Business Process Re-engineering: A Panacea for Reducing Operational Cost in Service Organizations

Main Article Content

Joseph Joseph Sungau
Philibert C. Ndunguru
صندلی اداری

Abstract

Organizations in today’s business environment struggle on how to reduce operation cost in order to set prices that can be afforded by many customers while obtaining reasonable profit.  In order to reduce Operational Cost, service organizations have been working hard to identify techniques that facilitate business processes improvement for reduced Operational Cost. In so doing, the global literature indicates that service organizations adopt Business Process Re-engineering technique as a panacea of reducing Operational Cost. Despite a documented potentiality of Business Process Re-engineering technique, there are mixed empirical results, findings and conclusions regarding the effect of Business Process Re-engineering on Operational Cost. Therefore, this paper aimed at assessing and explaining effects of BPR on Operational Cost.

The study used cross-sectional survey design to investigate the effect of BPR on Operational Cost. Intensive literature review enabled the construction of structural measurement model, formulation of testable hypotheses and operationalization of constructs. In order to test the model and hypotheses, data were collected from ninety five (95) service organizations in Tanzania. Results of the study reveal that BPR and delivering speed have no direct effects on Operational Cost; they indirectly affect Operational Cost through the mediations of service quality. Therefore, BPR influences first both service quality and delivery speed in affecting Operational Cost of service organizations. It is now recommended that service organizations should use Business Process Re-engineering as panacea of reducing Operational Cost.

Downloads

Download data is not yet available.

Article Details

Section
Articles

References

ADEYEMI, S.; AREMU, M. A. (2008) Impact assessment of business Process re-engineering on organizational performance. European Journal of Social Sciences, v. 7, n. 1, p. 115-125.

AGI. (2001) The theory of constraints and its thinking processes. Jonal Program, New haven.

AL-MASHARA, M.; IRAN, Z.; ZAIRI, M. (2001) Business process re-engineering: A survey of international experience. Business Process Management Journal, v. 7, n. 5, p. 437-455.

AREMU, M. A.; SAKA, S. T. (2006) The impact of information technology on library, Management: A Marketing Perspective in Advances in Management. A Publication of Department of Business Administration, University of Ilorin, Nigeria, v. 5, n. 1, p. 141-150.

ARMISTEAD, C. G.; BOWMAN, C.; NEWTON, J. (1995) Managers’ perceptions of the importance of supply, overhead and operating costs. International Journal of Operations & Production Management, v. 15, n. 3, p. 16-28.

ATTARAN, M. (2004) Exploring the relationship between information technology and business process reengineering. Information & Management, n. 41, p. 585-596.

ATTARAN, M. (2003) Information technology and business-process redesign. Business Process Management Journal, v. 9, n. 4, p. 440-458.

ATTARAN, M.; WOOD, G. G. (1999) How to succeed at reengineering. Management decision, v. 37, n. 10, p. 752-757.

BECKFORD, J. (1998) Quality, a critical introduction. London:Routledge.

BROERSMA, H. P. (1997) A theoretical approach to Business Process Re-engineering. Thesis. Rand Afrikaans University, South Africa.

BURNS, A. C.; BUSH, R. F. (2002) Marketing research: Online research applications (4th Ed). New Jersey: Prentice Hall.

CHAMPY, J. (1995) Reengineering management. London: Harper Collins.

CHAN, P. S.; PEEL, D. (1998) Cause and impact of reengineering. Business Process Management Journal, v. 4, n. 1, p. 44-55.

CHEN, Y. (2001) Empirical Modelling for Participative Business Process Reengineering. Thesis. University of Warwick.

CHENGHU, Z. (2007) The Bank IT outside wraps and its risk control. Journal of China Financial Computer, n. 4, p. 18 -24.

COFFMAN, D. L.; MACCALLUM, R. C. (2005) Using parcels to convert path analysis models into latent variable models. Multivariate Behavioral Research, v. 40, n. 2, p. 235-259.

COVERT, M., (1997) Successfully Performing Business Process Re-engineering, Visible Systems Corporation.

DAVENPORT, T. H. (1993) Process innovation. Boston: Harvard Business School Press.

DAVENPORT, T. H.; SHORT, J. E. (1990) The new industrial engineering: Information technology and business process redesign. Slogan Management Review, p. 11-27.

DEBELA, T. (2009) Business process reengineering in Ethiopian public organizations: The Relationship Between Theory and Practice, JBAS, v. 1, n. 2, p. 20-59.

DEBELA, T.; HAGOS, A. (2011) The design and implementation of business process reengineering in the Ethiopian public sector: n assessment of four organizations. African Books Collective Limited.

DODARO, G. L.; CRWLEY, B. P. (1997) Business process reengineering assessment guide. United States General Accounting Office-Accounting and Information management Division, 3rd Version.

GUNASEKARAN, A.; CHUNG, W. W. C.; KAN, K. (2000) Business process reengineering in British company: A case study. Ogistics Information Managenmen, v. 13, n. 5, p. 271-285.

HAIR, J. F.; BUSH, R. P.; ORTINAU, D. J. (2003) Marketing research: Within a changing information environment (2nd Ed), New York: McGraw-Hill/Irwin.

HALL, G.; ROSENTHAL, J.; WADE, J. (1993) How to make reengineering really work. Harvard Business Review, p. 119–131.

HAMMER, M. (1990) Reengineering Work: Don't Automate, Obliterate, Harvard Business Review, p. 104–11

HAMMER, M.; CHAMPY, J. (1993) Reengineering the Corporation: A Manifesto for Business Revolution. New York: Harper Business.

HE, X. J. (2005) A comparative study of Business Process Reengineering in China. Communication of the IIMA, v. 5, n. 2, p. 25-30.

HEIZER, J.; RENDER, B. (2011) Operations Management (10th Ed). New Jersey: Prentice Hall.

HESSON, M. (2007) Business process reengineering in UAE public sector: A naturalization and residency case study. Business Process management Journal, v. 13, n. 5, p. 707-727.

HESSON, M.; AL-AMEED, H.; SAMAKA, M. (2007) Business process reengineering in UAE public sector: A town planning case study. Business Process Management Journal, v. 3, n. 3, p. 348-378.

HOOPER, D.; COUGHLAN, J.; NULLEN, M. R. (2008) Structural equation modelling: Guideline for determining model fit. Electronic Journal of Business Research Methods, v. 6, n. 1, p. 53-60.

JONES, T. M.; NOBLE, J. S.; CROWE, T. J. (1997) An Example of the Application of Production System Design Tools for the Implementation of Business Process Re-engineering. International Journal Production Economics, n. 50, p. 69-78.

KASSAHUN, A. E. (2012) The effect of Business Process Reengineering on public sector organization performance (A developing economy context). PhD Thesis. RMIT University, Ethiopia.

KIM, S.; MAHONEY, J. (2008) Resource co-specialization, firm growth and organizational performance: an empirical analysis of organizational restructuring and its implementations. Working Paper.

KLINE, R. B. (2005) Principles and Practices of Structural Equation Modeling (2nd Ed). New York: The Guilford Press.

KOTLER, P. (2003) Marketing Management (11th Ed). Pearson Education Inc, Delhi.

KNIGHTS, D.; WILMOTT, H. (2000) The reengineering revolution? Critical studies of corporate change. London: Sage.

MAGUTU, P. O.; NYAMWANGE, S. O.; KAPTOGE, G. K. (2010) Business process reengineering for competitive advantage: Key factors that may lead to the success or failure of the BPR Implementation (The Wrigley Company), African Journal of Business & Management, n. 1, p. 135-150

MANGANELLI, R. L.; KLEIN, M. M. (1994) The re-engineering Handbook: A step-by-step guide to business transformation. New York: American Management Association.

MINYAN, Y.; TONGJAN, Z. (2009) The empirical analysis on the structural model of business process reengineering of National Commercial Banks. Journal of Reformation and Strategy, n. 3, p. 69-72.

MOTHOBI, M. (2002) Business process re-engineering: Improving business operations. Dissertation. The University of Wales.

NDUNGURU, P. C. (2007) Lectures on research methods for social sciences. Research Information and Publications Department, Mzumbe University.

OSTGAARD, T. A.; BIRLEY, S. (1996) New venture growth and personal networks. Journal of Business Research, v. 36, n. 1, p. 37-50.

PALLANT, J. (2007) SPSS survival manual: A step-by-step guide to data analysis using SPSS version 15 (3rd Ed). Singapore: Markono Print Media Pte Ltd.

PARASURAMAN, A.; ZEITHAML, V.; BERRY, L. (1988) SERQUAL: A multiple item scale for measuring consumer perception of service quality. J Retail, n. 64, p. 12-40

PERRY, C. (1998) A structural approach to presenting theses: Notes for students and their supervisors. Australian Marketing Journal, v. 6, n. 1, p. 63-68.

RANGANATHAN, C.; DHALIWAL, J. S. (2001) A survey of business process reengineering practices in Singapore. Information & Management, v. 39, n. 2, p. 125-134.

RINGIM, K. J.; RAZALLI, M. R. (2011) Effect of business process reengineering factors on organizational performance of Nigerian banks: Information technology capacity as the moderating factor. International Journal of Business and Social Science, v. 2, n. 13, p. 198-201.

RINGIM, K. J.; RAZALLI, M. R.; HASNAN, N. (2012) Moderating effect of information technology (IT) capability on the relationship between business process reengineering factors and organizational performance of Bank. African Journal of Business Management, v. 6, n. 16, p. 555-5567

RUHL, J. (1997) The Theory of Constraints within a Cost Management Framework. Journal of Cost Management, p. 16-24.

SAUNDERS, M.; LEWIS, P.; THORNHILL, A. (2005) Research methods for business studies. London: Pearson Profession Limited.

SHIN, N.; JEMELLA, D. (2002) Business process re-engineering and performance improvement: The Case of Chase Manhattan Bank. Business Process Management Journal, v. 8, n. 4, p. 351-363.

SLACK, N.; CHAMBERS, S.; JOHNSTON, R. (2007) Operation Management (5th Ed). London: Prentice Hall.

SELLADURAI, R. (2002) An organizational profitability, productivity, performance (PPP) model: Going beyond TQM and BPR. The journal of total quality management, v. 13, n. 5, p. 613-619.

STODDARD D. B.; JARVENPEA S. L. (1995) Business process redesign tactics for managing radical change. Journal of Management Information System, v. 12, n. 1, p. 61-107.

STREBEL, P. (1996) Why do employees resist change? Harvard Business Review, n. 3, p. 86-92.

SUNGAU, J; MSANJILA, S. S. (2012) On IT enabling of business process re-engineering in organizations. Advanced Materials research, n. 404-408, p. 5177-5181.

TABACHNICK, B. G.; FIDELL, L. S. (2001) Using multivariate statistics (4th Ed). Boston: Allyn & Bacon.

TENG, J. T.; KETTINGER, W, J. (1995) Business process redesign and information architecture: Exploring the relationship. ACM SIGMIS, v. 26, n. 1, p. 30-42.

TENNANT, C.; WU, Y. (2005) Research and concepts: The application of business process reengineering in the UK. The TQM Magazune, v. 17, n. 6, p. 537-545.

TERZIOVSKI, M.; TITZPATRICK, P.; O’NEIL, P. (2003) Successful predictors of business process reengineering (BPR) in fincial services. Int. J. Production Economics, n. 84, p. 35-50.

YAHYA, B. N. (2002) Business process re-engineering: concepts, causes and effects. Journal of Technical Industries, v. 4, n. 2, p. 102-110.

VENKATRAMAN, N. (1994) IT enabled transformation: From automation to business scope redefinition. Sloan Management Review, v. 35, n. 2, p. 73-87.

VON DER HEIDT, T.; SCOTT, D. R. (2007) Partial aggregation for complex structural equation modeling (SEM) and small sample sizes: An illustration using a multi-stakeholder model of cooperative interorganisational relationships (IORs) in product innovation. 21st ANZAM Conference, Sydney. 4 – 7 December, 2007.

WEERAKKODY, V.; JANSSEN, M.; DWIVEDI, Y. K. (2011) Tranformational change and business process reengineering (BPR): Lesson from the British and Dutch public sector. Government Information Quarterly, n. 28, p. 320-328.

WHITMAN, M. E. (1996) IT divergence in reengineering support: Performance expectations vs perceptions. Information & Management, v. 30, n. 5, p. 239-250.

XIAOLI, L. (2011) Correlation between business Process reengineering and operation performance of National Commercial Banks. Journal of Innovation and Management, n. 7, p. 981-985.

ZAHEER, A.; MUSHTAQ, K.; ISHAQ, H. M. (2008) Reengineering the procurement process in public sector organization: A case study. International Bulletin of Business Administration, 1451-143X, n. 3. Retrieved on April 10th, 2012 from the World Wide Web: http://www.eurojournals.com/IBBA_3_04.pdf.

ZYGIARIS, S. (2000) Business process reengineering BPR: Report produced for the EC funded project, INNOREGIO: dissemination of Innovation and knowledge management techniques, HELLAS SA.

فروشگاه اینترنتی