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April 2003
Volume 10 • Number 2

Contents

Business Process Design: Correlates of Success and Failure

by Martin Smith, The Stratics Group

This article summarizes 75 organizational change efforts that had business process design (BPD) as an objective. BPD was found to be a common type of organizational change and usually occurred in combination with other types of change. The success rate for process design was low. Success was more likely when the sponsors were perceived to be mid-level rather than senior executives. BPD was most often undertaken because of cost trends, product problems, process control issues, customer complaints and suggestions, and competition. Statistical data were most often cited to describe successful process design, while unsuccessful change efforts were usually described by opinions. Success correlated most highly with the variables that reflected employee needs, leadership, and project management. Failure correlated most strongly with ineffective leadership and the clash with the existing culture. Success factors and barriers for cultural change resembled the profile for other types of organizational change. The author derived seven implications for managing process design and implementation and discussed difficulties in comparing this study with other research efforts to identify factors that facilitate or inhibit process design.

Key words: business process, organizational change, reengineering

INTRODUCTION

Business process design (BPD) is one of the most common forms of organizational change (Mourier and Smith 2001). BPD is any planned change in a business process to permanently improve the functioning of that process. The change may involve redefining the steps in the process, applying new technology (including software and hardware), redefining performance standards, improving the quality of inputs, training the personnel responsible for the process, enhancing management’s control over the process, and enhancing the alignment among processes.

BPD was a major trend in the 1990s. Boyle (1995) called it the “panacea of choice for an increasing array of organizational maladies.” Caldwell (1994) and Korchinsky (1997) estimated the billions spent on BPD projects and associated consulting services. Authors such as Hammer and Champy (1993), Leth (1994), and Eierman and Schultz (1995) described examples of dramatic improvements achieved through BPD and, in particular, through a variant called reengineering.

There appear to be at least three “camps” in the pursuit of process improvement: the total quality management (TQM) movement, business process reengineering (BPR), and what the author calls the “eclectic approach” to the radical design of business processes.

TQM offers a variety of techniques for detecting and correcting process inefficiencies. While each change might result in only a small gain in process performance, the accumulation of many small improvements over time will enable dramatic improvement in process measurements. TQM is generally administered at low levels in the organization, with the work often done by production and clerical workers organized into quality improvement teams. The other two camps criticize TQM-driven change as too slow in achieving too little gain. TQM methods are said to be incapable of radical change, and, further, enthusiasm and participation are difficult to sustain for more than a few years. Proponents say that TQM gets lots of people involved in managing and improving processes and, therefore, reflects a change in the organization’s culture, and a supportive culture is a prime requirement for sustaining process improvements. TQM proponents also argue that an organization cannot afford the substantial investments required for radical change in all of its business processes, and, therefore, a combination of TQM and radical change methods suits most organizations.

The research presented in this article does not deal with TQM-inspired process improvement. The brief discussion of TQM is presented because proponents of radical process improvement generally contrast their approaches to TQM. This article focuses on major organizational efforts to improve the functioning of business processes. These approaches share certain features:

  • The goal of radical change, that is, to enable the organization consistently to attain levels of performance never seen before by that organization
  • Building the case for a major investment in process design by explaining how improved process performance will enable the organization to address a critical business issue
  • Investment in information technology (IT) and systems architecture as a means for achieving radical change, sometimes called “breakthrough performance”
  • Being very specific about process performance parameters before outlining the component steps of the new process
  • The use of special techniques for flowcharting the new process design and possibly for analyzing the old process design
  • Recognition of a business process as a sociotechnical system (Passmore 1988) in which technological elements must be integrated with the capabilities of the employees assigned to operate the process
  • Attention to alignment and coordination issues between organizational units (or departments) that impact the functioning of the process
  • Emphasis on quantitative measures of process functioning (for example, cycle time, operating costs) and of outputs (for example, product defect rates, sales volume)
  • Testing prototypes of the process design by such techniques as computer simulation and trials at “beta” sites
  • A project infrastructure that typically involves a sponsor, a project manager and design team, a steering team, and a consultant

 

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