Business Process Re-engineering

Originally published as ETHIcol in the IMIS Journal Volume 6 No 2 (April 1996)

Much has been written about the success and failure of Business Process Re-engineering (BPR). Leadership, organisational, cultural and people issues have been identied as the major obstacles in achieving BPR success. Without doubt, there will be winners and losers in this activity. There is evidence to suggest that BPR errs on being socially insensitive and perhaps this is why most re-engineering efforts have had little measurable impact on the overall business. Consequently, it is important that organisations about to embark on such programmes are fully aware of the potential impact on individuals, groups, and society as a whole. Given the major impact that BPR has on an organisation and that this impact involves the generation, dissemination and use of information to sustain the redesigned processes it is inevitable that IT has a central role in this activity. For example, telecommunications often gures in reducing co-ordination costs or increasing the scope of co-ordination, and shared databases are commonplace in the provision of information across and during processes. Within BPR there are numerous activities and decisions to be made and most of these will have an ethical dimension. There are issues relating to both the process and the outcome of BPR. In his recent book, The Re-engineering Revolution - The Handbook, Michael Hammer sets out 10 guidelines based on potential reasons for failure. The two most ethically signicant are:

Prof. Simon Rogerson

Make sure that you know what re-engineering really is before you attempt to do it and then do it, not something else. Any successful re-engineering effort must take into account the personal needs of the individuals it will affect. The new process must offer some benet to the people who are, after all, being asked to embrace enormous change, and the transition from the old process to the new one must be made with great sensitivity to their feelings.

Opinion recently canvassed from BPR practitioners and employees affected by BPR initiatives located in the UK, USA, the Netherlands and Sweden revealed a number of ethical issues which included:

Business Process Re-engineering

The damaging of trust between employer and employees through insensitive BPR The existence of hidden agendas such as downsizing Censorship on full disclosure Conicts between what the BPR client wants or expects compared with what is considered to be correct action.

The following case study demonstrates what can go wrong. A large service-based organisation in the UK realised its ongoing programme to expand through opening regional ofces in light of increased demand was not nancially sustainable and indeed would put the company in a perilous state. It decided to re-engineer and hired an independent consultant to co-ordinate this activity. The CEO wanted to reduce the workforce and to move to a home-based operation where those directly involved with clients worked from home rather than from regional ofces as these were costly to maintain. Communication about the re-engineering project tended to be one-way pronouncements from the top. Reassurances were given about job security at an early stage. Processes were redesigned but not piloted. IT was specically excluded from the BPR exercise, a decision being made to consider this after the re-engineering dust had settled. The result of the BPR exercise was a signicant reduction of the companys middle management, the closure of some regional ofces with associated job losses, the move to more home-based working, and the majority of staff had to reapply for their jobs most of which had been modied. These major changes, which were very upsetting for many people, where announced without any prior warning. There then followed several months between the announcement and implementation, a time when all staff were expected to work towards establishing the new style of organisation. The effect of this BPR exercise was a loss of loyalty and motivation in the workforce, a high turnover of staff who were identied as being key in the new structure and 18 months later the organisation had to embark on drastic remedial action. But it does not have to be like this. Corning is the biggest company in the smallest town in the USA, with half the towns 12000 inhabitants working for the company. In this environment, the company has a long track record of social responsibility. The company decided to re-engineer after its market value plunged by 25% and signicant losses were announced. It made it clear from the onset that it would not re-engineer the company at the detriment of the town. Corning got the workers to do their own re-engineering, releasing key employees from their normal jobs for several months in order to undertake the BPR exercise. Easy access to senior management was established and there was a lot of effort put into informing everyone of progress and enabling frank discussion to occur. The outcome was focused on reduction of complexity in the corporate structure, the spreading of best practice, evolutionary change rather than revolutionary change, and even-handedness regarding job losses with an emphasis on early retirement rather than redundancy. The following year, Corning returned to prot and sales increased by 19%.

Business Process Re-engineering It will take several years before BPR has its full effect but it appears from this evidence that Corning has succeeded in turning the company round . Social responsibility is very visible in the approach that Corning adopted. Organisations considering undertaking BPR as well as those in the process of a BPR exercise must temper their actions to ensure that BPR is ethically sensitive thus increasing the probability of achieving genuine success for the greatest number of people. To encourage this there should be:

explicit consideration of ethical and social responsibility in the BPR process, training of BPR exponents in ethical practice to improve implementation success, adherence to ethical principles by BPR exponents.

Please send your views on ethical and social responsibility issues and cases of ethical dilemmas to: Professor Simon Rogerson Director Centre for Computing and Social Responsibility Faculty of Computing Sciences and Engineering De Montfort University The Gateway Leicester LE1 9BH Tel:(+44) 116 257 7475 Fax:(+44) 116 207 8159 Email:<srog@dmu.ac.uk> Home Page: (

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