IMS5042
Information Systems Strategic Planning
Week 7: Elements of IS planning Theory:
4. Business Process Re-engineering
Copyright 2002 Monash University
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
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Copyright 2002 Monash University
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
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1. Introduction to BPR (Hammer
version)
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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?!)
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What is BPR? Hammer’s “Official”
Definition
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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:
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‘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
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Rationale for need for BPR
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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
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Why did organisations design their
existing inefficient processes?
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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
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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’
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Organisational outcomes of
poor process design
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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
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Inadequacy of traditional
remedies
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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
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The BPR remedy
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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
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Outcomes of BPR
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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
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2. Doing BPR (Hammer
version)
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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 allor-nothing proposition with an uncertain result.” (H,
p105)
Copyright 2002 Monash University
Success and failure in BPR
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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
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The top ten rules for successful
BPR (H&S 1995)
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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
Copyright 2002 Monash University
3. BPR after Hammer: How do
you do it?
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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
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Considerable controversy over whether BPR
is possible or desirable and whether Hammer
or anyone else’s version is better
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BPR after Hammer
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For a good overview of literature on some of
the key issues in BPR, see Al-Mashari & Zairi
(1999)
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Changing systems and culture
Management support
Organisational structure
Project management
IT infrastructure
Figure 1 from p106
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Methods for doing BPR?
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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
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Methods for doing BPR:
Kettinger & Teng (1998)
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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
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Kettinger & Teng method for
doing BPR (just one example!)
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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
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5. Implications for ISP
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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
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4. Planning with CSFs: Assumptions
and implications
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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?
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BPR: Some of its assumptions
about IS strategy
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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
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BPR: Some of its assumptions
about planning
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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
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Planning philosophy behind
the BPR approach??
Comprehensive
Dictatorial
Rational
Pluralist
Deterministic
Pragmatic
Directed
Ad hoc
Emergent
Formalised
Contingent
Utopian
Political
Unified
Democratic
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Incrementalist
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How does BPR compare with
the other methods?
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??
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