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How to cite this thesis

Surname, Initial(s). (2012) Title of the thesis or dissertation. PhD. (Chemistry)/ M.Sc. (Physics)/
M.A. (Philosophy)/M.Com. (Finance) etc. [Unpublished]: University of Johannesburg. Retrieved
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UNIVERSITY OF JOHANNESBURG

ENGINEERING MANAGEMENT

A mini-dissertation submitted in partial fulfilment

Of the requirements for the subject

An Integrated Approach to Business Process Reengineering Management

At the

UNIVERSITY OF JOHANNESBURG

Student Name: Nkosinathi Madushela


Student Number: 200834205
Supervisor: Professor JHC Pretorius
Abstract

Business Process Reengineering (BPR) is intended to be a management initiative


that fundamentally redesigns business processes, through radical rethinking of core
business processes. Thus ultimately yield dramatic improvements in contemporary
performance measures such as quality, service, speed etc. Business processes are
driven by people, technology, and workflow, however very little has been mentioned
about the “people element” in reengineered processes literature. Hence the estimat-
ed failure rate of 70% in reengineering initiatives partly results from neglecting the
human element in redesigned processes. The report is aimed at dealing with the
“human element” in BPR through the introduction of the concept referred to as Busi-
ness Process Reengineering Management (BPRM). A number of BPR case studies
were used to develop the concept of BPRM. Case study findings in both successful
as well as unsuccessful BPR initiatives were analysed, and the concept of BPRM
was then deduced from both the case studies as well as the literature review.

1
Contents
List of Figures ...................................................................................................................................... iii
List of Tables........................................................................................................................................ iv
Abbreviations ........................................................................................................................................ v
1. Chapter 1: Introduction ................................................................................................................ 1
1.1. Problem Statement .............................................................................................................. 1

1.2. Objectives .............................................................................................................................. 2

1.3. Importance of Research ...................................................................................................... 2

1.4. Methodology .......................................................................................................................... 3

1.5. Conclusion ............................................................................................................................... 3

2. Chapter 2: Literature Review ...................................................................................................... 4


2.1. Business Process Reengineering Techniques: ............................................................... 6

2.1.1. The Four Domains of Organisations ......................................................................... 9


2.1.1.1. Structure Domain................................................................................................ 10
2.1.1.2. Task/Process Domain........................................................................................ 14
2.1.1.3. Technology Domains ......................................................................................... 19
2.1.1.4. People Domains ................................................................................................. 21
2.1.2. Implementing Business Process Reengineering ................................................... 22
2.1.2.1. Intuitivists versus Methodologists Believes ................................................................. 23
2.1.2.2. Recognising Processes to be Reengineered ...................................................... 25
2.1.2.3. Process Visualisation ......................................................................................... 26
2.1.2.4. Evaluating Current “As-Is” Processes ............................................................. 28
2.1.2.5. Redesigning “To-Be” New Processes ............................................................. 29
2.1.3. The Structure of Business Process Reengineering Teams ................................. 30
2.2. Resistance to Change ....................................................................................................... 31

2.2.1. Operations Strategy Consulting Model ................................................................... 32


2.2.2. Change Matrix............................................................................................................. 36
2.2.3. Who moved my Cheese? .......................................................................................... 38
2.3. Change Management and their Strategies .................................................................... 40

2.3.1. Change Management Classic Theories.................................................................. 41


2.3.2. John Crawford’s Strategy for Change Management............................................. 43

i
2.4. Conclusion ........................................................................................................................... 45

3. Chapter 3: Business Process Reengineering Case Studies ............................................... 47


3.1. Case Study 1: Ford’s Accounts Payable Process ......................................................... 47

3.2. Case Study 2: Honeywell’s Total Plant Paradigm ......................................................... 50

3.3. Case Study 3: BPR Failure at TELECO ......................................................................... 54

3.4. Case Study 4: BPR in the Public Sector ......................................................................... 57

3.5. Conclusion ........................................................................................................................... 59

4. Chapter 4: Cases Analysis and Proposed Combinations .................................................... 61


4.1. Cases analysis .................................................................................................................... 61

4.1.1. Case 1 Analysis .................................................................................................................. 61

4.1.2. Case 2 Analysis .......................................................................................................... 62


4.1.3. Case 3 Analysis .......................................................................................................... 64
4.1.4. Case 4 Analysis .......................................................................................................... 65
4.2. Combinations ...................................................................................................................... 66

5. Chapter 5: Conclusion and Further Investigations ................................................................ 71


5.1. Limitations of the research ................................................................................................ 72

5.2. Further Investigations ........................................................................................................ 72

Bibliography ........................................................................................................................................ 73

ii
List of Figures
Figure 1: Leavitt's View of the Organisation [14] ........................................................................... 10
Figure 2: Traditional View of the Organisation [13] ....................................................................... 11
Figure 3: The Network Enterprise Structure [16] ........................................................................... 12
Figure 4: Hybrid Enterprise Structure [16] ...................................................................................... 13
Figure 5: Process Balance [18] ........................................................................................................ 15
Figure 6: Anderson's 7 Primary Operations Processes [19]........................................................ 16
Figure 7: The Process Triangle [20] ................................................................................................ 17
Figure 8: Earl's Topology of Processes [21] .................................................................................. 18
Figure 9: Cyclic Relation between IT and Reengineering [24] .................................................... 21
Figure 10: Process Visualisation Link in the Organisation [26] ................................................... 26
Figure 11: The Transition Curve [28] .............................................................................................. 32
Figure 12: Attitude Chart [29] ........................................................................................................... 33
Figure 13: Pyramid of Resistance [29] ............................................................................................ 35
Figure 14: Change Matrix [31] .......................................................................................................... 36
Figure 15: Moving Organisations from "As-Is" to "To-Be" Processes [33] ................................ 40
Figure 16: Change Management Strategies [35] .......................................................................... 41
Figure 17: Composition of "Change" Management Operating Model [37] ................................ 44
Figure 18: Ford’s Accounts Payable Process "as is" [38] ............................................................ 48
Figure 19: Ford's Accounts Payable Process "to be" [38] ........................................................... 49
Figure 20: Cyclic Nature of Fail Safing [39].................................................................................... 52

iii
List of Tables.
Table 1: Differences between BPR, BPM, and BPI [11] [12]......................................................... 6
Table 2: Comparing Continuous Improvement and Reengineering [9] ....................................... 9
Table 3: Advantages and Disadvantages of Functional Structures [15] .................................... 11
Table 4: Advantages and Disadvantages of Network Enterprise Structures [16] .................... 12
Table 5: Differences between the Network and Functional Infrastructures [17]....................... 14
Table 6: Summary of Breaking old Rules through Disruptive Technology [5] .......................... 20
Table 7: Intuitive Versus Methodology Believes [25] .................................................................... 23
Table 8: Methodology and Intuitive Frameworks [25] ................................................................... 24
Table 9: Davenport’s critical activities for Selecting Processes to be Redesigned [9] ............ 25
Table 10: Davenport’s Method for Process Visualisation [9] ....................................................... 27
Table 11: Davenport’s Activities on Evaluating "As-Is" Processes [24] ..................................... 28
Table 12: Davenport's Critical Activities in Redesigning New Processes [24] ......................... 30
Table 13: Operations Strategy Consulting Model [29].................................................................. 34

iv
Abbreviations
Abbreviation Meaning
BPI Business Process Improvement
BPM Business Process Management
BPR Business Process Reengineering
BPRM Business Process Reengineering Management
RACI Responsible Accountable Consulted Informed
SMART Specific Measurable Agreed Realistic Time-specific
TQM Total Quality Management

v
1. Chapter 1: Introduction

A lot has changed since the inception of the industrial age (around 1780) [1], and it
has become quiet vivid that Adam Smith’s concept of breaking down work to its sim-
plest specialised entities, thus the notion of (division of labour and specialization) [2]
is no longer relevant in today’s business environment. However not all is lost as in
the 1990s the concept of Business Process Reengineering (BPR) has been dealt
with by a number of researchers and businesses alike [3].

Lotfollah et al defined Business Process Reengineering (BPR) as a tool that focuses


on reducing wastage, improves efficiency, and ultimately reduces costs. A business
process on the other hand is viewed as the grouping of interrelated tasks which cre-
ate value in a business [4]. What should be noted on the aforementioned definitions
is that BPR is aimed at reviewing Processes rather than tasks, jobs or people, as de-
fined by Hammer and Champy [5]. BPR focuses on revising and redesigning both
manufacturing and management processes, but in the current research more em-
phasis will be on the management aspect, along with the workers reactions towards
BPR implementation initiatives. The logic behind this decision is based on the fact
that management ultimately decides whether to proceed or not with any given BPR
exercise, thus the manufacturing part of BPR is dependent on management’s under-
standing of the process, and whether they will approve it or not. An investigation on
what has been done in industry as well as literature will be reviewed. The integration
of BPR in organisations has been given little attention in literature, and that is
“how to integrate Business Process Reengineering Management tools, in a
way that the stakeholders (employees, management and customers) will have
minimal resistant towards the intended change”. Hence the concept of Business
Process Reengineering Management (BPRM) will be introduced.

1.1. Problem Statement

It is inevitable that there should ultimately be change upon the implementation of a


BPR strategy [3]. However the integration of BPR into existing processes relies on
the attitudes of the stakeholders that will be affected by the change. Thus BPR strat-

1
egies give little attention to the change management factor involved in the whole
process, and how the stakeholders will react towards it. A great business manage-
ment consultant company once stated “Culture eats strategy for breakfast” [6], thus
one can have a well-developed BPR strategy designed, however if the culture is not
conducive to make success of the strategy, the strategy is bound to fail. It was stated
earlier that the research will be primarily focused on BPR from a Management per-
spective, thus the term Business Process Reengineering Management (BPRM) will
also be used regularly.

1.2. Objectives

 Investigate widely used BPR techniques,


 Investigate how resistance to change in the business environment can be
minimised, and how to successfully implement change in the environment,
 Analyse case studies on BPR and identify where they had areas of improve-
ments, as well as their successes,
 Investigate possible factors that can cause stakeholders to either accept or
reject the reengineered business processes,
 Determine possible combinations that can be used in the integration of
Business Process Reengineering techniques;
 Identify possible benefits that the stakeholders can obtain from a well-
integrated BPRM strategy.

1.3. Importance of Research

 The world is constantly evolving hence the knowledge that is contained in lit-
erature on the subject needs to be constantly evaluated to aid in the perfor-
mance of businesses by reducing their costs, improving their processes, and
above all have a competitive advantage to survive in the business environ-
ment,
 Companies spend a lot of money on BPR strategies, and they expect
them to be a success. However if they do not get their value for money, that
negatively affects them;

2
 To be able to identify a link between business processes and the integration
thereof in the workplace with minimal resistance. Thus ultimately saving the
company both time and money, and keeping their employees loyal to the
company.

1.4. Methodology

i. Investigate the need for BPR and how it came into existence,
ii. Collect information on the different BPR techniques utilised,
iii. Collect information on the different “resistance to change” factors,
iv. Collect information on the different change management techniques and driv-
ers, and how they can be utilised to minimise resistance,
v. Analyse case studies on BPR and identify where they had areas of improve-
ments, as well as their successes,
vi. With reference to the five aforementioned points, propose different BPRM
combination tools that can be used to improve the implementation of BPR ini-
tiatives;
vii. Conclude the investigation, and propose further possible investigations in the
subject.

1.5. Conclusion

An introduction to investigate “An Integrated Approached to Business Process


Reengineering Management” was presented coupled with the objectives as well as
the methodology to be used. In conclusion the importance of the investigation goes
without saying, as the investigation could provide the business environment as well
as scholars with a combination of techniques that could be used to effectively im-
plement BPR processes, thus saving businesses and the Public Sector both time
and money.

3
2. Chapter 2: Literature Review

The current section is aimed at clearly defining BPR, its inception and growth over
the last two decades, and why it has been deemed as an important tool for western
businesses to survive in the current business space.

Business Process Reengineering (BPR) or simply reengineering is a concept that


started in the early 1990s [3], and has to date received mixed to positive reception in
business and scholars alike. Hammer and Champy defined Business Process Reen-
gineering as follows:

“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 [5]”

From the aforementioned definition, it can be stated that the following criteria needs
to be met, for a process and implementation thereof to be deemed as a BPR initia-
tive:

i. Fundamental rethinking: Fundamental rethinking is a combination of two


words, fundamental and rethink, where the former is defined as a central
principle on which something is based, and the latter means considering or
assessing something “especially a course of action” again, especially in order
to change it [7].Thus it can be seen that reengineering to a large extent deals
with assessing a business process with the intent of changing it, based on the
importance of asking why the process should be revaluated in the first place.
Thus from the aforementioned, it can be seen that BPR is not only aimed at
just changing, improving or modifying how things are done, but rather to ask
the fundamental question “why are these processes done or not done in the
first place”,
ii. Radical redesign of business processes: Radical can be defined as departure
from tradition, thus radical redesigning in BPR can be viewed as completely
altering the way business processes are designing [7]. It has been said that
the only constant in life is change [8], thus for businesses to be able to keep
their competitive advantage, and market share in industry, radical redesign-

4
ing, to increase efficiencies is imperative, and Business Process Reengineer-
ing is aimed at addressing this issue;
iii. Dramatic improvements in critical contemporary measures of performance:
Measures of performance have changed with time, and as customers are
constantly demanding personalised goods and services to tailor their needs,
businesses are finding it extremely difficult to try and meet everyone’s unique
wants and needs. Contemporary measures of performance are far more dif-
ferent with what they used to be at the beginning of the industrial age. In the
21st century customers do not only demand built-in quality in the prod-
ucts/services they purchase, but they also want quick turnaround times of
customized goods/services. Thus when corporations benchmark, they gauge
themselves using contemporary measurements of performance. Thus upon
the implementation of BPR, senior management expects dramatic improve-
ments on their processes, in order to ensure that their businesses are always
competitive.

With reference to the above definition, the importance of Business Process Reengi-
neering cannot be stressed enough for both scholars as well as businesses alike.
However reengineering also has its shortfalls, which will be highlighted in Chapter 4
of the current research. The life-cycle of reengineering can be understood better us-
ing Davenport’s model described below [9]:

 All of the processes need to be reviewed and updated, even if some might be
considered as generic,
 Reengineering is aimed at dramatically altering the “As-Is”/current business
processes,
 The proposed reengineered solutions need to be constantly revaluated, thus
there is a feedback mechanism incorporated to assess the progress of the
reengineered processes, and this is helpful as it aids in gauging the rate and
level of effectiveness of the reengineered processes;
 Finally and most importantly, reengineering can take a number of cycles be-
fore maximum efficiency is achieved. Thus reengineering is an exercise that
can be done more than once to achieve its full potential. It should be noted
that this presents a dichotomy as reengineering emphasises on its dramatic

5
improvements, however the process itself has the potential to take durations
longer than expected to achieve those dramatic results, due to its cyclic na-
ture.

Research conducted at the University of Maribor in Slovenia also incorporated other


performance measures when conducting an analysis on reengineering [10]. The per-
formance measures included flexibility, reliability, customer satisfaction, and human
resources. However these factors can be effectively gauged provided the personnel
within the organisation are willing to accept reengineering. It is due to this reason
that these factors are not incorporated in the current research, as it is primarily con-
cerned with the “human element factor” that affects effective implementation of reen-
gineering initiatives.

2.1. Business Process Reengineering Techniques:

Before diving into the different techniques and steps thereof, Business Process
Reengineering (BPR), Business Process Management (BPM), Business Process
Improvement (BPI), Total Quality Management (TQM), and Business Process Reen-
gineering Management (BPRM) should be clearly defined, as business executives
tend to use these different concepts interchangeably “It is understandable to some
extent as the processes have some common traits”. Table 1 summarises the differ-
ences in the concepts:

Table 1: Differences between BPR, BPM, and BPI [11] [12]

Concept Definition and Features


Business Process Reengineering  Fundamentally rethink to radically rede-
(BPR) sign business processes, and yield dra-
matic improvements in performance;
 From the aforementioned, reengineering
can be viewed as completely removing
“As-Is” processes, and reengineering new
“To-Be” processes,
 BPR is revolutionary, and doesn’t just
evolve with time;

6
 Conducted by companies that realise that
they need dramatic growth rather than in-
cremental growth/ Conducted by compa-
nies that want to be at the forefront of the
industry and either retain or increase their
market share.
Business Process Management  BPM aims to study, identify, change, and
(BPM) monitor business processes;
 Thus the fundamental concept of BPM is
to sustain existing processes.
Business Process Improvement  Process aimed at matching organisation’s
(BPI) goals, objectives, and shareholder expec-
tations, through identifying a gap that ex-
ists between the current deliverables,
compare them to what the deliverables
should be,
 It is outcome and not tasks oriented,
 Considers correcting and improving on
processes, before evaluating the potential
to automate them.
Total Quality Management  TQM makes the assumption that existing
(TQM) processes are correct and useful in princi-
ple;
 Places emphasis on involving all the
stakeholders, and in some instances even
goes to the extent of involving customers
and suppliers.

Business Process Reengineering Management (BPRM) is a concept proposed on


the current research; hence it has not been included in Table 1. However it should
be noted that the concept emphasises on the smooth integration of BPR, in such a
manner that the affected stakeholders embrace the BPR processes rather than be-
ing defensive, and resisting the complementing change. One critical aspect that the
7
process takes into consideration is that BPR is traditionally a top-down approach [9],
hence there could be an emergence of resistance towards a BPR project from bot-
tom-up. Therefore BPRM is aimed at identifying such gaps.

Below are some of the common traits that BPR, BPM, and BPI have [11]:

 BPI and BPM were derived from BPR,


 They are endeavours that seek to change/improve processes;
 They all analyse and seek clarity on how processes should operate.

Before discussing the two techniques which have been widely used in industry for
reengineering initiatives, the question of why would organisations make use of reen-
gineering instead of TQM should be contemplated. From Table 1 it was stated that
TQM is based on the premise that the current processes are fundamentally correct,
hence they do not need to be fundamentally redesigned, but rather be improved up-
on. However that is not entirely correct, as organisations are operating in constantly
changing environments, hence processes that might have worked at the inception of
the organisation might not be feasible as the company grows, customer expectations
change, and the competition landscape changes.

There are two techniques which have been widely used by industry for reengineer-
ing, and they are:

i. Davenport’s Methodology Approach;


ii. Hammer and Champy’s Intuitive Approach.

Methodologists believe that upon the initiation of a reengineering project, the reengi-
neers may find it dismaying to start with a blank page without having any plan of ac-
tion, while intuitivists believe that every reengineering endeavour is contextual (simp-
ly because organisations operate in different industries, and they also have different
organisational cultures) [13]. It should be noted that the success of one approach
versus the other is difficult to gauge, as a number of business case studies were ini-
tiated prior to the inception of the methodical approach. However Business Process
Reengineering Management (BPRM) can be applied to both approaches as it focus-
es on the management of the technique irrespective of their approach. Hence the
two approaches can be comparable in terms of BPRM.

8
One final note prior to discussing the differences between the two techniques is that,
the commonalities between them should be identified, as it is through these com-
monalities which all the pillars of different types of reengineering techniques rely up-
on. Table 2 highlights these commonalities, while differentiating them from BPI:

Table 2: Comparing Continuous Improvement and Reengineering [9]

From Table 2 it can be seen that any new technique which does not conform to what
is deemed to be reengineering will either be classified as continuous improvement
(BPI), or other business process initiatives.

2.1.1. The Four Domains of Organisations

Both methodologists as well as intuitivists agree that to have a successful reengi-


neering endeavour the four organisational domains need to be give attention [14]:

i. Structure Domain,
ii. Task Domain,
iii. Technology Domain;
iv. People Domain.

Figure 1 illustrates the relationship of the organisational domains, adopted in reengi-


neering.

9
Figure 1: Leavitt's View of the Organisation [14]

The following sections are devoted to analysing Leavitt’s domains:

2.1.1.1. Structure Domain

The Organisational Structure is a hierarchical view of employees within the organisa-


tion, and it seeks to define the organisation’s aims through activities such as task al-
location, coordination, and the supervision thereof [15]. Traditionally organisations
have utilised functional structures, which adopt a very rigid hierarchial structure,
where bureaucracy can hinder a lot of cross-functional work that needs to be done.
Reengineering proposes that structures should be aligned with the systems that they
will support, and as it will be seen, this results in flattened structures.

Traditional functional structures display the following traits [13]:

 Breakdown work into narrowly defined tasks through the use of func-
tions/departments/silos,
 Rigid hierarchy;
 Provide top management with four primary objectives:
i. Structural architecture,
ii. Organisation’s chief strategist,
iii. Generate and manage information structures;
iv. Control systems.

Figure 2 illustrates an example of a functional structure [15]:

10
Figure 2: Traditional View of the Organisation [13]

One of the major setbacks that stands’ out from Figure 2 is the inability to easily ex-
change information cross-functionally for middle and lower-management. A set of
advantages and disadvantages of functional structures is indicated in Table 3:

Table 3: Advantages and Disadvantages of Functional Structures [15]

Functional Structure
Advantages Disadvantages
Clear roles and responsibilities New business era’s primary drivers have
changed: Customers, Competition, and
Change itself.
Performance appraisal reviewed by Silos formed make it difficult for lower man-
direct line manager agement to resolve inter-departmental issues
efficiently.
Definite start and end-point of pro- Forces senior management to resolve junior
cesses performed by individuals management inter-departmental problems.

Reengineered structures display the following traits [16]:

 Seeks to break traditional structures,


 Managers assume coaching roles as opposed to managing employees;
 More flat structure, with increased management span of control.

11
Figure 3 illustrates the organisational structure post BPR, known as the network en-
terprise structure:

Figure 3: The Network Enterprise Structure [16]

The network enterprise structure is far from being realised in a number of organisa-
tion, as people are still entrenched in their own ways of doing things, and the level of
Information Technology to support such structures is still relatively complex to com-
prehend for some employees, including executives [16]. Similarly to functional struc-
tures, network enterprise structures also have their own advantages as well as dis-
advantages indicated in Table 4:

Table 4: Advantages and Disadvantages of Network Enterprise Structures [16]

Network Enterprise Structure


Advantages Disadvantages
Lower level management resolve inter- Potential duplication of work
departmental issues
Provides sense of empowerment to Vague responsibilities assigned to individuals
employees
Improved rate of process flows Vague accountability

Reengineering practitioners proposed a hybrid business structure which has the ad-
vantages of both the functional as well as the network enterprise structures; while

12
having none of the complementing disadvantages. Figure 4 illustrates the Hybrid
Business Structure:

Figure 4: Hybrid Enterprise Structure [16]

From Figure 4 it can be seen that the hybrid structure allows for inter-departmental
communication between necessary stakeholders involved, while also having a clear
chain of command, as well as rules, roles and responsibilities of individuals. Thus
both approaches (intuitivists as well as methodologist strive to attain a hybrid struc-
ture when performing a BPR exercise)

In closing, Selvin and Colvin illustrate the difference between network and functional
enterprise, hence the emergence of the hybrid structure as indicated in Figure 4.
Selvin and Colvin’s differentiation of the two structures is illustrated in Table 5:

13
Table 5: Differences between the Network and Functional Infrastructures [17]

2.1.1.2. Task/Process Domain

Business processes can be defined as a set of logically-related tasks which are car-
ried out to realise a clearly defined business outcome [9]. Thus a business process
can be interpreted using Equation 1 given below:

BUSINESS PROCESS  PEOPLE  WORKFLOW  TECHNOLOGY

Equation 1: Business Process [18]

From Equation 1 it can be seen that people play an intricate role in business pro-
cesses, however, as previously stated, in literature the human element involved in
BPR initiatives has been highlighted and has not been dealt with extensively com-
pared with the other two variables on the right hand side of Equation 1.

Figure 5 illustrates diagrammatically how the equation can be unbalanced if not all
the variables are not given the attention they deserve, and in most instances than
not, BPR failures arise from not balancing the process equation, as seen in Figure 6:

14
Figure 5: Process Balance [18]

Figure 5 illustrates an example of what happens when more energy is invested in


technology and people are neglected. It should be reiterated that the literature cur-
rently available for BPR does not extensively deal with how reengineers should han-
dle this variable, although it plays an integral part in the initiative as well.

Structures as discussed in Section 2.1.1.1 of the current research should be syn-


chronised with complementing processes. Hence BPR’s premise is concerned with
the modern way of work which allows it to focus on processes rather than tasks. It is
due to this viewing of processes rather than tasks which gives BPR a persona of
pervasiveness in a number of organisations where it is carried out [13]. However,
when applied correctly, processes will not only ensure that departmental workflow is
properly integrated, but they will also prove to be the quickest way to recover time
and costs at relatively low amounts of investment [18].

There are several techniques that can be used to categorise processes. Anderson’s
process classification scheme provides a framework which consists of thirteen core
business processes which are then partitioned into two sections, and more than 140
sub-processes, which aid organisations in realising their peak performance [19]. An-
derson’s 13 core processes are indicated below [19]:

1. Operation Processes:

i. Understanding markets and customers,

15
ii. Develop vision and strategy,
iii. Design products and services,
iv. Market and sell,
v. Produce and deliver products and services,
vi. Produce and deliver for service oriented organisations;
vii. Invoice and service customers.

2. Management Processes:

viii. Develop and manage human resources,


ix. Manage information and technology,
x. Manage financial and physical resources,
xi. Execute and manage environmental, health, and safety management
program,
xii. Manage external relations;
xiii. Manage improvement and change.

The first seven core processes which are clustered under operations processes,
should follow each other exactly as they are listed, whereas the last six core pro-
cesses clustered under management processes can be handled in any sequence, as
indicated in Figure 6 [19]:

Figure 6: Anderson's 7 Primary Operations Processes [19]

16
From Figure 6 it can be seen that depending on whether the organisation is service
orientated, product orientated or a the combination thereof Processes 5 and 6 can
be run in parallel. Another thing to note is that Figure 6 depicts processes and not
tasks; hence there also exists Anderson’s secondary sub-processes as previously
indicated.

Edwards and Peppard also proposed a technique on how to classify processes, and
they coined their technique “The Process Triangle” [20].Edwards and Peppard’s
classification is also split into processes categories, which are, competitive, infra-
structure, core, and underpinning processes [20]. A point of note is that the core pro-
cesses as defines by Edwards and Peppard are different from those defined by Earl,
on his Topology of processes. Where Earl’s core processes are customer related
Edwards and Peppard core processes are stakeholder related i.e. Edwards and
Peppard’s processes include everyone related to the business. Figure 7 illustrates
the Process Triangle.

Figure 7: The Process Triangle [20]

Another major process classification technique is Earl’s Topology of Processes. This


is one of the process classification techniques widely used in industry, and it is also
adapted by intuitivists in classifying processes [13]. Figure 8 illustrates Earl’s Topol-
ogy of Processes:

17
Figure 8: Earl's Topology of Processes [21]

What should be immediately noted from Figure 8 is that the two parameters used to
classify a process are, (i) its structuredness i.e. the more unstructured “chaotic” the
process is, the more attention it will require, (ii) the value chain is a set of activities
that the organisation operates under within a specific industry to achieve the required
deliverables [22]. Hence the value chain target refers to the ability of the process to
meet the set deliverables of the value chain. The characteristics of each process are
as given below [22]:

i. Core Processes:

 Central to the operations of the business,


 Relate directly to the customers;
 Constituted by the primary activities of the value chain.

ii. Support Processes:

 Comprised of internal customers,


 Support/backup core processes;
 Internal processes.

18
iii. Business Network Processes:

 Processes beyond the organisation’s boundaries,


 Processes including suppliers, business partners, etc.,
 Potential to increase the market share, and how the company is
perceived by external stakeholders.

iv. Management Processes:

 Processes that enable planning,


 Processes that enable organising;
 Processes that enable control of resources in the organisation.

The aforementioned process classification, aids reengineers to be able to categories


processes, with the logic being that if one can classify processes, then reengineering
them is potentially not as daunting as one might expect.

2.1.1.3. Technology Domains

Now that process identification has been discussed, the complementing technologies
that support the processes can be discussed. Technology refers to the application of
scientific knowledge for practical usage, particularly in industry [7]. It should be noted
thought that technology in BPR predominantly refers to Information Technology (IT)
in particular.

Business Process Reengineering places emphasis on the point that organisations


should adopt technologies that are synchronised with the level of the organisation’s
sophistication in making use of its information systems [13], noting that technology is
a primary driver in allowing people to perform their tasks differently.

Information Technology has not lived up to its expectations, as indicated by Hammer


and Champy who stated that the failure thereof resulted from organisations attempts
to automate old ways of doing things, instead of using Information Technology to
support reengineered processes [5]. Gartner Group’s research reported that approx-
imately 40% of technology projects fail, and that is due to the fact that technology on

19
its own is not the entire solution to organisations processes problems. Thus business
requirements should define the type of technology required, rather than trying to
make processes conform to technology packages [23]. Thus organisations should
not use technology to accelerate fundamentally flawed processes, as that will only
address the symptoms of the problem, and not its root cause [5].

Hammer and Champy promote the use of “disruptive technology”, which is technolo-
gy that is aimed at disrupting/breaking old rules/ways of doing things in business [5].
Table 6 summarises the old rules that can be broken through the use of disruptive
technology [5]:

Table 6: Summary of Breaking old Rules through Disruptive Technology [5]

Table 6 indicates that the proper utilisation of Information Technology, will not only
accelerate processes, but will also improve the entire efficiency of the organisation.
For instance, prior to the introduction of advanced telecommunication networks, or-
ganisations were forced to either centralise, or decentralised their operations.

Davenport and Short proposed a cyclic test that reengineers and organisations
should apply when considering the implementation of technology (The Cyclic Rela-
tion between Information Technology (IT) and Reengineering) [24]:

 Redesign processes then ask the following,


 How can business processes be transformed through IT?
 Investigation of IT capabilities.
 How can IT support reengineering?

20
Figure 9 best illustrates the aforementioned cycle [24]:

Figure 9: Cyclic Relation between IT and Reengineering [24]

From Figure 9 it is evident that reengineering and Information Technology considera-


tions should be done in parallel. Thus when reengineers and organisations are in the
process of redesigning processes, they should always keep in mind the type of In-
formation Technologies that are capable of fulfilling their objectives.

With the proper application of Information Technology the following Value Adding
Capabilities should manifest themselves:

 Competitive advantage,
 Reduces the organisations hierarchy, thus making the organisation more flat,
hence allowing individuals to assume a greater span of control,
 Dramatically upgrades inter-functional workflow ,
 Improves computation measures, thus reducing operational costs,
 Better communication channels, thus reduced co-ordination costs;
 Databases reduce both costs of duplication as well as information costs.

2.1.1.4. People Domains

It was indicated earlier that the human element when it comes to reengineering is not
dealt with exhaustively, and some of the reasons why that is the case will be identi-
fied in section 2.1.2 of the current research. The current research also goes further
by discussing resistance to change, as well as management styles and the impact
thereof on change management in sections 2.3 and 2.4 respectively.

21
Commitment of all stakeholders is imperative to the success of a reengineering initia-
tive. People want to feel as forming part of a team through collaboration, and they
also want to be empowered in order for them not to feel like reengineering is perva-
sive [13].

Empowering employees includes:

 Involving them in decision making,


 Allowing decision points to reside where the work is to be carried out;
 Empowering also decreases hierarchy, and increases individuals span of
control and responsibility, thus the work that they perform will feel rewarding.

Reengineering aims to break the functional structures and allow people to combine
multiple functions into a single process. The aforementioned does not only help indi-
viduals who only work with a single process, but it also allows parallel processes to
be realised, thus ultimately saving everybody time, which in business terms equates
to money.

Points of caution to be considered when allowing people to work together in a team


are:

 Instil discipline so that people are always focused on the mission,


 Set process boundaries and limits to avoid blame shifting,
 Set internal and external roles outside of the process, where internal roles are
their roles within the process, and external roles, are their roles when they are
back to their functional activities.

Davenport noted that “worker empowerment can also provide impetus for general
innovation” [24], thus People Domains need to be explored in detail in order for
reengineers to achieve the desired results of redesigned processes.

2.1.2. Implementing Business Process Reengineering

The primary objective of implementing reengineering is to introduce new processes,


rather than fixing the old ways of conducting business, and as indicated in section
2.1, there are two approaches that propose different alternatives when it comes to

22
implementation, and they are intuitivists as well as methodologists. The following
subsections of 2.1.2 will be comparing Hammer and Champy’s intuitive approach,
versus Davenport’s methodology approach.

2.1.2.1. Intuitivists versus Methodologists Believes

Table 7 gives a summary of the major differences that the two approaches have. The
advantages as well as disadvantages of the approaches are discussed in detail
throughout subsections in 2.1.2 [13]:

Table 7: Intuitive Versus Methodology Believes [25]

Intuitive Approach Believes Methodology Approach Believes


Believe in “higher level understanding” of Believe that although intuitive supporters
the “As-Is”/current processes, and not pay- start on a clean-slate, they eventually de-
ing detailed attention to “As-Is” process. velop a plan of action (methodology)
Claiming that reengineering aims to radical-
ly redesign i.e. starting from scratch.
They argue that all reengineering process- Argue that having to start on a clean-slate
es should commence on a clean-slate, as may be dismaying, especially to inexperi-
they believe that every organisation is enced reengineers.
unique and imposing methodology would
restrain creativity
Heavily rely on imagination and the utilisa- Argue that “BPR is itself a process, thus it
tion of extensive experience will have a methodology. However the
techniques employed at each step are high-
ly contextualised which can then make BPR
appear to be intuitive”

From Table 7 the major difference resides in the definition of reengineering itself,
radical redesigning becomes a focal point. This could prove to be a problem to intui-
tivists in a sense that, starting on a clean-slate could potentially duplicate effort, as
well as incorporating efficiency problems of current processes to “To-Be” processes.
However imposing a lot of rules to be followed in radical redesigning (as suggested
by methodologists) has the pitfall of designing processes which are similar to the
23
“As-Is” processes, thus the benefit of creatively redesigning radical processes could
be forsaken. The most crucial offering of methodology is that it introduces discipline
and structuring, which are essential, e.g. programmers could start the reengineering
initiative with programming, prior to sufficient analysis and design [9], if they do not
follow methodology.

The two approaches provide frameworks for reengineering initiative as indicated in


Table 8 [25]:

Table 8: Methodology and Intuitive Frameworks [25]

From Table 8 the following can be listed as common steps which are important in
the BPR initiative:

i. Recognising processes to be reengineered,


ii. Construct process visualisation,
iii. Evaluating “As-Is” processes;
iv. Redesign “To-Be” processes.

The two approaches will be evaluated on the aforementioned steps.

24
2.1.2.2. Recognising Processes to be Reengineered

The reengineering initiative begins with the classification of processes (refer to sec-
tion 2.1.1.2), Hammer and Champy’s selection criteria of processes which need to
be reengineered are given below [5]:

i. Importance of process (core process),


ii. Feasibility (can the process be reengineered from network, support, and or
management processes perspective);
iii. Dysfunction of the process (processes in the biggest disarray)

Hammer and Champy’s preferential starting point is to analyse dysfunction, claiming


that these processes usual could have symptoms and diseases that can shed some
light on other processes that might experience similar problems.

Davenport on the other hand lists crucial activities to be utilised inorder to identify
processes for reengineering, as indicated in Table 9 [9]:

Table 9: Davenport’s critical activities for Selecting Processes to be Redesigned [9]

What should be clarified in Table 9 is the 10-20 processes Davenport mentions in


step 1 (Enumerating Major Processes). This refers to the number of processes that

25
the reengineer or organisation concentrate on the most. Arguing that a number of
organisations have well over a hundred processes, and for a reengineering team to
analyse all of them could be potentially time wasting, as some of them are potentially
not critical to the core business processes [9]. Hence between ten and twenty (10-
20) processes is given as a guide on the processes to be reengineered.

2.1.2.3. Process Visualisation

Achieving the objectives set at the beginning of a Business Processes Reengineer-


ing initiative requires a very strong vision, hence the concept of Process visualisa-
tion. It is particularly difficult to visually generate processes which are intended for
Business Process Reengineering, due fact that the organisation or reengineers
should filter a number of processes to ensure that the processes that are being ana-
lysed are correct. However reengineers and/or organisations should also strike a
balance between analysing a lot of processes and analysing fewer than required
processes. The initial starting point of process visualisation is to recognise that visu-
alisation is primarily driven by the organisation’s strategy as indicated in Figure 10
[26]:

Figure 10: Process Visualisation Link in the Organisation [26]

Whilst business strategy is intended to “define the right things to do”, process visual-
isation provides the actual recipe of “doing the right thing right” [26].

26
Hammer and Champy propose that the following should be done when one needs to
effectively visualise a process [5]:

i. Ask the customer about his/her problems and goals. Taking note of the im-
portance not to ask the customer what he/she wants as his/her unexpended
mind-set to the problem might result in limited responses, which could be diffi-
cult to decipher;
ii. Hammer and Champy strongly believes that if one genuinely wants to acquire
customer information about what they do, all one needs to do is to simply
watch them do it. Thus in that way the reengineering team will get thorough
understanding of what is and is not important.

Davenport on the other hand proposed a set of steps to achieve an effective process
as indicated in Table 10:

Table 10: Davenport’s Method for Process Visualisation [9]

From Table 10, step number 3 “Benchmark for process performance”, also serves as
a creativity barrier, as reengineering strives to redesign processes that are superior
to the current industry norms (benching marks).

27
2.1.2.4. Evaluating Current “As-Is” Processes

The major disagreement of the two approaches arises in the depth in detail of evalu-
ating “As-Is” processes. Hammer and Champy believe that only “high level under-
standing” of “As-Is” processes is sufficient, and analysing “As-Is”/current processes
in depth does not play a crucial role in Business Process Reengineering, because
reengineering places emphasis on radical redesign, and ultimately new processes
should be generated at the end of the exercise [5]. Davenport on the other hand ar-
gues that sufficient time should be taken in analysing existing processes. Claiming
that investigating current processes will enable reengineers to identify pitfalls that
reengineered processes could potentially be faced with. Davenport goes as far as
generating a list of key activities in understanding as well as improving “As-Is” pro-
cesses as illustrated in Table 11 [24]:

Table 11: Davenport’s Activities on Evaluating "As-Is" Processes [24]

What should be pointed out from Table 11 is that, Davenport proposes that short-
term improvements on current processes be implemented, while redesigning new
processes. This will not only identify dysfunctions in the current processes, but it will
also enable reengineered processes to be more efficient. Reengineers take a sub-
stantial portion of blame in failed reengineering initiatives, hence it is advised that
they should take note of any pitfalls associated with “As-Is” processes [24].

A final note on evaluating “As-Is” processes is that, when reengineers decided to an-
alyse “As-Is” processes, they should always bear in mind the cost implications asso-

28
ciated with the exercise, because when they invest a great amount of time on ana-
lysing “As-Is” processes which will not yield great returns on identifying the associat-
ed pitfalls, then the exercise becomes costly. However when the opposite happens
then, analysing current processes will not only save time, and identify pitfalls to re-
designed processes, but the incremental improvements will also save the organisa-
tion a great deal of money.

2.1.2.5. Redesigning “To-Be” New Processes

With technology being one of the primary drivers of reengineering, both intuitivists as
well as methodologists agree that disruptive technology should be exploited, and uti-
lised to the fullest “bearing in mind the organisation’s level of technological sophisti-
cation” [25]. Given below are the two approaches views when it comes to redesign-
ing new processes:

i. Hammer and Champy’s Approach to Redesigning Processes (Intuitive Ap-


proach) [5]:
 Identify and remove any assumptions,
 Irrespective of any process step, questions about why it should be
or shouldn’t be done should always be asked. Even though some
steps might be perceived as generic;
 Exploit disruptive technology.

ii. Davenport’s Approach to Redesigning Processes (Methodical Approach)


[24]:
 Involve key stakeholders, as they would want to feel that their inter-
ests are recognised,
 Analyse feasibility, risks, and benefits;
 Exploit disruptive technology, and prototype newly reengineered
process.

Davenport’s critical activities for redesigning new processes are indicated in Table
12 below [24]:

29
Table 12: Davenport's Critical Activities in Redesigning New Processes [24]

2.1.3. The Structure of Business Process Reengineering Teams

Now that the two major techniques utilised in industry have been discussed, the
structure that should form part of a Business Process Reengineering team can be
discussed, in order to have a successful reengineering initiative. The amount of au-
thority and the particular personnel who are selected for the initiative are equally im-
portant. When selecting the reengineering team, people that have the necessary
skills and who are also generally accepted in the current environment should take
first preference. Below is a list of personnel as well as their roles that should form
part of the reengineering team [25]:

i. Reengineers:

 Management individuals, who will be responsible for managing the


reengineering team,
 Should have an in-depth understanding of technology,
 Requests time and freedom to do a thorough analysis and diagnostics
of the problems.

ii. Insiders:

 A minimum of thirty percent of the individuals in the reengineering team


should be people familiar with the current processes,

30
 People who have worked with “As-Is” processes;
 People who understand the details of the “As-Is” processes.

iii. Champion:

 Should exhibit the same traits as reengineers,


 Responsible for leading the reengineering team;
 Attends to issues such as political battles, removing obstacles, gather-
ing support across all levels of management.

iv. Public Relations Officer:

 Spreads positive message about reengineering in the workplace,


 Highlights and promotes advantages and benefits of the initiative;
 Irons out incorrect statements that employees might have heard
through the grapevine.

The number of reengineers as well as insiders will depend on the complexity of the
initiative. While the other posts can be fulfilled by an individual assigned to them.

2.2. Resistance to Change

Resistance is the refusal to accept or comply with something [7], while change simp-
ly put is to make or become different [7]. Thus resistance in the organisation can be
viewed as the refusal to accept the organisation’s different approach in conducting
business. It has been said that human beings are creature of habit [27], and intro-
ducing change is bound to have obstacles if not handled properly. There are a num-
ber of techniques available in literature which proposes potential solutions of how to
effectively manage change. The three major techniques in literature will be dis-
cussed, and the most feasible or the combination thereof will be incorporated to the
concept of Business Process Reengineering Management (BPRM).

Before the discussion of the aforementioned different techniques, it should be stated


that most change resistance issues exhibit the same transition curve profile. Howev-

31
er the rate at which the curve morphs is imperative and the techniques try to accel-
erate the morphisis this curve. Figure 11 illustrates the transition curve:

Figure 11: The Transition Curve [28]

Figure 11 places major emphasis on the capacity and time of the different stages in
change resistance. A special note is that integration in the transition curve takes the
longest duration with the biggest capacity in effort shown by resistors. The three dif-
ferent techniques are discussed below.

2.2.1. Operations Strategy Consulting Model

Megan Burns “Founder and Managing Director of Operations Strategy Consulting”


starts by identifying the four major sources of resistance to change, and then subse-
quently provides alternatives on how to identify each source coupled with remedial
steps [29]. It is believes that only five percent of people embrace change, with little to
no resistance, while five percent would do anything to resist change, and the rest of
the population is in-between as indicated in Figure 12:

32
Figure 12: Attitude Chart [29]

From Figure 12 it can be seen that the majority of the stakeholders affected by emi-
nent change will tend to resist it to some extent, hence it is imperative that the con-
cept of Business Process Reengineering Management be addressed. There are four
main sources of resistance to change, and all three techniques develop their solu-
tions based on these four sources [30]:

i. Cognitive resistance: Resistance resulting from individuals beliefs, based


on the individuals own experiences,
ii. Ideological resistance: The believe that the suggested change violates
the individuals fundamental values, which they perceive to be projected in
the organisation,
iii. Psychological resistance: The avoidance to trying new things, which
leads individuals to accept low levels of tolerance for uncertainty, discom-
fort and ambiguity;
iv. Power-Driven resistance: The morphisis of psychological resistance,
which results in the perception of loss of power.

33
The Operations Strategy Consulting Model proposes that to effectively deal with re-
sistance to change one needs to follow the steps indicated below [29]:

i. Analyse the behaviour of individuals, and recognise specific traits,


ii. Classify the traits into the four major resistance to change sources;
iii. Apply the proposed plan of action.

Table 13 summarises the technique:

Table 13: Operations Strategy Consulting Model [29]

Traits to Identify Resistance to Change Plan of Action


Source
 Information and expe-  Listen attentively to the
rience based, proposed arguments,
 Challenge facts,  Show your rationale to
 Recurring debates;  Cognitive the proposed change,
 Perceive change to be resistance  Talk to resistors pri-
time wasting. vately as they might
contaminate the entire
group;
 Get resistors to make
small commitments.
 When facing change  Restructure the
resistors have a moral change statement to
dilemma,  Ideological highlight the organisa-
 Challenge the change Resistance tions values and be-
leader directly, lieves,
 Resistance to change  Do not try to argue
is rooted with the re- about values (be ob-
sistors personal val- jective),
ues and beliefs;  Make the new values
 Resistors feel like to be positive and en-
change is pervasive gaging;
 Resistors fear that  Increase the perceived

34
change will make risks of the status quo,
things worse,  Indicate what resistors
 Exaggerate change stand to benefit from
difficulties,  Psychological change,
 Potentially spread fal- resistance  Propose rewards for
sified information desired behaviour,
through the grape  Show empathy.
vine;
 Resistor concentrate
on costs rather than
potential benefits.
 Pretenders,  Increase management
 Form “clans”, participation,
 Usually in manage-  Power-Driven  Negotiate with them,
ment; resistance  Share credit,
 Normally politically  Promote teams,
motivated

It should be noted that the distribution of the aforementioned resistors is not spread
out evenly, and the level of impact that each group has in influencing change varies,
see Figure 13:

Figure 13: Pyramid of Resistance [29]

35
Figure 13 indicates that although the majority of individuals can be classified as cog-
nitive resistors, the level of impact that they have in negatively impacting the pro-
posed change is not as severe as the level of impact that the power-driven and ideo-
logical resistors could potentially have.

2.2.2. Change Matrix

Eli Goldratt proposed the change matrix technique which states that the individual’s
resistance to change can be evaluated by understanding how an individual weighs
the advantages as well as the perceived disadvantages of change [31]. Figure 14
illustrates the change matrix:

Figure 14: Change Matrix [31]

Goldratt highlighted four drivers which make people draw conclusions about the per-
ceived implications of change as indicated in Figure 14 by a pot of gold, crutches, a
mermaid, and an alligator which are discussed below:

 Pot of gold:

 Listed on the top left quadrant of the matrix,


 The pot of gold illustrates what resistors can possibly achieve, should
they embrace change,

36
 Different individuals have different perceptions of what the pot of gold
(benefits) could be, thus change managers need to ensure that they
communicate efficiently.

 Crutches:

 Listed on the top right of the matrix,


 Highlights the potential risks associated with change,
 Change managers should explicitly define potential risks to avoid the
distribution of incorrect information through the grapevine,

 Mermaid:

 Listed on the bottom left of the matrix,


 Represents the current benefits that the resistors are currently enjoy-
ing, and resistors might be too scared to change to save their mer-
maids e.g. some people feel comfortable with the status quo, and they
could potentially be suffering from learning anxiety, and they think that
the new processes could potentially make them looking incompetent;
 Change managers should ensure that proper training is given to rele-
vant stakeholders, in order to minimise the resistors perception of in-
competence.

 Alligator:

 Indicated on the bottom right of the matrix,


 Represents the danger of sticking to the status quo,
 Change managers should ensure that the potential risks associated
with continuing with “As-Is” processes are exploited to support and
show the importance of the proposed changes.

Goldratt’s technique is more accommodating compared to the Operating Strategy


Management’s model for junior or entry level managers. Junior change managers
might not have the experience to identify the behaviour traits of a number of individ-

37
ual, given a limited duration. Hence the change matrix can aid junior change manag-
ers to devise a methodical way of dealing with multiple personalities. However the
change matrix is more involved and requires a great deal of time compared to Burns
strategy. However when dealing with a large number of people Burns’ strategy can
potentially overlook the influence and impact that power-driven and ideological resis-
tors have on the entire change exercise.

2.2.3. Who moved my Cheese?

The bestselling book by Dr. Johnson Spencer has been deemed to be a business
breakthrough since 2001. The book follows the lives of four small characters which
live in a faraway land and are in constant pursuit of cheese. The moral of the story is
that individuals should not be relaxed in their comfort zone, and they should strive to
constantly search for new opportunities, which inevitably comes through change. Be-
low are the major key concepts of the book [32]:

 The more important the cheese is to you, the more you’d want to hold on to
it:

The statement implies that when people view their current circumstances, they do so
in an “understandably” bias manner, meaning that the perception of what they have
on their current circumstance is more importance for them to hold on to, and in most
instances than not their circumstances might no longer be relevant. This statement
leads to the following major concept of the book.

 Smell the cheese often, so you know when it’s getting old:

Individuals should constantly be aware of their current circumstance, and they


should not be content in their comfort zones, as their environment constantly chang-
es, so should their awareness of their surroundings. In the business environment,
the aforementioned statement translates to people constantly improving their skills,
to remain marketable and have a competitive advantage.

 If you don’t change you become extinct:

The current business environment is extremely competitive, and competitors are al-
ways trying to be innovative, thus being good in your current market does not neces-

38
sarily translate to the survival of your organisation. When you are not proactive
enough to initiate change e.g. Motorola was one of the leading telecommunications
companies in the 1980s and 1990s, through its pagers devices. However due to its
lack of investment in research and development, they were left behind in the cellular
phone industry.

 When you move beyond your fear, you feel free:

Fear presents a perception of danger “which might or might not be true”, and that in
turn leads people to regress to what they feel most comfortable with [27]. Allowing
yourself to move beyond your fear(s) does not only allow you to explore new things,
as Dr. Spence puts it “when you move beyond your fear, you feel free”.

 What would you do if you were not afraid:

Dr. Spencer proposes a guide to help individuals and organisations transcend be-
yond their fears, and he does that by asking them this simple question “what would I
do if I wasn’t afraid?” [32], and if the advantages of the action that you would take if
you were not afraid, exceed the disadvantages of not taking any action, then you
should take action.

 When you change what you believe, you change what you do:

Change enables individuals to look at things from a different perspective, thus


change enables individuals to better understand “As-Is” processes, and the necessi-
ty thereof to question them. Changing believe is not an overnight processes, howev-
er the potential rewards can give individuals and/or organisational a competitive ad-
vantage, thus allowing them not only to survive but to thrive in the current business
environment.

Who stole my cheese does not explicitly highlight the four sources of resistance to
change, however the lessons that are derived from the story of the small characters,
implicitly reveal these sources, and the book proposes lessons that could be used in
any change environment. The proposed lessons appear to be generic in nature,
however they can be adopted and customised to a number of contextual cases, and
still be relevant, provided that they are applied correctly.

39
2.3. Change Management and their Strategies

Change management is the utilisation of tools, processes, and techniques during the
management of people, when an organisation transforms itself [33]. There are four
key areas which are affected when organisations change the way they operate, and
they are [33]:

 Processes,
 Systems,
 Organisational structure;
 Job roles.

It should be noted that change management is a process, rather than an event, and
it is important to constantly monitor the process to achieve the desired results. Figure
15 illustrates the change transition process [33]:

Figure 15: Moving Organisations from "As-Is" to "To-Be" Processes [33]

Business Process Reengineering can be viewed as a project management endeav-


our,(i) as it too has a starting point,(ii) feedback of the current progress needs to be
relayed back to the relevant stake holders, and (iii) finally the endeavour should end
at some point (as soon as the reengineered processes are running smoothly). Thus
Figure 15 illustrates the importance of handling Business Process Reengineering in
parallel with change management, in order to ensure that the transition from current
to future processes yields the desired results.

40
2.3.1. Change Management Classic Theories

There are three primary strategies for change management as listed below [34]:

 Empirical-Rational: Strategy based on the principal that people are rational,


thus they always align themselves with change that seeks their personal gain,
 Normative-Reeducative: Suggests that people adhere to cultural norms and
values, thus should the organisation decide to change its culture and values,
people can easily adjust to the change;
 Power-Coercive: Proposes that people are compliant, and they would nor-
mally do as their told, or when instructed.

Organisational change is contextual; thus organisations seldom use only one change
strategy in a given situation. Hence organisations utilise a meta-strategy, which is a
mixture of the aforementioned strategies, and indicated by Figure 16 below:

Figure 16: Change Management Strategies [35]

Figure 16 identifies the different Change Management strategies which can be ap-
plied in specific situations, however as Business Process Reengineering involves a

41
host of stakeholders the grand/meta strategy which is a combination of the strategies
identified in Figure 17 can be adopted.

It was indicated earlier that when organisations are dealing with change, in most in-
stance the challenges that they face are contextual, however below is a list of situa-
tions that change managers should look for in order to select which strategy will work
best [36]:

 Level of Resistance:

When experiencing strong resistance, a strong power-coercive strategy is recom-


mended, however the change manager should always bear in mind that resistors
have perceived power which can potentially negatively impact the power-coercive
strategy.

Weak resistance can be better dealt with through a normative-reeducative strategy,


in conjunction with the empirical-rational strategy

 Population:

Large populations generally have multiple personalities involved, hence the meta-
strategy approach is proposed.

 Stakes:

High stakes directly relate to high risk, and when the risk probability is high, it is rec-
ommended that all three strategies be taken into consideration.

 Time Frame:

The power-coercive strategy is proposed for short time frames, as organisations


cannot afford to delay the planned processes, hence a more authoritative approach
is advised. While long time frames are best handled through the empirical-rational
strategy, as the change manager has time to identify the unique needs of all the rel-
evant stakeholders.

 Dependency:

42
When management is heavily reliant on its employees, then the management’s abil-
ity to dictate is limited. Whilst, when employees are heavily reliant on management,
then their bargaining power is also limited. Thus in this instance negotiation skills,
rather than a specific strategy, are important.

How to go about into implementing the change strategies is best summarised by


section 2.2.1, where different alternatives are provided by Megan Burns for different
situations “provided that” the change manager can identify particular traits, which fit
the aforementioned change strategies.

John Crawford proposed a change management strategy that combines different


scenarios, and how a change manager can go about into developing a framework,
which will help in selecting a change strategy with the best fit. It is imperative to note
that John Crawford’s strategy does not explicitly point out which strategy to use e.g.
power-coercive, empirical-rational strategy, etc. However his strategy is fundamen-
tally a grand/meta-strategy, with emphasis on how to identify change situation, and
which elements influence one change strategy relative to the other. Section 2.3.2
discusses John Crawford’s strategy.

2.3.2. John Crawford’s Strategy for Change Management

John Crawford proposed a change management strategy, where he places empha-


sis on the importance of ensuring effective communication through proper communi-
cation channels. The key aspects which need to be focused are indicated below [37]:

 Ensure consistency of information,


 Include all relevant stakeholders,
 Always be forward looking, to try and prevent problems before they arise;
 Always accommodate the views of others.

The aforementioned points should form the basis of the organisation’s change man-
agement operating model, which is indicated in Figure 17 below:

43
Figure 17: Composition of "Change" Management Operating Model [37]

All of the elements on Figure 17 heavily reply on effective communication, which is


based on accurate information. Business Process Reengineering prioritises on the
organisation’s competencies and capabilities, however effective change should also
include the business’ strategic direction, which “as indicated in section 2.1.2.3”, di-
rectly relates to the process visualisation exercise.

Upon the completion of setting the intended priorities using the elements of Figure
16, coupled with the key aspects of effective communication, John Crawford sug-
gests that change managers should develop a SMART criteria as indicated below
[37]:

 S: Specify the changes objectives, potential benefits, and the associated


risks,
 M: The desired change outcomes should be measurable, in order to quantify
the change’s efficiency,
 A: Ensure that all affected stakeholders have agreed on the change strategy
and plan of action,
 R: Set realistic results and potential risks, in order to best manage detours
that might arise along the transition process;

44
 T: Change managers should set milestones, and ensure that the deliverables
of the change process are time specific.

Finally John Crawford Suggests that upon the commencement of the change initia-
tive, a RACI checks should be conducted:

 R: The change manager should know the roles and responsibilities of the
relevant stakeholders, in order to be in agreement regarding the expected
deliverables from the change manager,
 A: The change manager should be aware of who is accountable for signing
the acceptance or the rejection of the proposed processes,
 C: Consult all relevant stakeholders to obtain their input, as well as their
buy-in on the documented deliverables;
 I: Ensure that all relevant stakeholders are informed of the completion of
the initiative, in order to formerly close and document the life-cycle of the ini-
tiative. This will also increase the organisation’s memory i.e. lessons learnt
that could potentially be used in the future.

John Crawford’s model provides guidelines on what needs to be done during a


change initiative, however the model is not specific on the actual details of how to go
about into setting specific deliverables, key milestones, etc. John Crawford’s model
does not have generic processes, as each organisation is contextual, and setting
generic steps will potentially exclude critical information in specific areas.

2.4. Conclusion

The entire chapter was devoted into identifying Business Process Reengineering
techniques that are widely used i.e. methodology versus intuition approach. The
chapter started off by indicating the difference between Business Process Reengi-
neering (BPR), Business Process Management (BPM), and Business Process Im-
provement (BPI). It was imperative that the distinction of the concepts be granted
audience, as a number of executives tend to use them interchangeably. The poten-
tial danger of using these terms interchangeably could result in reengineers deliver-
ing outcome which were not intended by the organisation. Prior to discussing the
reengineering techniques, the fundamental cornerstones on which organisations are

45
primarily based on were discussed, because change affects these cornerstones
known as the four domains of organisations.

Section 2.1.2 was devoted into discussing the processes adopted to implement
Business Process Reengineering by both methodologists as well as intuitivists, along
with their respective strengths and pit-falls highlighted.

Upon the implementation of reengineering, change is expected within the organisa-


tion, however as people are creatures of habit, resistance could manifest in different
forms hence the different resistance to change factors were discussed, and how they
could be dealt with best. Finally change management strategies were discussed, and
how they could be implemented to organisation’s which are going through change.

46
3. Chapter 3: Business Process Reengineering Case Studies

The primary data used in the current research is based on case studies in business
process reengineering initiatives. Business Process Reengineering Management
(BPRM) is developed by identifying both positive and negative outcomes of different
business cases, and highlighting areas where the initiatives can be improved on fu-
ture projects. Four business cases dealing with Business Process Reengineering are
investigated, the first two cases analysed were reengineering successes, and the
last two were failures. The case studies were selected based on how reengineering
was utilised in terms of the aspects that the organisations took into consideration
when implementing the initiative. Moreover the case studies demonstrate the ap-
plicability of BPR across different industries.

3.1. Case Study 1: Ford’s Accounts Payable Process

Ford owns a minority stake of Mazda, and Ford representatives once visited Mazda
offices [5]. On their visit they realised that Mazda only utilise one fifth of the employ-
ees that Ford uses to process accounts payable [5]. They also realised that one of
the documents in their accounts payable department was not entirely necessary.
Figure 18 illustrates the process that Ford was initially utilising (“As-Is”/ current pro-
cess):

47
Figure 18: Ford’s Accounts Payable Process "as is" [38]

With reference to Figure 18, the “As-Is” process involved in making the payment to
the vendor is discussed:

i. The purchasing department sent a purchase order to the vendor, and an-
other copy of the purchase order was sent to the accounts payable de-
partment,
ii. Upon the arrival of goods, Ford’s stores department then sent a copy of
the signed delivery note to the accounts payable department,
iii. When the vendor received the signed delivery note, they then sent an in-
voice to the accounts payable department,
iv. The accounts payable department finally reconciled the three documents
and then payment was made to the vendor.

It is quite apparent that the Mazda process was more efficient than Ford’s, as Ford’s
process was slow and cumbersome. There was an excessive head count compared
to Mazda for performing the same task; mismatches of documents were a common
sight.

With the process observed from Mazda, Ford reengineered their accounts payable
process. They took on a holistic view, and instead of having the view of the accounts

48
payable process, they redesigned it to the procurement process, as indicated in Fig-
ure 19:

Figure 19: Ford's Accounts Payable Process "to be" [38]

With reference to Figure 19, the “To-Be” process involved in making the payment to
the vendor is discussed:

i. Ford realised that they do not necessarily need invoices to make pay-
ments, because if they knew the price of the item they purchased (as per
the purchase order), and they also knew that they received everything that
they ordered (as per the delivery note), then they do not need to have the
invoice to make a payment,
ii. Ford incorporated an IT database where purchase orders, and the delivery
notes were kept,
iii. Thus the clerk only needed to match the purchase orders, with the delivery
notes, and then generate an electronic payment.

The benefits associated with the redesigned process improved the following:

 Head count was cut by 75 percent,


 Accuracy of the system improved,
 Invoices were removed;

49
 The reconciliation of purchase orders and the delivery notes was computer-
ized.

The Ford case is one of the few cases where the human element factor did not come
into play during reengineering, as it would be evident on other cases. Most Business
Process Reengineering initiatives attempt to reengineer core business processes,
and in Ford’s case only a single process was reengineered, which made it more
manageable.

3.2. Case Study 2: Honeywell’s Total Plant Paradigm

Honeywell Industrial Automation and Control (IAC) designs, manufactures, and con-
figures control and instrumentation systems called the TDC 3000X family [39]. The
systems allow customers in the refineries, chemical plant, and paper mills industries
to realise process-control capabilities.

During 1989 Honeywell set itself a target of reducing defects, while increasing their
cycle time [39]. In 1990 the organisation commenced their initiative by closing the
manufacturing line, and sent everyone to a different location for training. During the
training session management emphasised the need for radical change, explained
what the changes would be, and how the changes would impact the employees, and
this was the inception of their Business Process Reengineering initiative.

Prior to the initiative management implemented a performance appraisal review for


both salaried and wages workers, where salaried workers performance was based
on a “pay for performance” basis, while the wages workers were reviewed based on
a “reward for performance” basis. In just over three years the organisation’s defects
rate reduced by seventy percent, customer rejection rate reduced by fifty-seven per-
cent, cycle time was reduced by seventy-two percent, their inventory investment was
reduced by forty-six percent, and finally their lead times reduced by seventy percent
[39]. How did they do it? They implemented a concept called the Total Plant Para-
digm, which focused on four principles listed below [39]:

i. Process Mapping,
ii. Fail Safing,
iii. Team Work;

50
iv. Communication.

The aforementioned principles are discussed, and how they were applied during the
initiative.

 Process Mapping:

Process Mapping is a tool used to model business processes. The tool is important
as it allows for the optimisation of processes, rather than departments, thus allowing
cross-functional activities to be identified. The organisation hired an experienced fa-
cilitator to conduct the process mapping training. The structure of process mapping
was identified and agreed upon by all the relevant stakeholders as listed below [39]:

i. Choose process,
ii. Identify boundaries,
iii. Develop teams,
iv. Generate “As-Is” process map,
v. Analyse cycle times,
vi. Identify gaps for opportunities of improvements,
vii. Develop “To-Be” process map;
viii. Develop an implementation plan, and obtain confirmation prior to implementa-
tion.

The process mapping enabled employees to work as a collective, and generate “To-
Be” maps which would be supported by IT. Instead of selecting an IT package and
then try to force “To-Be” processes to conform to the IT package.

 Fail Safing:

It is a method used to identify defects, analyse their root cause, and thereafter gen-
erate solutions which prevent the reoccurrence of future defects. Honeywell’s fail
safing method has five steps listed below [39]:

i. Identify defect,
ii. Identify root cause of the defect,
iii. Develop alternatives,
iv. Select most feasible alternative;
v. Create a plan for fail safing.

51
It should be noted that for an efficient Fail Safing method, the PDCA technique
should be implemented. Below is a brief discussion of PDCA as indicated in Figure
20 [39]:

 P: Plan what needs to be do,


 D: Do what has been planned,
 C: Check the results of the implemented plan;
 A: Take action if the results are not satisfactory through planning again. Thus
repeating the cycle.

Figure 20: Cyclic Nature of Fail Safing [39]

Figure 20 illustrates the cyclic nature of the Fail Safing methodology. The importance
of the cycle is that even the most feasible solution that is selected can still be im-
proved upon. The manner in which individuals can gauge the effectiveness of the
selected solution is to implement it, analyse the results of the solution, then take ac-
tion if the solution does not meet the minimum requirements.

The fail safing method does not pose a lot of problems as the human element factor
is negligible, and the dominating factor being the technical competence of the indi-
viduals carrying out the method. However team work on the other hand is completely
different as discussed in the following point.

52
 Team Work:

Human beings are usually sceptical of change for a number of reasons as discussed
in section 2.2. Hence training and due diligence when dealing with teams was high-
lighted as being imperative at Honeywell. Management support coupled with a nur-
turing working environment was prioritised by management.

 Effective Communication Skills:

It has been said that the number one problem in most organisations can be traced
back to ineffective communication [39]. Faulty communication usually leads to misin-
terpretation of information, and ultimately conflicts. People’s emotions can get hurt
and rapports can be damaged. Honeywell provided conflict resolution training, which
was aimed at resolving disagreements and misunderstanding in a positive way. One
particular session that was also included in the program was listening skills. The ma-
jor emphasis of the program was to make people understand that the conflicts
should not be posed in such a way that they get personal. The training ensured that
people understood that when dealing with conflict, they shouldn’t make it, but rather
make others see that their behaviour in a particular instance did not conform to the
vision of what the organisation wanted to achieve.

As with all reengineering initiative IT plays an integral part, and Honeywell ensured
that their IT systems are aligned to their manufacturing processes. Honeywell
changed their information systems to the information technology (IT) department.
The department was then tasked with mapping business processes and then trans-
forming the information systems to match the “To-Be” processes [39].

When Honeywell executed the reengineering process, they ensured that all relevant
stakeholders were on par with the Total Plant Paradigm principles, with the belief
that execution is what separates failure from success. Hence the organisation’s
management behaviour was shifted from autocratic to facilitative [39].

The points listed below can be derived from the successful implementation of Busi-
ness Process Reengineering at Honeywell:

 Management’s behaviour can make or break projects,


 People are the primary drivers of effective change,

53
 People require a methodology to map processes,
 Create an atmosphere of teamwork , and team ownership;
 Even though reengineering is a top-down initiative, create a culture of bottom-
up empowerment, to obtain employees commitment.

3.3. Case Study 3: BPR Failure at TELECO

It should be noted that the actual name of the organisation has be changed, to dis-
guise the organisation as well as the informants, however the contents of the case
study are real [40].In 1993, TELECO (a pseudonym) was an independent telephone
services provider in the United States of America, and it catered for both residential
areas, as well as businesses. The organisation employed approximately 3500 em-
ployees, and the organisation had been a market leader for more than a century.
Hence the culture of the organisation was monopolistic and territorial [40], as the or-
ganisation did not have a great deal of competition in its industry, and the majority of
its priorities were only heavily influenced by the environment regulatory laws.

In 1993 a task team was assigned to investigate external environment effects that
could negatively affect the company. After several months the task team reported the
eminent danger to the CEO. They said that technology advancements in the tele-
communications sector were growing exponentially. Hence the company could be
potentially facing a number of competitors in the near future, and they would do so
with relatively little investment capital [40]. This prompted the CEO to initiate a pro-
ject that will reengineer the organisation, and ensure its survival in the industry.

Senior management selected 25 “privileged” employees, who were deemed to have


diverse expertise within the organisation. The reengineering team was tasked with
redesigning the organisations processes as well as its structure within one calendar
year. Senior management also hired an internationally recognised management
consulting company to lead, coach, and manage scheduled activities as well as de-
liverables of the reengineering team. The management company was also tasked
with leading the reengineering team through the steps of Business Process Reengi-
neering [40].

54
The reengineering team was relieved of their functional duties, and along with the
management consulting company representatives, they were relocated to the top
floor of the company, secluded from other employees, and that presented an envi-
ronment of secrecy. A step by step process of how TELECO implemented the reen-
gineering initiative is discussed below.

 The reengineering initiative started by dividing processes which seemed to be


core business processes, and then assigned portions of those processes to
sub-sections of the reengineering team. Information was gathered by inter-
viewing more than 1500 employees from different parts of the organisation
within a period of a month.
 The second step involved conducting a root cause analysis to identify prob-
lematic areas, and some of the problems that could potentially be resolved
immediately were overlooked. It is during this step that the backlash started,
when some of the employees which were not part of the reengineering team
did not like some of the terms used by the management consulting company.
Terms such as “quick-hits” were interpreted as implying that, some of the em-
ployees could be quickly replaced, or their functions quickly removed.

 The secrecy around the initiative made employees tense, and it also raised
suspicions around the management’s real agenda. Thus mistrust developed,
and employees were not fully cooperative with the reengineering team, hence
some of the information was lost, and mistrust developed.

 Thirdly the reengineering team used the (starting on a clean slate approach),
meaning that some of the efficient processes were also cancelled, instead of
working on existing problems.

 Fourthly, due to the secrecy of the initiative, only one team member had an in-
depth understanding of Information Technology, and that led to the generation
of processes which were not feasible enough for IT implementation. It was
during this step that the hidden agenda of senior management became ap-
parent, as reengineers will present a number of redesigned processes, and
when those proposals did not include some of the functions of senior mem-

55
bers, the reengineering team was ask to revise them again. Senior manage-
ment also gave the reengineering team a head count that was supposed to be
relieved of their duties, which made the exercise a down-sizing exercise ra-
ther than a genuine reengineering exercise.

 The fifth step was to incorporate IT systems to conform to the redesigned pro-
cesses. However, commercially available packages could not conform to the
process requirements. Hence an IT company that forms part of the sister
company of TELECO was awarded the tender; hence the IT selection was bi-
as. Due to the fact that TELECO and the IT Company both belonged to the
same parent company, TELECO’s job was not prioritised. The lack of IT
knowledge by the reengineering team also resulted in open ended specifica-
tions to the IT Company, which meant that the IT Company could not be liable
for a number of inefficiencies of the developed IT infrastructure.

 When TELECO implemented the initiative, the redesigned processes were not
well received by the employees which manifested in the forms of:

 Lack of trust,
 Minimal coordination,
 Poor IT delivery;
 Management discontinuity.

The aforementioned were a result of management expecting people whose jobs


were on the line to be cooperative.

 Finally TELECO’s adopted the “parking lot” transitioning strategy. This in-
volved “firing” all the employees from their current jobs, and then staffing the
openings of the redesigned processes from the available pool. This resulted in
people having to close out their jobs, while having to learn their new jobs vir-
tually in a day’s time. This caused conflicts and confusion, as employees said
that they could not commence with their new jobs prior to closing their old
ones and everybody was going in circles, and no real change took place.

56
TELECO as a monopolistic organisation did not handle reengineering with due dili-
gence and that in turn resulted in a failed initiative. As a point of interest, the task
team that warned management about the eminent danger from potential competitors
was not entirely correct, and some companies even stated that they were not inter-
ested in going into the industry dominated by TELECO.

3.4. Case Study 4: BPR in the Public Sector

PubliCorp (A Pseudonym) was a large government owned civil engineering organi-


sation in Brazil. The organisation started as an inspection body, but with govern-
ment’s increased need for infrastructure, the organisation assumed construction ser-
vices as well. The organisation over looked all regulatory and related enforcement
services (such as land and building services) which were necessary for the competi-
tors, hence its monopoly on the industry [41].

The government eventually deregulated the construction industry, based on the in-
creasing number of successful non-compulsory quality standards, which the majority
of were derived from ISO 9000 [41]. This in turn posed a threat to PubliCorp’s mo-
nopoly, and as a result, the organisation initiated a Business Process Reengineering
initiative.

The organisation hired two companies, an Information Technology (IT) consulting


company, as well as a business management consulting company. The business
management company was assigned to analyse the organisation’s core processes,
while the IT company was assigned the task to support and implement business pro-
cesses proposed by the management company [41].

The management consulting company identified two major problems, the centralisa-
tion of IT services, as well as a high number of internal holding points along the pro-
cesses [41]:

 PubliCorp utilised the Central Processing Department (CPD) for running pro-
grams on a central mainframe to pass on information from one department to
the next. A number of frequently used programs by employees such as tender
documents as well as construction projects coordination programs. Thus the
centralisation was identified as being a bottleneck.

57
 The high number of handling points resulted from the organisation’s structure,
as cross-functional activities were rigid, and people worked in their own silos
without appreciating the whole process.

An initial assessment by the management consultant company suggested that reen-


gineering the aforementioned points is likely to lead to a dramatic reduction in oper-
ating costs. However the company did not give any figures.

Once the management consulting company completed redesigning the business


processes, the IT company set-up the Local Area Networks (LAN) for PubliCorp to
decentralise their information systems, and make information more accessible to a
number of PubliCorp employees [41]. During the setting up of LAN the IT Company
experienced strong resistance from the CPD staff. The CPD staff claimed that their
salaries were not revised for several years, however management had the finance to
fund external consulting companies [41].

When the LAN structure was finally established, the IT Company then started to
downsize obsolete applications from the mainframe, and again they experience a
number of challenges as some of the applications on the mainframe were coded in a
different computer language, compared to the language that the IT Company was
using.

Excluding the two major core business processes that the management company
indicated as being problematic, on a more subtle level, they also noted politically mo-
tivated hindrances. PubliCorp was reluctant on downsized as that could allow oppos-
ing political parties to exploit the organisation is laying people off who were promised
jobs during election campaigns [41]. Hence a total of US$8million was spent on the
reengineering initiative; however no staff reduction was affected. Moreover the gov-
ernment issued a lot less construction contracts, due to its reduction in the construc-
tion budget. Therefore PubliCorp could not recover their return on investment.

Now the question is, was the initiative a genuine reengineering attempt? Some ar-
gued that it was “including the organisation’s CEO” stating the following reasons [41]:

 The primary target of the initiative was the analysis of core processes,

58
 The organisation identified the need and for radical change;
 IT was used as the primary enabler.

However some argued that the initiative was not a genuine reengineering initiative,
stating the following reasons [41]:

 The redesigned process were expected to realise dramatic change in the or-
ganisation’s processes, and human arrangements,
 The initiative was automation oriented instead of fundamentally redesigning
the business processes;
 The management consulting company’s objectives gradually transgressed
from reengineering, to incremental process improvement (through automa-
tion).

Thus a number of scholars, and reengineering consultants did not recognise the ini-
tiative as a success stating the following [41]:

 Successful reengineering initiatives do not only target core business process-


es, but they should also bring about dramatic organisational change,
 Improvements did not yield a positive return on investment;
 Successful reengineering initiatives should yield radical organisation wide im-
provements on quality as well as productivity.

There are three primary reasons for failure indicated by Nereu Kock et al [41]:

i. Political agendas overweighed the interests of primary objectives of the


reengineering initiative,
ii. Failure signs were hidden by management, until incremental process im-
provement was accepted subconsciously, rather than reengineering;
iii. The gradual shift of focus by the management consulting company from
reengineering, to fixing problems of the “As-Is” business processes, thus
only improving on them and not radically redesigning “To-Be” processes.

3.5. Conclusion

59
Four Business Process Reengineering initiatives were discussed, which were a mix-
ture of failed as well as successful initiatives. Case studies are used in the current
research as the primary source of field data. It should be noted that although it is dif-
ficult to generate general processes from cases, as different industries and compa-
nies are very unique. Case studies provide a fertile data pool which can be extrapo-
lated to other initiatives with similar characteristics. Section 4 of the current research
analyses the discussed cases. Combinations of proposed solutions are intended to
build on the Business Process Reengineering Management (BPRM) initiative, which
is the driver of the current research.

60
4. Chapter 4: Cases Analysis and Proposed Combinations

The current section is split into two portions 4.1 and 4.2 which are: cases analysis,
and the proposed combinations respectively. The proposed combinations will form
the basis of Business Process Reengineering Management (BPRM).

4.1. Cases analysis

The case studies discussed in section 3 are analysed, where their advantages as
well as disadvantages indicated. This is done to better understand the pros and cons
of reengineering, and the gaps identified will form part of Business Process Reengi-
neering Management.

4.1.1. Case 1 Analysis

Ford’s accounts payable reengineering case (Case 1) is unique in a sense that, the
human element factor did not play a major role in the successful implementation of
the initiative. Ford also utilised a strategy which had a proven track record from Maz-
da. The other cases illustrate the complexity of reengineering multiple core process-
es, which include the human element factor.

Ford’s reengineering initiative had all the traits of reengineering as fundamental re-
thinking was displayed through realising that the process needed to be a procure-
ment process rather than revolving around the accounts payable department exer-
cise. Radical redesign and the implementation of Information Technology to support
the initiative were introduced through the setting up of a database. Finally there were
dramatic improvements as accounted for by the 75% head count reduction, as well
as improved productivity.

One of the most significant notes in the case is that Ford did not encounter re-
sistance during their transition, due to the fact that only one department was being
reviewed, and the changes were implemented using a power-coercive strategy,
which was suitable for the initiative.

61
4.1.2. Case 2 Analysis

Honeywell’s Total Plant Paradigm features Business Process Reengineering as one


of the aspects essential for dramatic improvements. The first important point to note
is that, Honeywell is proactive, and did not wait for the market conditions to change
before taking it upon themselves to reengineer their processes. This gave the organ-
isation enough time to conduct a thorough reengineering exercise.

The organisation ensured that all stakeholders that would be affected by change
were informed on time, and the objectives of the intended change were addressed
by management, thus reducing the possibilities of incorrect information being passed
through the grapevine.

It can be seen that process mapping includes analysing cycle times as well as identi-
fying areas of improvements in the “As-Is” processes, and in so doing process ana-
lysts will not only redesign processes, but rather redesign efficient processes. How-
ever choosing a process to analyse is another challenge as some organisations
have a number of processes, and the process analysts need to ensure that the se-
lected processes are core processes. While also taking into account that some pro-
cesses which might not be included in the analysis can also influence the redesigned
processes. Hence Honeywell encourages its employees to take ownership of their
processes, implying that even though reengineering is a top-down initiative, its em-
ployees should approach the initiative with a bottom-up approach (through team-
work), and that allows employees to be innovate, and potential gaps of processes
which might have been left-out of the process analysis can be re-evaluated. It is due
to this reason that the concept of Total Plant Paradigm is a cyclic process with a
feedback mechanism to compensate for improvements throughout its life-span.

Fail Safing is a systematic approach used to identify the root-causes of the problems
in the processes, and then developing measures to ensure that the problems do not
occur again. The most important thing to note about Honeywell’s Total Plant Para-
digm concept, is that communication plays an integral part, for instance, even though
Fail Safing is a proven methodology, without proper communication, the entire meth-
odology can still fall short on providing the required results, hence Honeywell places
major emphasis on communication and conflict management.

62
Information Technology (IT) was used to support the reengineered processes, and
constant consultation with the IT department was exercised, to both understand IT
limitations, well as to understand where IT can be exploited more than initially antici-
pated. The regular consultation with the IT department did not only allow the under-
standing of IT capabilities, but it also enabled automation systems to be carried out
in parallel with the reengineering initiative, which meant that the organisation did not
experience long lead-times for the implementation of automated processes.

One can have an impressive reengineering initiative on paper, however if the execu-
tion thereof is poor, it is most likely that the initiative will not succeed. Execution does
not only entail informing employees that on a specific date, reengineered processes
will be executed, and then expect employees to easily adjust to the news (as dis-
cussed in section 2.2), hence effective communication with the employees is as im-
portant as management’s commitment to the initiative in order to accelerate the im-
plementation rate during transitioning from “As-Is” to “To-Be” processes (see Figure
12). Honeywell’s successful Total Plant Paradigm initiative can be attributed to the
points listed below:

 The organisation had a methodology which ensured that all relevant stake-
holders knew what was expected of them, and they also knew what was
happening throughout the entire initiative,
 All relevant stakeholders were involved in the entire initiative, to ensure that
innovation what exploited,
 Constant feedback on the progress made was relayed to the stakeholders,
which in turn made them aware of what was happening, and that also re-
duced the possibility of incorrect information seeping down the organisa-
tional structure,
 Intensive training played an important role, as it allowed employees to better
handle themselves during situations which arise from change such as con-
flict;
 Execution of the different phases on the transition curve was effective;
 All of the aforementioned points heavily rely on effective communication,
which Honeywell displayed remarkably.

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4.1.3. Case 3 Analysis

TELECO was an independent telephone service provider which catered for both res-
idence as well as businesses. The organisation had a monopolistic culture, and that
became evident when it attempted a reengineering initiative.

The first thing to note is that the company did not take all the relevant stakeholders
into consideration when they initiated the reengineering exercise. Only a selected
few were elected to form part of an exercise that would affect almost all of the organ-
isation’s employees.

The reengineering team had to revise their “To-Be” processes in order to accommo-
date some of the senior management, and that in turn frustrated the reengineering
team, because they had voluminous processes which management showed little in-
terest on.

When the reengineers conducted more than 1500 interviews in a space of one
month, important information was lost in the process because people resist change
differently (cognitive, ideological, psychological, and power-driven resistors). The
reengineering team made a devastating assumption by assuming that people will
accept change, because management expects them to, thus they adopted the pow-
er-coercive strategy, which did not work.

Reengineers also assumed that Information Technology (IT) did not have limitations,
assuming that as soon as they stipulated their processes specifications, IT will just
conform to them. When they realised that their assumptions were incorrect, that did
not only delay the implementation of the redesigned processes, but it also led to poor
IT services.

The lingo used by the subcontractors was negatively received by the employees,
thus as a consequence of ineffective communication, employees associated the ini-
tiative with negative connotations, and incorrect information seeped down the organ-
isation, hence the reengineering team could not extract accurate information when
they were conducting interviews.

64
During their transition period, the adoption of the “parking lot” strategy also proved to
be devastating, as management once again expected people to learn their new jobs
in a relatively short amount of time, while they were also closing out jobs from their
previous roles. This created confusion, and the transition was not as expected.

Finally, TELECO did not conduct due diligence when analysing the market for poten-
tially new competitors, the task team suggested that competitors will grow, and they
will also increase their market shares with relatively low investments. Due diligence
was also not done when analysing both “As-Is” as well as “To-Be” processes, bear-
ing in mind that processes are a function of people, workflow, and technology (as in-
dicated in Equation 1). The organisation placed major emphasis on workflow, while
both people and the proper implementation of technology were also as equally im-
portant.

4.1.4. Case 4 Analysis

The initiative of the once large civil engineering organisation (PubliCorp) can be seen
as successfully implementing a Business Process Improvement (BPI) initiative.
However their primary objective was to implement a Business Process Reengineer-
ing (BPR) initiative. Hence the entire initiative was deemed as a failure due to lack of
radical redesign, and dramatic improvements within the organisation’s processes.

The organisation had a monopolistic culture; hence employees were used to doing
things the same way for a long time. Therefore training was imperative for the em-
ployees; however that did not happen, as evident from the CPD department. The
CPD department was not willing to assist the subcontracted IT Company, stating that
their salaries were not revised for several of years, but the organisation was willing to
spend money on subcontractors.

Due diligence was not taken into consideration when stipulating the conditions of the
reengineering initiative. The CEO wanted the entire initiative to be conducted within
one calendar year, and that in turn placed a lot of financial resources under strain to
fund the initiative, and to make matters worse, the government also reduced its capi-
tal expenditure on infrastructure due to budget constraints. Thus the return on in-
vestment of the initiative was negative.

65
While most Private organisations evaluate their performance based on the differ-
ence between their profits and costs, government institutions evaluate their perfor-
mance based on the difference between benefits and costs. Benefits are a much
broader term than profits, as public institutions do not only serve to obtain profits, but
rather provide improved service delivery for their citizens as well. It is due to this co-
nundrum that the initiative shifted from reengineering to Business Process Improve-
ment. Reengineering exhibits a common factor throughout the majority of successful
cases and that is the reduction of head count. In public organisations however, poli-
tics play a major role, and politicians are in most instance sceptical of processes
which could relief employees from their dues, because opposing political parties are
most likely to capitalise on this area.

The initiative was deemed as a success by the CEO due to the fact that the CPD
was decentralised to local area networks, and the “As-Is” cyclic times subsequently
got shorter, however as mentioned earlier, the management consulting firm eventu-
ally improved existing processes rather than redesigning new processes, due to po-
litical reasons. The reengineering attempt can be deemed as a failure due to the
reasons listed below:

 No radical redesign was exhibited, only automation of current processes was


introduced by making use of local area networks rather than the use of the
central processing department, which the organisation had initially,
 The headcount was not affected,
 No dramatic improvements in the core business processes were realised,
hence the return on investment of the initiative was negative.

4.2. Combinations

There are a number of reasons organisations undertake reengineering initiatives,


and they are listed below [42]:

 Organisations that want to be at the forefront in their markets,


 Organisations that just want to change how they conduct business;
 Organisations that need radical change or they will go out of business.

66
It is always best to be proactive and initiate reengineering while there is still time, be-
cause reengineering carries a lot of risk, and due diligence is done best when things
are done at a moderate rate.

From the analysis of the cases and literature, there is a common trend with the ma-
jority of successful reengineering initiatives, and that is, there needs to be a plan of
action for the initiative and communication is imperative. Below are nine steps pro-
posed for effective reengineering, and they form the core of Business Process
Reengineering Management:

i. Conduct a RACI check:

Ensure that the roles of individuals in management are clearly understood. This is
important as some redesigned processes could potentially affect senior management
negatively by making their functions obsolete. Once the roles have been clearly de-
fined and understood, ensure that you know who is accountable for delivering what,
and this is particularly important for external reengineering consultants, because the
roles and responsibilities could possibly prove to be problematic in the future. In
whatever is being done during this process, one cannot make assumptions, hence
consultation is emphasised in order to form a concrete database. Finally inform all
relevant stakeholders of the investigated roles and responsibilities, accountability
terms, and ensure that you’ve consulted all relevant stakeholders.

ii. Develop a SMART Criteria:

Ensure that the intended changes are clearly specified, as the identification of pro-
cesses will partly depend on the changes specifications. The specified changes
should be measurable, because the progress of the initiative will be measured
against these specified measurable changes. All relevant senior management’s buy-
in should be received at this point, in order to avoid resistance to change by senior
management in the latter stages of the initiative. Management’s objectives should be
realistic for a given timeframe, and if either the objective or the timeframe is not
plausible, then it is imperative that such issues be addressed at this stage.

67
iii. Carryout a Process Mapping Methodology:

Based on the organisation’s strategy, which is supported by the organisation’s vision


(see Figure 11), conduct a process visualisation exercise, and identify the organisa-
tion’s core processes. Upon the selection of “As-Is” processes to be analysed, have
a number of sessions with all affected stakeholders, and analyse the root causes of
the problems of existing processes. It is in this step that BPRM separates itself from
BRP. BRP assumes that “As-Is” processes are fundamentally wrong, and they need
to be redesigned, but this assumption is not universal because it can be incorrect in
some instances. However BPRM proposes that during this step intensive sessions
with affected stakeholders should be conducted, not only to identify problematic core
processes and redesign them, but rather to improve on core processes where con-
siderable results could be achieved, while also redesigning processes which need to
be redesigned. A feedback mechanism plan for process mapping is important, in or-
der to re-evaluate processes that have been improved, while also gauging the pro-
gress of “To-Be” processes. It is also during this step that Information Technology
(IT) personnel should be brought on board, as they could shed some light on possi-
ble limitations, as well as IT features which can be exploited during the initiative.
However constant communication is necessary to ensure that (IT) should support
“To-Be” processes, and not force “To-Be” processes to conform to IT packages.

iv. Fail Safing (where applicable):

The fail safing method is not applicable to all industries, because some industries do
not deal with defective items/components e.g. contact centre industry. However
where applicable the method used by Honeywell for Fail Safing can be adopted, as
this methodology has been tested across a number of industries, and still found to be
viable. The fail safing steps are [39]:

1. Identify defect,
2. Identify root cause of the defect,
3. Develop alternatives,
4. Select most feasible alternative;
5. Create a plan for fail safing.

68
v. Identify resistors:

With reference to Chapter 3, it can be seen that organisational culture plays a major
role in dealing with resistance. The cases analysed were from large monopolistic or-
ganisations, thus their culture to some extent influenced how they had gone about
into making decision. Even Ford’s manner in which it carried out the reengineering
initiative was risky, as individuals were not involved in the process, and had some-
thing gone wrong, lack of communication with the affected stakeholders (in Ford’s
case, the accounts payable department personnel) would have resulted in a failed
initiative. Thus it is important to understand the type of people that the change is be-
ing imposed upon, as different people have different resistance to change attributes.

When dealing with large organisations, and relatively short timeframes, Megan
Burns’ technique for identifying the types of resistors can be used. This technique
reveals general traits of the different type of resistors, and Burns’ also proposes how
to deal with each group. However it should be noted that one of the pitfalls of using
this technique is that, when the resistors are misinterpreted the severity of their neg-
ative impact can be divesting. Hence more than one session is required with all af-
fected stakeholders during the initiative. The bulk of the sessions should come from
process mapping and fail safing, where individuals’ interactions with one another
should be given attention, so that proper remedial actions can be taken on time.

When dealing with relatively small organisations, Goldratt’s change matrix can be
adopted instead, as it is more accurate than Burns’ technique, because it enables
one to identify each individual’s likes and dislikes about the change, and that in turn
will provide you with some indication of the type of resistors you are dealing with.

vi. Adopt change management strategy:

From point number (v) above, once the types of resistors have been identified, make
use of the Pareto (80/20) principle [43] to weigh the amount of resistors you are deal-
ing with versus the level of impact/ severity (using the pyramid of resistance “See
Figure 14”) that each group possibly has on the outcome of the initiative. Thereafter
adopt a suitable change management strategy e.g. empirical-rational, normative-
reeducative, etc. However it should be noted that as organisations are contextual,

69
one might need to use a meta-strategy, which is a combination of the primary strate-
gies discussed in section 2.3.

vii. Provide constant feedback of the initiative to the relevant stakeholders:

Communicate the progress of the initiative in order for stakeholders to gauge the ef-
fectiveness of the initiative, as well as recognise the level of commitment that both
management and employees have on the initiative. This will serve as a feedback
mechanism to indicate whether the initiative is succeeding or not.

viii. Monitor the Transition Curve:

When transition is taking longer than it should, refer back to the feedback mecha-
nisms, in order to ensure that processes are doing what they should be, and also ad-
just where there might be problems.

ix. Notify Relevant Stakeholder Upon Completion:

It was indicated earlier that a reengineering initiative can be viewed as a project, thus
it should terminate at some point. It is important to notify all stakeholders of the ter-
mination of the initiative for the following reasons:

1. People tend to drag projects once they get attached to them, and that
in turn could lead to capital waste, when people are still doing things for
the fear of letting go,
2. Gives you an indication of whether you’ve achieved your objectives, or
you are continuing with a project that yields a negative return on in-
vestment;
3. Allows Business Process Improvement to be implemented, to fine tune
reengineered processes. Before another reengineering initiative can be
conducted.

70
5. Chapter 5: Conclusion and Further Investigations

Reengineering has been used for more than two decades, and although it has re-
ceived negative connotations such as “a tool that is used to reduce the headcount”.
Its primary intentions are to radically redesign business processes, and not to dra-
matically reduce the headcount. Reengineering has been adopted by a number of
organisations both in the Private as well as the Public Sector, and a number of fac-
tors have been deemed to be important in the initiative such as the seven r(s) of pro-
cess redesign which are [44]:

i. Rethink,
ii. Reconfigure,
iii. Resequence,
iv. Relocate,
v. Reduce,
vi. Reassign;
vii. Retool.

However, effective management of BPR initiatives is still problematic and it forms


part of the estimated 70% failure rate of reengineering initiatives. The research ana-
lysed both intuitive as well as methodology approaches proposed by Hammer &
Champy as well as Davenport respectively. The two methods have been applied in a
number of reengineering initiatives; however the gap in managing the reengineering
initiative still eludes a number of organisations. In literature it has been said that
reengineering is a management initiative, however a considerable amount of re-
search focuses on how to analyse processes that need to be reengineered, and how
IT can support reengineered processes. Very little is mentioned about how to man-
age the processes in totality, as processes are a function of people, workflow and
technology.

Business Process Reengineering Management (BPRM) aids in incorporating all of


the elements which forms processes. A number of cases were analysed, with both
advantages and disadvantages in implementing reengineering initiatives discussed,
and finally a BPRM model was proposed to cater for all the elements of reengineer-
ing.

71
5.1. Limitations of the research

Although case studies provide fertile ground for data analysis, one major barrier that
they have is that, they are highly contextualised. Hence some organisations in other
industries or within different companies in the same industry might not experience
the advantages and disadvantages of the organisations that reengineered their pro-
cesses as discussed in the case studies.

5.2. Further Investigations

Both the Private as well as public organisations are urged to adopt BPRM as a pilot
project, and subsequent case studies be analysed thereafter. One final note is that
other scholars argue that BPR initiatives cannot be initiated in the Public Sector, as it
will potentially reduce the headcount, which in turn could be used by opposing par-
ties to recruit supporters. BPRM on the other hand caters for such circumstances
and encourages constant feedback, incremental process improvements during the
reengineering initiative, and promoting human development which can be viewed as
equipping employees with more skills, thus making them more marketable.

72
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