Business Process Reengineering – The failure of IT investments, business processes and value realization management
During the last two decades, companies invested more and more in IT technologies to acquire competitive advantage and improve their performance and position in the market. IT is intractably connected with business process reengineering (BPR) initiatives, as it contributes greatly to the successful implementation of BPR. But how can companies ensure that their investments in IT will reap beneficial results? IT has developed a poor reputation among organizations over the past 20 years. Executives of large companies claim that the reason for its reputation is that usually IT fails to deliver ‘value for money’. This reputation has deep roots in the management practices and strategies of the organizations.
Usually, organizations that proceed to Business Process reengineering and use IT to implement new processes and functions aim to overcome existing operational problems or barriers to growth and expansion. BPR enables companies to achieve the maximum stated goals and prevent deterioration of performance in the future to keep their advantages and momentum in the market.
Business Process Improvement: First, Simplify and Eliminate Waste
Most companies, however, focus on implementing IT technologies rather than simplifying business processes and removing non-value activities in order to fully realize the business value of the investment. They are concerned primarily about reducing costs. This failure to realize value is primarily influenced by the methods, approaches, and tools that IT emphasizes to improve the delivery of the technology vs. the business benefits.
Additionally, only a few companies invest in post implementation assessments and monitoring, as they claim to know that some of their goals would not be achieved either way. Due to several examples of failure in the past, executives believe that nothing can change in order to achieve all the desired benefits. On the other hand, there is a belief from companies that if new technology comes in, the solutions to their problems will automatically be found and the benefits will appear. IT technologies have no inherent value. The IT investments and projects result in positive outcomes but that does not necessarily mean that these outcomes are translated into benefits, for the company. In fact, in many cases there is a delay in benefits recognition after the implementation, and it is up to right management if these projects will yield active business results.
Why Business Process Reengineering Initiatives Fail?
It is not a surprise why there are so many cases that business process reengineering (BPR) initiatives have failed shortly after implementation. In order for a company to successfully transform its business and operations and realize extra value and benefits, continuous monitoring, adjustments, and improvements are needed.
Value will only be added to the organization and its operations by IT if the people inside adopt and internalize changes. Only when the workforce of an organization is more effective in its roles will business benefits arise. This is usually achieved with the correct use of IT, as the Business molds new processes and facilitates operations through reengineering (BPR). Extra value emerges from changes and innovative redesign of processes, and therefore is crucial for employees of organizations to understand, accept, and adopt.
Getting Reengineering Initiatives Right
Humans tend to successfully adopt change when they are included in the creation of the objectives, goals, design and implementation. The feeling of responsibility and being an active member is motivation for working hard and implementing the new business processes efficiently and effectively. They have to understand the need for the change and believe in the benefits the change will bring. Furthermore, a factor that affects how easily people adapt to change is the trust in new technologies and business processes.
If employees for example know that the new technology accurately automates tasks and activities so they can trust the results, they are more likely to accept and apply the new business processes. Of course, we should not forget to mention the factors such as complexity and time consumption when we talk about how people react to changes. If a business process change and new technology is simpler to use, takes less time for employees to perform their daily tasks, and enables them to perform their duties more efficient without extra steps, people will be more motivated to achieve and sustain the changes.
Conclusively, we should highlight that as technology progresses, the investments of companies and global organizations in IT will increase, in their effort to capture extra value and gain competitive edge in the market through innovations. Business Process re-engineering will continue to be a hot topic in 2020, and implementing lean operations and continuous improvement are worldwide priorities in order to improve performance and grow. Business Process change is essential, so the best tip for companies and the people within is to embrace it and harvest the successful results.