1. INTRODUCTION
Business process re-engineering (BPR) is being attempted by many firms that are looking for radical gains from the successful redesign of their processes. BPR is a high risk, time consuming activity, with no guarantee of success, and yet many businesses claim to be re-engineering their processes. There is no universal definition of BPR, however common components of individual definitions exist. Typical characteristics of BPR include: the radical redesign of business processes; the deployment of information technology as an enabler; major disruption to the organization during the process of reengineering; and attempts at achieving organization wide improvements in performance (Davenport 1993; Hammer & Champy, 1993.; Grover, Teng & Fiedler, 1993).
As BPR is relatively new there is a lack of empirical research in the field. Of the few studies conducted, the focus has been on the large organization, and the majority have used the case study approach on one or a few individual firms. Despite the youth of the field, certain principles and attempts at establishing a universal reengineering methodology have emerged. However, there has been little consideration for the small firm in the BPR literature. This is confirmed by the small proportion of the literature specifically encompassing the small business, and of this small amount, even less is written explicitly for the small firm. There is a need to investigate the small firm arena in order to determine whether the same principles for BPR apply, or whether a different approach needs to be taken by a small business looking for radical change.
This study attempts to provide some initial indication of the extendability of the existing principles and methodologies in the BPR literature to the small firm. A number of BPR methodologies have been provided, however, the range of firms for which they are devised is not often stated. It is possible that the characteristics of the small firm are such that a customised approach to BPR is necessary. In order to investigate this, a case study on a New Zealand firm consisting of four divisions was conducted. The next section summarises the literature, including BPR methodologies, and the application of BPR to small firms. The method used in the study is outlined in the third section, followed by the results from the case study. Finally the implications of the results are discussed, and conclusions are drawn.
2. PRIOR RESEARCH
Business process reengineering as it is practised today, was first defined in 1990 by Michael Hammer in his article "Don’t Automate, Obliterate". This paper outlined seven principles of reengineering which were considered to be essential for any reengineering project. Davenport & Short (1990) were also early writers in the field, who published a five step methodology for the redesign of business processes. This was developed from observed similarities between different corporate approaches to BPR.
Since these initial articles were written, the low success rate in BPR efforts has led to a number of authors emphasising different aspects of BPR. The development of a methodology for BPR has been investigated by a number of authors since Davenport & Short in 1990. However there has been little empirical testing or subsequent research to confirm any of these approaches, and no superior methodology has yet emerged.
Guha, Kettinger & Teng (1993) aimed to provide a framework as a standard for large-scale organizational change. They consider that the use of a methodology enables the common aspects of the various approaches to be collated and used to the best advantage in any reengineering effort. Wastell, White & Kawalek (1994) developed a methodological framework based on a contingency approach in order to provide a flexible approach suitable for a wide range of situations. These illustrate the perceived value of a standardised approach to BPR, but also that any such generic methodology still requires customising to the needs of the individual organization, and that the specifics of any redesign will vary with the type of process.
Many writers postulate the value of alignment of the re-engineering efforts with the business strategy in increasing the chance of successful BPR (Luftman et al 1993, Davidson 1993, Grover et al 1993). Strategic alignment of the information systems strategy with the business strategy ensures that any changes adapted will be consistent with the goals of the business. This is not a step within a BPR project, rather it is a factor which will enhance the value of any reengineering effort if it exists. Strategic alignment involves similar issues to BPR, for example, change management to deal with cultural adjustments, surfacing opportunities for using IT, and allocation of resources. In addition, IT alignment indicates a thorough knowledge of the business and a clear vision for future development.
The identification of critical business processes is another element which has been found to be crucial to the probability of successful reengineering and the failure of many reengineering projects to produce results has been attributed to the lack of such thorough identification (Cypress, 1994). Defining these processes is difficult, and each process must be given an owner, which also poses problems where the process spans functional boundaries. Identifying processes suitable for innovation includes consideration of the importance of the process to the organization, the feasibility of reengineering that process, and the dysfunction of that process, or how seriously flawed it is (I/S Analyzer, 1993).