BP1 – Week 2 – Activity 3: Why do so many managers fail at BPR?

Business process reengineering (BPR) started in 1990s in America. This new concept was spreading so widely that as many as 65% of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to do so. There were many successful stories of implementing BPR such as Dell and Ford, while many organizations failed on the other hand. There are reasons for both success and failure. What caused failure? I would like to discuss the factors behind a failed implementation of BPR.

In Module 2 of BP1, we learned a number of factors that caused failure of BPR as the following:
1. Flawed or incomplete reengineering strategy - a company who conducts a BPR should align its BPR project goal to the organization’s strategic objective. The organization should demonstrate this alignment in all aspect of activities, such as financial performance, customer service and employee values. Without such a strategic alignment, the project may not get supports from all levels of the organization, especially from top management, which is critical for success of a project.
2. Inappropriate use of outside consultants – this could cause project failure by cost overrun, technical failure, delayed project. So choosing an appropriate consulting firm is very critical at the beginning of the project. This part of the project management skills should be executed with guidelines of choosing a consulting firm. Poor management, incompetent consultants, inexperienced team all contribute a failure of a BPR project.
3. People tied to old technologies with poor training programs – an organization culture and the level of technical skills are also important to implementation the BPR project. If employees in an organization will not or cannot accept or operate in the new process, no matter how wonderful the BPR design is, it will not bring any benefit to an organization. So communication and proper training through the whole BPR process is necessary to prevent a failure.
4. Legacy systems not easily changed and effort to do so underestimated – how to transfer the data from legacy systems and how to start the new system is a big challenge to an organization undergoing BPR. Parallel, pilot, or divisional method can be adopted in the transition from legacy systems to new systems. But the costs for extensive training and overlapping work could be underestimated which would lead to a BPR failure.
5. Lack of ES integration tools not acted on – BPR is about integration and improving the performance. Proper ES integration tools are necessary. An organization can either have an ES program or have a best of breed to implement BPR. Imagine what would be the outcome if an organization insist on using end-user systems?
6. Attainment of objectives not validated to determine if attainable – BPR objective setting must follow the rules of SMART, that is specific, measurable, attainable, realistic and time-framed. Objective should be validated for its attainment. Blueprint can only benefit an organization when it turns to reality.
7. Organization not properly prepared for the degree of change – BPR always involves change, sometimes it is tremendous. So change management is among the key factors to success or failure of BPR project. Most people don’t like change, change means stress, adapting, training and possible job loss. When implementing a BPR project, proper communication and training throughout the process will ease the resistance of training.
8. Inadequate planning or inadequate resolve to follow the plans – Planning part is the crucial for the success of a BPR project. It involves project goal setting and alignment with business objective, cost budgeting, time budgeting, project team formation or outsourcing options, project executing and change management, project implementing, monitoring and evaluation. Any oversight at the planning stage may cause serious problem in later stages.
9. Management lacking long-term commitment – business world is changing constantly. An organization should picture itself in a long run, say three or five years from now. A long-term strategy will support achieving this goal. When executing BPR, management should align BPR project with organization’s mission statement. As BPR project is time consuming and costly, it is only beneficial to an organization if long-term commitment is taken into consideration.
10. Project management skills underestimated – project manager plays an important role in the BPR project. As we discussed in previous blog, project manager is required to be an excellent communicator, great bargainer, problem solver, team player and motivator, well experienced and educated. So project management skills are a key factor of success.
In the process of BPR, some large industrial companies tend to adopt clean-sheet change program in order to get rid of the straightjacket of the past. I don’t think it is a good approach to start BPR with a clean-sheet. It sounds good to many large companies in thought of that they could start like a brand new company and have escaped the problems from the past. This is not the right way to deal with the problems. They may get rid of the old problems, but they will face even more new issues in the redesigned the process. The new system may not work as well as anticipated. Problem solving and improvement may be constant issues. And in reality, business is on going, a company can’t really cut off the past completely. This would make management struggle between the legacy systems and new systems. Clean-sheet means big change, which will affect the effectiveness and efficiency both internally and externally for a period of time due to adapting to new system. This impact may offset the benefit clean-sheet may bring to the organization.

Reference:
CGA/SAIT lesson notes
http://www.fastcompany.com/online/01/reengin.html

http://en.wikipedia.org/wiki/Business_process_reengineering#Successes