Business Process Reengineering in the public sector
Our existing knowledge of business process reengineering (BPR) is mainly derived from the experiences of private sector organizations, which have fundamentally different characteristics from public organizations. ... It concludes with lessons learned for implementing BPR in public organizations.
Abstract
Our existing knowledge of business process reengineering (BPR) is mainly derived from the experiences of private sector organizations, which have fundamentally different characteristics from public organizations. This paper represents a first step in understanding how BPR may be different in public organizations. Drawing on the public administration literature, it examines the differences between public and private organizations and their implications for BPR. Following that, it examines the BPR experience of a large public organization through an intensive case study. The case analysis shows that while there are similarities in the BPR experiences of public and private organizations, there are also notable differences. In this specific case, there were social and political pressures to reengineer, press publicity to promote BPR, a reengineering team comprised mainly of neutral staff, performance benchmarks adapted from the private sector, high-level approval for redesigned processes, and a pilot site implementation to secure further funding. It concludes with lessons learned for implementing BPR in public organizations.
Differences between public and private organisation
Anderson (2012) recognises that private organisations are not driven exclusively by the profit motive, but that decisions take account of a host of criteria of which monetary profit is only one. Public and private organisations can be distinguished according to the presence or absence of market structures, externalities, and ownership transferability. Private sector managers are more likely to support budget decisions made with analysis and less likely to support them when bargaining is applied. On the other hand, public sector managers are less likely to support budget decisions backed by analysis and more likely to support those that are derived from bargaining with agency people. Rainey et al. (1976) state that the main distinction is in their ownership.
BPR critical success factors
To identify BPR critical success factors in an organisation, it is necessary to understand the organisation itself, since the factors may differ regarding the type of organisation, including private or public. Among other organisational change attempts, the success rate for reengineering was second highest (23%) next to technology change (28%), and compared with culture change (19%), mergers and acquisitions (14%) and restructuring and downsising (10%). Much effort is needed in developing a model for BPR, as a radical process change, since many critical success factors should be considered for it, whether for private organisations or public organisations. 50% to 70% of BPR initiatives fail to deliver the expected results because while there is an improvement in particular areas, for example, a 20% cost reduction, a 50% process-time reduction, and a 25% quality improvement, at the same time business-unit cost increases and profits decline. Organisations should exploit all needed technologies and the process which organisations use to arrive at the product or service they provide to customers should be radically redesigned in the light of the organisation’s current environment rather than its traditions introduced several CSFs based on contingency theory as: strategic alignment, level of IT investment, performance measurement, level of employee’s specialisation, and several other CSFs Based on dynamic capabilities as: organisational changes, appointment of process owners, implementation of proposed changes, use of a continuous improvement system, and several other based on task-technology fit theory as: standardisation of processes, automation, informatisation, training and empowerment of employees. Considered employees, assets, equity, IT budget, advertising, market share, industry concentration and industry capital intensity as the most important factors in conducting a BPR project. Additionally, Natarajan introduces factors such as creating an effective culture for organisational change, change management, revising.
Process reengineering in the public sector: Learning some private sector lessons
The possible applicability of business process reengineering (BPR) to organisations in the public sector is explored through analysis of the central issues in BPR and the emerging experience of organisations which have recently implemented it. In particular, the paper suggests that success of reengineering may depend critically on the strategic capability of the organisation prior to undertaking the effort. For that reason well-performing organisations are more likely to improve performance by means of BPR than are weak ones. Yet, in the public sector, it tends to be badly performing agencies which are most encouraged to undertake BPR. Knowing and understanding the reasons for success or failure of BPR in private organisations can prepare public sector managers for undertaking the effort, but each reengineering initiative must be tailored to the specific needs and circumstances of the individual agency. Public sector managers should use the widest possible definition of ‘value’ when analysing value-added in process reengineering and should be especially sensitive to the way in which ‘value’ in the public sector is differently interpreted by major stakeholders. During this learning process, public sector agencies would be well advised to be conservative in estimating gains from BPR.
WHAT IS BPR AND WHAT DOES IT iMPLY?
Hammer and Champy (1993, p. 32), the early pro- ponents of the BPR concept, define reengineering as: "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed". However, they are a little coy in coming up with a more precise definition. On the basis of their work and subsequent writings by others, it is possible to identify the follow- ing elements as important components of the concept of BPR.
