copyright 2002 monash university ims5042 information systems strategic planning week 7: elements of...

Copyright 2002 Monash University

IMS5042Information Systems Strategic Planning

Week 7: Elements of IS planning Theory:

4. Business Process Re-engineering

Copyright 2002 Monash University2

Agenda

1. Introduction to BPR (Hammer version)

2. Doing BPR (Hammer version)

3. BPR after Hammer: How do you do it?

4. BPR and its Implications for IS Planning

5. BPR and planning philosophy


Business Process Re-engineering (BPR): References

Hammer M (1990), ‘Re-engineering work: Don’t automate, obliterate’, HBR, Jul-Aug, pp104-112

Hammer M & Champy J (1993), Re-engineering the Corporation: A manifesto for business revolution, Harper Business

Hammer M & Stanton S (1995), The Re-engineering revolution, Harper Collins Al-Mashari M & Zairi M (1999) ‘BPR Implementation process: an analysis of key

success and failure factors’, Business Process Management Journal, Vol 5, No 1, pp87-112

Davenport T & Stoddard D (1994) 'Re-engineering: Business change of mythic proportions?', MIS Quarterly, Vol 18, No 2, pp121-127

Kettinger W, Teng J & Guha (1997), 'Business process change: A study of methodologies, techniques and tools', MIS Quarterly, March, pp55-79

Strassmann P (1994), 'The Hocus-pocus of re-engineering', http://www.strassmann.com/pubs/hocus-pocus.html

http://www.strassmann.com/pubs/hocus-pocus.html


1. Introduction to BPR (Hammer version)

BPR achieved its initial fame/notoriety largely through the works of Michael Hammer

His works (listed in references) became huge best-sellers world-wide

Hammer was head of an IT consulting firm based near Harvard Business School; most of his work is industry-based

Style is that of a consultant rather than an academic (references? Supporting material?!)


What is BPR? Hammer’s “Official” Definition

Re-engineering is “… the fundamental rethinking and radical re-design of business processes to bring about dramatic improvements in performance”. (Hammer and Stanton, 1995)

Key terms:• ‘dramatic’ = quantum leaps in some aspect of performance• ‘radical’ = don’t improve; throw away and start again• ‘processes’ = group of related tasks that create value• ‘ redesign’ = change in how work is done - independent of

employees


Rationale for need for BPR

IT investments have not given the expected improvements in outcomes

Companies have used IT to automate and speed up old processes, but otherwise leave them intact

Old processes are geared towards efficiency and control; new need is for speed/innovation/service /quality

“It is time to stop paving the cow paths”. Use IT to create new business processes which are geared to current needs


Why did organisations design their existing inefficient processes? Sometimes they didn’t. Processes were not

designed, but just happened• Special cases and quick fixes became entrenched

practice• Ad hoc and temporary arrangements became standard• Work arrangements persisted long after the special

circumstances which created the need for them had passed

Processes which were designed are usually old• Design goals were usually related to control (like the

typewriter keyboard)• Processes preceded modern IT and were based around

‘information poverty’


Organisational outcomes of poor process design

Processes are treated as separate and fragmented - each controlled by a different organisational unit

Poor integration of processes and information

“Tunnel vision” among groups who have goals related only to their own processes

Lack of accountability to overall outcome No-one really understands the ‘big picture’ of

how it all fits together


Inadequacy of traditional remedies

Managers try to run their tasks as efficiently as possible, but this often has adverse effects on the next task in line (and the overall outcome)

Managers’ adaptations to changing circumstances tend to add new problems

Attempts to improve poor outcomes usually involve adding an extra task to the process (eg quality control procedures) which worsens the situation


The BPR remedy

Don’t try to improve existing processes. Destroy them!

Break free of out-moded principles on which existing processes are based and develop new ones relevant to current circumstances

Re-design processes from a cross-functional perspective

Challenge conventional wisdom and constraints; focus on the desired end result and look for the best way to achieve it


Outcomes of BPR

Replace people and tasks Eliminate geography as an issue Integrate processes across functions Manage and administer data across processes IS/IT function - friend or foe of process change?

Outsourcing Examples:

• Ford Motor Company accounts payable processing (see diagrams, Hammer (1990))

• Mutual Benefit Life Insurance application processing


2. Doing BPR (Hammer version) Almost all organisations have to do BPR in order to

remain competitive. “reengineering is the only solution” (H&S, p12)

“No-one in an organisation wants re-engineering. It is confusing and disruptive and affects everything people have grown accustomed to.” (H, p112)

“… the strain of implementing a re-engineering plan can hardly be over-estimated” (H, p112)

“Re-engineering cannot be planned meticulously and accomplished in small and cautious steps. It’s an all-or-nothing proposition with an uncertain result.” (H, p105)


Success and failure in BPR

50-70% of re-engineering efforts fail This has been interpreted as a normative statement,

but it was not meant to be so BPR has no inherent failure rate; failure is due to not

knowing what you are doing or not doing it properly


The top ten rules for successful BPR (H&S 1995)

Make sure you know what BPR is Re-engineer only processes; identify them first Limit the time spent analysing existing processes Get strong committed top-level leadership Be bold, creative and innovative in re-design Test new ideas before implementing them Do it quickly; one year maximum Allow no limits on what can be changed Don’t use standard implementation approaches; be

fast, improvisational and iterative Take account of the concerns of the affected people


3. BPR after Hammer: How do you do it?

A tidal wave of literature in the business and IS/IT worlds describing:• Variations on Hammer’s definition of BPR;• Case studies demonstrating the success or failure

of BPR• Methods for conducting and implementing BPR

studies• Issues in BPR implementation and philosophy

Considerable controversy over whether BPR is possible or desirable and whether Hammer or anyone else’s version is better


BPR after Hammer

For a good overview of literature on some of the key issues in BPR, see Al-Mashari & Zairi (1999)• Changing systems and culture• Management support• Organisational structure• Project management• IT infrastructure

Figure 1 from p106


Methods for doing BPR?

Hammer’s ‘rules’ and principles for BPR are extremely vague (and in parts contradictory). Clear on what to do, but not much advice on how to do it

The academic literature which followed produced nothing much more specific

Consultants produced lots of methodologies, but often without much justification


Methods for doing BPR: Kettinger & Teng (1998)

Attempted a consolidation of existing BPR practice

Reviewed academic literature Examined case studies Analysed consultants’ methodologies Produced a composite BPR framework

comprising the most popular elements of existing approaches


Kettinger & Teng method for doing BPR (just one example!)

See diagram (p96/97 Phase 1: Strategy linkage Phase 2: Change planning Phase 3: Process problems Phase 4: Social redesign Phase 5: Technical redesign Phase 6: Process re-generation Phase 7: Continuous improvement


5. Implications for ISP

IT and IS are critical to the success of BPR Not much written about the specifics of what IS

could/should contribute, but the IS is a key element of business process re-design

Some key issues begin to emerge about IS and IT infrastructure


4. Planning with CSFs: Assumptions and implications

What does the CSF approach assume about IS and IS strategy?

What does the CSF approach assume about planning? How does BPR compare with the other methods?


BPR: Some of its assumptions about IS strategy

Strong concern with explicitly tying IS strategy to business planning (IS and business inter-linked)

IS strategy is concerned with improving the efficiency of internal operations

IS is the enabling force behind revolutionary change in business processes

Implementation of IS initiatives to support dramatic business change is non-problematic


BPR: Some of its assumptions about planning

The basic objective of strategic planning is to completely re-design business processes to improve operational efficiencies

Planning is a visionary creative design activity Achievement of change will be resisted by

established organisational interests which must be fought and overcome

Planning is a process of constant on-going revolutionary change

Revolution is a necessity; stagnation means death


Planning philosophy behind the BPR approach??

Formalised

Unified

Comprehensive

Utopian

Rational

Deterministic

Directed

Dictatorial

Democratic

Emergent

Political

Contingent

Pluralist

Pragmatic

Ad hoc

Incrementalist


How does BPR compare with the other methods?

??

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