Total Quality Management Vol. 16, No.

1, 121 133, January 2005

The State of Business Process Reengineering: A Search for Success Factors

DAVID PAPER & RUEY-DANG CHANG
BISE Department, Utah State University, Logan, USA, Department of Business Management, National Sun Yat-Sen University, Taiwan, Republic of China

ABSTRACT In this article, we explore the organizational process change dynamic through a theoretical lens of business process reengineering (BPR) models. We review relevant literature related to such models to devise a synthesized model of BPR. The synthesized model facilitates the identication of success factors for BPR. Results from in-depth case-study research add explanatory power to our model. It is hoped that our model and subsequent success factors will offer insights to help organizations effectively manage change and transformation. KEY WORDS : Business process reengineering, change management, information technology, innovation, transformation vision

Introduction In the early 1990s, business process reengineering (BPR) came blazing onto the business scene as the saviour of under-performing organizations. Early advocates of BPR (e.g. Harrington, 1991; Davenport, 1993; Hammer & Champy, 1993) touted it as the next revolution in obtaining breakthrough performance via process improvement and process change. However, BPR has failed to live up to expectations in many organizations (Davenport, 1993; Hammer & Champy, 1993; Kotter, 1995; Bergey et al., 1999). Some of the reasons include adoption of a awed BPR strategy, inappropriate use of consultants, a workforce tied to old technologies, failure to invest in training, a legacy system out of control, IT architecture misaligned with BPR objectives, an inexible management team, and a lack of long-term commitment (Bergey et al., 1999). As one can see from this list, it seems obvious that many organizations failed to realize the scope and resource requirements of BPR. Although the proliferation of research articles has been abundant, research ndings have provided limited explanatory power concerning the underlying reasons behind BPR failure

Correspondence Address: R. D. Chang, Department of Business Management, National Sun Yat-Sen University, Kaohsiung 804, Taiwan, Republic of China. Email: raychang@mail.nsysu.edu.tw 1478-3363 Print=1478-3371 Online=05=01012113 # 2005 Taylor & Francis Ltd DOI: 10.1080=1478336042000309907

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and what it takes to succeed. To address this problem, several recent in-depth case studies have appeared in the Information Systems (IS) literature to add explanatory power to this issue (Broadbent et al., 1999; Clark et al., 1997; Cooper, 2000; Cross et al., 1997; Harkness et al., 1996; Paper, 1999). Of course, much more work of this type needs to be undertaken to uncover a rich and theoretically sound explanation of BPR success or failure. In this piece, we choose to synthesize the existing BPR literature into a theoretical model that depicts the components necessary for successful BPR. We begin by classifying the BPR literature into ve categories (or components). This classication is an extension of several multi-component theoretical models adapted from the literature. Theoretical Lens We explore the organizational process change dynamic through a theoretical lens of BPR models developed by Clark et al. (1997), Paper & Dickinson (1997), Paper (1998a), and Paper (1999). Each of the BPR models (with the exception of Clark et al.) drew conclusions based on in-depth case-study research with Caterpillar and Honeywell. Ancillary data was obtained, analysed, and synthesized from case-study work with FannieMae (Paper, 2001), Safeco (Paper, 1999), Bank of America (Paper, 1998b), The Utah Department of Transportation, The Department of Defense (Rodger & Pendharkar, 2000), The U.S. Military (Rodger & Pendharkar, 2000), AntHill.com (Mills et al., 2001), and Moore BCS (Paper & Mok, 2003). Clark et al. (1997) offered a ve-component star model featuring people skills, structure, reward systems, processes, and change-ready IT capabilities. The components structure and reward systems fall into the environment category developed by Paper (1998a). The component strategy falls into the vision category developed by Paper (2001). Paper (1999) extended the model to include IT capabilities. Paper et al. (2001) further extended the model to include vision that weaves the other components together with a top-down imperative. Since the component process is what organizations are attempting to change to improve performance (Broadbent et al., 1999; Davenport & Stoddard, 1994; Harkness et al., 1996; Kettinger et al., 1997; Nissen, 1998; Paper, 1999), we felt that it should not be a part of our theoretical lens. Figure 1 depicts the theoretical lens, which consists of ve interdependent components environment (E), people (P), methodology (M), IT perspective (I), and transformation vision (T). Environment Basic environmental factors (Figure 2) that lead to structural change include top-management support, risk disposition, organizational learning, teaming, compensation and reward

Figure 1. Theoretical lens

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Figure 2. Environment

systems, information sharing, and resources (Amabile, 1997; Clark et al., 1997; Lynn, 1998; Otoole, 1999). Innovation can come from any level of an organization, but environmental change originates at the top (Cooper & Markus, 1995; Paper, 1999). However, fear of failure must be limited and risk taking promoted for innovation to thrive (Nemeth, 1997; Paper & Dickinson, 1997). Once innovation is fostered, it can easily dissipate if nothing is learned. Organizational learning thereby should be cultivated by investing in training and education (Paper, 2001; Winklhofer, 2002). Team work is another key factor because organizational knowledge crosses functional boundaries. Reward systems are recognized as a viable means to motivate people to perform better (Pfeffer, 1998). However, compensatory resources must be shifted to promote information sharing because it enables people to better understand the business and what is required to be successful (Paper & Dickinson, 1997; Harkness et al., 1996). People Transformation success hinges on people (Figure 3) and their knowledge, creativity, and openness to change (Cooper & Markus, 1995). A shift in their skills will thereby be required (Cross et al., 1997). Mechanisms to build new skills include training and education, challenging work, team work, and empowerment (Paper & Dickinson, 1997). Challenge allows people to see the signicance of and exercise responsibility for an entire piece of work (Cummings & Oldham, 1997). It also stimulates creativity, gives a sense of accomplishment, and increases productivity (Amabile, 1997; Hackman et al., 1975). However, people cannot reach their creative potential unless given freedom (Pfeffer, 1998). Politics is another critical issue. Often change results from internal politics rather than external factors (Winklhofer, 2002). Methodology Methodology is critical to effectively dealing with the scope and complexities involved in change (Davenport & Short, 1990; Guha et al., 1993; Talwar, 1993; Kim, 1996; Kettinger et al., 1997; Paper & Dickinson, 1997; Paper, 1998a; Teng et al., 1998). Methodology

Figure 3. Environment and people

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Figure 4. Environment, people, and methodology

(see Figure 4) keeps people focused and acts as a rallying point for cross-functional teams, facilitators, and managers as it informs them about where the project is and where it is going (Paper & Dickinson, 1997). Methodology incorporates both top-down vision and bottom-up design. That is, vision originates at the top but design of detailed process activities can only be done by those who do the work (Davenport & Stoddard, 1994). Methodology is therefore a joint activity between top management, middle management, and process workers on an ongoing basis to hone and ne tune the approach (Paper & Dickinson, 1997). El Sawy & Bowles (1997) argued that customer support should be a key ingredient in process-redesign efforts. The tendency is to focus on workow without consideration for the customer. IT Perspective The perspective of IT (Figure 5) professionals toward change is critical because technology implementation is an organizational intervention (Markus & Benjamin, 1996) and integral to the successful implementation of business-process redesign (Broadbent et al., 1999). Moreover, a BPR project is labeled as a success or failure depending on the perceptions of people and their role in and view of the IT development process (Lyytinen, 1988). Given that the role of technology is to facilitate business processes (Davenport, 1993) and that the end goal of BPR is to delight the customer (Davenport, 1993; Drucker, 1998; Hammer & Champy, 1993; Paper & Dickinson, 1997), it is imperative not to lose sight of the importance of developing process workers and somehow extracting the knowledge they gain by being intimately involved in the effort. Transformation (Change) Vision Vision (Figure 6) offers a means of communicating the reengineering philosophy to the entire organization by pushing strategic objectives down to the process level, and aligning

Figure 5. Environment, people, methodology, and IT perspective

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Figure 6. Transformation component model

the project with business goals (Harkness et al., 1996; Paper & Dickinson, 1997). Davenport & Short (1990) added that top-down design is ineffective unless the people who do the work are involved (Davenport & Stoddard, 1994) and understand the business (Paper & Dickinson, 1997). Davenport & Stoddard (1994) purported that top-down imperatives should be tempered with involvement from people along the process path. Change management, however, is very difcult because people tend to react negatively to it (Topchik, 1998). Further, cultural change is the most difcult challenge of BPR (Caron et al., 1994). Hence, a top-down vision tempered with involvement from process workers is imperative because it helps people understand the reasons for change. If people believe that change will benet them and/or the organization, negativity is reduced. Top management should proactively sell the vision to key stakeholders (process workers, management, stockholders, etc.) before they try to implement change (Beer et al., 1990; Clark et al., 1997; Winklhofer, 2002). However, change brings many events that cannot be anticipated. Hence, Orlikowski & Hofman (1997) argued that the vision should account for both anticipated and unanticipated change. That is, the vision must be improvisational (Clark et al., 1997). Top management must be exible enough to understand that the vision is organic. The vision may have to change dramatically as more is learned about new ways of doing business. BPR Success and Failure The model developed offers a theoretically sound representation of the fundamental components needed to achieve successful BPR. However, it offers no specic guidelines to assist managers in their dealings with change. In this section, we offer such guidance by articulating a set of BPR success factors. Environmental Success Factors The working environment of any organization permeates everything people do. In a command and control environment, people are naturally discouraged from taking risks and being creative. Hence, top management must cultivate an environment conducive to change to make BPR work. As such, environmental success factors include topmanagement support, risk disposition, organizational learning, teaming, compensation and reward systems, information sharing, and resources. Top managers are the only people in a position of power to inuence the environment. Moreover, top managers committed to change and personally involved in BPR tend to have more success than those who are not (Paper & Dickinson, 1997; Paper, 1998a, 1998b, 1999, 2001; Paper et al., 2000, 2001; Paper & Mok, 2003). When people actually see

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top managers initiating process-improvement changes, they perceive that their work is noticed and that it is important to the organization (Paper & Dickinson, 1997; Paper, 1999). Top-management support is also a key factor in reducing the inherent fear of failure in people. People will not take risks without being encouraged to do so by their superiors. Encouragement comes in the form of rewards for thinking out of the box and compensation for innovative ideas that add value to the process. Top management is also in a position to provide resources for training, education, and learning. All of this has no long-term impact unless organizations learn from success and failure. Teaming offers a vehicle to enhance information sharing and reduce communication-channel blockage inherent in functionally separated organizations. We now articulate environmental success factors: . Top intervention is critical to successful change management. Intervention includes active involvement in the planning and execution of the change initiative, adequate budget for education, training, and technology, and compensation for innovative thinking. . Organizational learning must be planned. Training and education are wasted in the long term unless management plans ways to share such learning with the organization as a whole. Successes and failures during the change should also be shared. IT can play a critical role in information sharing of this kind. However, the budget must have funds allocated to innovative ways to share and ultimately store organizational knowledge. . Compensation must be recast to reward teamwork, innovation, and information sharing. In most organizations, this runs counter to the status quo. Hence, management must devise and execute detailed plans to change the reward structure. . People tend to be risk-averse, which is natural in an organization that fails to foster risk taking. To redirect this tendency, management must devise and execute detailed plans to change the perception of risk in its people. From the success factors, it is obvious that there is interaction between the components of the model. For instance, the environment cannot be adaptive without serious topmanagement support. Moreover, people are the key to change because it is they who do the work. Hence, the environment must be conducive to the change in the perception of the people that will enact the change. People Success Factors Since people enact change, it is logical that they are the most valuable assets of any organization. People success factors include training, education, politics resolution, ownership, and empowerment. Education and training are the single most powerful tools in cultural transformation (Wong, 1998) as they raise awareness and understanding of the business and customer (Paper & Dickinson, 1997; Wong, 1998). Training people helps them develop creativity, problem-solving, and decision-making skills so they can better deal with complex issues that potentially impact the entire enterprise. However, these tools are not enough if management is not proactive in dealing with political obstacles. Politics can derail an otherwise solid change program. If politics can be effectively dissipated, transformation will be fostered if people perceive ownership of the change process (Davenport &

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Stoddard, 1994; Paper & Dickinson, 1997; Paper, 1998b; Mir et al., 2002) and are empowered to enact change. We now articulate people success factors: . Management needs to be sensitive to and aware of their role in creating a workplace that allows people freedom to act on their ideas (Winklhofer, 2002). Management must also temper such freedom with adherence to objectives and company policy (Paper & Dickinson, 1997). Freedom without some semblance of control may lead to chaos and poor performance. . Management needs to foster commitment and ownership at all levels (Caron et al., 1994; Mir et al., 2002). At the same time, management must be tolerant of failure (Paper & Dickinson, 1997). A willingness to allow failure and learn from it is paramount to BPR success (Caron et al., 1994). Keep in mind that people are not used to ownership. The status quo has typically been following directives with little or no tolerance for error. As ownership is passed to people, errors will follow. The trick is to work with people to reduce repetition of the same mistake and to help people learn from each others mistakes. . To effectively deal with politics, managers must rst be aware of its existence (Pinto, 1998). In our experiences, managers have never had any reason to question the political environment. They have simply had to deal with it. To foster change, managers must now be sensitive to the detrimental effects of politics and plan for ways to dissipate political resistance to change. . Education and training must be concentrated on developing people to thrive in a dynamic environment. The literature agrees that people perform better if they understand how their jobs t into the overall scheme of the organization and how they do them adds value (Paper & Dickinson, 1997; Paper, 1998a, 1999, 2001; Paper et al., 2000, 2001; Winklhofer, 2002). Managers must thereby devise and execute plans to better link education and training with what people must do to enact change at the process level. . People fear change. They also inherently protect their position. Management at all levels must work to reduce this fear and let people know that their jobs are secure as change occurs. One problem with this thinking is that managers are also people with the same tendencies. They therefore have to be carefully trained and educated in how to deal with subordinate politics and their own political tendencies. As with the environmental component, there is interaction between the people component and the others. For instance, politics is a structural and cultural phenomenon but it is also an individual one. That is, politics exists at the organizational and individual levels. Organizations are political entities with functional, process, and ownership boundaries. Individuals also possess their own political allegiances and perceptions. The complexities inherent in politics make dissipation of such a much more difcult managerial task. However, successful change will be stymied unless management at all levels makes a conscious effort to deal with it. Methodology Success Factors Methodology provides a guiding blueprint for successful transformation. Methodology success factors include appropriate guiding principles, buy-in, direction, continuous monitoring, graphical process map, and customer support. Transformation cannot be accomplished in the absence of fundamental guiding principles (Hammer & Champy, 1993; Tapscott & Caston, 1993). Existence of such principles allows

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people to challenge existing assumptions, recognize resistance to change, and establish project buy-in (Kettinger et al., 1997). Also of critical importance is direction from top management (Paper & Dickinson, 1997), which is essential to identifying information-technology opportunities, informing stakeholders, setting performance goals, and identifying BPR opportunities. Direction can be formalized in the form of a process model (Harrington, 1991; Davenport, 1993; Paper & Dickinson, 1997). A process model provides a graphical representation of the targeted processes and a starting point for measurement-driven inference (Nissen, 1998). We now articulate methodology success factors: . A customized BPR methodology (process map) facilitates business and contingency planning for process transformation (Kettinger et al., 1997). It also provides a stepby-step map of activities and resource-allocation requirements (Paper & Dickinson, 1997). Hence, a detailed methodology for addressing change must be devised and customized by management prior to undergoing change. . A process map, however, only maps tasks and activity requirements. It fails to provide high-level support and direction. Management is thereby responsible for budgeting along mapped activities, directing (redirecting) process workers, and exhibiting visible support. A map is just a blueprint. Management must lead change. . The process map must be based on sound business principles and be appropriate for each business. That is, it should be customized. As such, an organizations map should incorporate business-specic principles and undergo continuous renement based on current and ongoing business needs. . A BPR methodology is not a turn-key program and should not be purchased as such. Each organization has its own special needs, environment, and business culture. . The process map should be represented as a graphical blueprint that depicts what needs to take place at each phase of a project so that everyone involved understands his or her role in the transformation (Paper, 1999). A graphical map makes it much easier for everyone to see the phases and conditions necessary for success. . The customer should be the focus of any change event. Hence, the process map should reect this focus. That is, customer demand should pull the change plan. The BPR methodology (process map) acts as a rallying point to keep people engaged and to help management continuously monitor the transformation as it unfolds. Buy-in of course is critical as management at all levels and people involved in change along the process path need to understand and believe in its potential for success. Top management and project leaders must offer direction, as it is very easy for transformation projects to glide off track. Finally, customer support must be part of the change plan as they are the reason for transformation in the rst place. An organization would not need to change if customers were already delighted. Given the cross-functional and radical nature of process redesign, a lot is learned by process workers (Paper & Dickinson, 1997). Further, new knowledge is created by those involved (El Sawy & Bowles, 1997). However, the organization can lose this valuable knowledge through attrition if an effort is not made to capture the knowledge on an organizational basis. As a result, the BPR methodology must move to a higher order of analysis to formalize the way in which the process learns during the redesign process. Thus, interactions between people, management, and the environment are necessary to enact a process map.

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Technology plays a critically important role in change efforts as the complexity and scope of a project increases. Further, BPR is considered a success or failure depending on the perceptions of people and their role in and view of IT. Technology perspective success factors include IT knowledge, IT belief system, and IT architecture. IT offers a vehicle to capture valuable knowledge gained during a change event. Such a vehicle has to be planned, developed, executed, and directed by management to be effective. One option is to build the technology architecture around adaptive learning processes. That is, coordinate IT to facilitate information sharing and capture knowledge as process workers learn during change. El Sawy & Bowles (1997) argued that IT built around adaptive learning architectures can provide a basis toward building faster-learning knowledgecreating organizations. The only missing ingredient to this plan is creativity. An increase in creativity tends to increase the likelihood of alternative-technology solutions, thereby enhancing the chances for project success (Cooper, 2000). People, however, will not be creative unless encouraged to do so. Moreover, creativity can be stied quite easily in command and control environments. As such, people need autonomy as well as opportunity for professional growth (Cooper, 2000). Success is also dependent upon buy-in to not only the transformation goals, but also the uncertainties associated with an unproven design (Clark et al., 1997). Perception of technology is critical because people who benet most from change are more positive than those who feel threatened and insecure (Winklhofer, 2002). That is, opinions of success and failure differ based on perceived benet. As a result, management must work hard to develop an environment perceived as equitable to everyone. This environment should also decry the importance of the customer to process workers and IT staff. IT has been touted as one of the key enablers of BPR (Davenport, 1993). However, IT can be one of the biggest obstacles if not properly aligned with business objectives (Broadbent et al., 1999). The heritage of a legacy system can contribute greatly to BPR failure (Bergey et al., 1999). Many legacy systems are not under control because they lack proper documentation, historical measurements, and change-control processes (Bergey et al., 1999; Paper, 1998b). Due to the scope and complexities inherent in a typical legacy system infrastructure, it should be treated with the same priority as the cultural and organizational structures when undergoing process change (Broadbent et al., 1999; Clark et al., 1997; Cross et al., 1997). We now articulate IT success factors: . IT architecture should be built around adaptive learning processes. As change unfolds, process workers learn how to adapt. To share this knowledge gained from people, we need to devise a means to capture it. As processes change, IT should be used to facilitate proper ow. As such, we should be able to creatively capture what is happening because IT is already a facilitator. . Creativity must be encouraged and rewarded. Without creativity, valuable changes in IT during transformation are very difcult (Couger, 1996; Glass, 1995). People enact change. People create new technology and ways that existing technology can be adapted. Finally, it is people that create knowledge with IT (Couger, 1996). Management must, therefore, account for creativity development in their change plan.

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. People must know their role in the change process. Managers facilitate and guide the process, but they do not enact the process. People enact processes, set their own goals (in adherence to directives), and are responsible for the consequences. However, managers must be responsible for sharing goal-setting tasks with process workers. They must also champion the effort, defuse political blockages, and encourage innovative behaviour. Technology is only a critical facilitative tool. . Perception varies among people. However, it can be shaped by policy. By encouraging innovation, sharing information, and providing a change blueprint, management is communicating the change vision to its people. Perception cannot be controlled, but it can be inuenced by such behaviour. If people know what is expected of them and their role in the change process, resistance will be drastically reduced. . Communication channels between management and IT change advocates should be kept as open as possible to ensure success (Markus & Benjamin, 1996). Creativity is very important to successful transformation. Creative people help design better processes that add value to the enterprise. As such, the IT architecture should be rened to support process changes and help people more creatively approach their jobs. IT gives people the power to move information across and outside the organization at incredible speed. Harnessing such potential allows people to rethink existing ways of doing business. However, people must understand IT and how it works if they are expected to use IT to make change happen. None of this will work unless the management encourages IT education and change. The IT department must reach out to educate people as to the uses of IT for process change. In addition, the IT department cannot be an obstacle to change if real transformation is to take place. Transformation (Change) Vision Success Factors The change vision is the glue that ties the other components together into a cohesive whole. Top management is critical in directing, monitoring, and controlling activities related to transformation. They are the only ones who can effectively remove political obstacles that cross department boundaries. They are the only ones who can set up and monitor equitable reward structures for all people within the organization. They are the only ones who can resolve real conict between managers. They are also the only ones who can push IT to embrace change. They set the cultural and political tone of the organization. The vision is the mandate that is communicated from top management to the people. The people can thereby see what top management advocates as transformation unfolds. Vision success factors include vision development, vision communication, vision deployment, and vision exibility. Top management has in its power the ability to inuence how the organization perceives environment, people, IT, and methodology. As such, they are responsible for developing, communicating, and deploying the vision as well as making the resources available to process workers to effectively do their job. We now articulate vision success factors: . The vision offers a blueprint for directing change. As such, it must be fully communicated to all. Moreover, it must be enacted. That is, top management must live the rules laid out by the vision. Top management must also be actively involved in all phases of change (Kettinger et al., 1997). After all, change is broad and strategic.

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. Open communication channels must be open (and kept open) between top management, IT, and process workers. Since top management has the clout, they should be responsible for the activities that facilitate openness. Open communication can help inform top management of political obstacles, training issues, and budget problems before they stymie the project. With open communication channels, top management has the means to identify communication bottlenecks that may occur between departments and between people at all levels of the organization (Winklhofer, 2002). It can also help top management disseminate information about the business and BPR progress across the organization. The more informed people are about the business, the better they feel about what they do. Happy people are more committed to their work (Mir et al., 2002), less resistant to change (Paper & Dickinson, 1997; Winklhofer, 2002), and more likely to trust management and their plans (Paper, 1999). . Change is broad and complex. One solution to this problem is to target a BPR initiative that is manageable and that will garner quick results (Paper, 1998a). A quick success shows that management is competent in dealing with change and serious about the change effort. . The change vision should be holistic. As such, work should be viewed as part of the whole system (Teng et al., 1998). The goal of such a vision must be to align employee goals and actions with those of the organization and vice versa (Drucker, 1998; Drucker, 1989). However, such a vision is too diluted to guide employees (Cross et al., 1997). Hence, top management must communicate with general managers the tactical and operational intentions. In turn, general managers must decompose management intentions into do-able activities at the process level. The vision should be developed in such a way to appeal to everyone involved in the change effort. Process workers who make changes should be considered just as important as any manager, even those at the top of the enterprise. The vision should therefore reect the importance of each person and how people are rewarded for their efforts. The vision should also include recourse for people who believe they are doing the right thing but are stymied by their supervisors and managers. Finally, the vision should also be developed to appeal to customers and other stakeholders. However, Bartlett & Ghoshal (1994) argued that a vision can be too focused, which leads to myopia and inexibility. Their solution is a more balanced approach that tempers broad vision with hard nancial realities. Transformation is expensive and should be justied in terms of increased competitiveness, prots, and efciencies. The vision should be reective of such performance requirements. It must also be properly communicated to the organization. Top management is responsible for this. As such, top management must be actively involved in transformation to show people that the project is important. Top management should also communicate a strategy for deployment in terms of project phases, timelines, and impacts on the business. Finally, the vision should be exible enough that it can be changed to accommodate changes in the business climate, personnel, and other unforeseen events. Conclusion In this study, we examined change through a component theoretical lens. Success factors for each component were individually identied and explained. We also articulated how the components overlap. People enact change, but they need direction. The change vision

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is the blueprint that provides such direction. The BPR methodology is the actionable plan that ows from the vision. However, the environment must be supportive of change. Such support must be championed by top management. Moreover, people must be rewarded, not reprimanded, for taking calculated risks. Technology plays a supportive role in this process. Hence, the vision must account for the environment, methodology, people, and technology. References
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