process re-engineering implementations using Internet technology
Business Process Management Journal; Bradford; 2000; Michael G. Wells;
Copyright MCB UP Limited (MCB) 2000
Michael G. Wells: Minnesota State University, Mankato, Minnesota, USA
Business process re-engineering (BPR ) can greatly help organizations achieve new heights of success by dramatically changing existing business processes. To do so, they must take advantage of new advances in information and communication technologies. IBM Credit Corporation, Kodak, Ford Motor Company, and many others have used BPR to achieve significant improvements in productivity.
Unfortunately, BPR implementations have not been as successful as organizations would like. BPR implementations fail 50 percent to 70 percent of the time (Hammer and Champy, 1993). A failed implementation is one that fails completely or does not yield expected increases in productivity and quality (Hammer and Champy, 1993). As the Internet becomes an increasingly critical component in an organization's IT system, it seems inevitable it will play a significant role in facilitating BPR (Leidecker and Bruno, 1984). There exists a definite possibility the success rate of BPR programs could be increased significantly based on new access to information and tools offered through the Internet. To date, no study has specifically examined the conditions necessary for successful BPR implementation using Internet technology.
Because of the high failure rate, it requires much caution and preparation for organizations to implement a BPR program. Initially, BPR can generate tremendous promise and excitement. However, over time, BPR can lose momentum as managers deal with the reality of limited organizational resources, slow return on investment, and reduced employee enthusiasm (Harkness et al., 1996). There are many reasons for organizations to use the Internet during BPR implementation including: availability; cost; return on investment; types of information storage; and platform independence.
Internet technology is an easily available and low-cost alternative for BPR implementation. The availability of Internet technology is demonstrated by the estimation in excess of 75 million users in the USA alone at the end of 1998 (Miller, 1997). Not only is Internet technology widespread, but according to Netscape Communications Corporation, organizations can equip Internet users for less than $40 (Rodriguez, 1995). The availability and low cost of Internet technology supports BPR by reducing management's concern for large amounts of organizational resources usually needed to implement a BPR project (Venkatraman, 1994; McGrath and Schneider, 1997).
Internet technology can allow a quick return on investment simply by publishing previously printed materials on the Internet. Analysts estimate that 18 percent of corporate printed material becomes outdated within 30 days (McGrath and Schneider, 1997). Documents that are printed and mailed, such as internal phone books, policy and training manuals, requisition forms and marketing materials, can be put on a Web server and updated for a fraction of the cost of reprinting material. It is not only the publishing but the updating of information that leads to savings (McGrath and Schneider, 1997).
Internet applications can become a depository of shared knowledge. In addition to text, these applications can support many types of information. Video, voice, color, photos, graphics, and multimedia are just a sample of the variety of formats for representing information (Cortese, 1996). Information can be accessed and updated quickly and easily. This reduces the amount of invalid, incomplete, outdated, and irrelevant information a user must wade through. In addition, Internet applications can spread expertise throughout an organization and provide drill down capabilities if a user requires more detailed information (Miller, 1996).
Within an organization, there are not always enterprise-wide standards for personal computers. Different functional departments may rely on specific platforms when using applications. With Internet technology in place, users may share the same applications and information. Macintosh, Unix, and Intel-base computers can all access the same applications just by loading a different version of an Internet browser (Greengard, 1995). Internet browsers make the platform type transparent to the user when using Internet applications. Platform independence creates an environment where cross-functional partnering is easily developed during BPR projects (Clark and Stoddard, 1996). These characteristics of Internet technology allow it to be an excellent candidate to be an IT enabler for BPR projects. The remainder of this paper discusses BPR, factors affecting BPR implementations using Internet technology, and methods by which management can increase successful BPR implementations.
Application of a new IT often enables re-engineering projects to be successful (Davenport and Short, 1990; Marchand and Stanford, 1995; Morris and Brandon, 1993; Parker, 1996; Scott Morton, 1991; Hammer and Champy, 1993; Teng et al., 1994; Hall et al., 1993; Venkatraman, 1994). IT not only provides organizational tools for efficient analysis and communication, but connects management to a wealth of useful information. However, a BPR project must be careful not to modify business processes to accommodate an IT. In other words, BPR is not a process for IT implementation; rather IT should be applied to bring about desired business process change (Grover and Malhotra, 1997). In addition to IT, BPR requires consideration of organizational and managerial issues and structures, because many re-engineering projects involve cross-functional processes. To accommodate these changes, organizations may need to be restructured around these new business processes (Grover and Malhotra, 1997).
Business process re-engineering
Practitioners have identified five elements that stand out to form the critical issues that define BPR (Grover and Malhotra, 1997):
(1) BPR consists of radical or at least significant change;
(2) BPR's unit of analysis is the business process, not the department or functional area;
(3) BPR tries to achieve major goals or dramatic performance improvements;
(4) IT is a critical enabler of BPR; and
(5) organizational changes are a critical enabler of BPR and must be managed accordingly.
Internet as an IT enabler
Many BPR projects would have difficulty achieving success without using an IT enabler. Processes previously serial in nature, can be reconfigured to become parallel. The reduction of physical processes by coupling may be enabled through application of ITs, such as databases, imaging, and Internet technologies. While IT can enable process change through reducing physical coupling, the enhancement of information independence is primarily enabled by the application of telecommunication technologies. Application of IT may improve communication and collaboration between different functions involved in a business process (Grover and Malhotra, 1997).
The Internet can be used as an IT enabler by allowing organizations to create easily accessible communication networks (Parker, 1996). The Internet can be accessed from all across the globe. Once on the Internet, users can access all resources they are authorized to use on their own Internet host, on any other Internet host on which they have an account, and on any Internet host that offers publicly accessible information. The Internet allows users to easily move information between hosts through file transfers or electronic mail (Malkin and Marine, 1991).
Applications can be developed for BPR projects using Internet technology (McGrath and Schneider, 1997). These applications may allow unrestricted or limited access to users depending on the goal of a BPR effort. These applications fall into three categories: Internet; intranet; and extranet (Tebbe, 1996).
The defining characteristic for each category is access to these applications. For example, Internet applications can be accessed by anyone on the Internet. Intranet applications can only be accessed by users within a single organization. Extranet applications can be accessed by users from two or more related organizations (Tebbe, 1996). For the purposes of this research, only applications using Internet technology for re-engineering business processes will be discussed. Internet applications developed for non-business activities such as personal Web pages will not be considered as they are not involved in BPR efforts.
Major productivity improvements are obtained by reengineering business processes that cross functional boundaries (Grover and Malhotra, 1997). To facilitate cross-functional BPR implementation, the following organizational enablers were chosen for examination during this research: culture; resource management; resistance management; and change management (Davenport, 1993; Johansson et al., 1993; Stanton et al., 1992).
In many cases, these organizational enablers complement IT enablers to successfully implement BPR projects. These organizational enablers were chosen because previous literature has suggested they may provide an innovative organizational environment for BPR projects. An innovative BPR environment is characterized by management support, cross functional partnering, and a customer focus (Malhotra et al., 1996).
BPR implementation can be either successful or unsuccessful. A successful BPR implementation is considered to be one that yields the expected improvements in productivity and quality (Hammer and Champy, 1993). An unsuccessful implementation is one that does not.
Purpose of research
It is the purpose of this research to determine factors associated with successful and unsuccessful implementation of BPR projects using Internet technology. Figure 1 shows that both IT and organizational enablers influence BPR implementation. IT enables BPR by providing tools necessary to analyze, communicate, and redesign business processes. In this study, IT refers specifically to technologies available via the Internet. IT has supported both successful and unsuccessful BPR projects. Following a contingency approach, this study proposes that successful BPR implementations using Internet technology are related to different organizational enablers (conditions). In other words, this study will attempt to identify the managerial issues, organizational issues, and structures (organizational enablers) associated with a successful BPR project implemented using Internet technology (IT enabler). Differences in IT enablers may demand different organizational conditions. Lack of attention to this relationship may be a reason for organizations not understanding which managerial and organizational issues to address, resulting in an unacceptably high implementation failure rate of previous BPR efforts. This research attempts to find the factors associated with successful BPR implementations using Internet technology.
Unlike previous work, which included BPR projects using any information technology, the focus of this research has been narrowed to include only BPR projects using Internet technology during implementation. The IT enabler portion of this research will remain constant, i.e. all BPR implementation will use Internet technology. Figure 2 depicts this relationship and shows Internet technology as the only IT enabler.
Factors affecting BPR implementation
BPR project implementations using Internet technology as its IT enabler are still found to be both successful and unsuccessful. To better understand factors contributing to BPR implementation success, researchers and consultants have begun to study organizational issues related to BPR (Grover et al., 1995). As IT enabled BPR continues to change business processes and improve its performance, organizations must undergo fundamental transformations (Teng et al., 1994). Management must recognize that organizational issues and challenges are at least as important as the selection of an IT supporting BPR implementation (Venkatraman, 1994).
Major productivity improvements are obtained by re-engineering business processes that cross functional boundaries (Grover and Malhotra, 1997). To facilitate cross-functional BPR implementation, the following organizational enablers must be managed during an organization's transformation to an innovative environment: culture; resource management; resistance management; and change management (Davenport, 1993; Johansson et al., 1993; Stanton et al., 1992).
Figure 3 shows the organizational enablers hypothesized to affect BPR implementation using Internet technology. The following is an explanation of each organizational enabler and its effect on successful BPR implementations.
Organizational culture is an important factor for successful BPR implementation (Grover et al.,, 1995; Marchand and Stanford, 1995; Scott Morton, 1991; Sproull, 1981; Tunstall, 1986). Egalitarian culture supports cooperation, co-ordination, and empowerment of employees. Egalitarian culture is characterized by:
(1) shared organizational vision and information;
(2) open communication;
(3) strong leadership style; and
(4) employee participation in decision making (Lee, 1995).
These characteristics should increase an organization's chance of successfully implementing a BPR project.
H1: An egalitarian culture is positively associated with successful BPR implementation.
Organizations use resource management for successful BPR implementation. A lack of resources can prevent BPR projects from succeeding (Bashein et al., 1994; Venkatraman, 1994; Marchand and Stanford, 1995; Johansson et al., 1993). Resource management involves the following four resources:
(1) financial (Marchand and Stanford, 1995; Johansson et al., 1993; Morris and Brandon, 1993; Bashein et al., 1993; Venkatraman, 1994);
(2) technical (Davenport and Short, 1990; Marchand and Stanford, 1995; Morris and Brandon, 1993; Parker, 1996; Scott Morton, 1991; Hammer and Champy, 1993; Teng et al., 1994; Hall et al., 1993; Venkatraman, 1994; Bashein et al., 1993);
(3) human (Marchand and Stanford, 1995; Smith and Willcocks, 1995; Bashein et al., 1993); and
(4) time (Marchand and Stanford, 1995; Smith and Willcocks, 1995).
Without sufficient resources, it is less likely BPR will be implemented successfully.
H2: A lack of resources is negatively associated with successful BPR implementation.
Employee resistance can prevent BPR projects from succeeding (Stanton et al., 1992; Venkatraman, 1994; Hammer and Champy, 1993). Resistance can be caused by:
(1) danger of losing job security (Hammer and Stanton, 1994; Venkatraman, 1994; Morris and Brandon, 1993);
(2) loss of power (Stanton et al., 1992; Hammer and Stanton, 1994; Morris and Brandon, 1993);
(3) skill or knowledge requirement (Hammer and Stanton, 1994; Morris and Brandon, 1993);
(4) skepticism about results (Moad, 1993; Hammer and Stanton, 1994);
(5) functional unit's interests (Hall et al., 1993; Hammer and Stanton, 1994); and
(6) resistance of customers (Hammer and Stanton, 1994; Venkatraman, 1994; Stanton et al., 1992).
When employee resistance is present it is less likely that BPR can be successfully implemented.
H3: Employee resistance is negatively associated with successful BPR implementation.
Another essential element of successful BPR implementation is the management of change (Hammer, 1990). Change management commitment includes: employee empowerment; performance measurement; reward systems; training and education; communication; and organizational structure (Hall et al., 1993).
During BPR , employees' roles change from controlled to empowered (Hammer and Champy, 1993). Employee empowerment is critical because decisions concerning business processes are made by front line employees. A high level of employee skill and authority are necessary for BPR to be successfully implemented (Rohm, 1993).
Methods used to measure performance should naturally change after a business process is re-engineered. Performance measurement should focus compensation from activity to results and allow advancement criteria to change from performance to ability (Scott Morton, 1991; Hammer and Champy, 1993; Grover et al., 1995).
Reward systems must also be changed after BPR projects (Scott Morton, 1991; Hall et al., 1993; Grover et al., 1995). Rewarding innovative ideas facilitates innovative thinking and creates an innovative organizational environment (Malhotra et al., 1996). Reward systems must reward employees for the value they add to the business. In addition, BPR requires that payment practices be used experimentally, boldly, and subtly as a management tool for reinforcement of change. These changes are for the benefit of the individual, team, and organization (Champy, 1996). Rewards are inducements used to change employee behavior (Hammer and Stanton, 1994).
Training and education must be changed to support a re-engineered process (Scott Morton, 1991; Hammer and Champy, 1993; Grover et al., 1995). Training and education are a mechanism for providing employees with the necessary skills needed to perform their new job responsibilities (Champy, 1996).
Effective communication is needed for successful BPR implementation. Communication should be continuous, simple, and understandable (Hammer and Stanton, 1994). It is needed throughout the BPR process and between all levels of an organization.
Organizational structure must be changed to maximize the benefits of BPR. Both IT (Venkatraman, 1994; Grover et al., 1995; Parker, 1996) and BPR have a dramatic effect on organizational structure (Davenport and Short, 1990; Scott Morton, 1991; Hall et al., 1993; Hammer and Champy, 1993; Venkatraman, 1994; Grover et al., 1995). BPR projects must be aware of these possible structural changes in order to match its technological and organizational enablers (Grover et al., 1995).
H4: Effective change management is positively associated with successful BPR implementation.
BPR implementation success
Hammer and Champy (1993) define a successful BPR implementation as one that yielded the expected improvements in both productivity and quality. Unsuccessful implementations do not meet expectations in these areas (Hammer and Champy, 1993). For this research, BPR implementation is defined as all BPR activities beginning from design all the way through the use of a redesigned application. BPR implementation success will be measured over the following six dimensions: process time reduction; process cost reduction; user learning; output quality; quality of work life; and responsiveness to customer needs (Morris and Brandon, 1993; Davenport, 1993).
Process time can be reduced by eliminating wasted and non-value adding work activities. These activities increase process time while creating no value for a customer (Hammer, 1996). For example, Bell Atlantic used BPR to reduce process time in its carrier access services (CAS) to almost zero. CAS is the link between Bell Atlantic's customers and their selected long-distance carriers. Previously, processing a request and hooking up the service took Bell Atlantic between 15 and 30 days. After giving their customers the ability to dial-up the service they want instantaneously with the buttons on their phone, process time was reduced to almost zero (Hammer and Champy, 1993).
Process costs are saved by eliminating non-value adding activities and streamlining the business process (Hammer, 1996). For example, after implementing BPR , Hughes Space & Communications (HSC) reduced their satellite communications electronics manufacturing process costs by 50 percent over a four-year period (Roby, 1995).
BPR can increase user learning (Davenport, 1993). To create effective business processes, employees should be empowered (Hammer and Champy, 1993). A re-engineered organization emphasizes ongoing employee education to increase business process understanding. As a result of cross-functional jobs and education, workers in a re-engineered process tend to be more knowledgeable or empowered (Grover et al., 1995). For example, when the Pulaski Furniture Corporation re-engineered its furniture manufacturing process, it left many furniture operators without jobs. Through re-education, they could use their furniture construction expertise during their new jobs as a machine operator (Greising, 1994).
BPR has increased the quality of output for organizations (Morris and Brandon, 1993). For example, CIGNA Corporation re-engineered its international country units in the UK, where a major regulatory change demanded a redefinition of that unit's business strategy. Within two years, CIGNA International's UK re-engineering team accomplished fundamental changes in organizational structure, roles and responsibilities, work flows, IT, and culture. These changes allowed new business processes that promoted accountability, flexibility, and skill deployment. Consequently, CIGNA's output quality increased by 75 percent (Caron et al., 1994).
There are numerous examples of BPR increasing the quality of work life for employees and customers (Davenport, 1993). For example, Matthew Thornton Health Care, a New Hampshire health maintenance organization (HMO) re-engineered its relationship with its affiliated physicians. The old relationship was based on capitation, a payment mechanism by which an affiliated doctor is paid a fixed monthly amount per member for all potential medical services, whether those services are rendered or not. The most common flaw of capitation is under treatment. Doctors have an incentive to provide less care. Matthew Thornton adopted a new pay scheme that supplied a fixed monthly amount for managing each patient, plus discounted payments for the services rendered. The amount of payment per patient varied according to the cost and quality of the treatment. The idea was simple, the doctors were paid for the services administered. For example, an expectant mother is brought into the hospital in premature labor. If the purpose of their health plan is to minimize cost, the woman is sent home as soon as her labor has stopped. This cost Matthew Thornton Health Care approximately $5,000. However, Matthew Thornton re-engineered their process to focus on the best medical outcome, the delivery of a full-term baby. In the HMO's view, good patient treatment leads to the best outcome, which in the long run leads to lower costs and a higher quality of work life. The average cost of treating a premature baby is $500,000. For every 20 cases of unmanaged premature labor, at least one can be expected to end with a premature delivery. In other words, Matthew Thornton is spending $100,000 to avoid spending $500,000. The results of the re-engineered process are healthier mothers and babies. The quality or work life is improved for the mother, baby, physician, and HMO (Hammer and Stanton, 1994).
BPR can increase responsiveness to customers' needs (Morris and Brandon, 1993). For example, GTE re-engineered its telephone maintenance and repair process. If a GTE customer's phone is not working, the customer would call the company and report the problem. Previously, a customer was connected to a repair clerk who recorded the information. The repair clerk did not have the tools, training, or authority to do much more than that. The information was passed to a line tester to check GTE's lines. If that did not solve the problem, a dispatcher assigned the case to a service technician who eventually arrived at the customer's premises to repair the equipment. From a customer's perspective this process was time-consuming and had a high degree of uncertainty. GTE re-engineered the process by allowing maintenance and repair to be handled from beginning to end by a single employee. Now when a customer calls GTE, a customer service advocate tries to solve the problem while the customer is still on the line. If he/she cannot solve it, the advocate acts as a dispatcher and sends a technician to the site. Immediately, GTE has increased its responsiveness to the customer's needs. Previously, only 0.5 percent of customers' problems were solved over the phone. With the re-engineered process, 40 percent of the calls are being solved with the customer on the line (Hammer and Stanton, 1994).
The main purpose of this study is to identify factors related to the success and failure of the implementation of BPR using Internet technology. Since the application of Internet technology to BPR is new and still not fully defined, an exploratory study is necessary to identify problems or salient variables involved when implementing BPR.
Based on the nature and purpose of this research, a survey approach was chosen. Key informants were used to determine whether a company has conducted a BPR project using Internet technology and respondents were used to collect data about the re-engineered process.
Owing to the fact that Internet technology has only recently been used in BPR applications, it was difficult to locate organizations willing to fill out questionnaires. Thus, three methods of soliciting respondents were chosen: open calls for participants posted to Internet discussion groups; four independent consultants distributed questionnaires to their clients; and questionnaires were mailed to attendees of the Intranets for Knowledge Management Conference.
A total of 113 questionnaires were distributed to Internet discussion group participants that responded to a call for research participants. Questionnaires were mailed to participants in the USA (100 questionnaires) and were transmitted via e-mail to those outside the USA (13 questionnaires). The four consultants worked for four different independent consulting firms specializing in creating systems using Internet technology. These consultants distributed 205 questionnaires to developers at their own firms as well as managers and users at organizations where consulting was being conducted. A total of 207 questionnaires were mailed to participants in the 1998 Intranets for Knowledge Management Conference. This event is used to examine the benefits offered by the convergence of two major industry trends, Intranet technology and knowledge management practices.
To test the research hypotheses, specific measurement instruments were employed for each construct. To measure each variable, standard measures were chosen from widely used scales for which evidence of validity was available.
The questionnaire was previously used by J. Lee's (1995) research, "An exploratory study of organizational/managerial factors influencing business process re-engineering implementation: an empirical study of critical success factors and resistance management" and distributed to key informants. In that study, key informants were also those who were directly involved in BPR projects.
The reliability of each construct variable was examined in J. Lee's (1995) research using Cronbach's coefficient alpha. Scores for all constructs exhibited relatively high Cronbach alpha values, indicating that questionnaire items are homogeneous within each measure. The Cronbach alpha values fell within an acceptable range. The instrument was found to be reliable when surveying the same population as this research.
For this research, minor adaptations were made to J. Lee's (1995) questionnaire to reflect the measurement of these constructs for Internet technology as opposed to the inclusion of all technologies used during BPR implementation. Respondents held similar positions at the organizations participating in this research the only difference is that all BPR projects examined in this research were implemented using Internet technology as opposed to grouping all implementation technologies together.
Results and discussion
A total of 525 questionnaires were distributed, 152 were returned, for a response rate of 29.0 percent. Seven returned questionnaires were deemed invalid because too many values were missing or incomplete. See Table I for a breakdown of participating respondents' organization's type of business. With the convenience sample being drawn from four independent consulting firms, an IT conference, and an open call on the Internet, it is not surprising to see very large organizations from the technology and consulting industries comprising a large percentage of the participants in this research.
The Pearson correlation coefficient was chosen to reveal the magnitude and direction of hypothesized relationships. In conjunction with Pearson's correlation coefficients, scatterplots were examined to further understand the relationships between variables and ensure the variables were linearly related.
The significance of the Pearson correlation coefficients was determined by using t-tests. The t-tests performed were two-sample tests assuming unequal variances, i.e. heteroscedastic t-tests. This form of t-test assumes the variances of both ranges of data are unequal and is used to determine whether two sample means are equal (Cooper and Emory, 1995). Alpha was set at 0.05. Pearson correlation coefficients and significant heteroscedastic t-test values are identified in Table II. In information systems research, it is not uncommon for correlation coefficients of 0.30 and above to be considered meaningful when using correlation analysis in an exploratory study (Harrington, 1996; Griffith and Northcraft, 1996). See Table III for a summary of correlation analysis and hypothesis acceptance or rejection.
H1, an egalitarian culture is positively associated with successful BPR implementation, was accepted due to the high correlation coefficient, 0.53, between the two variables. Egalitarian leadership style includes: shared vision and information; open communication; placing confidence and trust in subordinates; constructive use of subordinates' ideas; and strong leadership style.
The acceptance of H1 should indicate to management that steps must be taken to allow employees to be involved throughout BPR analysis, development, and implementation phases.
Lack of resources
H2, a lack of resources is negatively associated with successful BPR implementation, was not accepted. Effective resource management ensures that a BPR project does not lack resources such as: financial; technical; human; and time.
Although the heteroscedastic t-test indicated there were significant differences in the lack of resources and BPR strategy variables' means, 3.82 and 3.01 respectively, the hypothesis was rejected because the variables' correlation coefficient (-0.22) did not meet the minimum correlation coefficient of 0.30. In other words, regardless of how successful the implementation of a re-engineered system, there did not seem to be a great need for additional resources.
Reasons for the low correlation or abundance of resources could be: easy availability of Internet technology; low cost of Internet technology; ease of training on Internet technology; and short time to implement systems using Internet technology.
H3, employee resistance is negatively associated with successful BPR implementation, was rejected. Heteroscedastic t-tests found a significant difference in employee resistance and BPR strategy variables' means, 2.18 and 3.01 respectively. The reason for rejecting H3 was the low Pearson correlation coefficient of -0.03.
However, the significant difference in means identified by the t-test indicates that respondents did not experience significant employee resistance regardless of how successful the BPR project was. Employee resistance can be caused by: danger of losing job security; loss of power; skill or knowledge requirement; skepticism about results; functional unit's interests; and resistance of customers.
It can be concluded that Internet technology may prevent employees' resistance by allowing them to easily acquire the skills necessary to work with Internet applications.
H4, effective change management is positively associated with successful BPR implementation, was accepted. Change management includes: employee empowerment; performance measurement; reward systems; training and education; communication; and organizational structure.
This finding shows that BPR projects using Internet technology can dramatically change the way an organization functions and that these changes should be effectively managed in order to achieve a successful BPR implementation. The acceptance of H1 and H4 indicate that a BPR project team should take control of a re-engineering effort, but ensure that employees affected by a BPR project are well informed and involved in the process from beginning to end.
Summary of the research
BPR is one of the most important concepts for organizations as we enter the twenty-first century. Two separate accounting and consulting firms conducted independent studies in 1994 and found that 75 percent to 80 percent of USA's largest organizations had already conducted BPR projects and would be increasing their expenditures on it over the next ten years (Hammer and Stanton, 199r). A leading market research firm estimated that US corporations spent in excess of $30 billion dollars annually on BPR in 1994. This figure was expected to grow by approximately 20 percent per year (Hammer and Stanton, 1994). These estimates do not include the expansion of BPR concepts to organizations worldwide. The increase of BPR's popularity shows the need of research to fully understand BPR and the factors affecting it.
BPR provides the capability to dramatically improve an organization's performance by radically changing their methods of conducting business (Roby, 1995). The difficulty is that BPR implementation rates have been reported as high as 70 percent (Hammer and Champy, 1993). This research examines factors affecting BPR projects that use Internet technology during implementation. Internet technology was selected as the IT enabler because it has become such a powerful tool for organizations to use over the past few years. The goal of this research is to help organizations reduce future BPR implementation failure rates.
The importance of information technology to BPR cannot be understated. Internet technology can help organizations achieve process innovation while implementing BPR . An innovative organizational environment can be fostered through the following features of this technology: ease of availability; low cost; quick return on investment; and platform independence (Freed, 1996; McGrath and Schneider, 1997; Malhotra et al., 1996). To date, no study has examined the conditions necessary for successful BPR implementations using Internet technology.
Contribution of the study
This research used four hypotheses to investigate the relationship between organizational factors (egalitarian culture, resource management, resistance management, and change management) and successful BPR implementation using Internet technology. Although all hypotheses were not accepted, recommendations can be made from both accepted and rejected hypotheses. See Table IV for a complete listing of research hypotheses contributions.
The use of Internet technology during BPR implementation is a relatively recent development and the empirical research base is small. The following is a discussion of recommendations to organizations based on this research's findings. It is important for organizations to create an innovative environment to increase their chances of successfully implementing a BPR project implemented with Internet technology. In order to do so, organizations must use a strong leadership style to create an environment where employees affected by a BPR project understand its objectives and are involved throughout the BPR process. Radical changes may occur as a result of BPR and must be understood by all affected employees. Training and reward programs should be implemented to assist employees during their transition. These initiatives are easily implemented because employees find Internet technology easy to work with and do not feel threatened by the technology. Sufficient resources for the project must be provided, but this too is easier because Internet technologies are cheap and readily available.
Differences in IT enablers may demand different organizational conditions. Lack of attention to this relationship may be one reason for organizations not addressing the appropriate organizational issues and causing an unacceptably high implementation failure rate. Previous research, which grouped all IT enablers together (Lee, 1995), had some different findings than this research, which exclusively researched projects using Internet technology for BPR implementation. It is likely that the differences are due to the technology used during implementation because other factors were held constant. Further investigation into these relationships is necessary before any causal statements should be made.
Many articles have been written about BPR and its implementation, but there are very few that have utilized real-world, empirical data. This research extends basic BPR implementation research by isolating a specific technology used during implementation, i.e. Internet technology. In addition, this research provides an instrument to investigate additional technologies used for current and future BPR implementations. The isolation of an information technology helps determine the factors related to successful implementation of BPR for that technology.
Limitation of the study
One limitation of this study is that the information collected was not from a single industry or application type. The organizational issues may differ between industry type and/or application type. The reason for including different industries and applications together in this research was the concern of obtaining an adequate sample size due to the difficulty of finding similar applications at organizations within the same industry. Customer service, purchasing, order management, and inventory management applications along with technology and consulting industries were most frequently cited by respondents and may be a good starting point for further narrowing this research.
Another limitation is the exploratory nature of this research. A correlation coefficient of any magnitude or sign, whatever its statistical significance, does not imply causation. When interpreting correlation coefficients the reader should be concerned with its practical significance. Even when a coefficient is statistically significant, it must be practically meaningful. In many relationships, other factors combine to make the coefficient's meaning misleading. With large samples, even exceedingly low coefficients can be statistically significant. This significance only reflects the likelihood of a linear relationship in the population. By probing the evidence of direction, magnitude, statistical significance, and common variance together with the study's objectives and limitations, the chances of reporting trivial findings are reduced (Cooper and Emory, 1995). This research has tried to point out the practical implications of its findings, but additional research in these areas would only increase the understanding of the researched concepts.
This research examined only intranet, extranet, and Internet technologies used for BPR implementation. In order to better understand the relationship between successful BPR implementation and Internet technology, additional details are needed on specific Internet technologies being used during implementation. For example, Internet applications typically require the following hardware and software: Web server; network adapter; Internet-related hardware; server operating system; add-on software; and Internet utilities.
Additional issues for Internet application users include: server and network upgrades to handle increased traffic; management tools and manpower required; software licenses and upgrade fees; information publishing and archiving costs; and interfacing with legacy systems.
In future research all of these issues should be addressed, including their effect on the factors identified by this research as affecting the successful implementation of BPR projects.
Recommendations for future research
Although the correlation analysis conducted in this research is a good starting point, more in-depth analysis could provide additional insights into the relationship between organizational enablers and successful BPR projects using Internet technology. This could include techniques such as protocol analysis or interviewing.
There seems to be no universally applied factors for achieving success through BPR . A breakdown of industry and application types may assist managers in deciding what will work best for their own organization and application types. The contrast in results of this research and previous findings, should indicate to the reader that technologies used during BPR implementation should be separated from one another to achieve unconfounded research results. Research should be conducted for other technologies used for BPR implementation. Database, LAN, and client-server technologies are some current examples of popular technologies being used for BPR projects.
Future research should include the isolation of a single industry and/or application type. Some processes may be re-engineered more effectively when using Internet technology than others. In addition, this research could be expanded into a global study, comparing BPR research from a cross-cultural perspective. With the emergence of additional World Wide Webs (WWW2 and WWW3), possibility of a government regulated Internet, additional technologies available on the Internet (video, audio, etc.), and other issues, it is possible the relationship between organizational enablers and successful BPR implementation will continue to change. As these and other issues occur, their effect on BPR implementation should be investigated.
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Caption: Table I.; Participating organizations; Table II.; Correlation matrix for variables affecting BPR implementation success; Table III.; Summary of correlation analysis and hypotheses; Table IV.; Contributions of research hypotheses; Figure 1.; Enablers of BPR implementation; Figure 2.; Using only Internet technologies as the IT enabler; Figure 3.; Organizational enablers affecting BPR implementation