Reference -
Articles
Business Process Reengineering
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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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