2002 Best Practices in Business Process Reengineering Report

327 organizations share lessons learned

Executive summary

The goal of this study is to provide real-life lessons from the experiences of project teams recently or currently involved in projects. The comparison over time provides additional relevance and insight into the evolution of business process reengineering methods.

Contained in the report are sections about all aspects of a business process reengineering project, including:

·        what is being reengineered and why

·        what approach is working

·        critical ‘must do’ and ‘must not do’ items

·        how to pick the best team

·        requirements for project approval

Participant demographics

The 2002 study followed a trend started in 1999 with more international representation. US organizations comprised 52% of the 1997 study, 42% of the 1999 study and 39% of this study. Asia and Pacific Islands participation constituted 6% more of this study than the 1999 release while European participation grew 3%. Figure 1 shows the breakdown of study participants by geographic location.

Figure 1 – Geographic distribution of participants

Participants represented a broad sampling of industry groups. Product development and manufacturing, finance and banking and consulting were the three largest sectors, accounting for over one-third (37%) of participants (see Figure 2).

Figure 2 – Industry segment of participants

 Over a quarter of the participants were team leaders. Approximately 56% of participants were either a team leader, a team member or a consultant.  

What processes are targets for reengineering?

Customer service was again the most frequently reengineered process, as it had been in 1997 and 1999, but by less of a margin. Information (computer) services nearly doubled in frequency, moving it from the fifth to the second most targeted business process for reengineering.   

Why are they being targeted?

In each report (1997, 1999, 2002), the need to reduce cost/expense was the most frequently cited business driver for reengineering projects. In 2002, 65% of participants stated that expense reduction was the primary driver. The other three business drivers were:

• Competitive pressure
• Poor customer satisfaction
• Poor quality of products and services  

Are BPR projects successful?

Study participants showed much higher overall expected improvements from their BPR projects in 2002 than in 1999 or 1997. Over half (54%) of participants expected improvements of over 30%.

In addition to expecting higher improvements, study participants were more successful in their projects. One hundred and thirteen study participants were able to measure their project against the initial objectives that were set. Over 73% met or exceeded their objectives, with nearly half (47%) of study participants meeting their project objectives within 10%.  

What are the most critical project activities?

Participants overwhelmingly indicated that the planning stage where scope and roles were set was the most important phase in the project.

 “The most important step was the planning and design phase, which formed the cornerstone and set milestones for the project.”

Other steps participants cited as critical to project success included a high-level review of the business as usual or ‘as is’ state of the organization (although teams cautioned against spending too much time with this activity) and gaining support and ‘buy-in’ from top management (including building executive sponsorship).

Over 75% of participants were required to submit a business case that included the projected ROI for the project to insure funding. The project had to generate a significantly positive ROI and show results within a specified timeframe.  

How did teams spend their time?

Nearly two thirds of a typical project was spent planning, designing and gaining approval with only one third spent on development and implementation of the solution. 

Are projects getting longer or shorter?

Continuing the trend of shorter projects from 1997 and 1999, the average project lasted 13.8 months in the 2002 study. In 1999 projects lasted 14.5 months and in 1997 they lasted 19.7 months.  

What would teams do differently?

The top activity that project teams would do differently on the next project was more effective change management.

Study participants cited increased training in the areas of BPR, change management, technology and management principles as the number one activity they would do differently with their next project.  

Why are certain teams successful?

Participants cited a number of factors that contributed to their team’s success. The top-three factors were:

1.     Team members demonstrated a dedication to the project.

2.     The team had strong commitment and support from top management.

3.     The team shared a clear vision of the objectives and goals and had a common focus and understanding of project success.

The amount of time that team members are able to commit to the project (full-time vs. part-time) is steadily decreasing from the levels in 1997 and 1999. At the same time, study participants felt that a lack of focus on the project, caused by preoccupation with regular duties, inhibited the team’s success.  

Did using consultants pay off?

Teams used consultants for the following three reasons:

1.     To act as the team leader or key facilitator within the reengineering team.

2.     To provide and/or coordinate the training of team members.

3.     To provide specific and detailed IT or technical systems advice and expertise.

More than three-quarters of companies that used consultants rated the consultants’ effectiveness excellent or very good, and more than three-quarters of organizations cited the consultants’ influence as critical or very critical to the project’s success.  

Did using change management really make a difference?

Excellent or very good change management programs directly correlated with teams that met or exceeded their overall project objectives.

The top-three change management activities were:

           1.     Constant and diverse communication.

           2.     Training of employees on the new process and systems to be used.

           3.     Planning the transition and constantly re-evaluating short-term goals and targets.

Communication was again the most important change management activity listed by participants. Participants cited the use of multiple communication methods as the key to ensuring successful communication. Emails and websites were successful in reaching the wide audience, but as the topic was driven deeper in the organization, there was no substitute for face-to-face discussions.  

What can top management do to encourage project success?

Reflecting the results from the 1999 report, teams whose projects were driven or heavily supported by top management were more likely to complete their project at or above expectations.

The biggest mistake made by senior managers or executive sponsors was a failure to show sufficient visible involvement in the project.

 “… not staying involved enough after the initial phase, assuming that everyone in the organization understood their vision and strategy.”

An overwhelming majority of teams had senior managers or executive-level managers as their project sponsors, and most teams rated their sponsor effectiveness as very good or excellent.  

What were the biggest obstacles?

Participants cited a number of obstacles during implementation. Resistance to change within the organization was cited six times more often than any other obstacle. Resistance came in many forms, including organizational inertia, corporate culture, front-line resistance and management resistance.

 The most commonly cited contributors to implementation success were:

·        buy-in from upper management, including an executive sponsor

·        a clear understanding of the business issues and the BPR solution

·        employee support and buy-in for the proposed solution

How long before projects show results?

Study participants reported a short amount of time before they realized improvements. A total of 70% of participants realized improvements within 6 months of project implementation and only 12% of projects required over a year before improvements were realized.

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What else does the 2002 report cover? 

·        A list of the most critical "must do" and "must not do" recommendations from project teams and team leaders

·        The complete set of management mistakes most commonly made during major change projects

·        A comprehensive guide to BPR methodologies and activities used by teams

·        An analysis of which business processes are the future targets for change by companies

·        The roles of executive sponsors (what they can contribute most)

·        Key success factors for project implementation

·        Guidelines for selecting the most effective project team

·        Most important start-up activities for new projects

·        What teams would do differently on their next project

·        Charts and graphs showing what benefits teams are achieving

Learn more about the 2002 study

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