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Enterprise Resource Planning

notes initiatives that are intended to achieve radically redesigned and improved work processes in a
bounded time frame. Contrast between the two is provided by Davenport (1993):

2.5.3 process improvement (tQm) versus process innovation (Bpr)

improvement innovation
Level of Change Incremental Radical
Starting Point Existing Process Clean Slate
Frequency of Change One-time/Continuous One-time
Time Required Short Long
Participation Bottom-Up Top-Down
Typical Scope Narrow, within functions Broad, cross-functional
Risk Moderate High
Primary Enabler Statistical Control Information Technology
Type of Change Cultural Cultural/Structural
Source: Davenport (1993, p. 11)

2.6 What is a Business process?

Davenport & Short (1990) define business process as “a set of logically related tasks performed
to achieve a defined business outcome.” A process is “a structured, measured set of activities
designed to produce a specified output for a particular customer or market. It implies a strong
emphasis on how work is done within an organization” (Davenport 1993). In their view processes
have two important characteristics: (i) They have customers (internal or external), (ii) They cross
organizational boundaries, i.e., they occur across or between organizational subunits. One
technique for identifying business processes in an organization is the value chain method
proposed by Porter and Millar (1985).
Processes are generally identified in terms of beginning and end points, interfaces, and
organization units involved, particularly the customer unit. High Impact processes should have
process owners.

Example: Processes include: developing a new product; ordering goods from a supplier;
creating a marketing plan; processing and paying an insurance claim; etc.
Processes may be defined based on three dimensions (Davenport & Short 1990):
Entities: Processes take place between organizational entities. They could be Interorganizational
(e.g. EDI, i.e., Electronic data interchange), Interfunctional or Interpersonal (e.g. CSCW, i.e.,
computer supported cooperative work.).
Objects: Processes result in manipulation of objects. These objects could be Physical or
Informational.
Activities: Processes could involve two types of activities: Managerial (e.g. develop a budget)
and Operational (e.g. fill a customer order).

What are the myths about Bpr created by the popular Literature?

The popular management literature has created more myth than practical methodology
re-engineering. The concept of BPR has been with us since about 1990, however it is widely
misunderstood and has been equated to downsizing, client/server computing, quality, ABC,
and several other management nostrums of the past several years. Based on interviews and
conversations with more than 200 companies, and 35 re-engineering initiatives, Davenport &
Stoddard (1994) identify seven re-engineering myths.

24 LoveLy professionaL university