The Most Common
Business Reengineering Success Factors and Pitfalls
There a number of definitions of business process reengineering(BPR).
Klein and Manganelli in their book "The Reengineering Handbook" defines it as
the "Rapid and radical redesign of strategic, value added business processes-and the
systems, policies and organizational structures that support them-to optimize work flows
and productivity within an organization. Johansson and Mchugh in their book "Business
Process Reengineering: Breakpoint Strategies for Market Dominance," defines it as
"The means by which an organization can achieve radical change in performance, as
measured by cost, cycle time, service and quality, by the application of a variety of
tools and techniques that focus on the business as a set of related customer-oriented core
business processes rather than a set of organizational functions. Robert Jacobs in his
book, "Real Time Strategic Change" defines strategic change (similar in concept
to BPR) as an "Informed, participative process resulting in new ways of doing
business that position an entire organization for success, now and into the future."
The above definitions emphasize dramatic, radical change, usually
occurring in a short time frame that effects a core business process that cuts across
functional lines and where the people, human empowerment element is crucial for success.
In recent years a number of formal BPR CASE and other computer aided design tools have
been employed to support the task of creating structure/process diagrams and modeling an
organizations data. Further, as companies achieve success and failure in this
process, a number of stages in the BPR process have become clearly identified. The
breakdown I like best is Manganelli and Kleins division of the BPR process into six
stages. The stages and the questions they need to address are:
Stage 1: Preparation: What is the level of
organizational commitment; What are the expectations; What are the project goals?; Who
should be on the team? What are the required skill sets?; How will results be communicated
to the organization?
Stage 2: Identification: What are the major
business processes?; How do these processes interact with customer and supplier
processes?; What are the strategic processes?; What are the business breakpoints?; What
processes should be reengineered within 90 days, within one year or thereafter?
Stage 3: Vision: What are the subprocesses,
activities and steps that makeup the major business processes; How do resources,
information and work flow through each process; Why do we do the things we do now (getting
out of the box or mental prison); What are the underlying business and technology
assumptions?; Are there ways to achieve business goals that seem impossible today? (Dare
to Dream)?; What are the boundaries between business processes and key business partners
(suppliers, customers, etc.)?; How might these boundaries be redefined to improve overall
performance?; What are key benchmarking measures for measuring performance against
"best of breed"?; What are the specific improvement goals?; What is the vision
and strategy for change?; How best can associates collaborate in the process and share the
vision and strategy for change?
Stage 4: Solution: Technical Design: What are
the required technical resources and technologies needed in the reengineered process?
Stage 5: Solution: Social Design: What are the
required human resources?; What immediate, near term and long range opportunities exist?;
How will responsibilities change? What training programs will be required?; Who is most
likely to resist change?; How can they be motivated to accept or participate in this
change; What will the new organization look like?
Stage 6: Transformation: How and when should
progress be monitored? How should unanticipated problems be handled? How is the momentum
for continuous change sustained?;
Clearly BPR is an on-going process critical to an organizations success in a
competitive market place. I suspect that if I ask most executives of mid to large local
corporations if the are using BPR, they will answer in the affirmative. But I know from
experience that if I dig deeper, what I will find is that what they term reengineering is
usually a combination of incremental advances in information technology (a new
client/server system, a new network, a new software package, a new "Director of
Strategic Planning") and market opportunism (getting a new government or over seas
contract, expanding an already profitable area of their business, etc.). The following are
the most common short comings I have observed:
Failure Point 1: Spending megabucks on new
technology while giving little or no thought to changing the organizations
underlying business processes. The later is often far more difficult since it involves
invading political turfs and soul searching by the companys key executives.
Failure Point 2: Delegating the task of
reengineering to an outside consulting firm. Usually this firm has a little or no track
record in reengineering or industry specific experience. The outside firm is a sort of
"crutch", relieving the organization from the sometimes arduous but always
rewarding task of empowering and involving their employees at all levels in the
reengineering process. Often this outside firm is used to help them in making the
technology decision, a task they are usually only marginally qualified for.
Failure Point 3: On the other hand, involving
the right outside consulting firm can be critical in breaking down organizational barriers
and providing a fresh, presumably objective organizational assessment. The outside firm
can also facilitate team building which is critical to sustaining the reengineering
process. All to many companies will tell me that they know their problems, so why bring in
an outside firm. But do they really know their problems? Have they developed a clear
methodology to address their reengineering needs.?
Failure Point 4: Inability to identify key
breakpoints in core business processes. Breakpoints are defined as the achievement of
excellence in one or more value metrics where the marketplace clearly recognizes the
advantage, and where the ensuing result is a disproportionate and sustained increase in
the suppliers market share.
Failure Point 5: Another common error I see is
that most companies fail to commit the resources, internal or external to the task. Their
key executives are so busy "putting out fires", they think they dont have
time to address BPR planning needs. The key term here is "think". BPR often
addresses the most "screwed up" processes of a company. If these are not
addressed they fester and can mean ultimate disaster.
In summary common mistakes are: (1) An unclear definition of just what is BPR; (2)
Unrealistic expectations; (3) Inadequate resources; (4) Taking too long (BPR should
produce tangible results within realistic timeframes); (5) Lack of sponsorship; (6) Wrong
scope (either too narrow or too wide); (7) Too great (or to little) reliance on new
information technology and (8) Lack of an effective methodology.
Copyright © Lowell Greenberg. All rights reserved.
Revised: October 14, 1996.