Exploring the relationship between information technology and business process reengineering

Abstract

This study examines a series of relationships between information technology (IT) and business process reengineering (BPR). Specifically, it argues that those aspiring to do business process reengineering must begin to apply the capabilities of information technology. This paper provides a summary of IT roles in initiating and sustaining BPR and examines several companies that have successfully applied IT to reengineering. The paper also addressees barriers to successful implementation of reengineering and identifies critical factors for its success.

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.