Quantitative risk level estimation of business process reengineering efforts

With risk defined as the possibility of deviation in the results from the expected goals, business process reengineering (BPR) initiatives clearly involve risk taking. However, due to the high expected returns of such efforts, the acceptable risk levels of BPR will tend to be greater than those of less ambitious projects. This research reports the development of a tool to quantitatively estimate the potential risk level of a BPR effort before an organization commits its resources to that effort. The underlying research employed a survey of BPR-experienced organizations to collect assessment information in order to build a BPR risk estimation model. The developed tool uses triangular fuzzy numbers to approximate the degree of success/failure of proposed BPR initiatives. The tool can be applied by any organization contemplating BPR, thus giving such organizations a heretofore unavailable estimate of the risk level of proposed BPR efforts. Validation was performed based upon an 18-month BPR project conducted at the Missouri Lottery. Introduction In 1992 Goll defined BPR as `̀ total transformation of a business, an unconstrained reshaping of all business processes, technologies and management systems, as well as organizational structure and values, to achieve quantum leaps in performance throughout the business’’ (Goll, 1992, p. 29). Clearly BPR is synonymous with change, and resistance to change is human nature. The fear of the dramatic changes from BPR, even before they take place, needs to be anticipated and addressed to ensure the success of projects. The major element engendering the fear is the uncertainties associated with BPR, and these uncertainties translate into risks. The risk of a project is the possibility of deviation in the results from the expected goals. So risk does not equal loss as is sometimes perceived; in fact, it can be an opportunity. Thus risk is a relative concept not an absolute one (Spaulding, 1997). To evaluate the risk of a BPR project it is important not only to look at the risk involved but also at the return. Since BPR projects are The research register for this journal is available at http://www.emeraldinsight.com/researchregisters The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/1463-7154.htm