BUSINESS PROCESS CHANGE Concepts, Methods and Technologies potx

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BUSINESS PROCESS
CHANGE:
Concepts, Methods and
Technologies
By
Varun Grover
William J. Kettinger
Center for Information Management and Technology Research
College of Business Administration
University of South Carolina
Senior Editor: Mehdi Khosrowpour
Managing Editor: Jan Travers
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Printed in the United States of America
Library of Congress Cataloging-in-Publication Data
Grover, Varun, 1959-
Business process change: reengineering concepts, methods, and technologies /
Varun Grover, William J. Kettinger.
p. 704 cm.
Includes bibliographical references and index
ISBN 1-878289-29-2 : $84.95
1. Organizational change Management. 2. Information technology Manage-
ment. 3. Strategic planning. I. Kettinger, William J. II. Title.
HD58.8.G77 1995
658.4'063 dc20 95-37
CIP
To Anita and Lynda who’ve settled for only
incremental change in each of us,
and,
to Ankit, Arjun, Lindsey and David who have
wonderfully begun the process of life-long

change.
BUSINESS PROCESS CHANGE
a business process is a set of logically related tasks that use the
resources of an organization to achieve a defined business outcome.
Business Process Reengineering (BPR), Process Improvement, Busi-
ness Transformation, Process Innovation and Business Process Rede-
sign are terms frequently used interchangeably to represent the phe-
nomenon of “Business Process Change.”
Popular competing definitions of Business Process Change propose that
it is:
“the fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures
of performance”
“the analysis and design of team-based work flows and processes within
and between organizations”
“a methodological process that uses information technology to radically
overhaul business process and thereby attain major business goals”
“the reconfiguration of the business using IT as a central lever’
“the overhauling of business processes and organization structures
that limit the competitiveness effectiveness and efficiency of the organi-
zation”
“the design of a company’s core processes to yield breakthrough levels
of improvement, laying the basis for continuous improvement”
“a strategy driven organizational initiative to (re)design business pro-
cesses to achieve competitive breakthroughs in performance; differing
in scope from process improvement to radical new process design,
contingent upon the degree of socio-technical change required”
This phenomenon is typically known to:
involve CROSS FUNCTIONAL CORE PROCESSES
but

many improvement initiatives within narrower functional areas have
also proved successful.
focus on RADICAL/ONE TIME process changes
but
continuous improvement through stewardship of processes may be
more beneficial in the long term.
(iv)
This phenomenon is typically known to:
takes a CLEAN SLATE approach
but
most process change methodologies advocate documentation and
analysis of existing “as is” processes and many firms are unwilling to
commit resources for clean slate “revolutionary” implementation.
be STRATEGY LED with initiatives from senior management
but
some bottom-up process change initiatives, with strong inputs from
line workers and middle mangers, have proven successful.
strive for BREAKTHROUGH PERFORMANCE GAINS
but
benchmarking and measurement of these gains can prove elusive
and in many cases moderate gains more consistent with organiza-
tional culture and orientation define success.
be INFORMATION TECHNOLOGY ENABLED
but
numerous organizational innovations involving people, jobs, skills
and structures can also facilitate new process oriented behaviors.
be CUSTOMER DRIVEN with value defined as satisfaction
but
some scholars and practitioners advocate a longer-term and more
strategic perspective to overcome the possible myopia of immediate

customer demands in order to discover new ways to benefit future as
well as present stakeholders.
enhance individual capacities through EMPOWERMENT AND
TEAMS
but
many process change projects are defended based on cost objectives
achieved through downsizing and outsourcing with few opportuni-
ties for retraining, team work or reallocation of decision rights.
adapt a number of METHODS touted by armies of consultants
but
few standardized and structured approaches exist.
(v)
This phenomenon is typically known to:
minimize redundancy, maximize concurrency toward a
VIRTUAL SYSTEM
but
many successful process change efforts have benefited from simple
efficiency improvements without fully exploiting or optimizing the
best utilization of a virtual enterprise’s resources and knowledge.
be run by OUTSIDERS such as consultants
but
the lack of concern for maintaining new business processes once
reengineered has caused process management responsibilities to
shift toward internal managers closer to the processes and more
vested in the business.
Thus, the (r)evolution of reengineering, the requirement to
sustain and integrate process change, the need to reconcile
alternative process improvement and management ap-
proaches, and the recognition of organizational constraints
to implementation, all serve to broaden the concept of

BUSINESS PROCESS CHANGE, recognizing the need for
the radical, the incremental, the continuous and the contin-
gent.
(vi)
FOREWORD
This book was conceived during a period of tumultuous change
in the global business environment. Corporations were undergoing
massive restructuring. Global competition, sluggish economies and
the potential offered by emerging technologies were pushing firms to
fundamentally rethink their business processes.
Prominent consultants seeking to provide solutions to these
problems prescribed Business Process Reengineering (BPR) as a
means to restructure aging bureaucratized processes in an attempt
to achieve the strategic objectives of increased efficiency, reduced
costs, improved quality, and greater customer satisfaction. These
consultants typically repackaged existing change theories and tech-
niques of organizational structure, technology, operations, quality,
and human resources in a new and exciting synthesis directed at
dramatic improvements in business performance.
BPR soon became the rage! Endless magazine articles heralded
claims or tremendous payoffs resulting from process change. The
popularity of BPR was in part fueled by claims of high pay-offs from
early BPR projects. For example, Ford Motor Co. and AT&T reported
major increases in productivity and decreases in staff after process
reengineering and DEC was able to consolidate 55 accounting groups
into five. Kodak reengineered its 1,500-employee black and white
film operations by focusing on customer satisfaction and cut costs
15% below budget; cut response time in half; and dramatically
reduced defects. Other early reengineering success stories include:
Hallmark’s product development process, Bell Atlantic’s system

billing process, an similar examples at GE, IBM’s Credit Corp.,
Capitol Holdings, Taco Bell, Wal-Mart, CIGNA RE, XEROX and Banc
One.
Ironically, while much has been discussed about BPR, most
companies are still searching for theories and methods to better
manage business process change. Academics are also now beginning
to recognize the need to study this phenomenon, but precious little
has been published. Basic questions lack consistent answers:
• What does process change entail?
• What are key enablers of process change?
• Is there a process change methodology?
• What techniques and tools have been found to successfully model
and redesign business processes?
• What is the role of information technology in this change?
• What is the role of Information Systems personnel in changing
business processes?
• What is the role of people empowerment and team-based manage-
(vii)
ment in process change?
• How do we best plan, organize and control process change efforts?
• Under what conditions will BPR be most effective?
Answers to these questions are not easy, nor direct. Pondering
these same questions from our “steamy southern” vantage point in
the Summer of 1993, we recognized there was little impartial and
scholarly analysis of this compelling management trend. A book idea
was born! But where should we look for quality contributions on this
topic?
Managers from firms that had actually undergone BPR? —These
seasoned process “changees” certainly could provide important
hands-on insights. But cursory descriptions of their experiences had

been covered by the popular press. The time was right for moving
beyond simple “lessons learned” to understanding models and
attributes of successful BPR.
Management consultants and vendors? Many had been “doing”
BPR for more than five years. They had a lot to add! But we, like
many, were leery that books prepared exclusively by consultants may
be motivated more by the desire to sell proprietary theories and
methods, than to uncover the “truths” of BPR. Some balance was
needed!
Management and Information Systems Academics? Well, we
knew that they were interested in this topic — it involves addressing
fundamental organizational and technological paradigms upon which
much of their research is based. But up to that point, little real
scholarly contributions had been set forth in the literature.
Ultimately, we were resolved that if a presentation was struc-
tured and balanced, each group had great potential as distinguished
contributors. A decision was made — “Design a book and they will
Come!” We are happy to report that they came! In this refereed book
we have assembled enlightening contributions from the most emi-
nent academics and practitioners in the field of Process Change.
Their caliber is reflected in the enclosed chapters. Given the
embryonic stage of the research on this topic, reading and discussing
the chapter submissions has been a wonderful learning experience
for the editors. And the diversity of perspectives provided opens up
avenues for fresh thinking on this phenomenon. The authors
represent both North American and European viewpoints, private
and public sector perspectives, academic, consultant and manage-
rial frames of reference and material is presented using case studies,
empirical studies, conceptual frameworks and tutorials. We are
deeply indebted to the authors for their contributions, their respon-

siveness to suggestions for changes and their overall enthusiasm in
producing this quality endeavor.
On a final note, we have observed an evolution of the process
(viii)
reegineering concept through the development cycle of this book.
This evolution is noted by Thomas Davenport in his insightful
opening chapter and other prominent authors in this book. The
radical tone of the concept while initially “hyped” has been somewhat
tempered after a degree of contextual realism has set in. Further,
reconciliation with other (more incremental) process change pro-
grams has resulted in the evolution toward a broader, yet more
powerful process management concept.
V.G.
W.J.K.
(ix)
BOOK ORGANIZATION
We recognize that senior managers are still familiarizing them-
selves with this concept and want to move beyond consultant and
vendor recommendations to become in-house experts on BPR. At the
same time academics desire information for both pedagogical and
research purposes. Throughout this book we have made a concerted
effort to offer a significant body of fresh knowledge on which future
work can be grounded, provide a diversity of perspectives and
treatments, maintain a healthy balance between academic scholar-
ship and relevance, and include chapters that are visually stimulat-
ing and eminently readable.
The twenty-five chapters compiled in this book offer such variety
in their treatment of this topic that functionalizing them by imposing
a rigid structure on their organization might undermine the inte-
grated nature of the phenomenon being examined. Nevertheless, we

offer a general structure for this book that will guide the organization
of articles and the flow of the book, while preserving its integrity in
stimulating debate. The diagram below illustrates the transforma-
tion over time of the business process from a state of dynamic
equilibrium with individuals and roles, strategy, structure, and
technology to another point of relative equilibrium. This “business
process change” is facilitated by multiple diverse entities. These are
represented under the categories of information technology, meth-
(x)
ods, implementation and the information systems function. Each of
these entities can be comprised of a number of ideas, frameworks,
theories, concepts and perspectives.
As shown in the figure below, the book can be divided into 5
major parts:
• Part I (Overview) examines the concept of process change, its major
technological and organizational enablers, the importance of infor-
mation management and some theoretical foundations.
• Part II (Information Technology) evaluates the centrality of informa-
tion technology in process change, lessons from an information
technology planning paradigm, and specific hardware and software
initiatives.
• Part III (Methods) provides a generic methodology and a powerful
repertoire of tools and techniques for modeling and evaluating
process change.
• Part IV (Implementation) deals with the organizational problems in
conducting process change, including issues related to individual
attitudes, politics, teams and management of change.
• Part V (The Information Systems Function) examines the role of IS
professionals in process change and the impact of process change
on the systems development process and the IS function in general.

(xi)
ACKNOWLEDGMENTS
The process we followed for creating this refereed manuscript
included a number of steps. First, we requested proposals for
chapters in an open solicitation. These proposals were evaluated
with respect to the goals of the book and feedback was provided to the
authors. In some cases proposals were rejected outright if they did
not match the intent of the book. Next, completed manuscripts were
received and put through an anonymous review process. Each
manuscript was reviewed by two reviewers, one internal and one
external. Detailed guidelines were provided to each reviewer regard-
ing the purpose of the book and the types of papers desired. If the
manuscript was acceptable to both reviewers (subject to minor
revisions), the author(s) was invited to revise the manuscript.
Manuscripts that were unacceptable to both reviewers were rejected.
If there was disagreement among the reviewers, the editors extracted
the major concerns and sent a letter to the author(s) providing them
the option of resubmission with a major revision. In some cases these
manuscripts were eventually rejected or went through additional
rounds of review.
Clearly, in the above process the reviewers played a critical role.
We wish to express our gratitude to the reviewers who critiqued the
original manuscripts and in all cases provided detailed written
feedback. Their sincerity and dedication to the work they undertook
is highly appreciated. The following individuals through their review
of chapters, advice and support deserve special thanks. These are
Tom Davenport, Kirk Fiedler, Bob Galliers, Kirk Karwan, Al Lederer,
Don Marchand, Lynne Markus, Manoj Malhotra, Nancy Melone,
James McKeen, Vicki Mitchell, Arun Rai, Rajiv Sabherwal, James
Teng and Al Segars.

We would also like to express appreciation for the support
provided us by the Center for Information Management and Technol-
ogy Research at the University of South Carolina. In particular, we
owe a special round of applause to Midge Burgess who was instru-
mental in keeping our house in order. Through her patience, care
and attention to organization, we were able to complete this project
successfully. A final note of thanks goes to our families for their
patience, support, and a modicum of food stains, allowing us to
complete this project within an ambitious time frame.
February 23, 1995 V.G.
W.J.K.
(xii)
BUSINESS PROCESS CHANGE:
Concepts, Methods and Technologies
Table of Contents
BUSINESS PROCESS CHANGE iv
FOREWORD vii
BOOK ORGANIZATION x
ACKNOWLEDGMENTS xii
INTRODUCTION
Business Process Reengineering: Where It’s Been, 1
Where It’s Going
Thomas H. Davenport, University of Texas, Austin
PART I: OVERVIEW 14
Chapter 1
Technological and Organizational Enablers of 16
Business Process Reengineering
Varun Grover, University of South Carolina
James T.C. Teng, University of South Carolina
Kirk D. Fiedler, University of South Carolina

Chapter 2
Business Process Redesign : A Framework for 34
Harmonizing People, Information and Technology
Donald A. Marchand, International Institute for
Management Development (IMD), Switzerland
Michael J. Stanford, IMD, Switzerland
Chapter 3
Business Process Reengineering: Theory and 57
Practice — Views from the Field
Paul E. Cule, Georgia State University
Chapter 4
Understanding Business Process Reengineering: 78
A Sociocognitive Contingency Model
Matthew J. Klempa, Klempa & Associates
PART II: INFORMATION TECHNOLOGY 123
Chapter 5
The Place of Information Technology and 125
Radical /Incremental Organizational Change
in Business Process Redesign
Robert D. Galliers, The University of Warwick, UK
Chapter 6
Automation, Business Process Reengineering 143
and Client Server Technology: A Three Stage
Model of Organizational Change
Maggie O’Hara, University of Georgia
Rick Watson, University of Georgia
Chapter 7
The Search for Processes to Reengineer: 165
Avoiding the Pitfalls of Strategic
Information Systems Planning

Albert L. Lederer, University of Kentucky
Vijay Sethi, University of Oklahoma
Chapter 8
Alternative IT Strategies: Organizational 187
Scope and Application Delivery
Jesus A. Ponce De Leon, Southern Illinois University
Arun Rai, Southern Illinois University
Arlyn Melcher, Southern Illinois University
PART III: METHODS 208
Chapter 9
The Process Reengineering Life Cycle 211
Methodology: A Case Study
William J. Kettinger, University of South Carolina
Subashish Guha, AT&T/GIS Corporation
James T. C. Teng, University of South Carolina
Chapter 10
A Framework and a Suite of Methods for 245
Business Process Reengineering
Richard J. Mayer, Texas A&M University
Perakath C. Benjamin, Knowledge-Based Systems, Inc.
Bruce E. Caraway, Knowledge-Based Systems, Inc.
Michael K. Painter, Knowledge-Based Systems, Inc.
Chapter 11
Business Reengineering with Business Rules 291
Dan Appleton, D. Appleton Company, Inc.
Chapter 12
Process Modelling - Who, What and How — 330
Role Activity Diagramming
Tim Huckvale, PRAXIS, UK
Martyn Ould, PRAXIS, UK

Chapter 13
Reengineering and REAL Business Process 350
Modeling — Event Driven Modeling
Eric L. Denna, Brigham Young University
Jon Jasperson, Florida State University
Lee Tom Perry, Brigham Young University
Chapter 14
Value-based Business Process Reengineering: 376
An Objective Approach to Value Added
Valery Kanevsky, Pacific Bell
Thomas J. Housel, Telecom Italia, Italy
Chapter 15
Lessons Learned from Business Engineering with 402
the Amsterdam Police Force — Dynamic Modelling
Jeroen W. van Meel, Delft University of Technology
Pieter W. G. Bots, Delft University of Technology
Henk G. Sol, Delft University of Technology
PART IV: IMPLEMENTATION 425
Chapter 16
Strategy Congruence and BPR Rollout 428
Victoria Mitchell, North Carolina State University
Robert W. Zmud, Florida State University
Chapter 17
Assessing Customer Value for Reengineering: 453
Narcissistic Practices and Parameters from
the Next Generation
Aleda V. Roth, University of North Carolina
Jerry Julian, Rath and Strong, Inc.
Manoj K. Malhotra, University of South Carolina
Chapter 18

When People Work Scared: Understanding 475
Attitudes and Gaining Commitment in
Business Process Reengineering
Nancy P. Melone, University of Oregon
Chapter 19
Business Process Reengineering, Politics and 493
Management: From Methodologies to Processes
Gill Smith, OLM Systems, UK
Leslie Willcocks, Templeton College, Oxford University, UK
Chapter 20
Public Sector Reengineering: Applying Lessons Learned . 526
in the Private Sector to the U.S. Department of Defense
Thomas R. Gulledge, George Mason University
David H. Hill, David H. Hill, Inc.
Edgar H. Sibley, George Mason University
Chapter 21
Assessment of the Impact of BPR and 556
Information Technology Use on Team
Communication: The Case of ICL Data
Juha Parnisto, Turku School of Economics and Business
Administration, Finland
PART V: THE INFORMATION SYSTEMS FUNCTION 589
Chapter 22
Business Process Reengineering and the Role 591
of the Information Systems Professional
M. Lynne Markus, The Claremont Graduate School
Daniel Robey, Florida International University
Chapter 23
Reengineering the IS Function: A Managerial 612
Perspective

H
eather A. Smith, Queen’s University, Canada
James D. McKeen, Queen’s University, Canada
R. Ryan Nelson, University of Virginia
Chapter 24
Toward Reengineering the Information Systems 630
Development Processes
Rajiv Sabherwal, Florida International University
Chapter 25
Surviving Business Process Redesign: 650
The Impact on IS
Robert Zeibig, Nolan, Norton & Company
AUTHOR BIOGRAPHIES 669
INDEX 681
Where It’s Been, Where It’s Going 1
INTRODUCTION
Business Process
Reengineering:
Where It’s Been, Where It’s Going
Thomas H. Davenport
University of Texas, Austin
Business process reengineering is the most popular business
concept of the 1990’s. Celebrated in best-selling books (in the U.S.,
Japan, Brazil, and many countries in Europe), articles in every major
business publication, conferences, and even several videotapes,
reengineering has penetrated into every continent except Antarctica.
Thousands of companies and public sector organizations have
initiated reengineering initiatives. Internal and external consultants
on the topic have proliferated dramatically. Many universities have
created courses on the topic for business school students.

Perhaps the greatest testimony to the concept of reengineering
is the number of people who have adopted the term to describe what
they do. Within organizations there are many different types of
activities that are described as “reengineering,” ranging from incre-
mental process streamlining to headcount reductions and even new
information systems.
Within the reengineering literature, however, which is quite
voluminous, there is a much higher level of consistency about the
meaning of the term.
1
Reengineering generally means the radical
redesign of broad, cross-functional business processes with the
objective of order-of-magnitude performance gains, often with the
2 Davenport
aid of information technology. The most common variation from this
definition views reengineering not as change in processes alone, but
as a general organizational transformation—though in my view this
is an inappropriate extension of the term (Davenport and Stoddard,
1994).
One can only speculate as to why reengineering is so popular.
When it was initially adopted in the United States (and in Europe and
Japan), a recession was underway, which may have stimulated
managers to search for new ways to reduce operating costs. How-
ever, the U.S. recession is over, and reengineering’s popularity
endures. Strassman (1994) speculates that reengineering’s popular-
ity relates to its focus on white-collar processes at a time when the
proportion of white-collar employees in organizations has increased.
Another possible explanation is that companies have spent vast
amounts of money on information technology, and wanted to make
better use of the resource by tying it to process changes. Finally, it

is possible that reengineering’s popularity is purely a matter of
promotion by some of its creators. The concept offers so much
potential benefit to consultants, IT vendors, and systems integrators
that their publicity itself was an important causal factor.
Origins of Reengineering
Some argue that reengineering is new; others that there is
nothing new about reengineering. They are both right. The
“components” of reengineering all existed prior to 1990, when the
first articles on the topic were published. However, these compo-
nents had not previously been assembled in one management
concept. Reengineering is new, therefore, only as a new synthesis of
previously existing ideas.
The component ideas themselves came from multiple sources
that cut across academic disciplines and business functions. The
idea of managing and improving business processes comes primarily
from the quality or continuous process improvement literature,
which itself modified the process concept from industrial engineering
concepts extending back to the turn of the century and Frederick
Taylor. The notion of working on broad, cross-functional processes
is somewhat more recent, but is certainly at least implicit in the value
chain concept popularized by Michael Porter, and the concurrent
engineering and design-for-manufacturing concepts employed in the
manufacturing industry (Vogt, 1988; Schonberger, 1990).
Another key aspect of reengineering is the “clean slate” design of
processes. Although firms often disregard existing constraints in
designing a new business process, the constraints must be taken into
account during implementation unless a new organizational unit is
Where It’s Been, Where It’s Going 3
created. In any case, this idea is not new to reengineering. It was
used prior to the reengineering concept at General Motors (in the

Saturn project), at the Topeka pet food factory of General Foods in the
early 1970s (Walton, 1977), and in the First Direct subsidiary of
Midland Bank. The idea of such a greenfield site has been explored
in the work design literature (Lawler, 1978).
Reengineering typically involves the use of information technol-
ogy to enable new ways of working. This idea has been discussed
since the initial application of information technology to business,
though often not executed. It is present in the concept of the business
analyst function, and was also frequently expressed in the context of
the strategic or competitive system.
Each of the component concepts of reengineering, however, had
some “flaw”—at least from the perspective of someone desiring
reengineering-oriented change. Quality-oriented business processes
were too narrow, and relied too heavily on bottom-up change, to yield
radical new work designs. The idea of broader, cross-functional
processes was limited to certain domains and to manufacturing
industries. Greenfield change before reengineering often involved an
entire organization at a single site, with no smaller, exportable unit
like a process. Finally, while the notion that IT could change work
was powerful, the business analysts or other purveyors of IT could
not by themselves create a context in which radical organizational
change could occur. Reengineering appeared to “solve” all of these
shortcomings.
In terms of how the reengineering synthesis was created, IT-
oriented management consultants (most of whom were also or
formerly academics) deserve most of the blame or credit. The idea of
redesigning business processes with the aid of IT was “kicking
around” various consulting firms in the mid-to-late 1980’s. I was
working at Index Group (now a unit of Computer Sciences), and the
term was mentioned frequently by some consultants, particularly

those working to change management processes.
2
The concept was
also mentioned in internally-published articles or presentations I
have seen from Nolan, Norton & Company (now a unit of KPMG Peat
Marwick) and McKinsey & Company. However, in none of these cases
was there any evidence of deep understanding of the phenomenon at
this time.
Index Group and Michael Hammer had a multi-client research
program at this time called “Partnership for Research in Information
Systems Management;” I directed this program. In 1987 we re-
searched the topic of “Cross-Functional Systems.” In this research
we discovered that several firms (including Mutual Benefit Life and
Ford) had adopted many of the components of reengineering, par-
ticularly using IT to make dramatic improvements in cross-func-
tional processes. Michael Hammer learned more about these firms
4 Davenport
when he asked managers from them to speak at a conference on the
subject.
I left Index in 1988, and Michael Hammer and I (in my case with
Jim Short, then at MIT and now at London Business School)
independently began writing articles on the topic. Short and John
Rockart, also at MIT, had just completed an article suggesting IT’s
greatest use was in enabling change in cross-functional processes
(Rockart and Short, 1989). Short and I viewed our article as a much
more detailed elaboration of what that idea meant. We collected
several examples of firms that had done what we viewed as
reengineering (though we didn’t like the term then, and I still don’t),
and tried to abstract from the examples some maxims and general
steps to follow. Our article was published in June of 1990;

Michael
Hammer’s more popular and exhortatory version emerged a few
weeks later.
The reaction to these articles was very positive, and many
companies began reengineering projects or brought previous efforts
under the reengineering banner. Some early and particularly
aggressive adopters included Mutual Benefit Life Insurance, IBM,
Cigna, Xerox, and Bell Atlantic. Many consulting firms began to
repackage their existing expertise (in continuous improvement,
systems analysis, industrial engineering, cycle time reduction, etc.)
to claim that they knew all about reengineering.
3
In the summer of
1991 one analyst of the consulting industry told me he had counted
more than 100 firms offering reengineering services.
4
Firms also began to reinterpret their previous experiences in
reengineering terms. For example, of the oft-described reengineering
projects at Ford (accounts payable process), IBM Credit (financing
quotation process) and Mutual Benefit Life (new policy issue pro-
cess), none were undertaken as “reengineering” initiatives. Another
common reengineering success story, the food preparation process
at Taco Bell, was not undertaken in a reengineering context. After
it was successful and widely described as reengineering, Taco Bell
executives decided that they would undertake another project—this
time using formal reengineering methods and a well-known
reengineering consulting firm. This time the project failed, primarily
because of insufficient senior management sponsorship.
5

Beginning around 1992, academics began to publish research
on reengineering. Like the consultants, most of them came from the
information technology field. Some wrote on reengineering in general
(Short and Venkatraman, 1992; Grover, Fiedler and Teng, 1993;
Earl, 1994), others on the specific relationship to IT (Grover, Fiedler,
and Teng, 1994). Some of the most useful academic projects focused
on empirical analysis of results and trends across multiple
reengineering engagements (Jarvenpaa and Stoddard, 1993), and on
the course of reengineering over time in a single company (Caron,
Where It’s Been, Where It’s Going 5
Jarvenpaa, and Stoddard, 1994). The collection in this volume is,
however, by far the greatest concentration of academic work on the
subject published thus far.
As I write in late 1994, it would appear that a backlash to
reengineering is beginning to occur. There have been for some time
articles in the trade and consulting press suggesting that reengineering
projects have a high “failure” rate, though it is not exactly clear what
this term means. The figure of a 70% failure rate was originally
mentioned by Hammer and Champy, though both have since re-
canted this statement. Success and failure in reengineering is a
complex phenomenon, and might be equated to success and failure
in strategic planning. Many plans are created that never get fully
implemented (Mintzberg, 1993). If we view a reengineering initiative
as creating a strategic plan for how work will be done in the future,
we should expect that many such plans will not be implemented as
designed. We should also be aware that there are other benefits to
planning that may accrue even if the plan is not implemented; these
include learning, providing motivation for change, and communicat-
ing intentions.
Critics of reengineering generally focus on narrow aspects of the

concept. One book by popular business strategists, for example,
equates reengineering with cost reduction, and argues that firms
cannot thrive unless they focus on the future rather than reducing
costs of existing processes (Hamel and Prahalad, 1994). Given the
rapid rise of the reengineering concept and the level of publicity and
hype surrounding it, it is inevitable that some deflation of the concept
will occur. But there are some valid concerns about reengineering.
If IT-enabled radical process change is to avoid becoming just
another (though a particularly prominent) management fad, I believe
the movement must change in ways detailed below.
Reengineering Rhetoric vs. Reality
A critical factor in the understanding of reengineering is the
difference between what it is supposed to be and what it is. This
difference is most pronounced with respect to the radicalness of
process change. As described above, reengineering espouses radical,
order-of-magnitude change; its advocates urge taking a “clean sheet
of paper” approach to work design. I argued, for example, in a
relatively moderate form of this rhetoric, that:
Process innovation initiatives start with a relatively clean slate,
rather than from the existing process. The fundamental busi-
ness objectives for the process may be determined, but the
means of accomplishing them is not. Designers of the new
process must ask themselves, “Regardless of how we have
6 Davenport
accomplished this objective in the past, what is the best possible
way to do it now?” (Davenport, 1993, p. 11)
In practice, many companies do take a clean sheet approach to
designing a process. Design teams attempt to imagine “the best of all
processes” without regard to constraints of existing information
systems or organizational factors. Not surprisingly, the new process

designs that many firms have shared with me are quite radical, with
ambitious plans for new technologies, new skills, and new organiza-
tional structures.
The problem, of course, comes at implementation time. Few
firms can afford to “obliterate” their existing business environments
and start from scratch. Assuming that the organization is not
disillusioned by this realization (and many are, contributing to the
“failure” rate mentioned above), it proceeds to implement the new
process incrementally. Thus the general rule for reengineering is
“revolutionary design, evolutionary implementation.” I have ob-
served this pattern many times in my research and consulting work,
and it has been confirmed in a more rigorous study of 35 reengineering
projects (Jarvenpaa and Stoddard, 1993).
Where Reengineering is Going
There are several possible futures for reengineering. One is the
ultimate fate of all management enthusiasms, as described by
Richard Pascale (Pascale, 1990). He describes the rise and eventual
fall of such movements as “one minute managing,” “Theory Z,” and
more academically respectable topics like the use of decision trees.
Reengineering has many features of such fads, including a promi-
nent guru, a best-selling book, and extravagant claims of effective-
ness. It may be impossible to prevent the decline of reengineering in
terms of managerial and press attention.
Another possible future for reengineering is that it will become
embedded, either in whole or in part, in other, more traditional
approaches to business change. I know of several companies, for
example, in which the strategic planning process has been modified
to address issues of which processes should be reengineered.
Reengineering is also being embedded in information systems devel-
opment approaches and methods; the idea is to identify needed

process changes before building a system to support the process.
Reengineering might also be embedded in quality programs, which
is an important topic unto itself.
Integrated Process Management
Despite the likelihood of reduced management attention for
Where It’s Been, Where It’s Going 7
reengineering and its embeddedness in other activities, there are
some obvious means of extending its useful life. In the early days of
the movement, for example, it was important to distinguish
reengineering from less radical continuous improvement approaches.
In practice, however, firms often seek to combine radical and
incremental process changes within the same initiative. They may
design a radically different process, but implement incremental
improvements in the short term. Further, some methods and
techniques found in more traditional process improvement pro-
grams, e.g., process value analysis and root cause analysis, are
frequently useful in reengineering initiatives, particularly for diag-
nosing existing processes. Finally, the groups that support quality
and reengineering programs in organizations are becoming more
closely affiliated, and even merging in some cases (including DuPont,
IBM, Ford, American Express, and Eastman Chemical).
Therefore, one obvious direction for reengineering is better
integration with other approaches to process management. Some
firms, for example, are beginning to construct a “portfolio” of process
change programs, just as they might have a portfolio of financial
investments. The portfolio includes some high-risk, high-reward
reengineering programs, and some that are more incrementally-
oriented and thus more likely to be implemented. In some such firms
the senior management team has a sufficient understanding of
alternative process change approaches to decide on appropriate uses

of continuous improvement, traditional industrial engineering-ori-
ented approaches (Rummler and Brache 1990), and reengineering.
This requires not only a good knowledge of process improvement
techniques, but also a high-level understanding of the current
processes of the organization.
An even more integrated approach to process management
would be to pull tools from a variety of process change approaches
to construct a hybrid process design and implementation technique
(e.g., to combine process value analysis with IT enablement and
quality function deployment, each of which comes from a different
process change tradition). This already happens to some degree
within many reengineering initiatives in firms, but it has not been
formalized.
The institutionalization of process management involves not
only the redesign of business processes, but also changes in other
management domains to create a process orientation. These include
process-based measurement and information systems, process-
based organizational structures, process-based management ap-
proaches (e.g., budgeting and resource allocation), etc. At present
firms may undertake these after redesigning a business process, but
changing them may offer more rapid benefit than the process design/
pilot/implementation cycle firms typically employ.
8 Davenport
At one high-technology manufacturing firm, for example, two
processes were selected for change. In the order management
process a highly aggressive, exemplary approach to reengineering
was adopted. A radical new work design was created that would
employ significant new IT and human process enablers. After a year
of design and pilot work, however, managers decided that the design
was too expensive to implement and required too much change in

organizational structure. An entirely new effort to reengineer the
process was undertaken.
The other initiative was a logistics or supply chain management
process. Instead of a typical design and implementation project, the
management team for the process decided to focus on other levers of
change. They created for the first time worldwide visibility of
inventory levels across the company. They put managers in charge
of the entire supply chain process for large geographical regions, and
based much of their compensation on meeting inventory goals.
Within a year, inventory levels had declined 30%. In summary, the
fastest and most effective route to improvement may not be through
traditional reengineering projects.
Process management may extend the useful life of reengineering
in companies, particularly if a backlash against overly aggressive
reengineering approaches develops. However, this idea may be too
moderate and rational a message to inspire much frenzy in the
marketplace. It is much more exciting to adopt a “new and different”
approach to change than to realize that it is related to previous
approaches.
Reengineering Knowledge Work
Most reengineering projects have involved relatively adminstrative
processes such as order management or customer service. There
exists a large opportunity for reengineering or improving knowledge
work processes, e.g., new product development, management, sys-
tem development, and professional service processes. For many
companies these processes are significant sources of new revenue.
Knowledge work processes are difficult to reengineer because of
the autonomy of knowledge workers, but they may be well-suited to
improvement-oriented approaches. In some preliminary research on
the knowledge work processes of ten companies, several stated that

reengineering was too top-down and too structured a process for the
kind of workers involved in their processes. They had adopted more
incremental and participative process change techniques, and had
focused more on process outputs and organizational structure
(creating teams or co-locating workers) than on detailed work flows.
A non-traditional approach to reengineering that may be par-
ticularly appropriate for knowledge work is the use of ethnographic