BPR revolution

Contributed by Kirubel Tadesse Monday, 11 January 2010 00:00

First introduced in the 1990s in the United States to try and save local companies from fierce Chinese competition, the reform program, Business Process Reengineering (BPR), aims to improve the performance and efficiency of organisations it is applied to. Along with BPR, which is currently being implemented here under the leadership of the Ministry of Capacity Building, has come layoffs and concerns about the rising cost to the public of social services. Kirubel Tadesse sat down with Adebabay Abay, National Balanced Scorecard Programme Multi-system Quality Assurance Team Leader and PR head at the Ministry, to explore the issues. BPR revolution Capital: How is BPR relevant to Ethiopia? Adebabay: Modern management tools have transferred from the private sector to the public sector, especially in Western countries. Why? Because public sectors too should perform like businesses, focusing on effectiveness and efficiency. The public sector also has to be effective since its budget mainly comes from the taxpayers' pocket. In the United States they were doing business process reengineering across the entire public sector. Therefore the change is everywhere, not only for the private sector or public sector, it is everywhere. You can see a lot of countries, developing ones such as Malaysia, Indonesia, Brazil and some African countries like South Africa and Uganda too, carrying out BPR in their public sector successfully. It is like a revolution happening across the world. We decided to take this reform because there are many problems in the public sector. We had a study that dates back 15 years that revealed that the sector is highly inefficient and ineffective in terms of top level management systems and human resource systems, accountability, ethics and financial management. We were looking for a fundamental change that should bring about a radical change within the unaccountable and inefficient civil service system and the civil servants' thinking as well. The functional setup of the system needed to be changed to focus more on result. BPR didn't come first, our problem led to BPR when we were scrutinising various instruments and management tools. BPR, among other reasons, brings in dramatic change in institutions and we needed that dramatic change in our civil service and so have been implementing the reform over the last three years. Capital: There are concerns that BPR, as happened to other reform packages, won't last for longer than a few years. So why should BPR be different from other reforms, such as the result-oriented reform introduced in the past? Adebabay: BPR is part of our reform efforts, but it has its own transformational model. This model has a diamond shape mode, focusing on process change, work structures, management and measurement systems and value and beliefs change. A result-oriented performance management system that is a balanced score card system are simply part and parcels of the total change. On the one hand by creating BPR initiatives, we are trying to change our way of work

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BPR revolution
Contributed by Kirubel Tadesse Monday, 11 January 2010 00:00

organisation; from functional organisation to process organisation, which basically means focusing on outcomes. The reform is bringing changes; look at customer focused organisations like hospitals, in Oromia region for example, and city administrations. They are changed for the better because of BPR. Efficiency change is one; some tasks and services achieved 400 percent cycle time minimisation in their core process. You can see such achievements in courts, schools, and other institutions. Capital: You talked about some of the government organs that are registering better performance. Still we hear that some institutions, for example, the immigration offices that used to issue passports effectively, are actually slower after implementing BPR. How do you explain that? Adebabay: You may have a case of backlash in some organisations. We studied that in some organisation unless you have created a favourable environment for employees; sometimes the result you obtain can pull you back. In other organisations they try to calibrate the change, creating a favourable environment and sustainability. When there is backlash, there is a remedy, but this remedy should come before the backlash. One way which I saw working in some institutions was employee rewards. We have started in some regions, and we will start at federal level using different reward mechanisms. Because of the lack of such mechanisms some employees could have positioned themselves to produce weak performance, affecting the overall performance of the reform. In some other areas, the absence of consistent leadership for the reform can result in ineffective implementation. Such cases are a reality in any transformational change. Capital: As part of these rewards, is the government planning to increase salaries after implementing BPR? Adebabay: No, actually the reward is different from salary increment; we have a project studying the salary increment framework of the government. The reward, performance related pay, is to reward employees with bonuses, and such, within the salary scale and is given individually, unevenly, not like the one we have now given all across the civil service. Capital: One of the concerns from the citizens' side is that some operations to provide services for them, such as to issue kebele identity cards, are being automated and will be expensive. Is it correct to say some social services will become more expensive after BPR? Adebabay: One of the objectives of business reengineering is to provide citizens with affordable services. In any of the state-run institutions the government is trying to give affordable public services. So it is a needles worry to expect this to change. We are buying computers, and other various inputs, and rewarding employees, but a fear that the cost will go to escalate fees for services is wrong. The government is giving affordable service in every areas of the public sector, be it in education, health or diplomatic areas, so there is no need to worry that this will change. Capital: After implementing BPR, organisations are firing employees and there are huge layoffs from all federal organs. As you know, the government is the major employer in Ethiopia, so if BPR is going to cut jobs of thousands of state employees, the reform is a bad one and we

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BPR revolution
Contributed by Kirubel Tadesse Monday, 11 January 2010 00:00

should not adopt it in Ethiopia. Do you agree with such an assessment? Adebabay: No. Let's talk about the statistics first. The actual number of public servants in Ethiopia before the implementation of BRP and after the implementation of BPR is the same. The net number is the same. What it means is that we are retrenching some while we are recruiting new ones as well, so the overall balance evens out. Some organisations that had around 500 employees before the implementation of the reform now have over 800; it doesn't mean that they employed 300 more though. They could have hired like 500 or more, but, more importantly, what we can say is that new recruits are more than the ones let go. The cause for retrenchments or layoffs as you said can be quantity and quality reasons. People can lose their position because of educational criteria; that position could need a bachelor degree holder. When someone who already occupied the position doesn't meet the criteria, he or she has to be replaced by a qualified person. So, this one is as per qualitative selection mechanism. The government took various measures for those who cannot be hosted by the new system. The principle was that no one should leave his or her bread over the reform that was the government's agenda in the BPR. Some jobs are contracted out in regions and we recruit civil service for the jobs. And the employees who got the job got more salary than they used to make. And we said if the employee is an uneducated one, we say by no means we are going to retrench him or her because they don't have any chance to get a job in the market. There are only very few educated people who were let off, most had to do with ethics and attitudes. In that case it is a minor number compared to the total number. In that case the government offered various schemes, one is early retirement. The 25/50 approach which means early retirement for those who served for 25 years and reached the age of 50 years. For employees who don't meet the 25/50 criteria, they received financial support, we call it government golden shake; an amount of money given for those employees once. So in any means, employees are not losing their bread. Capital: The government has amended pension law specifically for BPR layoffs only. Previously employees were entitled pension as long as they served for 20 years and reached the age of 45, 20/45 criteria, that has changed to 25/50 for BPR. That is not the only criterion, the employees' name has to go to the council of ministers and should be approved as per unknown criteria. Why the special criteria if the number is as small as you say BPR layoffs are? Adebabay: This was a short term solution. In the previous case if you are leaving after some 20 years or more years of service, you get your pension only when you reach the age of 55. For example, if you leave the civil service at the age of 45, you have to wait another 10 years in order to get your pension. We cannot have that for BPR because employees are not leaving their jobs at their own request; it is due to restructuring coming with the reform. So if we don't amend the law it means that employees have to wait for five, 10, or more years in order to get pensions. The government is amending things to facilitate such early retirement and other benefits that is the only thing. You didn't automatically qualify for pension at 20/45; you can leave at that age but had to wait for more years before you start receiving the retirement salary. Capital: The 'golden handshake' as you said is only one year's salary plus 3,000 birr. Is it really enough for employees who could be supporting families?

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BPR revolution
Contributed by Kirubel Tadesse Monday, 11 January 2010 00:00

Adebabay: Many of these employees are professionals, as I said. Actually more than 95 percent of employees who received the support are professionals, so we know that they can get jobs, actually better paid than what the government offered them. Studies have shown in various organisations, such as at the Ministry of Agriculture and Rural Development and at the Ministry of Transport and Communications, employees who left got salaries three or more times higher than what they used to make, plus the financial support from the government. Capital: Minister Tefera Walwa last year promised to MPs that after the implementation of BPR, civil servants will get off their seats and say: 'Sir/madam, welcome, what can we do for you?' every time a citizen shows up at their office. Do you think such practice can be achieved at least in this generation given the current culture of civil service in Ethiopia? Adebabay: These courteous symptoms are not the end vision of capacity building, just symbols of the change. It needs many behavioural changes from both the employees' and customers' side. Because customers need to be empowered to demand their right and employees need to understand that they are recruited by the customers. The vision is creating mission-driven organisations. That is why we are coordinating capacity building efforts even in local society organisations which are non-governmental. After creating such capability, to be able to boost their capacity anytime they need, we may not need a capacity building ministry at all. We understand the vision takes time, it is not only building a system or structure, it is also changing software and working cultures - but though it may take time, it is achievable.

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