Business Process Reengineering Failure Case Study

This case study describes a business process reengineering (BPR) initiative undertaken by a US telecommunications company (TELECO) in response to imminent survival-threatening competitive pressures in its traditionally monopolistic market. The case study, first, highlights some of the seldom talked-about problems faced during the redesigning of business processes such as: the lack of detailed knowledge about functional areas; hidden agendas of top management; lack of knowledge of (and over-reliance on) computer-based BPR tools; poor choice of metaphors in the organizational language; and the lack of communication. Thereafter, the case study identifies critical problems faced in implementing redesigned processes. These problems include: the difficulty in creating an atmosphere of open communication; pressures against selecting IT vendors on merit; lack of awareness of the lead times associated with IT; uncoordinated implementation of HR and IT strategies; and discontinuities in the leadership. While we hope that the reader will be sensitized to the issues highlighted in the narrative and will individually derive lessons for application in familiar contexts, we nevertheless provide a discussion on three issues that, in our opinion, significantly contributed to BPR “failure” at TELECO.

The business world of today is very dynamic, changing very rapidly with the global
expansion trends and customer’s needs and expectations equally changing at a very fast
rate. Business process reengineering has been implemented by many organizations in
order to meet the demands of today’s business world and remain competitive. However,
many of these endeavors fail to realize their goals and many scholars like Champy
(1995), Cao et al. (2001), Marjanovic (2000) among others report that as many as 70%
of BPR efforts fails to meet their goals. Kenya Petroleum Refineries Limited
implemented a BPR project dubbed ‘Merchant Mode’ and this project did not meet the
expected goals. This research study sought to find out the factors that contributed to the
failure of merchant mode project at KPRL and the challenges that were encountered
during the implementation of the project. The findings were based on data collected by
means of questionnaires administered to employees across all functions. Twelve
respondents were targeted in three levels which included two top management members,
six middle management members and four supervisors. The study found out that the
failure was contributed by a combination of factors rather than a single factor. Literature
has emphasized the importance of the linkage between IT tools and system with BPR and
KPRL did not adequately invest in a proper system to manage the change. The IT system
was required right from the early stages of BPR implementation and the project team
needed proper and adequate induction into the application of the IT tool for effective
implementation. In addition, the study concluded that though the employees had the
determination to see the BPR succeed, they lacked crucial skills and knowledge of
embracing the new processes. This was caused by lack of adequate training, poor
communication and poor change management which did not effectively change the
organization culture and this was manifest in their strong commitment to existing
processes. The study also found out that the implementation of the project was faced by a
number of challenges. The main challenges were lack of proper information technology
tools and system, poor communication and sensitization to employees, and a strong
employees’ commitment to old process. Other challenges cited included a low focus on
the needs of the customers, the desire to change not being strong enough, inadequate
training on the project and also some external political interference. The study has
confirmed the prior findings of other researchers that BPR project before execution needs
deployment of success factors such as preparation for change, planning, recognition and
design, evaluation, culture and change, and information technology for them to be
successful.

 

 

http://erepository.uonbi.ac.ke:8080/xmlui/handle/123456789/60650

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