The critical success factors of business process management

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Abstract

Although business process management (‘BPM’) is a popular concept, it has not yet been properly theoretically grounded. This leads to problems in identifying both generic and case-specific critical success factors of BPM programs. The paper proposes an underlying theoretical framework with the utilization of three theories: contingency, dynamic capabilities and task–technology fit. The main premise is that primarily the fit between the business environment and business processes is needed. Then both continuous improvement and the proper fit between business process tasks and information systems must exist. The underlying theory is used to identify critical success factors on a case study from the banking sector.

Introduction

For 40 years the issue of fit between an organization and its strategy, structure, processes, technology and environment has been a basis for theory construction and research (Kanellis, Lycett, & Paul, 1999). The changing economic environment has led to an increasing interest in improving organizational business processes to enhance performance (McCormack et al., in press, Ranganathan and Dhaliwal, 2001). One of the fields dealing with these challenges is business process management (BPM) and there has been a surge of papers and practitioners interest in this area for more than a decade (Rhee et al., in press, Vergidis et al., 2008).

BPM is defined for the purpose of the paper as all efforts in an organization to analyze and continually improve fundamental activities such as manufacturing, marketing, communications and other major elements of company's operations (adapted from Zairi, 1997). A business process is a complete, dynamically coordinated set of activities or logically related tasks that must be performed to deliver value to customers or to fulfill other strategic goals (Guha and Kettinger, 1993, Strnadl, 2006).

Although various empirical researches indicate that there is a positive correlation between process management and business success (McCormack and Johnson, 2001, McCormack et al., in press, Skerlavaj et al., 2007) no comprehensive and substantial benefits that can justify the hype around the concept have been identified (Vergidis et al., 2008). Since the practical experience showed a large number of failed projects and programs, several papers tried to identify critical success factors (‘CSF’) of BPM (e.g. Ariyachandra and Frolick, 2008, Bandara et al., 2005). However, most of those papers failed to put their research within a theoretical framework. Therefore BPM still remains largely atheoretical (Karim et al., 2007, Melão and Pidd, 2000).

As a consequence, the field of research is currently disorganized, without a possibility to classify and/or compare such studies. BPM has mostly remained in the fad phase and papers still mainly describe what BPM actually means; what it constitutes; how it should be used etc. Management consultants and academics write similar papers on those topics (Dale, Elkjaer, van der Wiele, & Williams, 2001). Some even claim that BPM was just a repackaging of old ideas to fit a new context, and that this was ultimately used to drive growth in the consulting industry (Newell et al., 2000, Terziovski et al., 2003).

Therefore the main contribution of this paper is to provide a theoretical basis for the field. A novel combination of three underlying theories, namely contingency, dynamic capabilities and task–technology theory is proposed. It establishes a basis for the explanation of (un)successfulness of BPM efforts. This basis can then be used to study CSFs in general and can be applied to analyze CSFs in each particular example.

The structure of the paper is as follows: First, the need to further examine the CSFs for BPM is established. Then the approach is theoretically grounded and explained with the combination of three underlying theories. A case study of the bank that uses a theoretical framework to identify CSFs in their BPM efforts is presented. Finally, main implications and further research possibilities are discussed.

Section snippets

The need of CSFs for BPM and IT use

Since several different terms (e.g. business process reengineering, business process change etc.) are often used to describe similar concepts, the papers using different “buzzwords” are summarized together as long as their definition matches the one used in this paper. The term BPM is used consistently to describe the previously defined concept.

While there has been much research on process modeling techniques and corresponding tools, there has been little empirical research into the success

Theoretical background

Interestingly though, none of the studied papers tried to either develop a new theory or to base their thinking into the existing ones. This may derive from the inherent complexity of the field, since BPM challenges span from organizational, managerial, information systems and even social problems. However, the consequence is that the field of research is still in its infancy (Hung, 2006) and theoretical explanation and consequently analysis and categorization of both research and practitioners

Justification of the case study

A case study has been used as a research method to underline the theoretical findings set out in the previous sections, i.e. to show how the combination of three underlying theories can be used to identify CSFs and to improve the likelihood of a successful outcome of BPM efforts. The purpose of the case study is not to prepare a definitive list of CSFs but to show the connection of three underlying theories in the identification of case-specific CSFs. Nevertheless, the proposed CSFs are

Discussion and conclusion

Several interesting findings and considerations for the information systems field arise from the proposed theoretical framework and the case study. First, the paper has proposed a unique combination of three theories to respond to the question of the nature of competitive advantage and the role of BPM in it. Both the literature review and the presented case-study support the premise that a similar combination is needed to explain the complex interactions of various aspects, such as business

Acknowledgment

The research in this paper was partly funded by the Slovenian Research Agency (project no. J5-2105). The author would like to thank Dr. Andrej Kovacic and Rok Skrinjar for their help in conducting the case study.

Peter Trkman is an assistant professor at the Faculty of Economics of the University of Ljubljana in Slovenia. His research interests encompass e-government, telecommunications, technology adoption and various aspects of supply chain, business process and operations management. He has participated in various research and consulting projects and published over 60 papers/book chapters, including papers in Computers & Operations Research, European Journal of Operational Research, Government

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    Peter Trkman is an assistant professor at the Faculty of Economics of the University of Ljubljana in Slovenia. His research interests encompass e-government, telecommunications, technology adoption and various aspects of supply chain, business process and operations management. He has participated in various research and consulting projects and published over 60 papers/book chapters, including papers in Computers & Operations Research, European Journal of Operational Research, Government Information Quarterly, IEEE Transactions on Engineering Management, International Journal of Production Economics, International Journal of Production Research, Journal of Computer Information Systems, Online Information Review, Technology Forecasting & Social Change and Telecommunications Policy.

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