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Business Process Reengineering

 
 Be Prepared to Change
This article was published in the Canadian (Winter 1996), Transition to the Future. The Canadian is published quaterly by the Armed Forces Communications and Electronics Association (AFCEA).

Prepared By Dr. Mir F. Ali
 
Business Process Reengineering (BPR) is turning out to be a big business. The estimated amount spent on BPR by American corporations in 1994 was $37 billion including the consulting and related technology investments with an expected growth of 20 percent per annum for the next three years. There are indeed numerous BPR success stories documented and published all over the world, however, at the same time, there are much more instances of BPR failure than anybody cares to document or publicize.

Jack Stanek and his Chicago based company, International Survey Research (ISR) Corp., have compiled a database over several years that includes the opinions of 12.5 million workers and more than 300,000 managers from thousands of American companies. The surveys conducted by these company-discovered facts about corporate America that may be most provocative and controversial. It disclosed that contrary to conventional wisdom, corporations that have used the latest management wrinkles and trends have not become more efficient, flexible or competitive. It further disclosed that 56 percent of 312,742 managers surveyed indicated that companies that have undergone restructuring are actually less efficient, flexible, and competitive than they were before such programs were launched.

James Champy, a co-author of Reengineering the Corporation and author of a subsequent book called Reengineering Management, is not surprised at the discontent and mistrust that engulfs the American workplace. He said that the American work force is filled with legitimate fear and cynicism. Too many companies have engaged in downsizing rather than real reengineering. He also said that if you look at companies today, we find so much focus on the cost part of the equation that we have forgotten the growth part.

There are several reasons for these failures, including the lack of understanding of the BPR philosophy, attempting to implement radical changes without making provisions for the corporate culture and attitudes, rushing to eliminate people without going through a systematic approach to boost the productivity and proficiency before determining surplus resources, providing no incentive for people to do better and support the corporate vision, and dealing with the symptoms and expediting automation without allowing time for optimizing business processes first, to facilitate smooth information flows.

Perhaps the most damaging factor for BPR initiatives is the overall resistance to change. According to the annual surveys conducted by the Delphi Consulting Group, over the last three years, 70 percent of the people that participated in the surveys, consistently identified resistance to change as the major factor for failure. Obviously, the change is not being introduced properly in the organizations and if the increasing number of failures is any indication, it seems to be getting worse. This is consistent with the results of the surveys conducted by Jack Stanek that the approval rate of how management is handling the changes has dropped over the past four years, from 43 percent to 37 percent.

Understanding the nature, realizing the magnitude, and packaging the change to improve the probability of acceptance has always been a management challenge and this is no different in the federal community. We, as a company, have been working with several federal departments for the last few years to explore the potential for improvement and change implementation on an incremental rather than radical (quantum) basis. This approach indeed is a compromise but realistically speaking it is the only way to introduce change in the federal community as radical change is considered to be a great risk and no senior bureaucrat seems to be prepared for it. Let me share with you two experiences for conducting "Engineering" and Reengineering" studies in the federal community, which will provide you with a practical view:

In 1992, we had an opportunity to conduct a Business Process Engineering study for the Regulatory Secretariat of Transport Canada. The Secretariat came into existence as a result of political pressures to investigate whether or not the imposed transportation regulations are creating difficulties for Canadian businesses to be competitive. As this was going to involve a huge consultation process and the collection of endless paper work, the initial understanding was that they would need an Electronic Document Management system. Fortunately, the Informatics representative within Transport Canada had a vision and he convinced the Secretariat that there is a need for engineering the environment before considering any technology. This provided us with an excellent opportunity to articulate their vision/mission; develop objectives, goals, critical success factors, inhibitors, and performance measurements; define and document services, partners, clients, and develop business functions, processes and activities to support their vision; explore the possibilities of using technologies; and evaluate and recommend appropriate technologies to support their business objectives.

One of the critical success factors for this project was that this was an "Engineering" opportunity Vs a "Reengineering" effort. The total business and organizational structure was designed from scratch and there was no change to introduce. The other critical success factors were the staff, which had an excellent attitude, and the project authority, John Fisher, who provided effective leadership for the project.

We were contracted in the month of December 1993 to conduct a Business Process Reengineering study for the Deputy Commissioner, Corporate Management, Royal Canadian Mounted Police. We clearly identified in our contract that we would be using our proprietary BPR methodology which is based on Treasury Board's Blueprint and a modeling tool as we believed it would help us to be more effective. We developed the AS-IS model for the Deputy Commissioner, Corporate Management covering 7 major business functions, 114 business processes, and 650 business activities. It included functions like Corporate Financial Services, Corporate Policy and Planning, Corporate Support Services, Audit and Evaluation Services, Professional Support Services, Services and Supply, and Legal Services. We analyzed and developed TO-BE model - eliminating duplication, overlaps, and redundancies and identifying the potential for discontinuing, merging, and contracting out certain activities. This represented tremendous efficiency improvements as well as potential for millions of dollars savings. We also developed the Information, Technology, Application, and Organizational Models to support the optimized way of doing business.

Most importantly, it provided a management mechanism to make improvements on a continuous basis and sustain the quality of services. It clearly identified and documented the objectives to support the vision; goals were created to support each objective; and performance measurements were developed to keep track of the progress. In addition, critical success factors were developed, and inhibitors were documented to indicate the obstacles.

We learned a great deal working with this department. We learned how to deal with the political realities, what kind of compromises can be made without jeopardizing the quality (if any), how to get senior management motivated to identify strategic drivers, how to persuade senior management to become committed, etc. The main critical success factor for this project was the project authority, Superintendent Bill Erickson, who really understood the concept, provided excellent project directions, and used every opportunity to influence senior management for changing their attitudes and accepting a new way of managing environments.

At the end of each BPR project we conduct a Postmortem Review with the intention to review and document the lessons learned. Based on these findings, our conclusion was that the success of the change generally depends on a common human behaviour pattern. Therefore, we decided to adopt Kurt Lewin's model for change. Lewin, a leading behavioral scientist, introduced Force Field Analysis to recognize the two sets of opposing forces in change situations; Driving Forces, and Restraining Forces. Change occurs when the driving forces are stronger than the restraining forces.

Lewin's strategy for change consists of three steps:
  • Unfreezing: Part of the change process in which people are made aware of the need for change and are provided with the necessary skills, knowledge, and resources to execute new behaviour patterns;
  • Implement Change: Implement the recommended changes. This is basically a transition state; and
  • Refreezing: Part of the change process in which the desired behaviour patterns are re-stabilized and institutionalized so that previous patterns do not reemerge.

There is a way to apply restraining forces against driving forces in the field and the more we practice this model the more we feel comfortable with it. This model enables us to empower our clients in dealing with resistance to change. We also assist them to understand the potential factors responsible for resistance, which include Direct Costs of the change, saving Face, Fear of Unknown, Breaking Routines, Structural Inertia, and Team Inertia.

In conclusion, it is critical to the success of BPR initiatives in the federal community that the individual departments, as well as Treasury Board, be prepared to make legislative, policy, procedural, technological, and cultural changes to capitalize on the potential for productivity and proficiency improvements. Unfortunately, these measures are not options anymore, but necessities to survival in this environment of fiscal restraint.
 

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