Business_Process_Change_Methodology

Chapter11PartIChangeStrategiesThatWork2Kettinger&TengCHAPTER1ConductingBusinessProcessChange:RecommendationsfromaStudyof25LeadingApproachesWilliamJ.KettingerandJamesT.C.TengUniversityofSouthCarolina,USACopyright©2000,IdeaGroupPublishing.Businessprocesschangeismaturing.Gonearethedaysofunbridledenthusiasmandeasytargetsforradicaloverhaul.Tenyearsofbusinessprocessreengineeringhastaughtusthatfailureisafrequentoutcome.Surprisingly,evengivensetbacks,firmsaremovingaheadwithbusinessprocesschangeprojects.However,unliketheirearlypredecessors,today’sprocesschangeprojectsaremorelikelytofocusonenterprisewidemega-processessuchasnewproductdevelopment,integratedsupplychain,web-portalbasedorderfulfillment,andfinancialmanagementpro-cesses,includingtreasuryandriskmanagement.Today,BPRprojectsaremorelikelytoincludetheuseofenterpriseresourceplaningsoftware(e.g.,SAP)orentailthedevelopmentofnewmarketingorsupplychannelssupportedbyelectroniccommerce.Seniorexecutivesundertakingtheseprocessprojectstypicallydonotrefertotheseeffortsas“reengineering”andinsteadcallthem“e-Commerceinitiatives”,“ERP/supply-chainprojects”or“processimprovementefforts.”Regardlessofthename,executiveslearnedfromtheresultssurfacingfromearlybusinessprocesschangecases.Theyrealizethatallprojectsarenotalike.Effortsrangeindepthandstrategicimpactandthesedifferencesaffectprojectsuccess.Projectsaimedatimprovementsalongmultiple“strategic”dimensionssuchastime,cost,quality,satisfactionandproductinnovationareperceivedtohavehigherpayoffsthanunidimensionalprojectsfocusingonlyoncostreduction(Grover,Jeung,KettingerandTeng,1995)Overthepasttenyears,wehavelearnedthatwhenaprocessviewisrestrainedtoonlytheboundariesofatraditionalfunctionalareaandhastheprimaryobjectiveofcuttingcosts,reengineeringprojectstendtomerelysimplifyandautomatenarrowlydefinedinternalprocessesto“makethemmoreefficient.”Itisthisperceptionofreengineering,asbeing“narrowlyfocused”and“nonstrategic,”thathasreceivedthebruntofcriticismequatingittolittlemorethandownsizing(HamelandPrahalad,1994).However,asdeterminedbytheauthorsinastudyofreengineeringmethodspracticedby25leadingBPRconsultants(SeeAppendixA),thecontempo-raryviewofbusinessprocesschangeholdsthatitinvolvesafundamentalandstrategicanalysisofthefirm.NewprojectsfocusonmegabusinessprocessesthatChapter13spanacrosslogicallyrelatedfunctions(andorganizations)toachievebroad,strate-gicallydefinedoutcome.Thismaturetypeofstrategydrivenbusinessprocesschangebeginswith“generation”and“cultivation”ofinnovativestrategies—ithasmoretodowithintegratingabusinessprocessviewintostrategicdevelopment,thanitdoeswith“engineering.”Wetermthismorematureunderstandingofprocesschange“BusinessProcessRegeneration”(BPR)ratherthanreengineering.Bysignificantlyimprovingafirm’soperatingcapabilities,BusinessProcessRegenera-tionallowstheimplementationofnewstrategiesand,evenmoreimportantly,leadstoenvisioningofentirelynewstrategicoptions.Forexample,ProgressiveCorporation,alargecarinsurancecompanyintheU.S.A.,hasbeensuccessfulusingBPRtotargetthemarketofhigh-riskdrivers.Studiouslyavoidedbyotherinsurers,thesecustomersare(profitably)welcomedbyProgressive.ForyearsProgressive’ssecretwasaregeneratedunderwritingprocessthatwasmoredetailedandprecisethanthoseoftheircompetitorsandthatledtoveryprecisepricingdecisions.Eventually,Progressive’slargercompetitorsbegancopy-ingitsunderwritingprocessandinvadingitsniche.Progressive’sresponsewasmoreBPR,thistimeofitsclaimsprocess.Byexploitingatechniquecalled“immediateresponse,”Progressivecannowdispatchanadjustertoexamineaclaimant’scaronthedayoftheaccident-inmanycases,goingtotheaccidentsiteitself.Havingprotecteditscompetitiveturf,Progressivethenrealizedthatitsregeneratedpro-cessesallowedittoenternewmarkets(thoseofstandardandlowriskdrivers).Progressivebusinessstrategyisnowbasedonfirst-classbusinessprocessesthatprovidehighdegreesofcustomerservice.Progressivehasalsoregenerateditspricingprocesstoprovidemoredetailedcustomerinformationincreasingsatisfac-tion.BPRhelpedProgressivetopoachonnewterritory,identifyingunexploitedstrategicopportunitiesforunanticipatedcustomerneedsandtypes.MaturityinBusinessProcessChangeMethodsInresponsetoseniormanagers’pleasforbettermethodsandmeasures,theauthorsundertookastudytohelpderiveagenericplanningandimplementationguideincorporatingleadingBPRpractice.BasedonasurveyofBPRconsultants,theproposedBusinessProcessRegenerationMethodincorporatesthoseprojectactivi-tiesandtasksthathavebeenmostsuccessfullyemployedbymanyoftheleadingconsultinghousesinconductingbusinessprocesschange.InderivingandvalidatingtheProcessRegenerationApproach(SeeTable1)theauthorsundertookcaseandfieldresearchasoutlinedinAppendixA.Insum,theauthorsconductedaseriesofsemi-structuredinterviewswithBPRconsultantsandmarketresearchfirmstogainasystematicunderstandingofBPRmethodology.Interviewnoteswerecompiledtodevelopdescriptionsforeachmethodology’sphases,activitiesandtasks.SurveyresultsindicatethattheBPRconsultingfirmsareevolvingtheirmethodstobemorestrategydrivenwithgreaterconsiderationofcompetitivefactorsinpr