Business Process Reengineering and Organizational Performance: An Exploration of Issues

Abstract

It has been nearly seven years since the term BPR came into existence. Its innovative approach to change management and resulting successes and its overextension and misuse and the resulting dissatisfaction have raised many questions. This paper provides an empirical validation of some of the suggestions and prescriptions in the BPR ‘critical success factors/pitfall’ literature, through a content analysis of the annual reports of many companies that have reported successful reengineering projects. The results of this analysis suggest that many companies were not implementing BPR alone, but as one of the component of a set of change approaches that include strategic rethinking of business direction and less radical process improvement. This suggests that, at the organizational level, BPR should not be evaluated alone but as a part of a ‘strategic change set’. This paper also presents an exploratory longitudinal analysis of firm performance measures to see the value created by BPR to organizations. The main idea was to see the effect of process change on productivity measures like sales by employees and financial performance measures like revenue growth. The findings from this analysis show that process change seems to be correlated with the productivity measure sales by employees, but its effect on the other financial performance measures is not evident. This suggests the need for organizations to focus more deliberately on the effect of process change on these measures, and integrate BPR with other change approaches and move towards a continuous change paradigm.