A CASE OF SUCCESSFUL FAILURE BUSINESS PROCESS REENGINEERING

A CASE OF SUCCESSFUL FAILURE BUSINESS PROCESS REENGINEERING

ABSTRACT

Recent surveys show that business process re-engineering (BPR) has had widespread adoption in western countries This has been motivated by case studies where drastic improvements in quality,productivity, cost reduction and competitiveness have been reported. On the basis that we can learn more from our failures than our successes, let’s look at a case study of failed investments. The rate of failure in reengineering attempts, though, has been reported to be equally high. It is estimated that over 70 percent of all re-engineering attempts fail to produce bottom-line improvements. This paper describes one such failed attempt in a large public organization in Brazil. As a result of the re-engineering attempt , the organization had its IT infrastructure significantly improved, and the access to IT was decentralized by the downsizing of computer applications from a mainframe to a local area network. On the other hand, no radical changes in the organization’s business processes had resulted, despite the US$ 8 million invested in the BPR attempt. Moreover, even though some processes had been automated, almost no staff reduction was effected. The lack of layoffs meant that even the increase in efficiency in those processes, which by no means was radical,was not realized.

INTRODUCTION

Process-focused change has been the basis of several widely reported cases of organizational development projects, particularly in the 1980s and 1990s with the total quality management and reengineering movements. This is not the case of re-engineering, which still seems to be seen with reserve by public sector leaders. Re-engineering, according to a survey in Champy (1995) has had widespread adoption in the private sector. Approximately 70 per cent of all private businesses in US and Europe have run, or are running, re-engineering projects. The same survey suggests that the failure rate of re-engineering attempts has been equally high - over 70 per cent. A discussion, following that survey, suggests that much of that failure has been motivated by a lack of change in management paradigms, which should accompany the radical changes in the business processes. Archer and Bowker's (1995) survey with consulting companies specialized in re-engineering indicates some other failure factors, such as lack of communication of a clear vision of the project, lack of staff participation and ownership, lack of involvement from staff at different levels, failure to instil a re-engineering culture, and lack of project organization and planning. In this paper we describe a failed attempt to re-engineer a public organization. Our analysis of the case suggests that re-engineering's failure rate is likely to be even higher in the public sector, than it is in the private sector. Some of the reasons are related to factors, which re-engineering groups may not be able to control, and that are characteristic of public organizations.

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