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Developing a Framework to Identify the

Factors Affecting the Measurement of

Organization Readiness for Business ProcessReengineering Implementation

an Exploratory Factor Analysis Method

(EFA)

INTRODUCTION

Today's world is a world of changes and mutation.

These changes include all aspects of economic,

social, political, and technological-based.

Organizations that work in unstable conditions face

with unexpected events that if they are not properly

ready, needful and proportionate flexible to the

current situation, they will lose their contest potency

in the market. Therefore, organizations must be

dynamic and have flexible structures to

accommodate with external environment

turbulences.

Business Processes Reengineering (BPR) is one

of the most widely used approaches to cope with

changes. Hammer and Champy introduced the

concept of business processes re-engineering in

1990 in an article in the Harvard magazine for the

first time (Hammer & Champy, 1993). BPR was

defined as a radical redesign of processes to

achieve salient improvements in cost, quality and

service(Ozcelik, 2010). The base of the re-

engineering is thematic survey and removes the

old rules and fundamental assumptions that plat

the performance of the current business.

Accordingly, anything that does not have

contribution in the product efficacy is doomed to

elimination(Ryan & Hurley, 2003). Generally, the

main reasons for using re-engineering are

external competitive pressures, reduction in

Hamid.Shahbandarzadeh

Department of Industrial

Management, Persian Gulf

University, Bushehr, Iran

[email protected]

ABSTRACT

Results of business processes reengineering (BPR) projects in Iran and many other

countries show that the most necessary and fundamental changes on processes do not

implement and remain only as a suggestion. Therefore, before attempting to redesign

and re-engineering business processes, variables and factors affecting the assessment

of organizations readiness for the re-engineering process should be identified in order

to improve conditions and making good infrastructure to implement re-engineering

projects. Therefore, the aim of this study is to identify the factors that affect the success

or failure of re-engineering projects in organizations, and to develop a framework for

assessing organization readiness for processes re-engineering implementation. This

research uses exploratory factor analysis method and opinions of 229 of Iranian experts

in the field of BPR to develop a framework for identifying the factors affecting the

measurement of organizational readiness for BPR implementation.

Keywords:

Business Process Reengineering, Organization Readiness, Success Factors, Failure

Factors, Exploratory Factor Analysis.

Khodakaram.Salimifard




[email protected]

Farid.Saeedi




[email protected]

© International Academic ResearchJournal of Business and Management Vol No.1, Issue No.6, Page no.1-16. ISSN Number : 2227-1287



2 December International Academic Research Journal of Business and Management

internal costs and to improve productivity (Tennant

& Wu, 2005).

Predictions in 1995 showed that if all American

private companies proceeded tore-engineertheir processes, 25 million of workforcepopulation

wouldreduceand it is the most important reason of

personnel fray from this concept(Johnston,

1995).Researchresults revealed that in

companiesthat utilized re-engineering,onlya

fewhavebeen successful in implementing re-

engineering and most of companies failed (Hammer

& Champy, 2001). In general, 70 percent of

companies that went into re-engineering did not

succeed to implement it. All these results indicate

that this process has a high risk (Tarokh, Sharifi, &

Nazemi, 2008).

Since the lack of inattention to identify the factors

affecting the measurement of organization

readiness for processes re-engineering, it increases

the cost and time required to implement re-

engineering projects.If a company is not ready, it

leads to huge costs. Therefore, it is necessary to

identify the indicators, variables and factors

affecting the assessment of organizations

readiness for the processes re-engineering to

improve the situation and make appropriate

infrastructure ready to implement BPR project.

This study, therefore,intends to overview the

researches done in this area and to identify the

factors affecting the success and failure of

reengineering project implementation. Its objective

is to develop a framework for measuring the

organization readiness for processes re-

engineering implementation and itprovides someprerequisiteto successfully implement BPR in

organizations.

LITERATURE REVIEW

It is essential to carefully examine the factors that

challenge the future actions for change before

designing and re-engineering business processes.

Various available methods for re-engineering

implementation are not interchangeable because

none of these methods completely covers

requirements and major prerequisites for successful

implementation of BPR. Many articles have been

running the definition of the re-engineering nature

and its implementation processes, but they ignore

to clarify what is important in successful re-

engineering implementation and riskmanagement resulting from BPR implementation.

Following, we examine key factors in the success

or failure of BPR projects.

STRATEGIC FACTORS

Strategic factors are most important factors

affecting the measurement of organizations

readiness for processes re-engineering

implementation. Some researchers mention that

the most important reason for the failure ofBPR

is the lack of correlation between organization

and organization strategic objectives. Terziovski

and others (Terziovski, Fitzpatrick, & O’Neill,

2003) studied the Australian financial services

sector firms which engage in re-engineering.

They deduced that the strategy and customer

orientation are the most important factors in the

success of BPR projects. Paper and Chang

(2005) believe that factors related to organization

vision, such as development, prophecy, pitch and

flexibility, are essential for the successful re-

engineering program. Lack of good strategy is

one of the main obstacles to successful re-

engineering in the organizations (Attaran, 2004).

Other researchers such as Khong&

Richardson(2003), Wu(2002), and

Mcadam(2000)emphasized the importance of

strategic factors, such as prospective, market

environment and beneficiaries analysis, and

mutual relation between organization view andBPR goals and view.

PROJECT MANAGEMENT FACTORS

BPR requires planning and time scheduling,

enough budget, and accurate control as every

projects need. BPR projects should be based on

primal time schedule to prevent any time delay in

BPR implementation (Hutto & R. Kasich, 1994).

Lack of efficient planning, inadequate resources

in executive stage, and lack of utilizing project

management techniques are important BPR



2012 Hamid.Shahbandarzadeh, Khodakaram.Salimifard and Farid.Saeed 3

failure factors(Tarokh, Sharifi, & Nazemi, 2008;

Hammer & Champy, 2001). Project management

should cover all required activities and resources

at any time during the lifecycle of the project (Obara

Magutu, Onserio Nyamwange, & Kiplimo Kaptoge,2010). Learning, careful redesign of processes and

determination of performance key goals are other

important factors in BPR project management

(Xiang, 2010). Many other studies have

emphasized on factors associated with project

management in BPR success and failure (Herzog,

Polajnar, & Tonchia, 2007; Ahmad, Francis, & Zairi,

2007; Salimifard, Abbaszadeh, & Ghorbanpur,

2010).

INFORMATION TECHNOLOGY FACTORS

Information technology (IT) plays a vital role in the

overall success of the initiative to re-engineer

(Akhavan, Jafari, & Ali-Ahmadi, 2006). IT is the

most effective factor in BPR success and failure

(Love & Gunasekaranb, 1997; Goksoy, Ozsoy, &

Vayvay, 2012; Herzog, Polajnar, & Tonchia, 2007;

Abdolvand, Albadvi, & Ferdowsi, 2008; Paper &

Chang, 2005; Ahmad, Francis, & Zairi, 2007).

Having the right IT infrastructure is a vital factor inthe successful implementation of BPR (Obara

Magutu, Onserio Nyamwange, & Kiplimo Kaptoge,

2010) because unlike other approaches such as

TQM, BPR is heavily based on IT. Attaran(2004)

believes that IT role is very important in three

stages: a) before BPR implementation, b)

implementation stage and c)after BPR

implementation.

FACTORS RELATED TO TOP MANAGEMENT

Top management performs the leader role in

process management paradigm with effective

cultural change and elimination of obstacles(Hutto

& R. Kasich, 1994). Many of reported failures in

re-engineering planning caused by lack of top

management support and disinclination towards

change (Adenso-Diaz & Canteli, 2001).It is

mentioned that elected leadership is one of the

biggest barriers to successful implementation of

BPR. It is important for a manager to have a proper

mindset in addition to his management

authority(Hammer & Champy, 2001).Changing

cultural attitudes, understanding and acceptance

of the selected orientation, face-to-face

communication, and education are other

committed top management tasks(ONeill &S.Sohal, 1998). Sutcliffe(1997)obtained two

important results in his research on the

relationship between leader behavior and the

results of re-engineering; 1) successful leaders

of BPR projects use leadership styles that have

better fitness with vital factors; 2) successful

leaders of BPR projects do their leadership duties

in a very balanced way.Abdolvand and others

(Abdolvand, Albadvi, & Ferdowsi, 2008) believe

that sufficient knowledge about IT projects,

realistic expectations of the BPR results, and

frequent communication with BPR users and

team are the most essential tasks for top

management in BPR implementation. Other

researchers such as Wu(2003),Khong and

Richardson(2003), Salimifard and colleagues

(Salimifard, Abbaszadeh, & Ghorbanpur, 2010),

andTerziovski and others(Terziovski, Fitzpatrick,

& O’Neill, 2003)emphasized the top management

role in the success and failure of BPR.

CULTURAL FACTORS

Cultural factors are among influential factors of

BPR project performance. In many previous BPR

projects, some resistances in the organization

against re-engineering were due to cultural

factors that would cause organization failure if not

to be considered (Warren & David, 2006; Attaran,

2000; HRFocus, 1994). BPR problems and

restrictions in developing countries such as Iranare more related to organizational and managerial

culture and not to technical or work capabilities

(Salimifard, Abbaszadeh, & Ghorbanpur, 2010).

Mainly traditional conservative organizations are

task-oriented and vertically structured while top

manager rarely deals with fundamental changes.

Employees do not feel that they belong to the

organization and avoid new experience and risks.

Therefore, there is no attention to long-term

needs of customers, and flexibility is minimized

(Sepehri, 2005). These changes led to more flat

organizational hierarchy or larger control area in




organizations, more productivity and employees

satisfaction(Goksoy, Ozsoy, & Vayvay, 2012). Yu

et al. (Yu, Yi, Wang, & Zhao, 2010) believe that

organizational culture plays two important roles in

the organization. Firstly, it fosters unity and makesa good communication mechanism in which they

cooperate better with high productivity. Secondly,

it helps organization to be consistent with external

environment in order to train employees the daily

responsibilities to work faster and become

consistent with changes in exterior environment.

Other researchers focus on the cultural factors in

investigation of the amount of BPR success

(Haghighat & Mohammadi, 2012; Ahmad, Francis,

& Zairi, 2007; F.Jarrar & M.Aspinwall, 1999;

Terziovski, Fitzpatrick, & O’Neill, 2003).

METHODOLOGICAL FACTORS

Methodological factors focus on attempts to

change, support, set goals, measurement,

modeling, customer orientation, BPR team and its

performance (Kyung Sung & Gibson, 1998). In fact,

methodology is a combination of organized

methods, techniques and tools to direct re-

engineering project towards success by helping tosolve problems in this risky trend (Vakola & Rezgui,

2000). Factors such as suitable guide, commitment,

orientation, continuous monitoring, customer

support, process- oriented, and generally BPR

performance are involved in this collection (Paper

& Chang, 2005; Kyung Sung & Gibson, 1998;

Hammer & Champy, 1993; Davenport, 1993;

Belmonte & Murray, 1993; Hall & Wade, 1993).

Certainly, selection of appropriate techniques and

methodology based on organization conditions for BPR implementation has a verysignificantimpact in

its success or failure.

FACTORS RELATED TO THE CHANGES IN

MANAGEMENT SYSTEMS

Human resources play a vital role in improving

organizational processes (Abdolvand, Albadvi, &

Ferdowsi, 2008) and since business processes

should be run by human resources, considering this

factor is among most important elements in

changing processes because employees resistance

against changes will cause project failure (Paper

& Chang, 2005). Previous approaches for BPR

success should be changed. Re-engineering is

not only changing the processes, rather it is a

change in all sections of organization. Withoutchange management process, no improvement

can be enforced in any organization(Tissari &

Heikkila, 2001). Changes in rewarding system,

changing of organization structure to a flat state,

improved communications and decision-making,

and training or empowerment of employees are

all among factors related to this category (Fortune

Magazine, 1998; Khong & Richardson, 2003;

Kyung Sung & Gibson, 1998; AL-Mashari & Zairi,

1999; Abdolvand, Albadvi, & Ferdowsi, 2008;

Jeston & Nelis, 2008).

METHODOLOGY

This study is a survey research. Considering

sampling performed in a period, this study is cross

section study. General model of this study

includes seven main categories described in

previous sections. Exploratory factor analysis was

used to classify and name each factors related to

each category. The purpose of the factor analysisis to reduce the volume of data and determine the

most effective variables in shaping

phenomenon(Dobni, 2008).

DATA COLLECTION

A questionnaire was used for data collection. The

questionnaire contained 80 questions for the

seven categories of factors that affect the

measurement of organization’sreadiness toimplement the BRR. It was designed for

exploratory factor analysis. Some of the questions

in the questionnaire were in the form of

compilation and others were designed with the

previous articles help. 15 experts in quality

management and industrial engineering in Tehran

confirmed the validity of the questionnaire. The

sample size for factor analysis should be between

40 - 400(Hanafizadeh & Osouli, 2011). Random

cluster sampling method was carried out in this

study. Namely, the overall sample divided into

three industrial, scientific and services areas and




then the questionnaire was distributed among

countries and institutions of higher education

randomly. In general, 500 questionnaires were sent

electronically to Iranian professionals among whom

183 questionnaires completed electronically and 46were completed face to face. A total number of 229

questionnaires were used for exploratory factor

analysis. Data collection was conducted in August

and September of 2012.

EXPLORATORY FACTOR ANALYSIS

In exploratory factor analysis, the researcher

intends to discover the underlying structure of a

large set of variables. In other words, the researcher

has no initial theory. SPSS v19was used for

exploratory factor analysis. The following conditions

should be observed for exploratory factor analysis:

1. KMO coefficient: this coefficient indicates

sampling adequacy that its value is always

between zero and one. The result is acceptable

if KMO is more than 0.6.

2. Significance of Bartlett’s test: it is a minimum

requirement for factor analysis.

3. Matrix coefficient is greater than zero.

ANALYSIS OF FINDINGS

Cronbach's Alpha method was used in this study to

assess the reliability of the questionnaire. In this

case, each statement of the seven major parts of

factors were analyzed separately in order to

determine the scores of statement related to each

factor have accurate measurement in explaining

the actual score of responded. Information about

measuring Cronbach's Alpha for each of sevencategories is presented in Table 1. It should be

noted that Cronbach's Alpha value of all eight

statement of the questionnaire was generally

calculated as 0.973 that indicated high level of

reliability in the research questionnaire.Table 2

shows the scope and frequency of respondent.

As already mentioned, the main measuring factors

of organizations readiness to implement BPR were

classified into seven main categories. Hence,

exploratory factor analysis purpose is to identify

latent measures of each of these main categories.

Table 3 represents KMO coefficient values,

Bartlett’s test and determining correlation matrix

for each of the seven categories.

STRATEGIC FACTORS

According to high amount of KMO that is above

0.6 and obtained determining value of correlation

coefficient bigger than zero, the results are

acceptable. Moreover, it is worth nothing that

finding rotation matrix of factors has been

obtained with 5 replications. As data in Table 4

represents, 60.459 percent of changes in

explained by three new factors. The eigenvalue

in finding of the rotated matrix have been obtained

for first factor as 3.069, for the second factor as

1.979, and for the third factor as 1.602. Naming

of the factors in the theoretical literature and

statement that have taken place in the same

categories has been performed. Now, three

outputs for statements concerning strategic

factors should be named and explained that will

be investigated in next part.

Vision and Strategy

The first category of statements classified based

on the type of exploratory factor analysis and

theoretical review of literature. The statement is

called "prospects and strategy". Five definitions

of prospects and strategy subcategories are

"landscape changes with the load factor of 0.834",

"identification and providing appropriate

strategies of changing with load factor of 0.846",

"re-engineering strategy consistent with the

overall strategy of the organization with factor load of 0.528", "commitment to changing prospect

with factor loading of 0.696" and "flexibility of

changing prospects with factor load of 0.547".

Top- down approach

The second factor extracted from related

statements was called "top-down approach". A

major change must start from the top level. It is

clear that re-engineering never be implemented

in bottom up approach. Undoubtedly, top

manager of an organization with a holistic view




of the process and a clear vision of re-engineering

should manage organization during changes and

re-engineering. Three statements of "requirement

of re-engineering of top top with a loading factor of

0.849", "cooperation of middle top managers inre-engineering with a factor load of 0.568" and

"announcement of guidelines from top managers of

the organization with factor load of 0.828" are in this

category.

Identification of stakeholders

Since business environment is continuously

changing and competitive environment will

determine the direction of the markets, so

identification of the market and stakeholders,

analyzing of environment and prediction of the

possible changes play an important role in long term

re-engineering planning. Statements of "market

analysis and identifying stakeholders" and

"prioritizing stakeholder expectations in re-

engineering plan" with load factors of 0.701 and

0.884, respectively, were in this category.

FACTOR ANALYSIS OF PROJECT

MANAGEMENT FACTORS

According to Table3, the determining value of

correlation coefficient matrix is greater than zero

and other indices are in acceptable range. It should

be noted that the rotated matrix of factors is

obtained with three iteration. As it can be seen in

Tables 4, eigenvalue of two new factors is greater

than 1. Therefore, it is acceptable for factor

analysis. Eigenvalue of the first and second factors

was 4.140 and 1.978, respectively. Generally,55.616 percent of the total variation is explained by

these two factors that are acceptable in factor

analysis.

Planning and project control

The first factor in a series of factors is called "project

planning and project control". These factors

represent a set of statements regarding the

management of re-engineering. It should be noted

that one of the major reasons for the failure of

re-engineering projects is that they are too long.

The main causes include lack of proper planning

and monitoring of project resources. Statements

of "effective planning and using project

management techniques of 0.721", "regular

reporting of project progress of 0.710", “proper timing of projects of 0.797, "regular project

monitoring and correction of 0.732"and "avoiding

long delays in project of 0.629" are placed in this

category.

Allocation of resources

Lack of allocation of necessary resources for the

re-engineering is one of the other reasons for its

failure. This includes skilled work force and capital

resources and tools needed to implement project.Existence of unnecessary workforces and lack of

skills and education will not only stops project

progress but also people will be disappointed.

Allocation of sufficient funds to advance the

project in accordance with the scheduled program

will be crucial. In addition, the role of top

management to guide the process in the right

direction is very important. Based on the results

of exploratory factor analysis, the factor of

"allocation of required resources" is formed by

statements of "having enough resources withloading factor of 0.812", "diversity of project

resources (use of consultants, users, customers,

suppliers, etc.) with a load factor of 0.585" and

"Allocation of resources consistent with the

estimated load factor of 0.664".

FACTOR ANALYSIS OF INFORMATION

TECHNOLOGY (IT) FACTORS

Since determining the correlation matrix was

0.002 and the other values of indicators wereacceptable based on obtained information, so

results of factor analysis are acceptable.

According to statistical data of Table 4, it can be

seen that 60.321 percent of changes are

presented by two new factors that are somehow

acceptable. Eigenvalue of first factor in rotated

matrix is 3.703 and for the second factor is 3.536.

IT knowledge and resources

As mentioned before, one of the most important

differences of process re-engineering with other




development approaches such as TQM is the

important role of IT in its success. In order to have

a successful process re-engineering, IT

opportunities should be used effectively based on

sufficient resources and update knowledge of individuals in the field of IT. Statements of “having

databases and appropriate information systems

with load factor of 0.741", "sourcing and suitable

investment in IT with load factor of 0.734",

"appropriate use of software with load factor of

0.755", "developed organizational information

system with load factor of 0.634" and "synergetic

use of IT and redesigning methods of process with

load factor of 0.549" are related to this category

based on obtained results of factor analysis.

IT infrastructure

Before implementingBPR, we should ask whether

there are appropriate software and hardware

facilities available. To what extent the technology

infrastructure of the organization can meet the

process reengineering requirements. One of basic

conditions of process reengineering is the

availability of a powerful IT infrastructure.Statements of "having appropriate IT infrastructures

with load factor of 0.615", "development of abilities

of IT unit with load factor of 0.758", "IT infrastructure

consistent with process reengineering strategies

with load factor of 0.728", "appropriate

measurement of effective IT infrastructure in

business process reengineering with load factor of

0.815"and "appropriate design of IT network with

load factor of 0.767" are classified in the IT

infrastructure category.

FACTOR ANALYSIS RELATED TO TOP

MANAGEMENT

According to high value of KMO and determining

value of correlation coefficient bigger than one,

obtained results are acceptable. Eigenvalues,

variance percentage and cumulative variance

percent are considered for new factors before and

after rotation of factor loads in Table 4. Generally,

59.626 percent of changes are presented by three

new factors. Eigenvalue of first factor in the rotated

matrix is 3.820, for second factor are 2.718 and

for third factor is 1.710.

Commitment and leadership

One of the most important factors in successful

implementation of BPR is commitment and

leadership of top managers during change

operation. It is considered thattop management

commitment is a requirement for successful

reengineering(Hammer & Champy, 2001).

According to obtained results, statements of

"planning, guiding and coordinating of resources

by top management with load factor of 0.640",

"cooperation of top management with load factor

of 0.606","top manager support during operation

with load factor of 0.738" and "braveness of top

management towards project failure with load

factor of 0.585" are classified in the factor

category of "commitment and management".

Knowledge and wisdom

Manager who has no understanding of how to

re-engineering or someone who has no

knowledge in this field cannot manage BPR

during implementationphase. Top manager of

organization not only should have a good

understanding of re-engineering but also should

clarify it for staff. According to the obtained results

of factor analysis, statements of "sufficient

knowledge of top manager about reengineering

with load factor of 0.659", "integrated

management approach to re-engineering in all

units with load factor of 0.575" , "tendency of top

manager to accept and perform suggestions of reengineering team with load factor of 0.736",

"having an understanding of reengineering with

load factor of 0.601" and "effective management

of risks by top manager with load factor of 0.848"

are in this group.

Open communications

Top manager should have a clear

commensuration with other units of the

organization. He/she should communicate all the

time and regularly with implementing team of the




project. He/she should have contact with staff,

investigate their work progress, and make staff

aware of project progress. According to related

statements and theoretical literature review, the

third factor in the collection of top manager factorsis "open communication". Statements of

"continuous communication of top manager with

staff during the project with load factor of 0.763",

"regular communication of top management with

the team with load factor of 0.572" and "continuous

communication of top manager with other

stakeholders of the project with load factor of 0.639"

are in this group.

FACTOR ANALYSIS RELATED TO CULTURAL

FACTORS

According to Table3, determining value of

correlation coefficient is 0.099 and other values of

indicators are acceptable. Eigenvalues, variance

percentage and cumulative variance percent are

considered for new factors before and after rotation

of factor loads in Table 4. Generally, 71.425 percent

of changes are presented by two new factors.

Eigenvalue of first factor in the rotated matrix is

2.679 and for second factor is 1.607.

The climate of trust and collaborative

environment

When employees are not very intimate with each

other in a corporate environment and there is no

trust to top manager, then they will never cooperate

in re-engineering project. It is necessary that all staff

cooperate in the project. According to obtained

results of factor analysis, available statements of this category are: "climate of trust and collaborative

environment between staff with load factor of

0.810", "existence of cooperation culture among

staff with load factor of 0.894", "giving more

authority for attraction of staff with load factor of

0.905".

Readiness and acceptance for change

It is natural that each kind of new change in the

organization environment will cause some opposing

ideas and resistance. However, the important point

is that manager should not give up on these

disagreements. Organization disagreement

against re-engineering is a natural phenomenon.

Therefore, another important factor for

preparation of organization to perform re-engineering project is intra-organizational

preparations to accept changes. Various

meetings and briefings are considered as the

most important factors to remove this problem.

According to obtained results of Table 4, 22

statements of this category are "creation of an

effective culture for organizational changes with

load factor of 0.806", "stimulation of the

organization to accept change with load factor of

0.690" and "reduce the fear of individuals and

units towards make changes".

FACTOR ANALYSIS RELATED TO

METHODOLOGICAL FACTORS

Determining value of correlation coefficient is

0.005 and other values of indicators are

acceptable based on obtained data. Eigenvalues,

variance percentage and cumulative variance

percent are considered for new factors before and

after rotation of factor loads in Table 4. Generally,55.917 percent of changes are presented by two

new factors. Eigenvalue of first factor in the

rotated matrix is 3.682 and for second factor are

3.028.

Process focus

Re-engineering of processes requires process-

based thinking, processes scope, graphical

mapping, analysis based on local needs and

expectations of customers. For this purpose, all

required techniques and methods such as

modeling and continuous monitoring should be

used. In this study and according to the obtained

results, statements of this category are: "having

a process-based thinking among project team

with load factor of 0.527", "performing an exact

evaluation for identification and deletion of

activities with no added value with load factor of

0.674","identification of purposes of developed

function that requires development and

reengineering with load factor of 0.788",

"definition of main processes to achieve goals




and giving services to customers with load factor of

0.767", "attempt to change business processes not

their modification with load factor of 0.720",

"identification of the main customers, their needs

and requirements consistent with future changes

with load factor of 0.681", and finally,"effective

training of modeling tools and business analysis

with load factor of 0.533".

Methodology and BPR team

Selection of methodology is dependent on time,

structural conditions and type of business.

Moreover, using a capable BPR team is considered

as the first step in successful re-engineering plan.

BPR team should be selected among most expert

people with high motivation and sufficient

knowledge of the organization process. This team

can be a combination of experts inside or outside

the organization. According to obtained results of

Table4, 25 statements in this category are: "using

appropriate methods and tools for implementing

re-engineering process with load factor of

0.564","allocation of best knowledgeable staffs for

reengineering process with load factor of 0.792",

"focus of this team on the results with load factor of

0.828", "using appropriate methodology in thisprocess consistent with time, cost, structure and

type of processes with load factor of 0.607", and

"good identification of process re-designers based

on their experiences with load factor of 0.677".

FACTOR ANALYSIS RELATED TO CHANGES IN

MANAGEMENT SYSTEMS FACTORS

According to Table3, determining value of

correlation coefficient is 0.002 and other values of

indicators are acceptable. Eigenvalues, variancepercentage and cumulative variance percent are

considered for new factors before and after rotation

of factor loads in Table 4. Generally, 60.685 percent

of changes are presented by three new factors.

Eigenvalue of first factor in the rotated matrix is

3.064, for second factor is 2.763 and for third factor

is 2.669.

Rewarding and motivation systems

Reengineering means changes in all organizationalsections. In order to change one or several

processes, all other sections should be changed.

Philosophy of re-engineering means a kind of

fundamental change in the previous methods.

One of the most important changes is changing

of rewarding and motivation systems. Allbureaucratic structures and mechanical

environments should be removed in which staffs

are working with senseless machines. Staff

should be motivated to cooperate and share

information in BPR project. Although some

occupations may be eliminated after re-

engineering and some staffs become unsatisfied

with this system. Traditional occupations should

be removed in order to make fundamental

changes. However, it does not mean to endanger

staffs job security. According to the obtained

results of the factor analysis, statements in this

category are: "designing of a new rewarding

system with load factor of 0.626", "encouraging

of staffs to help changing process with load factor

of 0.709", "maintenance of staffs job security with

load factor of 0.672", "having training classes for

staffs about the PBR with load factor of 0.543",

"related evidence feedback with new processes

for workforces with load factor of 0.574", "not

using of intensive and bureaucratic methods of re-engineering with load factor of 0.594" and

"preparation of conditions for an effective team

work with load factor of 0.572".

Participation and empowerment of employees

As mentioned before, performance of

reengineering will not be successful without

cooperation of all organizational units. It is clear

that those employees can help in present project

that are completely familiar with this concept and

understand its necessity. Another requirement of

successful reengineering is to have skilled work

forces with multiple responsibilities that can play

a role in different organizational posts when some

fundamental changes happen. According to

obtained results of the factor analysis, statements

of this category are: "empowerment of

employees for multiple responsibilities with load

factor of 0.758", "giving authority, motivation and

responsibility to employees with load factor of 0.665","measurement of work for efficiency with




load factor of 0.773", "training of decision making

skills and problem solving to employees with load

factor of 0.785".

Effective Communicative Channels

It is not possible to coordinate different sections of

an organization during project without an effective

communication channel. Communications

indifferent levels should be clear. Traditional

methods such as excess correspondence should

be avoided. Another way to accelerate

communication between different sections is to

make a network-based and information technology

via Office Automation System. According to

obtained results of factor analysis, statements of

this category are "maximum use of network,

computer and IT for acceleration of communication

with load factor of 0.684", "communication

development with external environment of

shareholders with load factor of 0.860" and "making

effective communication at all organizational levels

with load factor of 0.648". Finally, theoretical model

of this study can be seen in Figure 1.

SUMMARY AND CONCLUSIONS

Identification of capabilities, effective factors of

failure or success of BPR project has had a huge

impact on the results of this study. So far, in

IranBPR is used in many organizations and

institutions such as Railways, Customs, and Oil and

Gas companies. However, the results of BPR

projects remain as suggestions and not being used

in practice. The main reason is that preparation of

these organizations for BPR is not measured in theorganizations and they do not pay attention to

requirements, infrastructures and effective factors.

After the completion of BPR project, following

questions should be answered:

1. Is there any determined prospect and strategy

provided by organization to perform BPR?

2. Is the project correctly planed and required

resources are available?

3. Is IT infrastructure capable to support changes?

4. Is top manager prepared to manage, cooperate

and support BPR changes?

5. Are necessary measures provided to

manage, cooperate and support BPR

changes?

This study attempted to investigate effectivefactors of organizations readiness to perform

BPR. As it is shown, this framework includes 7

general categories with 17 factors each of which

are classified based on obtained results of factor

analysis. Criteria to select the main categories

were review of theoretical literature and amount

of focus on each category as effective factors on

BPR results. Next, a separate exploratory factor

analysis performed to identify each subset of

factors. It is suggested in this study to classify

each main category with their subcategories to

determine importance of each one in BPR

implementation.

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Table1. Cronbach's alpha coefficient value for each of the seven major categories

Category name Statements Cronbach's alpha coefficient

Strategic factors 01-11 0.829

Project management factors 12-22 0.868

IT factors 23-34 0.907

Top management factors 35-48 0.893

Cultural factors 49-54 0.814

Methodological factors 55-66 0.89

Changes in management

systems factors 67-80 0.912




Table2. Scope and frequency of respondent

Context Percentage FrequencyCumulativefrequencypercentage

Academic - Research 59.83 137 59.83

Computer and ElectronicCommerce

9.17 21 69

Production-Industrial 5.24 12 74.24

Car building 4.8 11 79.04

Services (Insurance) 1.31 3 80.35

Services (consultantengineering)

6.55 15 86.9

Services (health care) 0.87 2 87.77

Banks 0.44 1 88.21

Municipal administration 1.75 4 89.96

Telecommunications 1.75 4 91.7

Transportation (railway, subway,etc.)

4.37 10 96.07

Oil and Gas 2.19 5 98.25

Mining and Industry(Development and Renovation) 1.75 4 100

Total 100 229

Table 3. KMO Coefficient values Bartlett's test for each of the main factors

Indicator Strategic

Projectmanag-ement

ITTop

manage-ment

CulturalMethodol

-ogical

Changein

manage-ment

systems

KMO 0.805 0.865 0.896 0.866 0.779 0.89 0.856

Bartlett'stest

Chi-square

(X2)

864.646 922.544 1390.803 1393.582 521.791 1189.813 1440.105

Freedomdegree

55 55 66 91 15 66 91

Possibilityvalue

0 0.000 0.000 0.000 0.000 0.000 0.000

Determining the

correlation matrix

0.001 0.001 0.002 0.002 0.099 0.005 0.002




Table 4. Eigenvalues and percentage of variance explained for each factor in the matrixand the rotation

Category

Factor Initial eigenvaluesExtraction Sums of Squared

loading

Total% of

Varia-nce

Cumulative %of Variance

Total% of

Variance

Cumulat-ive % of Variance

Strategic factors

1 4.239 38.537 38.537 3.069 27.904 27.904

2 1.387 12.606 51.143 1.979 17.993 45.897

3 1.025 9.316 60.459 1.606 14.562 60.459

Projectmanagementfactors

1 4.967 45.152 45.152 4.14 37.635 37.635

2 1.151 10.464 55.616 1.978 17.98 55.616

IT factors1 6.018 50.149 50.149 3.703 30.859 30.859

2 1.221 10.173 60.321 3.536 29.463 60.321

Topmanagementfactors

1 6.034 43.097 43.097 3.82 27.285 27.285

2 1.196 8.544 51.641 2.817 20.124 47.409

3 1.118 7.986 59.626 1.71 12.217 59.626

Cultural factors1 3.151 52.513 52.513 2.679 44.645 44.645

2 1.135 18.913 71.425 1.607 26.78 71.425

Methodologicalfactors

1 5.524 46.035 46.035 3.682 30.686 30.686

2 1.186 9.882 55.917 3.028 25.231 55.917

Changes inmanagementsystems factors

1 5.964 42.603 42.603 3.064 21.886 21.886

2 1.47 10.498 53.101 2.763 19.734 41.62

3 1.062 7.585 60.685 2.669 19.065 60.685

Developing a Framework to Identify the Factors Affecting the Measurement of Organization Readiness...

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