Exploring the relationship between information technology and business process reengineering
Introduction
The term “reengineering” first appeared in the information technology (IT) field and has evolved into a broader change process. The aim of this radical improvement approach is quick and substantial gains in organizational performance by redesigning the core business process. In the 1990s, many US companies embraced reengineering as an effective tool to implement changes to make the organization more efficient and competitive. The motivation was usually the realization that there was a need to speed up the process, reduce needed resources, improve productivity and efficiency, and improve competitiveness [14], [32], [33].
The changing economic environment has led to an increasing interest in business process reengineering (BPR) by progressive firms around the world. One study shows that about 87% of firms surveyed were either engaged in BPR projects, or indicating their intention to take up BPR projects in the next few years [25]. Hammer and Champy reinvigorate the topic in their book, “Reengineering the Corporation,” published in 2001. They reintroduce the goal of making major gains in reducing “waste” in the organization. They suggest that we reexamine every single process and rebuild businesses [12].
Another reason for BPR relates to the increasing emphasis placed on integrating business web sites with backend legacy and enterprise systems, as well as organizational databases. Such integration may require substantial reengineering [3], [20], [23]. In his new book, James Champy argues that BPR was 1990s remedy for sluggish corporations that lacked customer focus and competitive ability. Today, he sees reengineering as only a beginning. In this decade, businesses will need to continue by using technology to add customers, suppliers, and other partners to the process redesign mix. The redesign of work will be between a company and its customers, suppliers and partners. He calls this process X-engineering—crossing organizational boundaries. Companies such as Cisco, Dell, Intel and Solectron are examples of successful X-engineering implementations [4].
In the 1990s, significant reduction in the cost of IT resulted in enormous investments in IT applications that have stimulated increasingly complex organizational change. Information technology has been used to break down communication barriers between corporate functions, to empower line workers and to fuel process reengineering. In most cases, IT has been used to expedite office work rather than to transform it. Top executives consider IT a potent source of competitive advantage.
Working together, BPR and IT have the potential to create more flexible, team-oriented, coordinative, and communication-based work capability [34]. IT is more than a collection of tools for automating or mechanizing processes. It can fundamentally reshape the way business is done and enable the process design. In leading edge practices, information technology makes BPR possible and worthwhile. BPR and IT are natural partners, yet their relationships have not been fully explored [9]. Given the growing dominance of services, their recursive relationship is in need of further analysis and redesign.
Section snippets
IT capabilities and reengineering
IT has penetrated the office and services environment since the 1978. The shift from mainframe to PC based technology is breaking down communication barriers between employees and customers. Now managers and employees from various departments are designing and controlling complex business information systems.
IT capabilities involve improving information access and coordination across organizational units. It is so powerful that it can actually create new process design options, rather than
The current state of reengineering
Many companies considered reengineering to be the productivity breakthrough of the 1990s. American businesses spent more than US$ 30 billion on reengineering projects in 1994, and as much as US$ 50 billion in 1995 and 1996.
Reengineering efforts have produced a wide range of results. Some users achieved large cost reductions, higher profits and throughput, etc. In many of these firms, IT played an important role in process redesign (Table 2). Many innovative IT applications stem from a
Barriers to effective implementation
Despite all the energy, money, and efforts spent by companies trying to make their organizations’ reengineering efforts successful, reengineering is still an unfulfilled promise. Even substantial reengineering pay-offs appear to have fallen well short of their potential [10], [11], [19], [18], [24]. In his 1996 article, Harari suggested that BPR is dead [15]. This is true, not because the concept is flawed, but because of implementation problems.
Summary
BPR is going through its second wave. BPR is gaining importance as organizations develop inter-organizational relationships, alliances, and other methods of cross company coordination. A lot of the value and innovation in organizations today comes from knowledge workers and knowledge work processes. Davenport argues that the following processes ought to be considered [5]:
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Inter-organizational processes: Web services—SOAP and the UDDI Web services directory, XML.
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Marketing and customer-facing
Acknowledgements
The author wishes to acknowledge constructive suggestions and major editing received from Edgar H. Sibley, editor of the Journal.
Mohsen Attaran is professor of management at California State University, Bakersfield. He obtained his PhD in systems science with specialization in operations management and business forecasting from Portland State University. He is the author/co-author of three books, over 60 papers, and ten commercial software packages. His research has been widely published in the major professional journals in his field such as the Journal of Business Research, the Journal of Systems Management, Business
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Mohsen Attaran is professor of management at California State University, Bakersfield. He obtained his PhD in systems science with specialization in operations management and business forecasting from Portland State University. He is the author/co-author of three books, over 60 papers, and ten commercial software packages. His research has been widely published in the major professional journals in his field such as the Journal of Business Research, the Journal of Systems Management, Business Horizons, Information & Management, IIE Solutions, and Applied Economics. He has taught in the United States, Europe, and the middle east, and was a three-time recipient of the Meritorious Performance and Professional Promise (MPPP) award for outstanding performance in teaching, research and community services. In 1996, he was honored as recipient of the El Paso Natural Gas Faculty Achievement Award. Professor Attaran has been a consultant for public and private organizations and has planned and conducted numerous workshops and seminars for Caltrans Environmental Branch Managers, Chevron Western Business Unit, Shell Oil Co., Texaco, USA, Arco Oil and Gas, Computer Science Corp., Bechtel Petroleum, Phillips Laboratory, Mission Energy, State Farm Insurance Company, Kern County Waste Management Department, Corps of Engineers, and Edwards Air Force Base. Since 1995, he has been retained as an educational consultant by national organizations such as National Institute for Pension Administrators and National Tax Sheltered Account Association. Dr. Attaran is now involved in providing e-Business solutions to local and national firms. His research interests include e-Business strategy, management of technology, operations strategy, project management, continuous quality improvement, and managing the total quality transformation.