Successful predictors of business process reengineering (BPR) in financial services

Abstract

Business process reengineering (BPR) has been a popular business improvement strategy for the past decade. However, Holland and Kumar (Getting past the obstacles to successful reengineering, Business Horizons, 1995, p. 79) noted that 60–80% of BPR initiatives have been unsuccessful. An extensive review of the literature revealed significant gaps in research in this area of technology and innovation management. Therefore, the aim of this paper is to report on a cross-sectional study based on a survey questionnaire sent to strategic business units within the Australian Financial Services Sector that have implemented BPR. A response rate of 32% was obtained. The central finding of the study is that the proactive implementation of BPR as part of the organisation's business strategy, coupled with focusing BPR efforts on core-customer business processes are the most significant predictors of BPR success. Using multiple regression analysis, these BPR practices were found to explain more than 30% of the variance in organisational performance. On the other hand, there was no significant and positive relationship between the increased use of information technology and process cycle time reduction. The implication of these results is that managers must reengineer their core processes from a customer perspective. The paper concludes that the key challenges for successful BPR implementation are changing attitudes and culture, ensuring extensive communications and dealing with resistance to change from middle management.