Readiness Framework for Business Process Re‐engineering

• Date: 01 September 2016
• Author: Sanjay Mohapatra,Anupam Choudhury
• Published date: 01 September 2016
• DOI: http://doi.org/10.1002/jsc.2077

RESEARCH ARTICLE

Strat. Change 25: 509–524 (2016)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2077

Copyright © 2016 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2077

Readiness Framework for Business Process

Re-engineering1

Sanjay Mohapatra

Xavier Institute of Management, Bhubaneswar, India

Anupam Choudhury

Management Professional, India

Business process re‐engineering must be understood in the context of the dynamics

(internal and external) and the signals emanating from both the organization and

the operating environment.

Institutional organizations can be considered as learning and evolving organisms.

Ample evidence (Dekkers, 2008) has shown that organizations tend to evolve by

means of using business process re‐engineering (BPR). is places BPR in the

category of necessary tools for survival and growth of an organization. A lot of

change and growth in an organization can be explained by theories of social change

and development (Mohapatra, 2011; Ven and Poole, 1995). It can be understood

that the process of BPR and development is essential during the lifecycle of a rm.

is also brings the leaders running the business into focus (Roy and Roy, 1998).

It is known that the functions/initiatives of an organization are directly or indi-

rectly aected by people. e human factor in BPR is thus quite important in the

readiness framework.

e framework used for understanding basic industry dynamics – more popu-

larly known as Porter’s ve forces model (Porter, 1979) – has been used with

success over the last three decades. e model has been able to retain its relevance

by being able to explain the rise and fall of several industries. It has been used as

the cornerstone of corporate strategy across industries and geographies, and has

been used in both academic research and business practice. e forces have helped

rms dene their ‘strategic positioning’ to retain competitive advantage. is

research attempts to address areas of the ve forces which have been critiqued,

and link them to BPR.

In this article, three threads of management thought – namely the strategic

positioning of a rm, BPR, and organizational capabilities – have been used in

an attempt to build a readiness framework which would signal the need for BPR

1 JEL classication codes: M10, M15, M16.

Business process re‐engineering

(BPR) can be thought of as a

three‐tier mechanism, including

any step which would require an

organization to be proactive or

reactive.

BPR can be linked directly to a

trigger in any of the three factors

of the framework (external,

internal, and indicators).

Differences in the operating

environment of the rm (industry,

geography, etc.), as well as the

nature of the rm (startup

venture, established player, market

leader, etc.), are captured in the

leading framework, allowing it to

be used in a wide range of areas.

510 Sanjay Mohapatra and Anupam Choudhury

Copyright © 2016 John Wiley & Sons, Ltd. Strategic Change

DOI: 10.1002/jsc

in an organization. e infrastructure/construction sector

in India has been used as a test case to validate the working

of this framework.

Literature review

The ve forces

Porter’s ve forces (Porter, 1979) provide a quick snapshot

of any industry and its gradual evolution. Building on

decades of work and using return on invested capital

(ROIC) as a measure of protability of an industry, Porter

(2008) has been able to demonstrate the ecacy of this

model. e same article (Porter, 2008) also broadened the

perspective by making allowances for geographical dier-

ences as well as oering practical guidelines on using indus-

try analysis. e intense nature of competition and the

industry structure are illustrated by having a lowered ROIC

compared with less competitive industries. A fact that has

been accepted by businesses is that intense competition

tends to transfer prots from the industry to the

customers.

Building on the ve forces model

e idea of a sixth force in addition to Porter’s ve forces

was introduced by Prasad (2011). is force, called the

‘complementors,’ consists of the government and public

and other stakeholders, who also have a role to play in the

industry dynamics. A lot of dissimilarities in various

industries located across geographies having similar

dynamics are not easily explained by the ve forces model.

e introduction of elements of culture and history

(Prasad, 2011) is able to explain the dierences. is also

adds a signicant boost to areas which were not covered

by Porter’s national diamond and Hofstede’s cultural

dimensions theory (Prasad, 2011). A bird’s‐eye view of the

application of Porter’s ve forces model in India, with its

unique peculiarities, reveals that the traditional approach

to positioning and strategy would have to be reworked

(Parthasarathy, 2010).

A critique of Porter’s ve forces model (El Namaki,

2012) brings out certain deciencies in the model. A major

point of concern is the little or no importance given to

capital markets in the model. is concern is because of

the fact that capital markets inuence businesses substan-

tially, and hence cannot be ignored. Capital markets now

serve as signaling mechanisms, which have sounded the

death knell for many a rm. e emergence of private

equity, leveraged buyouts, sovereign wealth funds, struc-

tured nancial products, etc. has altered the very nature of

strategic positioning based on Porter’s ve forces. Corpo-

rate strategy and positioning has changed accordingly to

keep track of the same (Mohapatra, 2015a; El Namaki,

2012). is research attempts to take into consideration

this anomaly by incorporating nancial parameters which

are the main guiding principles for the capital markets.

Carrying forward the idea of ‘complementors,’ it is

intuitive to look at the agendas of each of the stakeholders.

is idea had been examined lucidly by the concept of

strategic agendas (Mohapatra, 2015b; Grundy, 2001).

e strategy agendas are broken down across dierent

levels for diering impact and ease of analysis: industry

agendas, competitive agendas, business agendas, organiza-

tional agendas. A grasp of the agendas at each level would

enable us to understand the phenomena which tend to slip

through the ve forces model. e industry‐level agenda/

movement toward a current trend are plotted in the form

of an industry stakeholder analysis (Figure 1).

By plotting and understanding the stakeholder posi-

tions and agendas at the industry level, a more distinct

picture of the industry emerges. It must be understood

that the positions of each of the stakeholders is not static,

but changes in response to emerging situations. e inu-

encing factors on the agenda of each stakeholder can

be decomposed into turn‐ons/attractors and turn‐os/

repellers. ese methods allow a person to be able to grasp

the complexities in the industry and predict the trends,

which makes a great addition to the BPR readiness frame-

work. A shortcoming of Porter’s ve forces (Grundy,

2001) is the fact that it tends to gloss over the agendas of