Increasing Bank BPR Benefits by Managing Project Phases

• Published date: 01 April 2016
• Author: Tor Guimaraes,Bransford Brandon
• DOI: http://doi.org/10.1002/kpm.1508
• Date: 01 April 2016

■Research Article

Increasing Bank BPR Benefits by

Managing Project Phases

Bransford Brandon

1

and Tor Guimaraes

2

*

1

Federal Reserve Bank of Atlanta, Nashville, Tennessee United States

2

Tennesse Tech University, J. E. Owen Chair of Excellence, Cookeville, Tennessee United States

In efforts to improve the performance of the banking/financial services sector, managers have widely recognized the

importance of innovation and the adoption of new technologies. Nevertheless, success implementing the required

changes is far from assured. BPR projects by their very nature are very expensive to prototype, forcing companies

to follow a sequential methodology for changing and implementing new processes. This is the first study in the bank-

ing sector aimed at identifying the prescriptions for success proposed in the literature, and empirically testing the re-

lationships between these success factors and the extent to which each BPR-project phase benefited from their

presence. A usable sample of 276 banks’internal auditors shared their organizations’experience regarding their last

BPR project implementation. The sample shows good representation based on banking center levels of total assets,

self-rated IT sophistication, and self-rated degree of knowledge about the specific BPR project implementation they

have addressed. Results indicate that some success factors are more or less important to a particular project phase.

Except for the insignificant relationship between project inception and process change/redesign-phase, the relation-

ships between the other phases are all significant and in some cases seem to represent a major determinant of success

in the subsequent phase. Managers can increase the chances for overall BPR project success and success in each phase

by ensuring that the prescribed success factors are in place before they start or as they pursue the project. Several man-

agerial insights and implications are discussed. Copyright © 2016 John Wiley & Sons, Ltd.

INTRODUCTION

The importance of innovation and adoption of new

technologies to improve the performance of the

banking/financial services sector is widely recog-

nized (Bajada and Trayler, 2015; Bos et al., 2013;

Tah er pa rv ar et al., 2014). Nevertheless, success

implementing the required changes is far from

assured (Bielski, 2008b; Bielski, 2008a; Fisher, 2009;

Trombly, 2007; Watts and Garrett, 2006). Business in-

novation manifests itself in terms of improvements

and/or introduction of new products, processes, and

other organizational changes (Overby,2014). Business

Process Reengineering (BPR) has been widely recog-

nized as an important component of business innova-

tion. Over the last decades the definition for BPR and

its success factors have been widely discussed. Tradi-

tionally, the definition for a BPR project calls for

substantial changes to one or more business processes,

in contrast with small incremental changes over time

through smaller and many times more informal pro-

jects. BPR has received considerable attention from re-

searchers (Chandna and Ansari, 2012; Eke and

Achilike, 2014; Gospodarevskaya and Churilov, 2011;

Leu and Huang, 2011; Ramanigopal et al., 2011) as to

its benefits and success factors. Some authors have

also proposed BPR as an integral part of the services

and product development process (Cooper and

Edgett, 2008; Rowlands, 2006). While the promises

from BPR project implementation among manufactur-

ing companies have been impressive in many cases

(Chandna and Ansari, 2012; Hise, 2007; Martin, 2006;

Ozcelik, 2010; Teresko, 2004; Yin, 2010), in practice

the encountered failures and problems are also rather

numerous (Habib and Shah, 2013; Hanif et al., 2014).

Despite the recognized importance of creating an

environment in which reengineering will succeed

(Gospodarevskaya and Churilov, 2011; Komaladewi

et al., 2012; Leu and Huang, 2011), some companies

in the past have had great difficulty successfully

*Correspondence to: TorGuimaraes, Tennessee Tech University,J.

E. Owen Chair of Excellence, 1105 Peachtree, JH Rm. 412, PO

Box 5022, Cookeville, TN 38501, United States.

E-mail: tguimaraes@tntech.edu; tstidham@tntech.edu

Knowledge and Process Management

Volume 23 Number 2 pp 136–146 (2016)

Published online in Wiley Online Library

(www.wileyonlinelibrary.com) DOI: 10.1002/kpm.1508

Copyright © 2016 John Wiley & Sons, Ltd.