Week 3 (Lecture 3) - The Strategic Framework and BPR for e-Business

Source / Reference:
1)Dusko Ursic, Sandra Anteric, and Matjaz Mulej. Business Process Re-engineering in Practice—An Example of A Medium-Sized Slovenian Company in Difficulties Systemic Practice and Action Research, Vol. 18, No. 1, February 2005
Retrieved from Springerlink: http://www.springerlink.com.ezproxy.lb.polyu.edu.hk/content/x2t114153p273153/
2)Knights, David; McCabe, Darren. When "life is but a dream": Obliterating politics through business process reengineering Human Relations51. 6 (Jun 1998): 761-798.
Retrieved from ProQuest: http://search.proquest.com.ezproxy.lb.polyu.edu.hk/docview/231475462/134B388216A6774FEF9/1?accountid=16210

Subject:
Importance of pressure groups and stakeholders that influencing BPR

Summary of lecture and motivation of this post:
In lecture 3, we have learnt about the strategic framework and BPR for e-Business. The strategic framework is based on three kinds of analysis techniques and tools in order to formulate the strategy. Among these three techniques, the environmental scanning tools including PEST and SWOT were introduced and discussed deeply and practices are made during class and tutorial lesson. However, the importance of pressure groups and stakeholders are explained in short that I would like to explore more on it.

Findings:
The first article, Business Process Re-engineering in Practice—An Example of A Medium-Sized Slovenian Company in Difficulties illustrates some criteria for selecting the management methods in order to bring an innovative business change management of a Slovenian mid-size company. One of the key issues that affect the re-design of business process is the ownership structure in Slovenia. It was found that 63% of cases are demonstrating an internal ownership, i.e. the employees of the companies have a transformed ownership in majority. Comparing with US, this kind of ownership structure is not common. Based on this unique feature, the company is not efficient due to considerable percentage of internal owners. Unprofessional conduct, vaguely defined situation and the policy of the investment are the threats posed by this kind of organizational structure and therefore, BPR project is not easy to conduct.

The company was facing many difficulties consists of low added value per employee, high business operation costs, low level of production and lacking invention of employee. One argument mentioned in the article, "BPR is efficient if the company's employees themselves suggest and implement measures taken in order to change the established methods of work and business. Here of special importance is their experience of many years and understanding of the essence of the company's processes." shows that employees are one of the key factors that can bring the BPR to success. Another reason that BPR implementation is difficult to conduct is because of the modification of business operation have a direct impact on the owners, management and the employees. If you know that your role may be eliminated after the process re-design, how would you be conscientiously involved in the project? The worst is rejecting such a project!

The second article, When "life is but a dream": Obliterating politics through business process reengineering emphasis on how organization politics affecting the BPR. With regards to the operation of BPR within a medium-sized UK bank, the author argued that BPR is likely to be comprised by and through political relations within and outside the organization, and then BPR will reconstitute organizational forms and norms in return.

The bank mentioned in the article wished to re-engineer its business process by cutting down the branches and expanding the central back office but it faced many kinds of challenges. One challenge that the top management encountered was the tension occurred between the branch and the back office staff. As the branch employees afraid of losing their jobs, they vented their frustrations against the back office. Another important stakeholder, who is the customer, also played an important role in the formulation of strategic framework. They got satisfaction from branch staff and they did not believe in back office staff so that they are not happy to hearing from cutting down the branches.


Conclusions:
The above case studies reflect that the pressure groups and stakeholders not only affecting the implementation of BPR, but also limiting the scope and direction of BPR project. In order to improve business competitiveness, sometimes we need to radically transform the traditionally defined structure of the organization to reduce the influence of stakeholders. This may take account of reducing the number of employees within the organization, or changing the customers' perspective on the business. Every decision made should be considered very carefully; otherwise the BPR would be a sink project. Both of the cases mentioned put many efforts in managing the pressure groups and stakeholders, and they are successful to complete the BPR project.