Critical predictors of business process reengineering (BPR) success in the Australian financial sector

In the last decade business practitioners have been bombarded with new tools and techniques to improve business performance. Business process reengineering (BPR) was one of a number of these tools. However, Holland and Kumar (1995) noted that 60-80 per cent of reengineering programs have been unsuccessful. A review of existing BPR literature in the Australian Financial sector has uncovered a relative absence of empirical research that characterises successful reengineering efforts. Attempts to describe successful BPR have manifested themselves as either case studies (Caron et. al, 1994), highly criticised by Cole (1994), or as conceptual frameworks (Lockamy III and Smith, 1997). The aim of our study, therefore, was to examine the relationship between strategic factors of the reengineering concept as postulated by the Lockamy III and Smith (1997) model and performance outcomes identified from the literature as benefits of BPR programs. This paper reports on a study based on a survey questionnaire and five mini-case studies. 156 questionnaires were sent to 52 organisations selected from the Dunn & Bradstreet Top 500 Companies. A questionnaire was sent to three separate Strategic Business Units (SBUs) within each organisation. A response rate of 32.3% was obtained. The central finding is that the proactive implementation of BPR as part of the organisation's strategy, coupled with focusing redesign efforts on core customer business processes are the most significant predictors of BPR success, explaining more than 30 per cent of the variance in organisational performance. The paper concludes that BPR in the Australian financial sector is playing a key role in business performance improvement.