The Most Common Business Reengineering Success Factors and Pitfalls

There a number of definitions of business process reengineering(BPR). Klein and Manganelli in their book "The Reengineering Handbook" defines it as the "Rapid and radical redesign of strategic, value added business processes-and the systems, policies and organizational structures that support them-to optimize work flows and productivity within an organization. Johansson and Mchugh in their book "Business Process Reengineering: Breakpoint Strategies for Market Dominance," defines it as "The means by which an organization can achieve radical change in performance, as measured by cost, cycle time, service and quality, by the application of a variety of tools and techniques that focus on the business as a set of related customer-oriented core business processes rather than a set of organizational functions. Robert Jacobs in his book, "Real Time Strategic Change" defines strategic change (similar in concept to BPR) as an "Informed, participative process resulting in new ways of doing business that position an entire organization for success, now and into the future."

The above definitions emphasize dramatic, radical change, usually occurring in a short time frame that effects a core business process that cuts across functional lines and where the people, human empowerment element is crucial for success. In recent years a number of formal BPR CASE and other computer aided design tools have been employed to support the task of creating structure/process diagrams and modeling an organization’s data. Further, as companies achieve success and failure in this process, a number of stages in the BPR process have become clearly identified. The breakdown I like best is Manganelli and Klein’s division of the BPR process into six stages. The stages and the questions they need to address are:

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Stage 1: Preparation: What is the level of organizational commitment; What are the expectations; What are the project goals?; Who should be on the team? What are the required skill sets?; How will results be communicated to the organization?

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Stage 2: Identification: What are the major business processes?; How do these processes interact with customer and supplier processes?; What are the strategic processes?; What are the business breakpoints?; What processes should be reengineered within 90 days, within one year or thereafter?

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Stage 3: Vision: What are the subprocesses, activities and steps that makeup the major business processes; How do resources, information and work flow through each process; Why do we do the things we do now (getting out of the box or mental prison); What are the underlying business and technology assumptions?; Are there ways to achieve business goals that seem impossible today? (Dare to Dream)?; What are the boundaries between business processes and key business partners (suppliers, customers, etc.)?; How might these boundaries be redefined to improve overall performance?; What are key benchmarking measures for measuring performance against "best of breed"?; What are the specific improvement goals?; What is the vision and strategy for change?; How best can associates collaborate in the process and share the vision and strategy for change?

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Stage 4: Solution: Technical Design: What are the required technical resources and technologies needed in the reengineered process?

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Stage 5: Solution: Social Design: What are the required human resources?; What immediate, near term and long range opportunities exist?; How will responsibilities change? What training programs will be required?; Who is most likely to resist change?; How can they be motivated to accept or participate in this change; What will the new organization look like?

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Stage 6: Transformation: How and when should progress be monitored? How should unanticipated problems be handled? How is the momentum for continuous change sustained?;


Clearly BPR is an on-going process critical to an organization’s success in a competitive market place. I suspect that if I ask most executives of mid to large local corporations if the are using BPR, they will answer in the affirmative. But I know from experience that if I dig deeper, what I will find is that what they term reengineering is usually a combination of incremental advances in information technology (a new client/server system, a new network, a new software package, a new "Director of Strategic Planning") and market opportunism (getting a new government or over seas contract, expanding an already profitable area of their business, etc.). The following are the most common short comings I have observed:

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Failure Point 1: Spending megabucks on new technology while giving little or no thought to changing the organization’s underlying business processes. The later is often far more difficult since it involves invading political turfs and soul searching by the company’s key executives.

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Failure Point 2: Delegating the task of reengineering to an outside consulting firm. Usually this firm has a little or no track record in reengineering or industry specific experience. The outside firm is a sort of "crutch", relieving the organization from the sometimes arduous but always rewarding task of empowering and involving their employees at all levels in the reengineering process. Often this outside firm is used to help them in making the technology decision, a task they are usually only marginally qualified for.

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Failure Point 3: On the other hand, involving the right outside consulting firm can be critical in breaking down organizational barriers and providing a fresh, presumably objective organizational assessment. The outside firm can also facilitate team building which is critical to sustaining the reengineering process. All to many companies will tell me that they know their problems, so why bring in an outside firm. But do they really know their problems? Have they developed a clear methodology to address their reengineering needs.?

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Failure Point 4: Inability to identify key breakpoints in core business processes. Breakpoints are defined as the achievement of excellence in one or more value metrics where the marketplace clearly recognizes the advantage, and where the ensuing result is a disproportionate and sustained increase in the supplier’s market share.

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Failure Point 5: Another common error I see is that most companies fail to commit the resources, internal or external to the task. Their key executives are so busy "putting out fires", they think they don’t have time to address BPR planning needs. The key term here is "think". BPR often addresses the most "screwed up" processes of a company. If these are not addressed they fester and can mean ultimate disaster.


In summary common mistakes are: (1) An unclear definition of just what is BPR; (2) Unrealistic expectations; (3) Inadequate resources; (4) Taking too long (BPR should produce tangible results within realistic timeframes); (5) Lack of sponsorship; (6) Wrong scope (either too narrow or too wide); (7) Too great (or to little) reliance on new information technology and (8) Lack of an effective methodology.

Lowell Greenberg
Copyright Lowell Greenberg. All rights reserved.
Revised: October 14, 1996.

 

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