The Failure of Business Process Reengineering

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The Failure of Business Process Reengineering

Let us start with a little history. In 1990, Business Process re-engineering emerged as a concept for integrating information technology into business processes with a cross functional perspective (Childe, Maull & Bennett, 1994, pp.22). Hammer and Champy(2001, p.35) on the other hand according to their famous book defined business process reengineering (BPR) as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measure of performance such as cost, quality, service and speed. BPR take in the methodologies, techniques from Information systems analysis, management, behaviour of the organisation and communication (Al-Hudhaif, 2009, pp.184). The pressure to meet expectations of customer is growing at a fast rate and Ronald tell us that the need for complete change is the way we work (as cited in Magutu, Nyamwange & Kaptoge, 2010).The total quality management (TQM) is found to be used to manage system cost according to quality requirements and a discrete event simulation is used to perform process reengineering and process improvement (Borgianni, Cascini & Rotini, 2008, 305-306).

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Hypothesis

For this essay, we have developed the below hypothesis:

Hypothesis 1: Resistant to change will is one of the top failure factors that lead to the failure of implementing of BPR since BPR is all about implementing dramatic changes.

Business Process Reengineering Research

Various essay and studies estimated that about 70% failed to achieve the remarkable result that was intended (Hammer & Champy, 2001, pp.221; Chamberlin, 2010, pp.14). It is due to the high failure rate that we need to investigate on it failure factors to identify why it failed. Elmuti and Kathawala (2000, pp.34) came out with the list of 10 failure factors that lead to BPR failure from a survey conducted. This survey was derived from the 24 organisations which were mentioned that they failed in BPR implementation out of the 146 questionnaires returned from the 500 questionaries sent out to organisations throughout the United States. The 10 failure factors are shown in figure 1.

Figure 1: Failure factors that may contribute to business reengineering (Elmuti & Kathawala, 2000).

I would be discussing on the first 3 failure factors on the above figure 1 as Hammer and Champy(2001) on the other hand have another set of failure factors which in my opinions are more interesting to share.

BPR failure factors:

Inadequate understanding of business reengineering ( Elmuti & Kathawala, 2000, pp.34)

You can understand something but you don’t have to lead but you can’t lead something you don’t understand. Of the 24 organisations, 78 percentages of them saw business reengineering as a mass chaos where there were no clear directions or clear solutions to many of the organisation problems. Hammer and Champy(2001, pp.229) further supported that by stated that in order to succeed un BPR, only one who is capable of thinking about the entire value added chain from production to sales and service can take the lead in the reengineering attempt and not just any senior management who has no clue on what is BPR.

Lack of an successful methodology to take on the reengineering plan ( Elmuti & Kathawala, 2000, pp.34)

Having a detailed methodology allow the organisation to know how it is suppose to start implementing BPR (Elmuti & Kathawala, 2000, pp.34). Carr and Johansson (1995, pp.86) stated that two third of the companies that surveyed used a structured framework or what they termed it as methodology. Carr and Johansson(1995, pp.86) informed that a methodoloy is 60 percent designed by a outside consultant, 20 percent developed in house and 20 percent a combination of consultant and in house. The advantage of an in house methodology is that it will present ideas that the employees are familiar with and easier to follow. An example of an methodology with regard to Aetna(Carr & Johansson, 1995, pp.87) includes methods for below:

  • Project Selection
  • Project planning which needs requirements for:
  • Defining a mission
  • Defining critical success factors
  • Internal and external s