Testing BPR Common Wisdom

The purpose of this research was to empirically determine what benefits were realized by organizations that have undertaken a Business Process Reengineering (BPR) project. The survey’s respondents indicated that they were general& satis$ed with their BPR projects. The findings suggest that BPR enabled organizations to increase productivity+ to raise the qua@ of products and services, to increase costs sm,ings, and to improve the quality of the organizational environment. The success factors, which Iead to these advantages, are the compliance with BPR principles, the methodological rigor of the BPR approach and the diversity of the project resources, in turn determined by the level of organizational support. Introduction Business Process Reengineering (BPR) is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical aspects of performance, such as cost, quality, service and speed, based on the innovative use of information technologies. BPR is a new approach which has quickly become an important preoccupation for Information System executives and is clearly an important business priority for IS managers [27,10]. Studies show that 88% of major American organizations have already undertaken or currently undertake a BPR project. While IS managers participated in an average of 1.6 BPR projects in 1992, this figure grew to 4.4 projects in 1993, an increase of 175% [20]. In 1994, 476 members of the Society for Information Management rated BPR as a very important management trend, along with the focus on consumers, the change in organizational culture, and the alignment of IT with business strategy. As reported in a recent survey, BPR applies as much to the public sector as to the private sector [3]. Several authors, practitioners and researchers have stated that BPR enables organizations to obtain a number of important advantages such as a drastic reduction in Proceedings of the 29th Annual Hawaii International Conference on System Sciences 1996 Suzanne RIVARD Ecole des H EC Mont&al, Quebec Canada costs, a reduction of errors and delays, and an increase in client satisfaction; in brief, an overall improvement in organizational efficiency and effectiveness [33,42,13,19]. However, the undertaking of such a project deserves careful consideration since there is contradictory evidence about the success rate of these projects. While it has been reported by Michael Hammer that as many as 70% of all BPR efforts fail 1351, a success rate of 70% has recently been observed in a survey conducted by Bergeron and Limayem [4] on Canadian firms. In view of the lack of strong evidence, this research study aims to determine empirically what specific advantages hmpe been obtained@om Business Process Reengineering and what are the success factors that determine these advantages? Business Process Reengineering The origins of Business Process Reengineering can be traced to the 1950’s when organizations first began to research ways of improving their performance by using information technology. Although current management philosophies have inherited a certain number of these methods and techniques, the underlying concepts of BPR, as we now know it, date from the 1990’s. BPR has evolved from the management ideas that have been developed over the last decades. It has originated from a variety of movements, all of which sought to improve business processes and product quality. Davenport [lo] has noted six significant inlluences: the total quality approach, the industrial engineering era, the systems approach, the socio-technical approach, the difbrsion of technological innovations and the use of information systems for competitive advantage. The sudden interest in BPR coincides with the productivity paradox, namely that organizations, despite their massive investments in the information technologies over the last fifteen years, have been rather unsuccessful in showing a direct effect of IT on productivity [3 1.12,32]. Although the application of IT has permitted jobs to be completed more quickly; they are not necessarily being performed more effectively. Management’s widespread acceptance of this fact, coupled with the publication in 1990 of Michael 1060-3425/96 $5.00