. 1987; Eisenhardt 1989).
the boundary is the business unit, is the provision
of a firm-wide customer database in a bank The firms were in the petroleum and retail indus-
where the customer's entire relationship is cap- tries, which both face intense competitive pres-
tured and used by several IT applications in dif- sures and are heavily reliant on information tech-
ferent businesses of the bank. nology. However, they provide a contrast in their
strategic use of information and information
While the significance of IT infrastructure to busi-
technology (Cash et al. 1992; Porter and Millar
ness process change is now increasingly recog- 1985). The petroleum firms use IT predominant-
nized, this finding is usually a by-product of BPRly in distribution, while the retailing firms use IT
studies or the articulation of concerns of practi-in all parts of the value chain from suppliers to
tioners. Knowledge of the role of IT infrastructure
post-sale customer service. The inclusion of
capabilities remains largely "in the realms of these two industries was not aimed at cross-
conjecture and anecdote" (Duncan 1995, p. 39).industry comparisons. Rather, the aim was to
check that the phenomena were not industry-
The implications of IT infrastructure capability
are examined in this paper to discover the way specific.
in
which firms commence and implement business In each industry two firms were selected that
process redesign. Specifically asked is whether
* had significant market share (over 15%);
the availability of IT infrastructure impacts the
nature or speed of BPR implementation. * had completed the redesign of at least one
business process; and
* had some firm-wide IT infrastructure.
The petroleum firms are referred to as CostCo

Research Method
and LeapCo and the retail firms as StockCo and
The links between IT infrastructure and business MergeCo. The names are indicative of a major
business focus of each firm.
process redesign were examined through an
exploratory case analysis of four firms. The mul-
tiple-case design was chosen to suit the objec- Data Collection
tives of description and theory building
(Benbasat et al. 1987). Multiple case design is an Both qualitative (e.g., open ended interviews)
intensive empirical research approach suited to and quantitative (e.g., response forms with quan-
the study of emerging and complex phenomena tified responses) methods were used (Kaplan and
(Yin 1994). Duchon 1988) with multiple respondents in each

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
firm
firm to
to achieve
achievetriangulation
triangulation
of of
data
data
andand each
eachfirm
firmwere
weremeasured
measuredusingusing
the list
theoflist
23 of 23
insights.
insights. Organizational
Organizationaldocumentation
documentation(e.g.,
(e.g., firm-wide
firm-wideservices
services
identified
identified
in Broadbent
in Broadbent
et et
memos,
memos, internal
internalreport)
report)and
and
presentations
presentations
by by al.
al. (1996)
(1996)(see
(see
Table
Table
1). A
1).high
A high
number
number
of ser-of ser-
senior
senior management
managementabout
about
the
the
BPR
BPR
initiative
initiative vices
vicesinina afirm
firmindicates
indicates
a high
a high
level level
of firm-
of firm-
were
were also
alsoanalyzed.
analyzed. wide
wideITITinfrastructure
infrastructure capability.
capability.
For example,
For example,
most
mostfirms
firmswith
with
anyany
shared
shared
infrastructure
infrastructure
pro- pro-
Each
Each firm
firmhad
hada aminimum
minimum ofof
four
fourparticipants,
participants,
vide
videcorporate
corporatecommunications
communications
network
network
ser- ser-
some
some ofof whom
whomwerewereinterviewed
interviewed on on
multiple
multiple
occasions.
occasions.These
Theseincluded
includedthe
thechief
chief
information
information
vices
vicesand
andfirm-wide
firm-wide
messaging.
messaging.
However,
However,
some firms also conducted business transac-
officer,
officer, ISISmanagers
managersfrom
fromat at
least
least
twotwo
different
different
tions through EDI capability on that physical
business
business units,
units,and
anda acorporate
corporateexecutive
executive
whowho
network. In addition, some firms managed the
was
was able
able to
toprovide
providea astrategic
strategic
perspective
perspective
across
across enforcement of IT architecture and standards,
the
the firm
firmasasa awhole.
whole.InIn some
somecases,
cases,
this
this
waswas
the the
and provided a common systems development
chief
chief operating
operatingofficer
officerand
and
in in
others
others
thethe
director
director environment as a firm-wide service.
of
of Strategy.
Strategy.InIneach
eachfirm,
firm,
the
the
CIOCIO
waswas
inter-
inter-
viewed
viewed about
aboutthe
theISISarrangements
arrangements
in in
thethe
firm
firm
and and
The provision of boundary-crossing infra-
structure services: By definition, all infrastruc-
the
the decision-making
decision-makingprocess
processrelating
relating
to both
to both
ture services are shared and available to all
business
business and
andITITstrategy.
strategy.Three
Three
different
different
response
response
business units in the firm. A subset of the infra-
forms
forms were
werecompleted
completedbybythethe
CIO,
CIO,
thethe
twotwo
IS IS
structure services is identified as boundary-
managers,
managers,and
andthe
thecorporate
corporateexecutive,
executive,
followed
followed
by
by interviews
interviews(of
(ofone
onetoto
eight
eight
hours
hours
over
over
several
several crossing where they are clearly and actively
meetings)
meetings)with
witheach
eachmanager
managerto to
explore
explore
thethe integrative, supporting information flows and
issues
issues in
in more
moredepth.
depth.The
Thecontact
contacttime
time
withwith
eacheach transaction processing beyond one functional
firm
firm ranged
rangedfrom
fromthree
threemonths
months to to
nearly
nearly
three
three area. Typically these boundary-crossing ser-
years.
years. Comparable
Comparabledata
datawere
wereobtained
obtained
on on
eacheach vices are mandatory rather than optional and
firm's
firm's investments
investmentsininITIT
over
over
thethe
past
past
fivefive
years
years are used by or influence multiple IT applica-
and the rationale for their investments. The tions across the firm (see Table 1). These ser-
vices were posited as particularly important in
Appendix contains further details on the type and
sources of data gathered from the firms. achieving the integrative and "end to end"
objectives of BPR (Davenport 1993; Hammer
and Champy 1993). For example, develop-
IT Infrastructure Capabilities ment of online linkages to customers or sup-
IT infrastructure is defined as the base foundation pliers (Table 1, service 20) is a boundary-cross-
of the IT portfolio (including both technical and ing service where the boundary is the firm.
human assets), shared throughout the firm in the Taken together, these services provide a strong
form of reliable services, and usually coordinat- basis for implementing cross-business and
ed by the IS group (Broadbent et al. 1996; McKay cross-functional systems more rapidly. All
and Brockway 1989; Weill et al. 1996). The IT seven boundary-crossing services provide a
infrastructure capability includes both the techni- common and standard electronic bridge across
the boundaries, between the functional areas,
cal and managerial expertise required to provide
reliable services. Because it can be shared across business units, or firms. It is posited that firms,
boundaries and because it can enable better without these services, will experience diffi-
business processes, IT infrastructure is different culties and delays in implementing systems
from other IT investments and applications thatsupporting cross-functional reengineering
directly perform business processes in a particu- efforts due to the lack of a common systems
lar functional area or business unit. platform.
* The firm's reach and range: The business
The IT infrastructure capability of each firm was scope of firm-wide IT infrastructure can be
assessed using three measures: defined in terms of "reach and range" (Keen
1991). An extensive reach and range is illus-
* The extent of the firm's infrastructure ser- trated in Figure 1, at point A. Here the firm is
vices: The number of infrastructure services in able to simultaneously perform transactions on

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
multiple applications updating all databases investments

investments and
and
capabilities,
capabilities,
and the
androle
theofrole of
across different business units, wherever they these
thesecapabilities
capabilitiesin implementing
in implementing
BPR are
BPRnow
are now
are located. For example, in a Japanese firm compared.
compared.A A summary
summary of the
of BPR
the implementa-
BPR implementa-
with this level of reach and range, an overseas tion
tionand
andITIT
infrastructure
infrastructure
capabilities
capabilities
in eachinfirm
each firm
business unit could take an order and process is
is presented
presented in in
Table
Table
2. 2.
it through inventory, production, scheduling,
and eventually accounts receivable, while
Process
ProcessChanges
Changesandand
IT Infrastructure
IT Infrastructure
automatically updating the corporate execu- Investments
tive information system back in Japan. A large
reach and range indicates that the firm has a CostCo and LeapCo are direct competitors as
high level of IT infrastructure capability. A major refiners and marketers of petroleum prod-
small reach and range would support the send- ucts. Each has over 15% share of the domestic
ing of standard messages within a single busi- market and revenue in excess of U.S. $1 billion.
ness unit location, as indicated at point B in Although they have many similarities, the strate-
Figure 1. The shaded area indicates the aver- gic intents (Hamel and Prahalad 1989, 1994) of
age reach and range from a group of 27 firms these two firms are different, leading to different
(Weill and Broadbent 1998, p. 262). emphases in undertaking BPR. CostCo clearly
identifies the need for cost consciousness, while
The motivation for, and nature of, process LeapCo is more expansionary and ambitious in its
changes in the four firms, their IT infrastructure aims to leap ahead into new business directions,
REACH- To whom
can we easily connect?
Anyone, anywhere
....?
Customers, suppliers I
... ..
regardless of IT base
18111BIIIIIIIIT.............. I I..... I.. I.................................... .......................
Customers, suppliers with I [

the same IT base as ours
Illlllllllllll................... II I m
J I. U~~~~~~~~~~Ai
Across
Across different
different
business
business
"' " '
units abroad
..................................*****************.*. .* M ? , , , , . , , , ,, . ,, , ,. ,
------------
Across different business

units domestically
Across geographically spread

single business unit locations .r:| !k.
Within a single business :
..i&n
unii ioauUn Iraf . . .. iin.';:: .n ::i-': :
I- : ..I
Send
Send
Messages Access to
Messages Perform
Perform J
Transactions Transactions
Perform Complex
I
Information Simple Transactions on
Ex........................ample......
Ex........................ample...... i Multiple Applications
I.................&.................... ;..........................
Exampms Send Memo Check Credit :

Take Orders Process Order
Rating
RANGE- What seivices can we

share automatically and seamlessly?
I , uE
P-4a aI
Note: Shaded area represents a
164 MIS Quarterly Vol. 23 No. 2/

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
r()r
tlI
Petroleum
CostCo LeapCo StockCo

Business Customer responsiveness Provide services for mobile Flexibility to accommodat
Drivers Build relationships with customers change
suppliers Respond to all phases of the Capacity to process Kn
Cost conscious value chain information
Differentiate through quality Fast supplier link
Q)t^~~~~ ~~and service Synergy for economies of scale Expan
0
c Continuous margin increases margin
u
Motivation Reduce costs in tight market Continuing need to re
for BPR Maintain profitability costs More efficient replenishment
A Move to Customer More radical gains sought cycles Necessar
XO Responsiveness after best practice Reduce inventory cost
Rethinking of core business
Leverage infrastructure
investments
Processes Billing, Procurement, Supply Finance Services, Managing Limited focus in Premiu
Involved Other process change Investments, Developing Ordering, Stock
ongoing Systems Replenishment Manage
Implementing all new Repl
,,,vl^~~~~~~~ ~processes based on detailed
,0aS~~~~~~o ~process map
rB
!7 ' Business Reduced cost of defects Rapid developments of Faster basic stock Better use of stock, s
, Impact Improved customer focus revenue-based services replenishme
iC
0
XQg ~ More efficient processes Accelerated development of
2 business IS selected suppliers New business
XQ'0-~~~~~~ ~New business opportunities Streamlined distribution
(11
CO Time Frame All processes between All processes between One major process betwee
of Changes 1991 and 1995 1992 and 1994 1991 and 1995 1

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
-0
0
i .i 1 1^.M I k ilm _ I U.;Im , oi I

0)
Petroleum
IC
CostCo LeapCo StockCo
Major Ongoing adjustments All sy
Infrastructure Enhanced communication 1990-1991 Firm-wide expertise
Investment networks Common database development Hardw
CI
Links to sites and supplies management system
CO
PO f^~~~j3~~~~~~ ~Upgraded telecommunications Stimulated local infrastruct
X?QI~~~~~~~~ ~Support service for systems investment case
.E development
> '=Common project management
. systems
U Infrastructure Medium High Mediu
2 ' Capabilities: 15 of 23 Services 20 of 23 Services 15 of 23 Service
Number of Three boundary-crossing Seven boundary-crossing Thr
X Services services services services
Infrastructure Average High Aver

Capabilities: Reach: Medium Reach: High Reach: Hig
Reach and Range: Low Range: High Range: Low
Range
Role of IT infrastructure and systems New IT infrastructure installed Firm-wide infrastructure New IT
X Infrastructure capabilities adequate for Process changes leveraged enabled process change to provide
_I O:Q ~ simplification of existing from the infrastructure commence radical
"' " processes capability Inadequate BU infrastructure
a fccapability presented
implem
.L Q- Impact of IT NEUTRAL ENABLING DELAYED and HINDE

- U Infrastructure Existing capability extended Business changes utiliz
_ Capabilities infrastructure capabilities capability needed
'^<,fi;t;=r~~~~~~~~~~~ U *?~~~~~~~implem
zi><oj~~~~~~~~~~~~~~~~~~~~~~~~~~ 2 ~~linke

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
articulating
articulatingthe theneed
need
forforincreasing
increasing participation focused initially on one major, but disparate,
participation
in
in customers'
customers' value
value
chains.
chains. process motivated by positioning and a "crisis of
opportunity" as opposed to a "crisis of survival"
StockCo
StockCoand andMergeCo
MergeCo arearebothboth
nationally
nationally
oper- oper- (Ramcharamdas 1994).
ating
atingretail
retailfirms;
firms;however,
however, theythey
differdiffer
in size,
in size,
scope,
scope,and andproduct
product range.
range.StockCo
StockCois a large
is a large In the early 1990s, CostCo took a more business-
retailer
retailerandandoperates
operatesseveral
several
retail
retail
business units units focused approach to its IT investments. Major
business
with
with chains
chainsofofboth
both
premium
premium and and
low cost cost stores. investments at the corporate level were of an
low stores.
In
In this
thisstudy,
study, BPR
BPRwaswas
examined
examinedby focusing
by focusing
on on incremental nature, particularly aimed at
the
the stock
stockreplenishment
replenishment cycle
cycle
in thein Premium
the Premium strengthening communications networks among
Stores
Storesbusiness
businessunit
unit
that
that
has has
revenue
revenue
of over
of U.S.
over U.S. commercial, retail, and manufacturing sites and
$1
$1 billion.
billion.The
Thebusiness
business
drivers
drivers
of StockCo
of StockCo
are are suppliers. CostCo has a robust network with
the
the increasing
increasinginformation
informationneeds
needs
of the
ofretail numerous LANs in place at its head office, in
the retail
industry,
industry,flexibility
flexibility
to accommodate
to accommodate change,
change,
large cities, and other major sites. "About 2,000
linking
linkingwith
withsuppliers,
suppliers,
economies
economies
of scale,
of scale,
and and
PC users have whatever multihost connectivity is
margin
marginincreases.
increases.MergeCo
MergeCohas has
a turnover
a turnover
of of required for their business needs. We have
over U.S. $450 million with over 300 stores moved from computer-centric to network-centric
nationally in the leisure and consumer markets. computing," noted the CIO. Business units uti-
MergeCo aims to be a dynamic speciality retailer lized these networks as a basis for a new distrib-
developing with, and responding to, the chang- utorship, retail and electronic funds transfer, and
ing needs of customers. To be successful, point of sale (EFTPOS) systems. At the com-
MergeCo depends on anticipating changing cus- mencement of the BPR, there was a concern
tomer needs, understanding buying patterns, and about the long term suitability of the IT infra-
modifying their product range accordingly with- structure of CostCo. IT infrastructure investments
out increasing costs. were argued on the basis of clear cost savings, or,
if part of the customer interface, delivery of high-
CostCo er levels of customer service.
The trigger for CostCo's BPR was the need to dra-

LeapCo
matically reduce costs in order to maintain prof-
itability in a shrinking market. In July 1991,LeapCo's motivation for BPR followed an
CostCo commenced a BPR activity, named East- improvement program in the late 1980s to iden-
West. "We were convinced that we could make tify best practice performance in their refineries.
considerable gains through taking a process LeapCo implemented a program of improve-
rather than a functional approach to the busi- ments resulting in the reorganization of opera-
ness," recalled the BPR project director. "Our ini- tions, reduced layers of management, shorter
tial goal was to focus on the order management communication chains, and elimination of dupli-
cycle which is a microcosm of everything that cate processes. In 1992, the benefits of the
we do." The order management cycle included improvements program were reflected in a 23%
handling customer orders, billing and payments, increase in production at the refineries, but
and fulfilling customer orders. In the early 1990s, LeapCo's financial situation continued to deteri-
each of these areas was treated as a separate orate. Major inefficiencies remained, and part of
business process, each handled by a different the reason was that "the organization failed to
part of the business unit. The processes were fundamentally change the way we do business,"
completed sequentially, and if customers had in the view of the director of Corporate Services.
problems in any part of the cycle, they had to The acquisition of crude oil, refining, estimates of
identify which group within CostCo was dealing refined products needed, sales to commercial
with that part of the order management cycle. outlets, and services to consumers at retail out-
East-West was seen as a project that would better lets were each treated as discrete business
integrate CostCo's Australian and New Zealand processes with their own planning approaches,
oil businesses that had recently been colocated timeframes, customer set, and underlying sup-
in the firm's reporting arrangements. CostCo port systems. While each part of the business

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
had
had made
madeefficiency
efficiency gains,
gains,
further
further
gainsgains
and a and a EDI/QR
EDI/QR to to dramatically
dramaticallyimprove improveefficiency
efficiency and
and
more
more radical
radicalapproach
approachwere
were
seenseen
as necessary.
as necessary.
A A competitiveness
competitiveness in inlocal
localproduction
productionand anddelivery.
delivery.
business
businessprocess
process reengineering
reengineering groupgroup
was was The focusfocus was
was thetheorder
orderreplenishment
replenishmentcycle cycle
formed
formedand andcharged
chargedwith
with
modeling,
modeling, challenging, that,
challenging, that, at
at the
the time,
time,consisted
consistedof ofa aseries
seriesofofdiscrete
discrete
and
and renewing
renewingallall
business
businessprocesses
processes
to ensure
to ensure processes
processes with
with many
manystepsstepsandandauthority
authority levels.
levels.
the
the firm
firmwaswasmanaged
managedin the
in the
mostmost
efficient
efficient
and and For example,
example, sales
salesstaff
staffmade
madeestimates
estimatesofof instore
instore
effective
effectivemanner
manner across
across
all processes.
all processes.
LeapCoLeapCo requirements
requirements based basedlargely
largelyon onmanual
manualcountscounts
took
took aablank
blanksheet
sheetapproach
approach aimed
aimed
at imple-
at imple- and historical
historical rules
rulesof ofthumb.
thumb.HeadHeadoffice
officebuying
buying
menting
mentingnew newprocesses
processes
across
across
all major
all major
business
business staff
staff for
for the
the specific
specificmerchandize
merchandizearea areareviewed
reviewed
areas.
these
these estimates
estimates based
basedon ontheir
theirpersonal
personalknowl-
knowl-
edge
edge and
and experience,
experience,and andthese
theseestimates
estimates were
were
In the late 1980s, LeapCo embarked on a major
then
then further
further reviewed
reviewedby bysenior
seniorcategory
category man-
man-
IT infrastructure investment program. At the time,
the motivation was a belief that success in the agers.
agers. Suppliers
Suppliers werewerecontacted
contactedand andgiven
given rela-
rela-
tively
tively open-ended
open-endedtime timeframes
framesfor forsupply.
supply. Stock
Stock
1990s would require better deployment of
was handled
handled several
severaltimes
timesatatwarehouses,
warehouses, distri-
distri-
emerging technologies, particularly telecommu-
bution
bution centers,
centers, and andstores.
stores.For Forevenevenstandard
standard
nications. "Investing in IT infrastructure in the
stock,
stock, such
such asas underwear
underwearand andhosiery,
hosiery,the themini-
mini-
late 1980s was a leap of faith," recalled the CIO,
mum
mum resupply
resupply period
periodwas wasover
over3030days.days.While
While
"but the competitive edge we gained must con-
StockCo
StockCo started
started BPR
BPRwith withjust
justone
onemajor
major process,
process,
tinue to be exploited, otherwise the investment
their
their goal
goal was
was ambitious
ambitiousininterms termsofofcompletely
completely
will have failed." The investment involved imple-
rethinking
rethinking their
theirelongated
elongatedreplenishment
replenishment cycle.
cycle.
menting a common database management sys-
tem, an upgrade of the telecommunications plat- As aa result
result ofof firm-wide
firm-wideand andbusiness-unit
business-unit plan-
plan-
form, the creation of a support service for staff ning
ning inin StockCo
StockCo in inthethelate
late1980s,
1980s,a aset setofof key
key
developing strategic systems, and the develop- requirements
requirements for forIT ITwere
werearticulated
articulateddrawing
drawing onon
ment of a common project management system. StockCo's
StockCo's business
businessdrivers.
drivers.These
Theserequirements
requirements
The IT infrastructure investments were made included
included
ahead of the current business strategies as these flexibility,
flexibility, connectivity,
connectivity,synergy
synergyfor
for
were "really still evolving." The investments economies
economies of
of scale,
scale,growth
growthwithout
withoutcorre-
corre-
"facilitated our more rapid development of rev- sponding
sponding cost
cost growth,
growth,reliability
reliabilityand
andven-
ven-
enue-based services and accelerated the devel-
dor independence,
independence,centralized
centralizedmanage-
manage-
opment of business systems," according to the IS ment where this would result in lower
manager in the Fuels business. Technology was costs, and positioning for new services and
viewed as a key factor in providing a flexible new technologies.2
base upon which new business opportunitiesStockCo identified a communications backbone
were created.
accessible by all businesses as critical for future
retail systems. In describing StockCo's situation,
StockCo the CIO explained:
In the late 1980s and early 1990s, StockCo's We were an early mover into EDI, and the
Premium Stores business found it increasingly Corporate Information Systems (CIS) group
difficult to compete with mass merchandizers provided the initial focus, expertise, and
engaging in "market creep" and with the entry of contacts for EDI for the business units. Our
specialist stores at the top end of their market. In communications network investment pro-
July 1991, the Premium Stores business unit start- vided the infrastructure for rapid and rea-
ed a pilot of EDI with selected trading partners. sonably consistent EDI implementation
"We realized the importance of linking EDI ini- across the businesses.
tiatives to Quick Response (QR), and then saw The benefits of investment in IT infrastructure
our task as redesigning the replenishment cycle were related to the cost savings from sharing as
from sale through to restocking," explained the
manager of the implementation team. The aim 2Extract from StockCo's IT Infrastructure Planning
was to utilize the information provided by documentation.
168 MIS Quarterly Vol 23 No. 2/June 1999

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
well
well as
as flexibility
flexibilityrequired
requiredtotomeet
meet
thethe
future
future chains and
and were
were expanding
expanding geographically
geographically
retail
retail environment.
environment.According
According toto
the
the
CIO,
CIO,
"We"We in the consumer
consumer electronics
electronics areas.
areas.
value
value flexibility
flexibilityasasititprovides
providesusus
with
with
an an
advan-
advan-
tage
tage in
in the
theretail
retailindustry
industryasas
well
well
as as
lowering
lowering
thethe The CFO emphasized
emphasized the
the importance
importance of
ofinfor-
infor-
mation:
cost
cost of
of doing
doingbusiness."
business."Firm-wide
Firm-wide infrastructure
infrastructure
provided
provided aa backbone
backboneservice
service
toto
bebe
utilized
utilized
by by We needed information to run the business
each
each business
businessasasititsaw
sawfit.
fit. and to deliver that information we needed to
invest heavily in information technology.
Changes in the business computer systems
MergeCo were aimed at achieving that vision.
MergeCo's commitment to IT infrastructure in
MergeCo's acquisition of two additional store
1991 was in response to the need for accurate
chains and their integration of the acquired and
information in an expanded business. While the
existing businesses almost doubled its size and
initial investment focus was survival and man-
presented major management challenges. The
agement control, this shifted with the realization
chief financial officer explained that
of the business benefits to be gained from exten-
sive and detailed customer and product informa-
virtually all our business processes were tion at the Stock Keeping Unit (SKU) level, (i.e.,
manual, labor intensive, and prone to inac-
details of each unique item sold including color,
curacies. We had no way of gaining accu- size, and style). MergeCo's investments in IT
rate and timely information from stores to
infrastructure capability were substantial.
manage and control the business. We did
know our acquired businesses were per- Summary
forming poorly, but we had a six-week delay
The four firms differed significantly in the initial
in that information getting to us.
breadth of their process changes. While CostCo
and StockCo commenced with one process,
All stock assessments, forward purchasing of new
LeapCo and MergeCo decided to design and
items, orders, and replenishment were done
implement many new processes across the busi-
manually. Invoice details were keyed into nesses. CostCo differed from the other three firms
MergeCo's basic financial software on a batch
by having relatively modest ambitions regarding
basis. MergeCo aimed to redesign all processes
size of the changes sought. CostCo sought to sim-
throughout the firm concurrently with the imple-
plify business processes, while StockCo, LeapCo,
mentation of their first significant investments in
and MergeCo sought radical change in one or
IT infrastructure and applications. "We recog-
more business processes.
nized the urgent need for an IT infrastructure to
provide the basis for new retail systems and the
concurrent need to redesign our processes across Extent of IT Infrastructure
all businesses." From an IT infrastructure per- Capabilities
spective, MergeCo was a "greenfield" site and
thus had no legacy systems to integrate. All four firms provided a substantial firm-wide
infrastructure capability. When compared to a
In 1991, MergeCo commenced major investment sample of 27 firms (with an average of 16 IT
in information technology, particularly IT infra- infrastructure services; Weill and Broadbent
structure.The CIO emphasized the link between 1998, p. 94), the four firms in this study each had
MergeCo's vision and the IT investments:
at least 15 services and at least an average reach
and range (see Figure 1). Each firm had the abil-
In 1990, the Board and executives devel- ity to send electronic messages to all business
oped a vision of where they wanted the firm units and the ability to perform transactions
to be. They accepted that integral to that across business units for at least one application.
vision was information. We had expanded The extent and nature of each firm's infrastruc-
through the acquisition of two national retail ture services is presented in Table 3.

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
CostCo LeapCo StockCo MergeCo Prototypical Firm-Wide IT Infrastructure Services

firm-wide communication network services I
3 Recommend
Recommend standards
standards for
for atatleast
leastone
onecomponent
component
of IT architecture
architecture (e.g.,
(e.g., hardware,
hardware,operating
operating
systems,
systems, data,
communications)
0 0 0
4 Implement
Implement security,
security, disaster
disasterplanning,
planning,andandbusiness
business
recovery
recovery services
services for
for firm-wide
firm-wideinstallations
installationsand
and
applications
applications
* 0 0 0
5 Provide
Provide technology
technology advice
advice and
andsupport
supportservices
services
* 0 0 0
6 Manage,
Manage, maintain,
maintain, support
support large-scale
large-scaledata
data
Drocessina facilities (e.a.. n ain-frame operations)
8 Perform
Perform IS
IS project
project management
management
0 0 0
9 Provide
Provide data
data management
managementadvice
adviceand
andconsultancy
consultancy
services
0 0 0
10 Perform IS plannina for business units
-:; ; 0;000;- jjj0 00t l:0: 0i :4171 Enforce IT arictur e and st
0 0
12
12 Manage
Managefirm-wide
firm-wide oror
business-unit
business-unit
workstation
workstation
networks
networks(e.g.,
(e.g.,LANs,
LANs,POS)
POS)
13
13 Managing
Managingandandnegotiating
negotiatingwith
with
suppliers
suppliers
and and
outsourcers
0
14 Identify and test new technologies for business
purposes
*
15 Develop business-unit specific applications (usually
on a chargeback or contractual basis)
* 0 0
16 Implement security, disaster planning and recovery
?? -'t
-'trruviue
rruviueeurlrliugy
eurlrliugy
euucaiurl
euucaiurl
services te.y.
services te.y.
training)
23 Provide multimedia operations and development
(e.g., video-conferencing)
Note: Shaded services are boundary crossing.

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
The
The firms
firms differed
differedinintheir
theirinfrastructure
infrastructure
capabili-
capabili- The
The Role
Role of
of IT
IT Infrastructure
Infrastructure
ty in
in the
the following
followingways:
ways:
Capabilities
Capabilities in
in Implementing
Implementing
* CostCo
CostCo had
hadaasubstantial
substantiallevel
levelofof
ITIT
infrastruc-
infrastruc- BPR
BPR
ture
ture capability
capabilitywith
with1515ofofthe
the2323
services
services
avail-
avail-
The
The key
key features
featuresof ofthe
theprogress
progressofofBPR
BPR imple-
imple-
able,
able, and
and with
withreach
reachand
andrange
rangecomprising
comprising an an
mentation,
mentation, the
the extensiveness
extensivenessand
andtime
timeframe
frameofof
"anyone,
"anyone, anywhere"
anywhere"reach,
reach,but
butlimited
limited
range
range
the process
process changes,
changes,and
andthe
theinteraction
interaction
between
between
with
with the
the ability
abilityto
toperform
performonly
onlysimple
simpletrans-
trans-
BPR
BPR and
and infrastructure
infrastructurecapabilities
capabilitieswere
wereexam-
exam-
actions
actions across
acrossaasmall
smallnumber
numberofofapplications.
applications. ined
ined (see
(see Table
Table 2).
2).The
Thesalient
salientfeatures
featuresofofeach
each
* LeapCo
LeapCo had
hadextensive
extensiveITITinfrastructure
infrastructurecapa-
capa- firm's
firm's BPR
BPR implementation
implementationininthe
thecontext
context
ofof
their
their
bilities
bilities with
with aahigh
highnumber
numberofofinfrastructure
infrastructure IT infrastructure
capabilitiesare
arenow
nowcompared.
compared.
services
services (20)
(20) and
andan
anabove
aboveaverage
averagereach
reachandand
range
range with
with the
theability
abilitytotoperform
perform complex
complex CostCo
transactions
transactions on onmultiple
multipleapplications
applications
across
across
business units.
The first phase of East-West, from mid-1991 to
early 1992, was primarily a learning exercise for
* StockCo had substantial IT infrastructure capa- CostCo, with the identification of the potential
bilities with 15 of the 23 services available.
business benefits from reconfiguration of the
StockCo differed from CostCo in having cen- order management cycle. From March to
tralized negotiations with information technol- September 1992, a small team further examined
ogy suppliers and the central identification and process approaches concurrently with a detailed
testing of new retail technologies. StockCo's study of the capabilities of the firm's current sys-
reach was high, but range was limited in the tems and infrastructure. In Phase 3 (October
type of transactions that could be processed 1992 to April 1993), a high level process map
across multiple applications. was completed. CostCo found it essential to have
* MergeCo had a high level of IT infrastructure agreement on a high level process map before
capability with extensive infrastructure ser- the redesign of specific processes began. The
vices (22). MergeCo had a higher than average billing process became the focus of the redesign
reach and range, including the ability to per- effort and detailed plans were developed to
form multiple transactions across all applica- reconfigure billing arrangements and instigate
tions across all business units.
cross-functional management approaches for
* All four firms provided three of the seven that process. The new billing process was imple-
boundary-crossing infrastructure services with mented, with the cost of the process being sub-
only LeapCo and MergeCo having all seven. stantially reduced, and the time taken to handle
customer queries reduced from three days and
The infrastructure services that differentiate the four handovers to three minutes (maximum) with
two groups of firms are enforcement of IT architec- no handovers. CostCo then commenced analysis
ture and standards, electronically provide man- of the procurement process and the refining sup-
agement information, firm-wide data manage- ply process. CostCo had redesigned almost all of
ment, and development of a common systems its major processes four years after commencing
development environment. These boundary- BPR and was well advanced in implementation.
crossing services exist in LeapCo and MergeCo CostCo's changes focused largely on existing
and not the other two, thus enabling cross- processes and the firm made incremental
boundary applications to be implemented more changes to its IT infrastructure. During the billing
quickly and easily in LeapCo and MergeCo than redesign process, "business managers found that,
in CostCo and StockCo. The role of these IT infra-
surprisingly, the changes they sought were possi-
structure capabilities in contributing to BPR ble with the existing systems infrastructure,"
implementation is described in the next section. recalled the BPR project director. Information
MIS Quarterly Vol 23 No. 2/June 1999 171

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
about
about additional
additionalsystem
system
features
features
had had
beenbeen
lost lost applications
applications such
such
as petrol
as petrol
pricing.
pricing.
These cross-
These cross-
from
from corporate
corporatememory
memory duedue
to staff
to staff
cuts,cuts,
lack of
lack of functional
functional infrastructure
capabilities
providedprovided
a a
documentation,
documentation,andand movement
movement of staff.
of staff.
CostCo's
CostCo's powerful
powerful base
base
forfor
LeapCo's
LeapCo's
highlyhighly
cross-func-
cross-func-
modest
modestfirm-wide
firm-wideIT IT
infrastructure
infrastructuredid not
did hinder
not hinder tional
tionalBPRBPRinitiatives.
initiatives.
In theInmid-1990s,
the mid-1990s,
LeapCo LeapCo
the
the BPR.
BPR. merged
mergedwith witha competitor.
a competitor.
Although
Although
LeapCo was
LeapCo was
the
thejunior
juniorpartner
partner
in the
inmerger,
the merger,
its systems
its systems
were were
LeapCo implemented
implemented throughout
throughout
the merged
the merged
companycompany
and
andprovide
providethethe
basisbasis
for further
for further
mergingmerging
of busi- of busi-
LeapCo developed a detailed process map link- ness processes.
ing 17 major processes grouped into three areas:
management, operational, and organizational
infrastructure. These processes were divided into StockCo
over 200 subprocesses. The process mapping
activities drew on, and benefited from, expertise In mid-1992, the Premium Stores business of
gained in developing a detailed business infor- StockCo completed the first stage of its EDI/QR
mation model as part of the previous IT infra- initiative, a project ultimately designed to con-
structure implementation. The process of devel- siderably shorten the stock replenishment cycle
oping information systems was redesigned with a and to reduce costs associated with holding
fourfold increase in productivity. inventory. Successful implementation of EDI/QR
required a major redesign of a key business
Redesign of the customer financial service process in Premium Stores. However, the further
process provides an example of the nature of the extension of the project stalled as the infrastruc-
changes in LeapCo. This process was completely ture of the Premium Stores group was unable to
redesigned through the development of a cope with the new requirements. The initial busi-
Customer Service System (CSS). Customers using ness case for the EDI/QR initiative did not con-
the CSS pay for a variety of purchases with a sider adequately the infrastructure capabilities
wide choice of credit and debit cards. LeapCo
necessary for implementation, particularly the
earns a significant and growing amount of rev- complete consistency and intensity of data man-
enue from their franchisees and card providers
agement required across all systems. Multiple
for the use of the CSS. This system was extended sales, financial, ordering, and distribution sys-
in the mid-1 990s to include acceptance of cards tems dealt with different aspects of triggering and
from another major petroleum retailer, leading to completion of the stock replenishment process.
possible future alliances. LeapCo captures details The current infrastructure, with its lack of data
of sales by petrol pump and transmits the data via consistency, multiple systems, and lack of pro-
the network to the central mainframe where the
cessing capacity at store level presented barriers
data are analyzed. In the very price-volatile to implementing all phases of the redesigned
petroleum market, the system has enabled process. Business managers did not at first appre-
LeapCo to revise its retail petrol pricing process ciate the significant ramifications of the planned
by monitoring petrol pump prices and respond- process changes for their systems (for example, to
ing to petrol discounting by other oil companies. process tens of thousands of products at the
The changes LeapCo made to its business stock-keeping unit (SKU) level for the first time).
processes were dramatic and innovative both for The lack of cross-functional consistency and pro-
the firm and the industry. LeapCo's extensive cessing capacity hindered implementation. The
cross-functional and cross-business unit IT infra- replenishment cycle was reduced from over 30
structure capabilities such as the electronic pro- days to less than 20 days with some incremental
vision of management information (Table 3, ser- changes to both systems and work practices.
vice 17), firm-wide data management (service However, the ideal of less than five days could
not be achieved until extensive infrastructure
19), and development of a common systems
development environment (service 21) provided investments were implemented along with the
the building blocks for faster development of new business processes. This included renewal
new and cross-functional business processes and and integration of multiple systems, a new focus

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
on
on consistent
consistentdata
data
management,
management, and an
and
increase
an increase and greater stock turns. It has also assisted
of
of data
dataprocessing
processingcapacity
capacity
at the
at store
the store
level. level. with our staffing at the local level. Staff can
be more effectively rostered, based on our
StockCo's
StockCo'sinfrastructure
infrastructure
required
required
extensive
extensive known peak demand periods.
upgrading
upgradingtoto
provide
provide
thethe
basisbasis
for successful
for successful
implementation
implementation of of
a redesigned
a redesigned process. Electronic links with suppliers are becoming
process.
StockCo
StockCosubsequently
subsequently developed
developed new techni- increasingly important to improve inventory con-
a newa techni-
cal
cal plan,
plan,completed
completed extensive
extensive
data data architecture trol and reduce buying and storage costs.
architecture
work,
work,including
including
thethe
identification
identification
of core
of data
core data The role of IT infrastructure was initially envis-
elements
elementsandand
data
data
dictionary
dictionary
definitions.
definitions.
A newA new
aged as facilitating business process changes.
generation
generationofof
store-level
store-level
technology
technology
is now
is now However, this moved to transforming the business
required
requiredtotogather
gather
andand
process
process
data data
fromfrom
stores stores
to to
processes as the new systems were planned and
headquarters.
headquarters. TheThe
delays
delays
in the
in the
implementation
implementation
implemented. MergeCo's infrastructure capabili-
have
have highlighted
highlighted to to
StockCo's
StockCo's
business
business
execu-execu-
ties were extensive and provided the base for rad-
tives
tivesthe
theintimate
intimate
linklink
between
between
the demands
the demands
of of
ical change to core business processes.
radical
radicalnew
newbusiness
businessprocesses
processes
and IT
andinfrastruc-
IT infrastruc-
ture
ture capability.
capability.This
This
linklink
was was
not appreciated
not appreciated
before
beforethetheprocess
processchange
change
stalled.
stalled.
Subsequent
Subsequent
infrastructure business cases have received
IT Infrastructure Capabilities
strong business support, particularly after
StockCo's competitive position declined further. Constraining and Enabling BPR m
The role of IT infrastructure in the implementa-
tion of BPR in the four firms is summarized here.
MergeCo
IT infrastructure capabilities played one of three
MergeCo radically changed all of the firm's busi- roles:
ness processes in less than two years from almost
completely manual processes to completely inte- * In CostCo, the infrastructure assisted simplifi-
grated IT-supported processes. Information from cation and streamlining of business processes
point-of-sale and management information sys- and did not hinder redesign.
tems provided the basis for completely new
* In StockCo, parts of the infrastructure provided
retailing and management strategies. All buying
both a sophisticated network and the capacity
was centralized, which gave the firm consider-
to commence business process redesign.
able power in price negotiations and in the qual-
However, other parts of the infrastructure hin-
ity of products selected.
dered implementation, extending the time and
Customer information allowed constant tracking initially reducing the scope of the changes that
of buyer behavior and provided the ability to pre- were possible. For example, StockCo's lack of
dict trends in the marketplace. Stores were the boundary crossing service "Enforce IT
redesigned to meet customer and product needs architecture and standards"(Table 3, service
that were identified using the higher quality 11) resulted in no data consistency across
information available to management. The functions. This inconsistency meant that much-
nature of work undertaken by store managers needed data about what was selling could not
changed drastically, freeing up to two thirds of be readily integrated with ordering and logistics
their time for customer-related and selling activi- systems. Development of a data architecture
ties. As the chief operating officer explained, was required to provide a foundation for cross-
functional systems that could then process and
Our store managers used to spend about
exchange data across systems.
one-third of their time on inventory and
order management and another third on * In LeapCo and MergeCo, IT infrastructure pro-
administration. These are now handled cen- vided building blocks of capability and stimu-
trally with less paperwork, more efficient lated and enabled implementation of radical
audit control of stores, reduced inventory, new business processes. Extensive boundary-

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
crossing
crossinginfrastructure
infrastructureservices
services
andand
highhigh
reach
reach extensive BPR
BPR had
had infrastructure
infrastructure range
range that
thatat
at
and
and range
rangeenabled
enabledspeedier
speedierimplementation
implementationof of least enabled
enabled complex
complex transactions
transactions across
across
cross-functional
cross-functionaland
andcross-business
cross-business
processes.
processes. multisite business
business units
units and
and in
in one
one firm,
firm,
The
The experiences
experiencesofof
these
these
four
four
firms
firms
highlight
highlight extended to
to multiple
multiple business
business units.
units. This
This
extensive range
range supported
supported BPR
BPR across
across bound-
bound-
aspects
aspects of
ofthe
therelationship
relationshipbetween
between
IT infrastruc-
IT infrastruc-
aries, and it
it is
is posited
posited that
that this
this is
is an
an important
important
ture
ture and
andBPR.
BPR.The
Thescope
scope
andand
depth
depth
of process
of process
changes
changeswere
weregreater
greaterin in
thethe
twotwo
firms
firms
withwith
moremore
aspect of infrastructure
infrastructure capability
capability to
to enable
enable
extensive
extensiveinfrastructure
infrastructure capability.
capability.
These
These
experi-
experi-
BPR. Browsers
Browsers such
such as
as Netscape
Netscape are
are now
now
being tentatively
tentatively used
used to
to access
access multiple
multiple data-
data-
ences
ences identify
identifythe
therole
role
of of
IT IT
infrastructure
infrastructure
as as
bases of different
different structures
structures and
and architectures.
architectures.
potentially
potentiallyeither
eitheranan
implementation
implementation barrier
barrier
or or
enabler to BPR. As browser
browser technology
technology advances,
advances, the
the expec-
expec-
tation is that some of the technical barriers to
The following conclusions are drawn from the increasing infrastructure range will disappear.
analysis of the firms:
1. All four firms had infrastructure capabilities 4. Two different types of BPR were identified:
that allowed implementation of some type of
process simplification and process innova-
BPR. All firms had a substantial set of infra- tion. Process change based on simplification
of existing processes required at least a medi-
structure services, including communication
um level of infrastructure services and a reach
networks, standards for at least one compo-
nent of IT architecture, and management of
and range suitable to provide some of the
cross-business and cross-functional systems
some firm-wide applications and databases
(see Table 3). All firms also had some form of that BPR typically requires. The implementa-
online or EDI linkage to suppliers or cus-
tion of radically redesigned processes,
tomers (Table 3, service 20). process innovation (Davenport 1993;
Stoddard and Jarvenpaa 1995) was facilitated
2. All four firms had experience in creating by extensive IT infrastructure capabilities with
boundary-crossing capabilities. Both infra- a high number of infrastructure services and
structure and BPR are cross functional in high reach and range extending across func-
nature and thus have natural synergies. Both tions and business units. Businesses were able
require a management perspective that is to integrate their processes through the ability
broader than one function or one business. to perform complex transactions across the
This perspective is evidenced by designing firm. This conclusion is illustrated by exam-
and funding IT infrastructure services such as ples from the firms:
the firm-wide electronic provision of manage-
ment information (Table 3, service 17), the The corporate IS group in StockCo laid the
enforcement of IT architecture and standards foundation for extensive infrastructure capabil-
(service 11), and a reach and range which ity through its communications infrastructure
enables the performance of complex transac-
investments in the late 1980s. This provided
tions across multiple business units. The con- the initial capability for the StockCo business
clusion is that the boundary-crossing services
units to commence business process change in
(shaded areas of Table 3) are particularly the early 1990s. Premium Stores drew on this
communications infrastructure to commence
important in enabling BPR. It is posited that
the lack of such infrastructure services will be implementation of EDI/QR aimed at substan-
a potential barrier to implementation of BPR.
tial changes to the replenishment cycle. The
successful implementation of the changes
3. Infrastructure range that crosses business could not be achieved until major aspects of
unit boundaries is important for BPR. The the business unit's IT infrastructure were rede-
four firms studied all had extensive infrastruc- veloped. The time delay meant that even more
ture reach and could generally send messages radical and extensive changes to IT infrastruc-
and access stored data across that reach. ture were eventually necessary due to
However, the firms that completed more StockCo's worsening financial situation and

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
Broadbent, Weill, & St. Clair/lT Infrastructure
the
theadvances
advancesmademade
by competitors.
by competitors. teria
teria for
StockCo's StockCo's forradical
radical(as(as
opposed
opposed
to routine)
to routine)
inno-inno-
desired
desired process
process
innovation
innovation
was limited
wasto limited
sim- to vation
vation
sim- (Nord
(Nordand
andTucker
Tucker
1987)
1987)
in that
in that
both both
are are
plification
plification untiluntil
the business
the business
unit's IT infra- new
new to
unit's IT infra- tothe
thefirms
firms and
and
require
requiresignificant
significant
structure
structure was was
redeveloped.
redeveloped.
Process innovation changes
changesin
Process innovation inthe
thebehavior
behaviorof employees
of employees and in
and in
was
wasonlyonly
possible
possible
after the
after
BU infrastructure
the BU infrastructure the structure of the firms. The less radical
was in place. approach of process simplification can offer
LeapCo and MergeCo undertook major firms the potential to capture some of the per-
changes to their IT infrastructure before or dur- formance advantage while minimizing risk
ing BPR. The infrastructure played a key role in factors (Craig and Yetton 1992). One of these
their ability to implement innovative process risk factors is significant further investment in
IT infrastructure.
changes as IT infrastructure provided the
building blocks for transforming processes. 5. Process simplification requires less infra-
LeapCo invested in IT infrastructure in the late structure capabilities because the process
1980s as a "leap of faith" driven by strategic changes are limited in scope. In our examples
intent and a belief that business in the 1990s
of process simplification, the supporting infor-
would require more effective use of IT. mation systems applied to only a limited
LeapCo's BPR exploited their infrastructure range of data types and involved a small num-
capability via innovative process change. For ber of applications, thus putting less demands
MergeCo, the IT infrastructure investment was on the IT infrastructure. The number of appli-
initially seen as a matter of business survival. cation system interface changes required to
Without the infrastructure investment, man- integrate different functions were limited.
agers lacked the controls needed for basic While still complex to implement, they could
information to manage an expanded business. be accomplished within the scope of a single
The implementation of MergeCo's IT infra- application maintenance project.
structure interacted with BPR initiatives, thus
enabling innovative process changes. 6. Process innovation requires more infrastruc-
This conclusion is consistent with studies of ture capabilities because the process changes
are more pervasive across the firm.
the nature of BPR implementation. Less than
Implementing process innovation involves
half of those undertaking BPR consider that
more extensive agreements about architecture
they are undertaking radical innovation (Butler
and standards, a greater range of data to be
1996; Caldwell 1994). In some instances,
processed, a larger number of applications,
there is both innovation and simplification in
and depth of consistency in work practices
the one firm (Chita 1996) with "simplification across functions and/or businesses. These
only" accounting, in different studies, for
capabilities are reflected in the seven bound-
between 28% (Butler 1996) and 58%
ary-crossing infrastructure services (shaded in
(Caldwell 1994) of BPR initiatives. In a process
Table 3) that LeapCo and MergeCo had in
innovation approach, the business is analyzed
place, only three of which were in place at
to determine what the business processes CostCo and StockCo. Process innovation
should be and a new process map constructed
requires a larger reach and range, particularly
(Hammer and Champy 1993, p. 118). A
the capability to process complex transactions
process simplification approach is more limit-
(i.e., involving multiple system platforms)
ed in scope, often focusing initially on one
across a single business unit, across multiple
major existing process and areas touching this
sites, and across multiple business units.
process. The change tactics in process simpli-
fication are more likely to be evolutionary,
7. Infrastructure capability has an impact on
while those in process innovation would be
successful BPR implementation. LeapCo and
expected to be revolutionary (Stoddard and MergeCo did not encounter significant IT infra-
Jarvenpaa 1993). structure implementation barriers in their BPR
Both the process simplification and processimplementation. They were able to dramati-
innovation observed in this study meet the cally
cri- redesign business processes and imple-

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
ment
mentthose
thosechanges.
changes.
There
There
is also
is evidence
also evidence * The
The findings
findingswere
werebased
basedonona alimited
limited
number
number
that
that the
thecapabilities
capabilitiesof the
of the
infrastructure
infrastructure
facil- facil- of firms
firms studied
studiedover
overa alimited
limitedperiod.
period.
itated
itatedmore
moreradical
radical
changes.
changes.
CostCo's
CostCo's
aspira-
aspira- * The
The difference
differencein inup-front
up-frontandand total
total
costs
costs
of of
tions
tionsfor
forBPR
BPRwere
werelimited,
limited,
and these
and these
aspira-aspira- providing
providing IT
IT infrastructure
capabilities was
wasnot
not
tions were achievable with incremental addressed.
addressed. However,
However,there
thereisisevidence
evidence that
that
changes to their IT infrastructure. StockCo's more more extensive
extensiveinfrastructure
capabilities
BPR aspirations were thwarted by the limita- require require considerably
considerablyhigher
higherlevels
levelsofof
IT IT
invest-
invest-
tions of the IT infrastructure in place, and their ment over time (Keen 1991; Weill and
implementation stalled. Broadbent 1998).
* The paper focused on the IT issues and did not
This conclusion is supported by longitudinal address the other factors necessary for imple-
work by Stoddard and Jarvenpaa (1995) clari- menting BPR. Success in the redesign effort
fying the two stages of BPR and the different requires many other changes including roles
approaches used: i.e., revolutionary vs. evolu- and responsibilities, incentives, organizational
tionary. The first stage is the design or blue- structure, and skills (Hall et al. 1993).
print for change and the second stage is the
implementation of those plans. The research
presented in this paper is consistent with
their findings in emphasizing the role of ITManagement Implications
infrastructure as an enabler or constraint in
implementation. Their observations can be The relationship between IT infrastructure and
extended to suggest where the design was business process redesign holds some important
innovative; infrastructure can be one of the implications for managing IT investments. These
barriers that then requires a more evolution- can be described from two viewpoints: that of
ary implementation. the BPR champion and that of the information
systems executive.
Summary Implications for Business Process

This work illustrates that firms with an extensive Redesign Champions
set of infrastructure capabilities, such as evident Successful process innovation makes many
in LeapCo and MergeCo, experience fewer tech- demands on a firm, including its IT infrastructure
nological barriers to BPR implementation. capabilities. As evidenced in the four firms stud-
Extensive infrastructure services enable BPR, par- ied, the implementation of radically redesigned
ticularly those services crossing organizational business processes will almost certainly require
boundaries such as firm-wide IT architectures
extensive IT infrastructure capabilities. If these
and standards, firm-wide data management, and capabilities are not in place when BPR is
a common systems development environment. launched, added implementation cost and time
These services enable BPR by providing a strongdelay will likely result. Specific boundary-cross-
base for the processing and exchange of consis- ing infrastructure services play a major role in
tent data and thus taking a process, rather than a enabling process innovation. Conscious invest-
task, perspective across and between businesses. ment in these infrastructure capabilities beyond
The ability to process complex transactions current needs can smooth the path to radical
across a business unit with multiple sites as well business process redesign. However, if these
as multiple business units is also a strong enabler capabilities are not quickly utilized to support
for BPR.
BPR or other initiatives, they constitute an over-
investment that is wasted. Thus, a delicate bal-
Limitations of the Study ance is necessary between potential delays to

important change initiatives, such as BPR, and
There are a number of limitations to the findings over-investing in IT infrastructure where the
of this study including: extensive capabilities are never exploited.

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
If aa firm
firm is
is engaged
engagedininprocess
processsimplification,
simplification,
thethe financially
financially feasible
feasible now
now that
thatthe
theIT
ITinfrastructure
infrastructure
existence of at least a medium level of IT infra- exists (e.g.,
(e.g., PC/LAN
PC/LAN andand network
networkinfrastructure).
infrastructure).
structure capability (i.e., services and reach and
range) is likely to assist in implementation of the Indeed,
Indeed, it
it was
was observed
observed that
thatBPR
BPRprovided
providedthe
the
new processes. The existence of extensive infra- basis for
for the
the financial
financial justification
justificationof
ofneeded
neededITIT
structure capabilities may further improve imple- infrastructure
infrastructure that
that was
was then
thenutilized
utilizedby
byother
other
mentation speed, but the benefits are likely to be applications,
applications, thus
thus illustrating
illustratingthetheshared
sharednature
natureofof
marginal. IT infrastructure
infrastructure and
and its
its similarity
similarityto
topublic
publicinfra-
infra-
structure
structure (e.g.,
(e.g., roads).
roads).
Before embarking on any form of BPR, managers
should complete a business audit of their infra- The existence
existence of
of rich
rich infrastructure
capabilities
structure capabilities. The current level of a firm's can encourage
encourage aa more
more aggressive
aggressiveapproach
approachtoto
infrastructure capability can be assessed by business
business process
process redesign.
redesign.However,
However,making
making
extensive infrastructure investments in advance
checking the evidence for each of the 23 infra-
structure services and the extent of reach and of current business needs is far more difficult to
range. Important questions to consider include: sell to top management, as it requires the valua-
tion of the flexibility that extensive infrastructure
* To what extent does the firm have at least the brings.
10 core infrastructure services (see Table 1)
together with the seven boundary-crossing ser-
vices in place?
* What is the reach in terms of who can be Conclusion
seamlessly connected?
* What range of services are available: only the IT infrastructure capability has an impact on the
speed and nature of process change. Four infra-
ability to access information or the capacity to
perform complex business transactions across structure services were identified that were part
multiple systems? of the IT capabilities in the two firms that had
implemented extensive business process changes
As experienced by StockCo, failing to address theand not in the other two firms. Reach and partic-
suitability of IT infrastructure when beginning ularly range were also higher in the two firms
BPR efforts can cause implementation to stall that implemented faster and more extensive
while the required infrastructure capabilities are
process changes. This higher level of infrastruc-
being built according to an expedited schedule.ture capability facilitated cross-business and
cross-functional applications through firm-wide
Implications for Information Systems consistency, architecture and standards in sys-
Executives tems development, data, applications, and man-
agement information.
This research found that having the "right" IT
In this limited sample IT infrastructure capabili-
infrastructure services in place speeds implemen-
ties facilitated the implementation of redesigned
tation of new process designs. If the required
processes. The impact tended to be greater when
infrastructure services do not already exist, the
business benefits of the redesigned or new busi-
extensive IT infrastructure capabilities were
implemented before or alongside process inno-
ness processes can be a powerful argument to
vation activities.
justify the infrastructure investments for BPR and
other initiatives. Whatever the initial state of a Management's perspective on IT infrastructure
firm's infrastructure, successful business process capabilities and the way in which infrastructure
redesign will likely result in some extension or is justified is likely to have an impact on the
renewal of IT infrastructure capabilities. This new extent of process change undertaken. Extensive
shared infrastructure can then be used by other IT infrastructure capabilities facilitated both
applications at marginal cost (e.g., a knowledge process simplification and process innovation,
management support system), which become but may be over-investment for the former.

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
Limited
Limited ITITinfrastructure
infrastructurecapability
capability
cancan
hinder
hinder editor,
editor,the
theassociate
associate
editor,
editor,
the reviewers,
the reviewers,
and and
process
process innovation.
innovation. Carey
CareyButler
Butlerandand
Margi
Margi
OlsonOlson
who provided
who provided
comments
comments ononearlier
earlier
versions
versions
of this
ofpaper.
this paper.
The
The firms
firmstaking
takinga aprocess
processinnovation
innovation
approach
approach Funding
Fundingfor
for
this
this
research
research
was provided
was provided
by the by the
were in turnaround situations where there was
IBM
IBMConsulting
Consulting
Group.
Group.
real urgency about the improvement needed in
their competitive situation. Strategically focused
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Thesis,
Thesis, Royal
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"How Information
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About
Aboutthe
Ramcharamdas, E. "Xerox Creates a Continuous theAuthors
Authors
Learning Environment for Business Marianne
MarianneBroadbent
Broadbentis director
is director
of GartnerGroup's
of GartnerGroup's
Transformation," Planning Review (22:2), IT IT Executive
Executive Program
Program in Australia
in Australia
and New
and New
1994, pp. 34-38. Zealand.
Zealand.She
Shewaswas
previously
previouslya professor
a professor
in the in the
Snell, M. "Dissatisfied Companies Blast Management
Management ofof
Information
Information Systems
Systems
at theat the
Reengineering," The Australian, 28 June 1994 Melbourne
MelbourneBusiness
Business School,
School,
University
University
of of
(reporting the findings of a study of 350 com- Melbourne,
Melbourne, visiting
visitingresearcher
researcher
at Boston
at Boston
panies by Arthur D. Little Inc.). University,
University, and
andhead
headof the
of the
Department
Department
of of
Stafford, A. "From Vertical to Horizontal in Three
Information
Information Services
Servicesat the
at the
RoyalRoyal
Melbourne
Melbourne
(Not So) Easy Steps," Business Change and Re- Institute
Instituteofof Technology.
Technology. Her Her
industry
industry
research,
research,
engineering (1:2), Autumn 1993, pp. 20-30. consulting,
consulting, and
andadvising
advisingactivities
activities
have involved
have involved
Stoddard, D., and Jarvenpaa, S. Business Process over
over8080businesses
businesses in nine
in nine
countries,
countries,
and sheand hasshe has
Reengineering: IT Enabled Radical Change, managed
managedher herownownsuccessful
successfulconsulting
consulting
and advi-
and advi-
Harvard Business School Note, 9-193-151, sory soryservices
services firm.
firm.SheShe
and and
her colleague
her colleague
Peter Peter
1993.
Weill
Weillare
areauthors
authorsof of
thethe
bookbook
Leveraging
Leveraging
the New the New
Stoddard, D., and Jarvenpaa, S. "Business Infrastructure:
Infrastructure: HowHowMarket
MarketLeaders
Leaders
Capitalize
Capitalize
on on
Process Redesign: Tactics for Managing Information
Information Technology.
Technology. Marianne
Marianne
has a has
bache-a bache-
Radical Change," Journal of MIS (12:1), 1995, lor's
lor'sand
anda amaster's
master's degree
degreefrom from
Sydney Sydney
and and
pp. 81-107. Macquarie
MacquarieUniversities
Universities respectively,
respectively,
and a and
doc- a doc-
Wastell, D. G., White, P., and Kawalek, P. "A torate
toratefrom
fromthe
the
University
University
of Melbourne.
of Melbourne.
Methodology for Business Process Redesign:
Peter Weill is the Foundation Chair of
Experiences and Issues," Journal of Strategic
Management (Information Systems) and a mem-
Information Systems (3:1), 1994, pp. 23-40.
ber of the Board of Directors of Melbourne
Watson, R. T, Kelly, G. G., Galliers, R. D., and
Wetherbe, J. C. "Key Issues in Information Business School at the University of Melbourne.
Systems Management: An International His research and advising activities center
around the business value of information tech-
Perspective," Journal of Management
nology (IT) in organizations. He is particularly
Information Systems (13:4), Spring 1997, pp.
91-115. interested in the link between business strategy
and investment in IT and the role and value of
Weill, P., and Broadbent, M. Leveraging the New
IT infrastructure. He has been an associate edi-
Infrastructure: How Market Leaders Capitalize
on Information Technology, Harvard Business
tor for both MIS Quarterly and Information
School Press, Boston, 1998. Systems Research and is coprogram chair for
ICIS 2000 in Australia. In addition, Peter is the
Weill, P., Broadbent, M., and St. Clair, D. "IT
Value and the Role of IT Infrastructure director of the Centre for Management of
Information Technology at the Melbourne
Investments," in Competing in the Information
Business School. Peter holds a Ph.D. from the
Age: Strategic Alignment in Practice, J. N.
Stern School of Business at New York University
Luftman (ed.), Oxford University Press, New
York, 1996, pp. 361-384. and has been a visiting professor at the Sloan
School of Business, Massachusetts Institute of
Yetton, P., Johnston, K. D., and Craig, J. F. "The
Pencil-less Architect's Office: A 'Deviant' Case Technology, and the College of Business at
Georgia State University.
Study of the Dynamics of Strategic Change and
Information Technology," in Proceedings of the Don St.Clair is a vice president at A. T. Kearney, a
Fourteenth International Conference on
worldwide management consultancy firm with
Information Systems, J. I. DeGross, R.offices
P. throughout Asia and the world. He has
Bostrom, and D. Robey (eds.), Orlando, FL,
extensive consultingexperience in the strategic use
December 5-8, 1993, pp. 145-155. of IT, especially in the areas of technology-based

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
attack
attack and
anddefense
defensestrategies.
strategies.
With
With
over
over
30 years
30 years
beenbeen
focused
focused
on infrastructure
on infrastructure
strategies
strategies
to sup- to sup-
of
of consulting
consultingand
andindustry
industry
experience
experience
spanning
spanning
portport
electronic
electronic
commerce
commerce
in Asia.
inHe
Asia.
holds
Hean
holds an
the
the financial
financialservices,
services,retail,
retail,
transportation,
transportation,
and and
M.B.A.
M.B.A.
degree
degree
fromfrom
the University
the University
of Chicago,
of Chicago,
an an
manufacturing
manufacturingindustries,
industries, heheleads
leads
thethe
strategic
strategic
M.S.M.S.
degree
degree
in electrical
in electrical
engineering
engineering
and comput-
and comput-
information
informationtechnology
technology practice
practicein in
Asia/Pacific.
Asia/Pacific.
er science
er science
fromfrom
Stanford
Stanford
University,
University,
and a B.S.
and a B.S.
Mr.
Mr. St.Clair
St.Clairisisa arecognized
recognizedspeaker
speaker
on on
innovative
innovative
degree
degree
in electrical
in electrical
engineering
engineering
from Bradley
from Bradley
applications
applicationsof
ofinformation
informationtechnology,
technology,
andand
has has
University.
University.
APPENDIX
APPENDIX
Data Gathered From the Firms
Strategy and Business Drivers

Initial data came from written responses to an open-ended question in the response form about the firm's
strategic intent and desired leadership position (Hamel and Prahalad 1989, 1994) asked of the chief infor-
mation officer (CIO) and the corporate executive (CE). In the subsequent interview sessions, firm-wide
business drivers flowing from strategic intent statements were identified, and later checked for their accu-
racy with both the CIO and CE. Business unit strategies were identified initially through questions on the
response form asked of both the business unit information systems manager (BUIS) and the CE. The ques-
tions drew on Porter's (1985) generic strategies and Bowman and Johnson's (1992) elaboration of these
for more detailed descriptions of competitive strategies. These too were followed up in subsequent inter-
view sessions and later checked for their accuracy.
BPR Motivation, Process Changes, and Impact

The motivation, nature, and impact of BPR were assessed, initially, in interview sessions with the CIO, CE
and BUIS managers. In three of the firms, additional interview sessions were held with other business
managers who were key participants in the BPR, such as executive sponsors of the BPR and members of
BPR project teams. In addition, in three of the firms, executive managers had given industry presentations
about their process changes and their notes and papers were made available to the researchers. The annu-
al report of the fourth firm outlined the motivation and nature of the changes being undertaken. In all
firms, access was given to significant documents that announced the commencement of the process
changes and internal memos that reported progress and outcomes.
Infrastructure Investments
The CIO provided details of the firm's total IT investment over the past five years, together with the pro-
portion that was firm-wide IT infrastructure. IT investment included dollars invested in all computers, hard-
ware, software, communications, phone, fax, data, and the people dedicated to providing IT services. Firm-
wide IT infrastructure is defined as the component of the IT investment provided centrally as services and
shared throughout the multibusiness unit firms. At subsequent interview sessions, the researchers worked
extensively with the CIO to identify the firm's infrastructure costs and their components in a way that was
consistent across all firms.
Decision Making for IT Infrastructure Investments

The CIO answered 12 questions (with Likert scales) on how the firm justified investment in IT infrastruc-
ture. The questions identified the extent of specific management objectives used for justifications, for
example, cost savings, flexibility. Three sets of four questions assessed the tendency of the firm to take
different approaches to infrastructure investments.

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00
IT Infrastructure
InfrastructureCapabilities
Capabilities
Infrastructure Services
During the interviews, the extent of firm-wide infrastructure services provided were identified. These were
tabulated against a list of services identified in 27 large firms and grouped into services that existed in all
firms and those that existed in at least one of the firms, but not all of the firms (see Table 1).
Reach and Range of IT Infrastructure

A series of questions for the CIO resulted in a plot of reach and range (Keen 1991; Keen and Cummins
1994).
Note: All firms checked for accuracy the five to six page summaries of their strategic orientation,
process changes, infrastructure investments, view of infrastructure, and the extent of their IT infrastruc-
ture capabilities.

134.219.227.30 on Tue, 14 May 2024 18:08:08 +00:00

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The Implications of Information Technology Infrastructure for Business Process

Stable URL: https://www.jstor.org/stable/249750

Management Information Systems Research Center, University of Minnesota is collaborating

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THE IMPLICATIONS OF INFORMATION TECHNOLOGY

MIS Quarterly Vol. 23 No. 2, pp. 159-182/June 1999 159

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160 MIS Quarterly Vol. 23 No. 2/June 1999

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Additional Information Technology Infrastructure Services

11. Enforce IT architecture and standards

underpins the "architecture" of business process

MIS Quarterly Vol. 23 No. 2/June 1999 161

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inconsistent data models have been used in dif- The

The petroleum firms are referred to as CostCo

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multiple applications updating all databases investments

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The trigger for CostCo's BPR was the need to dra-

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168 MIS Quarterly Vol 23 No. 2/June 1999

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CostCo LeapCo StockCo MergeCo Prototypical Firm-Wide IT Infrastructure Services

Note: Shaded services are boundary crossing.

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172 MIS Quarterly Vol. 23 No. 2/June 1999

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Summary Implications for Business Process