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Abstract
In a highly competitive business scenario, it has become imperative for the organizations to review the business systems and processes continually and implement changes to meet the market expectations. Business Process Reengineering (BPR) is one of the management techniques for bringing radical design and transformation of strategic organizational systems to improve organizational efficiency and productivity. The success of BPR initiatives needs wilful participation from the employees and the fullest commitment of the management to ensure the success of the BPR projects in any organization.
By engaging qualitative semi-structured interviews among selected employees of an engineering company in Saudi Arabia, this research evaluated the enablers of the success for the BPR project including employee participation and management commitment. This research was also extended to identifying the organizational factors, which impede the success of BPR projects to suggest best practices for successful implementation of BPR. The study finds that employee participation and management commitment are the most important factors that determine the success of BPR projects in XYZ Company.
The findings suggest the development and use of multi-functional teams of employees for the successful implementation of BPR. The study also recommends that the top management of XYZ Company should change their style of leadership and adopt innovative qualities for ensuring the success of BPR projects. The research finds that the introduction of teamwork among the employees will ensure the success of BPR and employee participation has a large influence on the success of BPR projects in the company.
Introduction
For almost a decade the discussion on the role of business process reengineering (BPR) in ensuring improvement in the organizational performance has been continuing. However, until today a consensus on the role and scope of BRP has not evolved among the managers. This makes the study of the role of BPR in improving organizational performance and how it differs from other change initiatives like Total Quality Management differs, interesting and significant.
There has been a wide range of studies conducted on the implementation and effectiveness of Business Process Reengineering (BPR) to improve the overall performance of organizations. Effective leadership among other organizational, cultural and people issues has been one of the major determinants of the success or failure of BPR. BPR has a major impact on the functioning of the organization and this impact involves the generation, dissemination and use of information by people at various organizational levels, which again is dependent on how well the BPR process managers can motivate and communicate with the people concerned for bringing about the desired changes in the processes.
The level of motivation and communication has a significant impact on the ability of the organization to sustain the redesigned process and make effective use of them. The success of motivation and communication is the factor of the leadership style of the managers involved in the process. Since BPR has the objective of improving organizational performance, leadership can be considered to have a significant influence on the success of BPR. Lack of leadership may cause failure in the BPR initiatives of any organization.
The current research extends to a comprehensive understanding of the role of BPR in organizational performance improvement and examining the key success factors of BPR. More specifically this research attempts to evaluate the role of employee participation and management commitment in ensuring the success of BPR project at XYZ Company, in the context of Saudi Arabia.
Business Process Reengineering an Overview
To study the impact of leadership styles on BPR, it becomes imperative that a clear understanding of the term and its nature and objectives are evolved. BPR is a concept, which encompasses improvements in business processes in a dramatic approach.
Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed, (Hammer & Champy, 1993 as quoted in Jones, Noble, & Crowe, 1997).
BPR is concerned with making changes that are radical and significant implemented to improve the overall efficiency of the business processes. Davenport & Short, (1990) refer to the changes as business process redesign. The process changes, even though referred to in several terms such as business process improvement, core process design, process innovation and organizational reengineering, the central focus of all these different concepts is to bring effective and dramatic changes to the business processes to improve productivity and performance.
There are different reasons like to decreased efficiency of the processes, reduced market share, increased customer dissatisfaction or challenges from the competitors that induce organizations to implement BPR. Hammer and Champy, (1993) identify the need for BPR in companies, which are in deep trouble. These companies do not have a choice except to improve the processes. Similarly, companies that do not have trouble, but who are expecting that the company may have to face troubles also introduce BPR. Companies that are in the peak of their business success and see the likelihood to develop a lead over the competitors are keen in resorting to BPR.
Several case studies on BPR have recorded failure in BPR, because of several reasons including lack of understanding of BPR and the inability to perform BPR effectively (Chan & Choi, 1997). The lack of understanding of BPR might be because of the unrealistic expectations of the managers. When these unrealistic expectations did not materialize the managers lost commitment.
The inability to perform BPR was because of several reasons including, the use of an effective methodology, embarking on wrong process and objectives, over-reliance on information technology and the lack of top management commitment. Reengineering needs a new way of thinking and breaking away from the old ways so that the organization can develop visions. Since most of the benefits that can be derived from BPR are expected to improve employee morale and productivity, there is the need for the managers to adopt a fitting leadership style so that they will be able to ensure effective implementation of the changes in the processes.
Research Questions and Sub Questions
The main aim of the current research is to focus on the existing BPR literature to evaluate the role of employee participation and management commitment to ensuring the success of BPR projects. The findings of the study will enable the successful implementation of BPR projects in XYZ Company in Saudi Arabia. The study will assess to what extent the employee participation and management commitment act as enablers of success of BPR projects in an organizational context. In the process of achieving this aim, the research will extend to the analysis of key success and failure factors affecting the implementation of BPR projects in general. The research will attempt to find an answer to the following research questions.
To what extent, level of employee participation and management commitment will contribute to the success of the BPR projects in XYZ Company Saudi Arabia.
The following are the research subquestions:
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What is the level of participation of employees required in ensuring the successful implementation of the BPR Project?
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What is the level of commitment of top/senior management required in successful BPR Implementation?
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To what extent does the collaboration between employees and top managers ensure the success of the BPR Project?
Overview of the Organization under Study
Background
Established during the 1960s XYZ Company is a transformer manufacturing company located in Saudi Arabia, having around 1000 employees working in the head office and two branches located in two different cities. The company possesses a good potential for growth and with effective implementation of BPR projects, the company will be able to achieve commendable performance and enhance its profitability and growth. The company has its plans to be enlisted in the Saudi Stock Exchange and contemplates to issue an Initial Public Offer (IPO) for raising additional funds to be invested in larger projects. However, before the company takes these steps it becomes essential to streamline its business processes mainly to have its mounting expenses under control.
The major issue with the operations of the company is that the controls are highly centralized and managerial authorizations and approvals have been made mandatory for each step in the operations, which affect the speedy progress of work in different processes and projects, with the result that there is a cost overrun in every process. Apart from this, there is a general lack of the efficiency of the employees to deal with problem situations and they look at the mangers to give them solutions. There is no team working and communication is not required nor needed, as the managerial authority is highly centralized and is expected to be able to force the organizational activities.
Problem Statement
During the past few years, there has been a gradual decline in the overall performance and the company has witnessed degradation in the efficiency and attitude of the employees. The employee morale has also deteriorated, with the centralized decision-making authority, which prevented any urgent action on the part of the employees for solving business issues. Continuous and inordinate delays in business processes resulted in an escalation of cost in all respects.
The efficiency of the organization suffered from finding fault with the overall supply chain and pointing fingers at the management. Managerial bureaucracy is too deep and they are unable to provide satisfactory service to the customers. This has created major bottlenecks in the process cycles and the overall organizational efficiency must be improved. The implementation of business process engineering has been one of the techniques that the company contemplates to implement to improve the efficiency at all levels of the organization.
Seeds of Interest
The topic of Business Process Reengineering was particularly fascinating to the researcher because of his position in XYZ Company, Saudi Arabia, where he observed the opportunity a large scope for implementing BPR initiatives. The Companys growth has been deteriorating and the profitability of the Company has shown a declining trend because of the deficiencies noted in different business processes. It hurt the overall performance of the company. The researcher because of his interest in working to improve the performance of the Company decided to look at BPR as the technique for improving organizational performance. This required an in-depth study of the enablers and barriers for successful implementation of BPR techniques in XYZ Company Saudi Arabia and this interest led to the research and the writing of this dissertation on the topic.
Rationale behind the Research
Ever since BPR technique has been recognized as a management technique for improving overall organizational performance, it was looked at as a panacea to initiate and legitimize even the most disparate projects for organizational change (Biazzo, 1998, p.10). This was a clear lack of the understanding of the capabilities of BPR as a management technique and this was the main reason that led to the failure of the technique in the case of several organizations. In the overall implementation process, there has been a lacuna, in which the employee participation was completely not taken into account.
Similarly, there was a lack of commitment from the top management, which hindered the successful implementation of BPR projects. This implies a complete lack of knowledge on the enablers and barriers of BPR in the organizational context. These factors were subjected to constant redefinition with every BPR program creating an inconsistency in the approach and the consequent failure. Therefore studying the enablers and barriers of BPR, especially the human elements involved in the successful implementation and crosschecking them with the knowledge gained from the campus course using utmost objectivity makes the current research significant. Research conducted using a survey among the employees of the chosen organization further extends to knowledge.
Structure of the Dissertation
This dissertation is structured to consist of six chapters. The current chapter introduced the background of this research and the objectives of conducting the research. The research question and sub-questions presented in this chapter. An overview of the company, XYZ_ Company forms part of the chapter along with a statement of the problem and the proposed solution by the company. The significance of the research is also discussed in this chapter followed by a section on the structure of the dissertation.
Chapter Two contains the literature review. Since BPR is an important management technique, it is important to understand the origin of the concept and explore the different elements of BPR. This chapter describes the origin of BPR followed by a few definitions of the technique. Then, a study of the success factors of BPR is discussed followed by the discussion on employee participation in BPR projects. Afterwards, a review of failure for BPR is presented and to conclude the chapter, the impact of leadership on organizational performance is discussed, later on, summarized, and consolidated into one framework.
Chapter Three describes the methodology used to conduct this research. A review of the various data gathering techniques is presented along with the strengths and weaknesses. On deciding the appropriate research design, the chapter presents a discussion on the tools and techniques used for conducting the secondary search. A section of the chapter focuses on the different sources of literature used in this research. The rationale behind the selection of a particular data collection method is presented in this chapter. The design of the research instrument and the process of selection of samples are also discussed in this chapter. A note on the theoretical limitations of the research process forms part of this chapter.
Chapter Four deals with the analysis of the data collected. The chapter contains a discussion on the sample selection that will participate in this research. The chapter also deals with problems of data administration. As a part of this chapter, the data collected are tabulated and an analysis of the data is presented. The chapter will also cover the limitations encountered at the stage of data analysis. Chapter Four also contains a detailed discussion of the findings of the survey and interview. The discussion relates to all the points covered by the questionnaire and critical analysis made on the findings. An overall assessment focusing on the results and their impact on a global perspective, leading to theoretical and practical conclusions drawn from the research findings are presented in this chapter.
Chapter Five is the concluding chapter, which presents a recap of the research and the chapter presents recommendations for future researches. Chapter Six is on the reflections about the research. A list of sources from which information and data are drawn for completing the research is listed under the head References . The questionnaire used for drawing information from the samples is presented in Appendix I.
Literature Review
Organizations are sure to become successful when they network across functional boundaries and business processes rather than depending on functional hierarchies. However, the sheer use of the latest technology on existing processes and procedures will not be an effective solution to the organizational issues. An approach of rethinking the business activities to be of fundamental to the business processes has been found successful, which is the central theme of business process reengineering (BRP).
Effective redesign of business processes by removing unnecessary activities and replacing archaic, functional processes with cross-functional activities, in combination with using information technology as an enabler for this type of change will, according to the advocates of BPR lead to significant gains in speed, productivity, service, quality and innovation (Simon, 1994). BPR includes a fundamental analysis of the organization and a redesign of Organizational structure, job definition, reward structure, business workflows, control processes and, in some cases reevaluation of the organizational culture and philosophy (Diaz, 2004), to bring radical and dramatic changes in these elements to improve organizational performance.
Bringing changes at the organizational level requires committed change management at all levels. Change management can be practised efficiently applying the appropriate leadership style. The scope of this study is to explore the relationship between leadership styles and BPR. In this context, this chapter presents a review of the past literature on leadership styles, BPR and the underlying relationship between the two phenomena.
Origin of BPR
The concept of BPR originated during the mid-1980s, at which point of time there was massive support for business process redesign. Japanese managers used the concept along with the other management concept like TQM, for implementing continuous improvement. During the late 1990s changes in economic scenario forced organizations to introduce downsizing programs and using improved technology. According to Biazzo (1998), the concept has an extremely comprehensive definition and strategy of using information technology in redesigning the business processes.
Hammer (1990) gave a legitimate shape to the concept and defined BPR as the need for a radical reengineering of the processes by altering the existing processes by creating new processes. Despite the coverage of several research works and studies, BPR has not been fully understood (Biazzo, 1998; Knights & McCabe 2001). BPR is being used as an attractive banner under whose shade it has been possible to initiate and legitimize even the most disparate projects for organizational change (Biazzo 1998; p. 18).
Definitions and Key Elements of BPR
Davenport and Short (1990) define business processes as a set of logically related tasks performed to achieve a defined business outcome. According to this definition, there are two important factors characterizing business processes. They are (i) the processes have customers implying that the processes have defined outcomes and the customers represent the recipients of these outcomes, and (ii) the processes cross-organizational boundaries the processes occur either across or between organizational subunits.
The definition of business processes as given by Hammer & Champy (1993) reads as a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer . Based on this definition, developing a new product, ordering new goods from a supplier and creating a marketing plan can be considered as business processes. Hammer and Champy (2001) describe BPR as The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed (p. 35).
Biazzo (1998) explained BPR as the radical transformation of a firm carried out through reengineering its processes (p. 3). Knights and McCabe (2001) define BPR concept as [involving] the delayering and dismantling of management hierarchies; the empowerment of staff; and the introduction of multi-skilled teams of workers as opposed to fragmented, task-based forms of working (p. 3). According to Gunasekaran et al. (2001), the objective of implementing BPR is to transform the organization into a customer-oriented process-focused rather than functional procedure-focused based.
Although various definitions are describing the role and function of the concept of BPR, they all have recurring themes, which characterize the concept and methodology of BPR (Hammer and Champy, 2001). They are:
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It involves combining several jobs into a single job;
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Employees are empowered to take decisions along different processes;
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It involves the execution of the processes in their natural order;
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It is necessary to expect multiple variations of processes;
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Work is to be executed as it needs to be;
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It aims at minimizing managerial control and reconciliation and
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Customers are given the opportunity for a single point of contact.
Davenport and Short (1990) have attributed three distinct dimensions to business processes. They are (i) organizational entities or subunits, which take part in the process (these include inter-organizational, inter-functional and interpersonal processes), (ii) the type of objects attended through the process (physical and informational processes) and (iii) the type of activities that take place because of the business process (operational and managerial processes). It is to be noted that different processes require different levels of management attention and ownership. The processes have also different types of business consequences.
This emphasizes the importance of practising the appropriate type of leadership to derive the anticipated changes in the business processes so that the organization can be steered to success.
Application of the Technique of BPR
In the context of BPR, it is to be ascertained, which type of organization needs the application of the reengineering process. Hammer & Champy (2001) have identified three different types of organizations, which might need reengineering programs. First is any firm, which is in deep financial trouble because of heavy financial losses. Second is the company, which is not in deep financial trouble, but the management expects some troubles for the company shortly. Thirdly, the technique may be applied to such companies, which want to bring aggressive changes for business growth, even though there are no current or future threats envisaged. There are various examples of companies, which were benefited by engaging BPR. For example, Ford, General Motors, Southwest Airlines and Dell Computers are some of the companies quoted by Hammer & Champy (2001).
Process Orientation
Many current business processes with their functional structures were designed to enable efficient management by separating processes into small tasks that could be performed by less skilled workers with little responsibility. (Rock, 2003) Under this structure, the task of making important decisions within the organizational context was entrusted to the higher skilled and trusted leaders of the organization. Traditional approaches to business reengineering were expected to follow this sequential order, which centred on the decisions of the managers.
The sequence followed the formulation of a business strategy, followed by planning the business structures and processes with the final stage of implementation. In contrast to these traditional hierarchical structures, BPR is more process-oriented. The objective of BPR as practised today is to mitigate many of the issues raised by the traditional organizational structures, which are hierarchical. BPR is the process-oriented to change the structural relationship between the management and employees in the organization. It involves an essentially interactive process between both the parties. Any BPR process is undertaken to identify the deficiencies in the current process structures and dismantle them so that they can be replaced with innovative ideas and techniques.
BPR is carried out following certain well-defined approaches undertaken to improve the process concerned. A frequently adopted approach of BPR is to identify and improve those process(s), which are central to the achievement of business objectives and which do not perform to the desired levels. The next step is to undertake a systematic analysis for determining the most important areas for development.
Organizational Enablers for BPR
Evaluation of BPR projects has been attempted from several perspectives, to measure the success of the projects. Researchers have identified different factors contributing to the success of BPR. Davenport and Short (1990) identified reducing in the overall costs, reducing the time involved in performing the process, improving the volume of output and quality standards and improving the employee performance through empowerment and leaning as the objectives of BPR.
According to Morris & Brandon, (1993), the goals of BPR include
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streamlining the operation,
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reduction of costs,
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improving the quality of products,
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increasing the revenue,
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improving customer orientation and satisfaction,
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merging the operations acquired in the course of business.
Stow, (1993) observes that improving the organizational effectiveness, efficiency and competitiveness of the organization and enhanced profitability of the organization are the major objectives of BPR. According to Stow (1993), defining the objectives of BPR is the first essential step for the success of BPR.
The success factors of BPR are categorized into two broad groups factors relating to process redesign and factors relating to change management. In respect of process redesigning there are three different categories of success factors have been identified relating to
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process,
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project-team management and
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information technology.
In respect of change management, issues the categories of success factors include:
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people-oriented factors,
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managerial/administrative factors and
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organizational factors.
Based on this discussion the focus of the current study can be identified to concentrate on the success factors concerning change management, as leadership has an important role to play in all the factors relating to change management and in turn on the success of BPR.
Peppard and Fitzgerald (1997) identified ambitious objectives, the deployment of a creative team in problem-solving and a process approach and integration of electronic data processing as some of the key success factors. Ascari et al (1995) have included culture, processes, structure and technology as the four elements leading to the successful implementation of BPR. The study by Ascari found that the rethinking by the organization of its fundamental business process led to changes in the culture of the organization.
Organizations that were keen on implementing BPR, have to focus on recognizing and facilitating core business systems. However, the scope and maturity of the business process architectures and the nature of changes within processes vary within organizations. Successful implementation of BPR also requires significant changes to be brought in the organizational structure, especially promoting cross-functional work-teams. The study by Maul et al (1995) highlights the importance of change in organizational structure for reaping the benefits of BPR.
Several researchers and practitioners are of the view that top management commitment is the most important factor in ensuring the success of BPR (Janson, 1993; Davenport, 1993). The researchers point out that a reengineered process alone cannot make changes to the way the people work, as BPR can never happen using a bottom-up approach. According to Champy & Arnoudse, (1992), the role, attitude, vision and skill or knowledge of the leaders contribute to the success of BPR. The authors argue that the BPR must follow a top-down driven approach because the process requires effective change management.
Because of the inherently cross-functional focus on processes, BPR demands leadership by those who have comprehensive perspectives. The leaders in charge of BPR processes must have the authority to coordinate different interest groups effectively. Janson (1993) is of the view that clears, honest and frequent communication is important for the successful implementation of any BPR process, which in effect needs managers with appropriate leadership qualities who could communicate with employees at different levels cohesively and clearly.
Janson (1993) states sharing information and empathizing with the concerns of the employees would help in minimizing the resistance to change. Katzenbach & Smith, (1993) propose that a BPR project team should consist of people from different interest groups and the team members need to have acceptable skill levels, shared goal and mutual accountability among them. It is also important that any BPR project is led by people having the desired leadership qualities and style to accomplish the BPR project objective.
The BPR efforts must be undertaken based on certain chosen objectives. The objectives need to be selected based on the strategies and visions of the company. When conducted based on objectives, the success of BPR can be ensured easily. Davenport and Short (1990) selecting the right processes for BPR could be identified as one of the success factors. All these success factors become effective only when there is effective leadership, which controls the BPR process.
Some prior literature has dealt with the critical success factors for the implementation of BPR in the organizations. Ahmad (2004) considered the importance of leadership and top management support for the BPR as one of the key elements in ensuring the success of BPR. Based on this finding, this study considers top management commitment as interrelated and necessary in all the success factors enabling BPR implementation. According to Davenport (1993), only a successful change leader can have a realistic and positive expectation of improved organizational outcomes.
Employee Participation and BPR
Many authors have pointed out that employee participation is a key element in the successful implementation of BPR (Biazzo 1998; Mumford 19997, 1998; Taylor 1998; Paper 2001; Haines et al. 2005; McCabe 2004; Simón-Elorz et Al. 2005). Mumford (1998) argues that BPR cannot be termed as participative, as there is no element of employee participation in the design of the system. According to Mumford (1998), the focus of BPR is centred around the output of the firm as improved by efficiency and quality; but in reality, team working must have more focus. To make matters worse the technique of BPR tries to achieve its objective by tightening the production process by exercising workforce reduction, which in turn stresses the remaining workers more. Lack of employee participation and senior management support has been identified as reasons for the higher rate of BPR failure.
According to Mumford (1998), suggest employee participation in the areas of process design, training and development. This is important and essentia
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