Int. J. Process Management and Benchmarking, Vol. X, No. Y, xxxx 1

Copyright © 200x Inderscience Enterprises Ltd.

Business process reengineering in public sector: ranking the implementation barriers

Ali Rajabzadeh Ghatari* and Zahra Shamsi Tarbiat Modares University, Tehran, Farmanieh, Lavasani St, Saeidi St, Hamid, Rahnama Chitsaz, No 16, Iran E-mail: Alirajabzadeh@modares.ac.ir E-mail: Z.shamsi@modares.ac.ir *Corresponding author

Ali Vedadi Iran Management and Productivity Study Center, Tarbiat Modares University, Tehran, Farmanieh, Lavasani St, Saeidi St, Hamid, Rahnama Chitsaz, No 16, Iran E-mail: Ali.vedadi@modares.ac.ir Abstract: The purpose of this research is to identify and rank the failure factors of business process reengineering projects in public sector. BPR requires a break with organisation’s previous situation in and out of the organisation, because after BPR, organisations should have a different situation to support the new way of managing their various functions. In this regard, public organisations have characteristics that usually prevent a successful implementation of BPR. To conduct the research, we review the literature to investigate the success and failure factors in BPR projects. Also, we prepare a new categorised list of barriers which is the basis for conducting a survey to measure the BPR barriers in public sector. Accordingly, the TOPSIS method is used to rank the importance of the factors. Moreover, path analysis is used to identify the causal paths or relationships between these barriers. Results of path analysis show that external barriers significantly affect internal barriers.

Keywords: business process reengineering; BPR; public sector; critical success factors; path analysis; TOPSIS.

Reference to this paper should be made as follows: Ghatari, A.R., Shamsi, Z. and Vedadi, A. (xxxx) ‘Business process reengineering in public sector: ranking the implementation barriers’, Int. J. Process Management and Benchmarking, Vol. X, No. Y, pp.xxx–xxx.

Biographical notes: Ali Rajabzadeh Ghatari is the Associate Professor of Management at Tarbiat Modares University, School of Management and Economics. He has published extensively in the areas of production and process management and has served as a review for variety of academic journals. His current research interests include business process management, decision making and productivity.

Zahra Shamsi received his Master of Science in Information Technology Management from Tarbiat Modares University and currently works on several business process reengineering projects. Here research interests include IT for public organisations, business process reengineering, business process automation and software development.

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Ali Vedadi received his Master of Science in Information Technology Management from Tarbiat Modares University. Currently, he serves as a Research Associate at Iran Management and Productivity Study Center and works on several projects related to strategic planning, business process design and performance optimisation. His current research interests include strategic analysis of public organisations, change management and business information systems.

1 Introduction

Since reengineering is different in private and public organisations, we are looking at properties that are distinct between these two areas and which factors are more important than the others.

In this research, we try to identify the basic factors and dimensions involved in the success or failure of business process reengineering (BPR) projects, specifically in public sector. Two basic dimensions consist of criteria and barriers are analysed. Public sector is primarily financed by taxpayers’ funds to serve the citizens but private companies are privately owned and their primary purpose is profit making,

Rainey et al. (1976) state that the main distinction is in their ownership: members of political communities own public agencies collectively, whereas businessmen or shareholders define private sector ownership. More specifically, public agencies, unlike their private sector counterparts, are funded by taxpayer funds, whereas private companies are funded by customer fees paid directly to services or goods.

By reviewing the relevant literature and interviewing those engaged in BPR projects or employed in public organisations, we list factors that lead to failure of projects. Some of these factors are organisational factors and the others are related to a framework of macro-environmental strategic factors in four categories: political, economic, social and technological.

We consider organisational factors as internal and the rest as external factors. Then we rank these factors based on four criteria: importance of the factors, experience of responders, financial facilities and human ability of BPR teams in removing these factors. In order to satisfy these different criteria we apply TOPSIS, the multiple criteria decision making (MCDM) method. It is an effectively multiple attribute decision-making method which is to construct the ideal solutions and minus idea solutions to the problems of multiple attributes and uses the two benchmarks of being close to the ideal solutions and being far from the minus ideal solutions as the criteria of evaluating the feasible solution (Zhongyou, 2012). The factors which have significant influence will be identified, and the results will be used to make several recommendations for BPR project team.

In addition, we will use path analysis to demonstrate how variables interact or interfere with each other, and which exert the most influence. Path analysis involves standard, multiple, linear-regression techniques to estimate path coefficients – the magnitude and direction of which allows estimation of a particular variable’s effect after adjustment for the effects of the other factors in that model (Woods et al., 2003).

In this research, we aim to answer the following questions:

1 What are the primary barriers in public BPR projects?

2 What is the relationship between barriers?

Business process reengineering in public sector 3

The paper is divided into seven sections. The first section deals with an overview of BPR in public and private sectors. The second section focuses on the barriers of BPR projects based on critical success factors. Next, we describe the research methodology and then rank the identified barriers using TOPSIS technique. In the next section, the casual model the relationships between barriers are depicted. Path analysis of relationship between external and internal barriers is also presented in the sixth section. Finally, the results are discussed and concluded.

2 Literature review

2.1 Definition of BPR

As stated by Hammer (1990), BPR is the fundamental rethinking and radical redesign of an entire business system – the business processes, jobs, organisational structures, management systems, values, and beliefs to achieve dramatic improvements in critical measures of performance, such as cost, quality, service and speed. and based on (Davenport and Short, 2003) BPR is the logical organisation of people, materials, energy, equipment and procedures into work activities designed to produce a specified result. Another definition (Talwar, 1993) focuses on the rethinking, restructuring and streamlining of the business structure, processes, methods of working, management systems and external relationships through which value is created and delivered. (O’Neill and Sohal, 1999) believe that BPR involves the concurrent redesign of processes, organisations, and their supporting information systems to achieve radical improvement in time, cost, quality, and customers’ regard for the company’s products and services. As such, reengineering underpins every attempt to seize and maintain a true competitive advantage (Hammer and Champy, 2003).

The objective of BPR is not only to improve cost and performance, but also to meld organisational cultures and impose parental controls on the acquired business. Mergers offer a tremendous opportunity to improve efficiency and reduce operating costs through consolidation of activities, streamlining of operations, and integration of business processes. Barriers to successful integration include divergent organisational cultures, poor communication, incompatible processes, and language problems. If BPR is not properly performed, resulting integration can disrupt operations, impede productivity, hurt employee morale, and stifle growth. Unanticipated organisational changes can threaten the very success of the integration effort. Careful planning and analysis is essential for a smooth, uninterrupted transition to the new business processes (Ozcelik, 2010).

2.2 Public organisation

Public or government organisations – those primarily financed by taxpayer funds – serve the public by providing public services such as policing, waste management and others.

Historically, many public servants and public organisations, operating within the traditional bureaucratic model, have played a vital role in fostering economic and social development and sustaining democratic institutions. However, the environment within which public servants now work is changing rapidly and dramatically (Kernaghan et al.,

4 A.R. Ghatari et al.

2000). As stated by (Ramos et al., 2007) the majority of public organisations still generate most of their income from the state and have to account to several stakeholders.

Government agencies are urged to attain the greatest possible efficiency in their delivery of services to cut through red tape whenever possible. On the other hand, since public agencies should presumably operate in the public interest, they must be responsive to the needs and desires of those with whom they work. Moreover, it can be argued that public agencies bear a special responsibility to help educate citizens to deal more effectively with social problems on their own (Denhardt, 2010). Also, (Thong et al., 2000) characterised the traits of public organisation in the three categories as below:

1 environmental factor: a degree of market exposure b legal, formal constraints c political influences

2 organisation-environmental transactions: a coerciveness b breath of impact c public scrutiny d unique public expectations

3 internal structure and processes: a complexity of objectives, evaluation and decision criteria b authority relations and the role of the administrator c organisational performance d incentives and incentive structure e personal characteristic of employees.

2.3 Private organisation

Private organisations or businesses are companies privately owned with primary purpose of profit making. They do not need to meet the strict security and exchange commission filing requirements of public companies.

2.4 Differences between public and private organisation

Anderson (2012) recognises that private organisations are not driven exclusively by the profit motive, but that decisions take account of a host of criteria of which monetary profit is only one. Public and private organisations can be distinguished according to the presence or absence of market structures, externalities, and ownership transferability (Niskanen, 2007).

Private sector managers are more likely to support budget decisions made with analysis and less likely to support them when bargaining is applied. On the other hand, public sector managers are less likely to support budget decisions backed by analysis and more likely to support those that are derived from bargaining with agency people (Nutt, 2006). Rainey et al. (1976) state that the main distinction is in their ownership:

Business process reengineering in public sector 5

members of political communities own public agencies collectively, whereas businessmen or shareholders define private sector ownership.

MacIntosh (2003) compares BPR practices in public (two cases) and private sector and concludes that the attractiveness of BPR is same in both sectors. Furthermore, he shows that it is more appealing in public sector where mostly employees are dealing with handicap resources. One of the major findings of this study was due to limited resources and other constraints in public sector, consultants’ services are not used nor are involved in the process due to which employees will have to participate and act as planners, implementers and evaluators at the same time.

In fact, BPR is the main focus in every sector across the globe and it still needs to be addressed as it is taken as an art not as science for lack of frameworks, tools and techniques (Mansar and Reijers, 2007). It is assumed and anticipated by many researchers that BPR will bring radical changes in public sector with the empowerment of employees through educating them about the need for change and their role in successful implementation, as well as by providing advocate support in terms of training and resources as discussed by (McAdam and Donaghy, 1999).

2.5 BPR critical success factors

To identify BPR critical success factors in an organisation, it is necessary to understand the organisation itself, since the factors may differ regarding the type of organisation, including private or public (Ahmad et al., 2007).

Among other organisational change attempts, the success rate for reengineering was second highest (23%) next to technology change (28%), and compared with culture change (19%), mergers and acquisitions (14%) and restructuring and downsising (10%). Much effort is needed in developing a model for BPR, as a radical process change, since many critical success factors should be considered for it, whether for private organisations or public organisations (Smith, 2003).

50% to 70% of BPR initiatives fail to deliver the expected results because while there is an improvement in particular areas, for example, a 20% cost reduction, a 50% process-time reduction, and a 25% quality improvement, at the same time business-unit cost increases and profits decline (Hall et al., 1994).

Organisations should exploit all needed technologies and the process which organisations use to arrive at the product or service they provide to customers should be radically redesigned in the light of the organisation’s current environment rather than its traditions (Halachmi and Bovaird, 1997). Trkman (2010) introduced several CSFs based on contingency theory as: strategic alignment, level of IT investment, performance measurement, level of employee’s specialisation, and several other CSFs Based on dynamic capabilities as: organisational changes, appointment of process owners, implementation of proposed changes, use of a continuous improvement system, and several other based on task-technology fit theory as: standardisation of processes, automation, informatisation, training and empowerment of employees.

Ozcelik (2010) considered employees, assets, equity, IT budget, advertising, market share, industry concentration and industry capital intensity as the most important factors in conducting a BPR project. Additionally, Natarajan (2009) introduces factors such as creating an effective culture for organisational change, change management, revising

6 A.R. Ghatari et al.

reward and motivation, effective communication, empowerment, human involvement, training and education to succeed in BPR.

Mitchell and Mcadam (1998) introduces CSFs such as: people/personal, culture, structures, processes, information technology, strategy and policy, communications. Also, Nawab et al. (2011) consider factors related to public organisation in two groups:

1 external: salary and benefits, insurance and medical, bonus and overtime, status and designation, accommodation

2 internal: responsibilities, team planning, development programme, and, work autonomy. Another says that four elements leading to successful BPR: 1 culture 2 processes 3 structure 4 technology (Ahmad et al., 2007).

Seven factors for successful implementation of BPR are mentioned in (Ahmad et al., 2007): teamwork and quality culture, quality management system, satisfying rewards, effective change management, less bureaucratic and more involvement, information technology/information systems, effective project management and financial resources. Al-Mashari and Zairi (1999) consider the following as critical success factors:

1 change management

2 management competency and support

3 organisational structure

4 project planning and management

5 IT infrastructure.

McAdam and Corrigan (2001) consider these factors as critical success factors in public healthcare BPR project in England, as well. Ongaro (2004) states that BPR enabling factors are the legal and cultural settings, reforms, executive leadership, organisational culture, and information and communication technology as well as process management. Also, Abdolvand et al. (2008) note that critical success factors are determined in five categories: egalitarian leadership, collaborative working environment, top management commitment, supportive management, and use of information technology and critical failure factors in one category: resistance to change.

However, Ahmad et al. (2007) state that human-related problems for BPR projects in the public sector should be seriously considered. Resistance force will lead to the failure of BPR projects. If changes are not carefully managed, people can resist, even if it is from the top down that is driven from the top (Peppard and Fitzgerald, 1997). Hutton (1995) mentions, that rigid hierarchies, culture, multiple stakeholders, swift and dramatic changes in policy direction, overlap of initiatives, wide scope of activities, and staff resistance, are crucial parts of public sector organisations. Some of the common reasons pointed by (Belmiro et al., 2000) are:

• management heterogeneity

• vague methodology

Business process reengineering in public sector 7

• creating problems bycross-functional teams

• employee commitment and job security

• focus on short-term objectives

• basic concept: companies that are following someone’s footprints ignore or are not able to fulfil the prerequisites of BPR and results in failure

• lack of proper training

• other reasons including, lack of resources, leadership, communication, resistance to change, organisational structure and organisational culture.

Maull et al. (2003) considered the dimensions related to BPR project in this category:

1 strategy-localised involvement and broad involvement

2 the second dimension concerns the extend of the alignment of the overall business strategy with business environment

3 performance measures were integrated with a company’s CSFs or project based and largely independent of strategic direction

4 cost focus (reduction cost)

5 service improvement.

3 Research methodology

This research is both qualitative and quantitative and for collecting the data, we conduct open-ended interviews and distribute questionnaire among 100 top managers. Also, we use TOPSIS method to rank the identified barriers. Ultimately, we use path analysis to discover the relationship between external and internal barriers.

3.1 Open-ended interviews

We develop a set of interview question about the barriers factors for top management and BPR teams that are engaged in projects in public organisations. The questions are asked in following framework:

• Explain the barriers that caused the BPR or radical process change project failure? The instruments for open-ended interviews are developed based on the literature

review.

3.2 Questionnaire

Questions are designed by extensive literature review and comments of interviewees which include five sections. Every section has a set of questions about the barriers.

8 A.R. Ghatari et al.

4 Ranking the barriers with TOPSIS method

To rank the barriers, we use TOPSIS algorithm which is one of the MCDM techniques.

Step 1 Making the decision matrix to a scale matrix B using the formula:

ij

1

n2

m

i

rij

rij=

=

∑

Step 2 Creating a scale weight y matrix given vector W as input to the algorithm. Namely: W = {w1, w2, w3, …, wn,}

D n*n

11 1scale weighty matrix V N W

1= = ⋅ =

Index scores in Matrix ND is unique in its scale and comparable and Wn*n is a diagonal matrix whose main diagonal elements are the only non-zero.

Step 3 Determining the ideal solution and negative-ideal solution.

We define the ideal choice and negative ideal choice:

{ }{ }

ij ij

+ + + +1 2 j n

Ideal choice A (max V | j J), (min V | j J ') | i 1, 2,..., m

V ,V ,...,V ,...V

+= = ∈ ∈ =

=

{ }{ }

ij ij

1 2 n

Negative-ideal choice A (minV | j J), (max V | j J ') | i 1, 2,..., m

= V , V ,..., V ,...Vj

−

− − − −

= = ∈ ∈ =

Step 4 Calculating these parathion measures (distance):�

Distance with ideals by using Euclidean method is:

( ){ }0.52i+ 1

d distance i from ideal = ;i 1,2,..., mn

ij jjV V +

== − =∑

( ){ }0.52i 1

d distance i from negative-ideal = ;i 1, 2,...,mn

ij jjV V −

− == − =∑

Step 5 Calculating Ai’s relative closeness to the ideal solution. This relative closeness can be defined as follows:

i i i i icl d / (d d );0 cl 1; i 1,2,...,m+ − + − += + < < =

Should be noted that if Ai = A+, then di+ = 0 and cli+ = 1 and if Ai = A– , then di– = 0 and cli+ = 0. Therefore much closer to the ideal solution is a choice, cli+ ; s value will be closer to the unit.

Step 6 Ranking the options.

Based on cli+’s decreasing order, can rank the existing options of given problem.

Business process reengineering in public sector 9

Barriers are ranked as following:

1 bureaucracy in administrative tasks 2 inadequate investment in human resources 3 lack of flexibility in decision-making 4 distrust of the BPR executive team 5 complexity and contention of goals 6 the large number of laws and regulations governing on organisation 7 no motivation for cost reduction 8 fear of compatibility with major changes in organisation 9 managers displacement due to political reasons 10 less management commitment and acceptance of the changes 11 no attention to market 12 long cycle of synchronisation among important parts of governance 13 complex organisational communication 14 conservative spirit 15 lack of preparation to accept the risk 16 staff effort to maintain their position in the organisation 17 legal restrictions on methods of organisational operations 18 dependence on outside power sources to achieve goals 19 employee resistance 20 too many rules and regulations governing the organisation 21 employees’ insufficient valuing of the customers 22 fear of losing organisational position 23 neglecting to invest in resources BPR 24 lack of education for staff after changes 25 poor investment in IT 26 lack of motivation and enthusiasm and belief about change 27 lack of clear organisational goals and strategies 28 dependency on government budget 29 poorly defined job and inappropriate allocation of human resource 30 asymmetries between suppliers and demand on the market 31 colluding group of people to maintain their corporate strength 32 the communication barriers 33 neglecting the nature of organisational change 34 vulnerabilities in different processes 35 lack of entrepreneurial spirit

10 A.R. Ghatari et al.

36 wide range of activities 37 insufficient number of staff 38 concerns about the future of the organisation changes 39 overlapping actions 40 willingness of senior managers to formal controls in the organisation 41 neglecting the need for IT applications 42 lack of government support for IT companies 43 lack of expertise in human resources 44 lack of government support for the deployment of new technologies 45 low level of system automation: including financial accounting, information,

assessment, control, payroll, production, marketing and sales and rewards 46 lack of an efficient IT infrastructure.

We also ranked the categories of barriers and the results are as follows:

1 Political 2 Technological 3 Economic 4 Organisational 5 Social

5 The causal model

Based on studies mentioned in this paper, we model the causal effect of external constraints on the internal barriers of BPR. In the model proposed here, influence of external barriers on the inner is shown:

Figure 1 Basic model of relationship between internal and external barriers

Organisational

Social Economic

Political Technological

The followings are internal barriers: Table 1 Internal barriers of public BPR projects

Organisational O1 Lack of clear organisational goals and strategies O2 Complexity and contention of goals O3 Lack of flexibility in decision-making O4 Vulnerabilities in different processes O5 Bureaucracy in administrative tasks

Business process reengineering in public sector 11

Table 1 Internal barriers of public BPR projects (continued)

Organisational O6 Complex organisational communication O7 Poorly defined job and inappropriate allocation of human resource O8 Overlapping actions O9 Wide range of activities O10 Lack of education for staff after changes O11 Insufficient number of staff O13 Inadequate investment in human resources

The following table includes the external barriers: Table 2 External barriers of public BPR projects

Social Political S1 Neglecting the nature of organisational

change P1 Legal restrictions on methods of

organisational operation S2 Lack of motivation and enthusiasm and

belief about change P2 Long cycle of synchronisation among

three important parts of governance S3 Distrust of the BPR executive team P3 The large number of laws and

regulations governing on organisation S4 Lack of preparation to accept the risk P4 Willingness of senior managers to

formal controls in the organisation S5 Fear of compatibility with major changes

in organisation P5 Staff effort to maintain their position in

the organisation S6 People have conservative spirit P6 Colluding group of people to maintain

their corporate strength S7 Concerns about the future of the

organisation changes P7 Managers displacement due to political

reasons S8 Employees’ insufficient valuing of the

customersS9Lack of entrepreneurial spirit P8 Dependency on outside power sources

to achieve goals S9 Lack of entrepreneurial spirit P9 The communication barriers S10 Staff resistance P10 Fear of losing organisational position S11 Lack of expertise in human resources P11 Too many standards in public sector S12 Less management commitment and

acceptance of the changes

Economic Technological E1 No attention to market needs T1 Neglecting the need for IT applications E2 No motivation for cost reduction T2 Lack of an efficient IT infrastructure E3 Asymmetries between suppliers and

demand on the market T3 Low level of system automation

E4 Negligence or poor investments in the IT sector

T4 Lack of government support for the deployment of new technologies

E5 Neglecting to invest in resources BPR T5 Lack of government support for IT companies

E6 Dependency on government budget

12 A.R. Ghatari et al.

6 Path analysis of relationship between external and internal barriers

Path analysis, an extension of multiple regressions, allows testing more than one dependent variable at a time and allows for variables to be dependent with respect to some variables and independent with respect to others. Structural equation modelling extends path analysis by considering latent variables. At this stage, our goal is to find the relationship between internal factors and external factors with partial least square (PLS) software. In this regard, in the image below, there is the conceptual framework of relationship between internal and external barriers:

Figure 2 Conceptual framework of relationship between internal and external barriers (see online version for colours)

Using the SEM results, it is possible to determine, for example, that political factors has the strongest effect on organisational factors (0.516), followed by social factors (0.281) and technological factors (0.063). Economic factors (0.009) has little effect on the dependent variable organisational. The four exogenous constructs together explain 52.4% of the variance of the endogenous construct organisational (R² = 0.562), as indicated by the value in the construct circle.

Latent variable correlations: Table 3 Latent variable correlation

Economic Organisational Political Social Technological

Economic 1 - - - - Organisational 0.37 1 - - -

Business process reengineering in public sector 13

Table 3 Latent variable correlation (continued)

Economic Organisational Political Social Technological Political 0.385 0.6681 1 - - Social 0.3498 0.5108 0.4007 1 - Technological 0.2686 0.2435 0.2895 0.0581 1

6.1 Results from PLS bootstrapping

The t values can be compared with the critical values from the standard normal distribution to decide whether the coefficients are significantly different from zero. For example, the critical values for significance levels of 1% (a = 0.01) and 5% (a = 0.05) probability of error are 2.57 and 1.96, respectively (two-tailed test).One-tailed test for 5% (a = 0.05) level is .98.

The t values for the measurement and structural model estimates are shown below:

Figure 3 Results from bootstrapping (see online version for colours)

The original estimate of the outer weights are shown in the second column = Original Sample. If this number is divided by the standard deviation (STDEV) you get the t-value. The t-statistic is also shown below: Table 4 T-statistic of latent variable

Original sample

Sample mean

Standard deviation

Standard error T-statistics

Economic ->Organisational 0.0564 0.1388 0.1108 0.1108 0.5091 Political ->Organisational 0.5157 0.4727 0.1127 0.1127 4.5764

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Table 4 T-statistic of latent variable (continued)

Original sample

Sample mean

Standard deviation

Standard error T-statistics

Social ->Organisational 0.2807 0.3174 0.1093 0.1093 2.5695 Technological ->Organisational 0.0628 0.0756 0.1159 0.1159 0.5417

The t statistics in the table below indicate that four structural path coefficients are statistically significant (> 0.05).Consequently, the model is confirmed: Table 5 T-statistics of apparent variables

Original sample (O)

Sample mean (M)

Standard deviation (STDEV)

Standard error

(STERR)

T-statistics (|O/STERR|)

e1 <- Economic 0.3990 0.2918 0.2546 0.2546 1.5674 e2 <- Economic 0.3003 0.2021 0.1903 0.1903 1.5779 e3 <- Economic 0.4806 0.3446 0.2070 0.2070 2.3216 e4 <- Economic 0.2695 0.2070 0.2160 0.2160 1.2478 e5 <- Economic 0.3998 0.2981 0.2475 0.2475 1.6154 e6 <- Economic 0.2414 0.1477 0.3667 0.3667 0.6584 o1 <- Organisational 0.1601 0.0810 0.1570 0.1570 1.0197 o10 <- Organisational 0.3530 0.2674 0.0981 0.0981 3.5974 o11 <- Organisational 0.1031 0.0904 0.1457 0.1457 0.7076 o12 <- Organisational 0.1055 0.1018 0.1757 0.1757 0.6004 o2 <- Organisational 0.1418 0.1056 0.1287 0.1287 1.1016 o3 <- Organisational 0.3026 0.2297 0.1110 0.1110 2.7255 o4 <- Organisational 0.2798 0.1858 0.1384 0.1384 2.0218 o5 <- Organisational 0.1585 0.0974 0.1625 0.1625 0.9753 o6 <- Organisational 0.1914 0.1529 0.1282 0.1282 1.4925 o7 <- Organisational 0.2095 0.1582 0.1366 0.1366 1.5343 o8 <- Organisational 0.2288 0.1568 0.1063 0.1063 2.1520 o9 <- Organisational 0.2856 0.2128 0.1075 0.1075 2.6566 p1 <- Political –0.0367 –0.0177 0.1138 0.1138 0.3225 p10 <- Political 0.1435 0.1268 0.1287 0.1287 1.1148 p11 <- Political 0.1962 0.1685 0.1841 0.1841 1.0657 p2 <- Political 0.0896 0.0827 0.1789 0.1789 0.5007 p3 <- Political 0.0044 –0.0004 0.1316 0.1316 0.0332 p4 <- Political 0.1036 0.0809 0.1147 0.1147 0.9028 p5 <- Political 0.2433 0.1797 0.1272 0.1272 1.9127 p6 <- Political 0.1288 0.1031 0.1253 0.1253 1.0280 p7 <- Political 0.3057 0.2413 0.1316 0.1316 2.3228 p8 <- Political 0.3714 0.2864 0.1134 0.1134 3.2749 p9 <- Political 0.4808 0.3750 0.1601 0.1601 3.0024

Business process reengineering in public sector 15

Table 5 T-statistics of apparent variables (continued)

Original sample (O)

Sample mean (M)

Standard deviation (STDEV)

Standard error

(STERR)

T-statistics (|O/STERR|)

s1 <- Social –0.2058 –0.0885 0.1907 0.1907 1.0794 s10 <- Social 0.1919 0.1305 0.1509 0.1509 1.2718 s11 <- Social 0.1437 0.1175 0.1412 0.1412 1.0181 s12 <- Social 0.1612 0.1307 0.1987 0.1987 0.8114 s2 <- Social 0.1187 0.0778 0.1685 0.1685 0.7046 s3 <- Social –0.1596 –0.0962 0.1202 0.1202 1.3275 s4 <- Social 0.1815 0.1094 0.1589 0.1589 1.1421 s5 <- Social 0.0661 0.0402 0.1664 0.1664 0.3972 s6 <- Social 0.2311 0.1094 0.2158 0.2158 1.0710 s7 <- Social 0.3385 0.2329 0.1335 0.1335 2.5357 s8 <- Social 0.2017 0.1050 0.1867 0.1867 1.0803 s9 <- Social 0.5295 0.3760 0.1494 0.1494 3.5446 t1 <- Technological 0.1587 0.0653 0.3812 0.3812 0.4163 t2 <- Technological 0.3400 0.1855 0.3226 0.3226 1.0540 t3 <- Technological 0.5921 0.4267 0.2863 0.2863 2.0679 t4 <- Technological 0.4641 0.3055 0.2601 0.2601 1.7842 t5 <- Technological 0.1178 0.1435 0.3196 0.3196 0.3684

The t-statistics in the table above indicate that 45 out of the 46 structural path coefficients are statistically significant (> 0.05). The only non-significant path isp3 <- political-organisational (t value = 0.0322).

7 Discussion and conclusions

In response to the changing business environment, many companies consider planning and investing in BPR. BPR uses redesign of business processes to achieve dramatic changes, such as increased profitability and productivity and to improve organisational performance.

On the other hand, rapid environmental changes has not only influenced the private sector, but also has affected the public organisations. To adapt to changing environment, public organisations need to improve the quality of their services and to meet the growing demands that require radical changes. If they apply reengineering in their processes efficiently, the creativity and innovation will certainly expand.

Public organisations are characterised by hierarchical and bureaucratic models which are suitable when there is a high degree of stability and there are specified rules. It is also the case when only when the top managers have access to information and are the only source of decision-making. General characteristics of public sector are risk aversion and stability. On the other, they are not market-oriented (non-profit) and more dependent on public budget. Thus, there is no incentive to reduce costs and consequently the efficiency

16 A.R. Ghatari et al.

is low and indicators of broad market such as profit, cost, etc are not available, either. Morgan stated that organisations are like governments and hence we can compare them to the political system. Issues such as goals, interests, conflict and power play a major role in the political metaphors and the conflict between the interests leads to the more conflict.

Three important parts of governance are the most influential on decision making in public sector and organisations in this area have to accept this fact. More constraints on procedure of operations make it difficult to redesign procedure. Greater tendency toward proliferation of formal specification causes reluctance in doing BPR.

Complexity, contention and variety of organisational goals, vague and intangible goals lead to difficulties in setting BPR goals, as well as conflict and contradiction of goals. Additionally, lack of autonomy in decision making increases the time for doing BPR.

It is also worth noting that in public sector, informal groups play an important role in shaping the protest against major changes in organisation. Inappropriate incentive systems also decrease the motivation for obtaining the BPR goals in public organisations. Additionally, many government schemes do not have effective results, so the motivation for implementing such projects will reduce. There are few projects in this area which more likely to be less successful. However, it must be admitted that BPR is a new approach and it may require sufficient time to be accepted and implemented widely in public organisations.

It must also be stated that BPR is customer-oriented and government employees are not sufficiently motivated to be customer-oriented since the market issues and the organisational goal is not profitability. It was also revealed that weakness in training and issues such as lack of motivation, as well as resistance to change and lack of appropriate protocols to reduce or eliminate the resistance are the other causes for BPR failure. Every organisation has a set of technical and human challenges that can be solved with quality techniques like BPR. Humanitarian challenges cause of human resource inattention as the most important change agent in organisation. Also, technical challenges are issues that come from the organisational structure, performance, environment and corporate communications.

Future researches can use the findings of this study to develop a more valid and comprehensive implementation road map for BPR projects in public sector.

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