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The first national study of Business Process Redesign

in Romania

November 2008

Ensight Management Consulting

Business Process Redesign Study 2008

© 2008 Ensight Management Consulting. All rights reserved.

ACKNOWLEDGMENTS

The Ensight Management Consulting team wants to thank all the companies and their representatives who made themselves available for this study.

This learning experience was made possible mostly due to your responsiveness towards the Ensight team’s questionnaires. We want to express our appreciation for facilitating open talk between companies truly interested in BPR.

We hope this report will assist your organization for both current initiatives as well as future actions you may undertake to optimize process performance.

Our Ensight Management Consulting team will always make itself available for

answering any questions you may have regarding this study.

With regards,

Robert Maxim Ion Ghimbovschi

Managing Partner Manager



FOREWORD

During the final steps prior to joining the European Union, but more so afterwards, an increasing number of Romanian companies understood that it would be improbable to face competition from western counterparts. Client focus, the ability to forecast and control internal processes as well as the constant struggle to cut

down costs had already become part of western “DNA”. By contrast, their Romanian counterparts have just begun moving in that direction.

Local companies’ outcome will depend on how fast they can adapt their business

practices in order to face new competition and market changes.

The Business Process Reengineering / Redesign (BPR) concept is a perfect match for what Romanian companies need in today’s environment, while the maturity and

international experience of the concept are a guarantee of its efficiency.

Given the circumstances, Ensight’s study into BPR can be seen as an information exchange catalyst for companies already engaged in BPR projects or willing to do

so. The end objective is to help Romanian companies become more competitive and improve performance.

The companies selected to participate in this study were chosen from our Ensight

database as well as from business magazine Capital “Top 100 Companies”.

Among respondents we have fast growing companies, industry leaders as well as a significant number of small and medium companies that constantly face increasing

competition.

In order to develop the questionnaires we have researched a wide variety of international documentation on this subject. This was later supplemented with

Ensight consultants’ experience to better adjust this survey to Romania’s business environment.

As a result, the current study is a combination of mutual learning experience for

Romanian companies, as well as a comparison of the approach structure and initiative results between local versus international organizations.

We hope this study will prove useful for your ongoing process improvement initiatives as well as for general business development needs.

For better financial performances and improved customer service, Ensight Management Consulting is dedicated to provide assistance in your business TRANSFORMATION initiatives.

Sincerely yours,

The Ensight Management Consulting Team



Table of Contents

Acknowledgments ..........................................................................................1

Foreword .......................................................................................................3

1. Brief overview on BPR concepts ................................................................5

2. Purpose of study.....................................................................................7

3. Conclusions ............................................................................................8

4. Key findings ...........................................................................................9

5. Study approach .................................................................................... 25

Ensight’s BPR competences ........................................................................... 27

Acronyms and terms ..................................................................................... 28

Figure Summary .............................................................................................1



1. Brief overview on BPR concepts There are several terms used in business readings when it comes to process

performance improvement. Some of the most often used terms are Business Process Reengineering and Business Process Redesign. Although the same acronym is used (BPR) and the two concepts are often interchanged, there are some subtle differences between the two. The term reengineering is associated

with radical process changes, whereas the word redesign mostly refers to small and medium changes.

The actual concept was launched during the early 1990’s by M. Hammer1 and T.

Davenport2 and shortly became very popular amongst western companies. After a short drop in interest BPR recaptured companies’ attention at the beginning of the decade after it got adjusted and completed following ten years of experience and

work in progress. The revised concept received the acronym BPM – Business Process Management.

During the first stages, BPR was seen as a radical change in the way companies

approached their daily operations. This was done in order to increase performance and flexibility towards new market conditions. At the same time IT solutions were seen as the main catalyst for changes done using BPR concepts.

International practice has shown however, that many projects don’t follow this

practice. BPR projects most often imply different types of approaches based on companies’ objectives, the degree of maturity regarding process management, the efficiency of selected processes, etc.

As shown in the diagram below, a BPR project can include both process improvement elements (minor process improvements) as well as process reengineering (major or radical adjustments to the way a process is run).

BPR type of projects

Process

InnovationBest-In-Class

Quality

management tools and

systems (TQM,

ISO, Six Sigma etc.)

Process

Improvement

Process Improvement Process Innovation

1 “Reengineering the Corporation: a Manifesto for Business Revolution”, Michael Hammer & James

Champy, HarperBusiness 1993 2 “Process Innovation: Reengineering Work Through Information Technology”, Thomas H. Davenport, HBR 1992



Future trends in this field focus on transforming the classic BPR into a holistic management approach. The effort implied by business process transformation through a BPR project is considered a necessary yet not sufficient engagement to

ensure success. In the future, after having already redesigned their processes, companies will probably focus on a continuous process performance improvement strategy.



2. Purpose of study As a result of our past experience in increasing business processes’ efficiency,

Ensight has launched this learning and cooperation tool for Romanian companies.

We hope that our findings will benefit both companies participating in the first Romanian BPR study as well as other companies that are interested in process

efficiency improvement and gaining a competitive edge.

The current report helps us expand on the study’s objectives by:

� Comparing different practices used by Romanian companies undergoing BPR

projects

� Contrasting Romanian BPR approaches with those of foreign companies

� Identifying main difficulties when undergoing BPR projects

� Presenting critical success factors for BPR projects

� Sharing our consultants’ knowledge pertaining to different BPR aspects seen

throughout this study

The purpose of this study is aligned with our company’s mission, as well as that of our employees, to constantly support Romanian companies in their continuous

drive to increase performance.



3. Conclusions Our study revealed that most Romanian companies are still in the developing

stages with regards to implementing BPR. Still, the achievements these companies have made so far are more than encouraging.

The high degree of success registered by BPR initiatives is mostly due, however, to

favorable market conditions. This fact became self evident when contrasting BPR initiatives developed by local companies amongst themselves and against foreign competitors.

The degree of competitiveness within local markets has not yet reached that of

their western counterparts, while market saturation still remains at relatively low levels allowing companies to increase performance without paying too much attention to customer care.

We can safely assume this status quo will change. Our study indicates that Romanian companies are gradually following the same developing path set forth by western organizations. Consequently, a higher degree of stress will be necessary in

order to avoid or minimize major hardships, while at the same time maximize BPR specific critical success factors.

We do believe however, that some of the major problems identified in this study

will continue to hold true in the future. Adding to this, the constant struggle to become ever more flexible and ever more adaptable to market variations will result in constant demand for consulting services.

Based on a shortage of human skills or capacity, outside consultants will become a

critical success factor in BPR projects’ success. The main feature that sets consultants apart is their catalyst role in other success factors. Using their know-how and experience consultants can amplify the impact other factors can have on

BPR initiatives. Change management, project management, knowledge transfer and communication are some of the factors which are most influenced by the consultants’ presence.

None of the above factors however, can provide the desired results if lacking proper management approach or support for the ongoing project. These elements not only modify the project’s degree of success but also a company’s willingness

towards launching a BPR initiative.

Still, BPR should not be seen as a universal remedy for all of a company’s problems. There are several elements that require a customized approach towards

finding the optimal solution. Areas that pertain to business strategy, HR development or IT infrastructure development are among internal initiatives that must be correlated with company processes.

Looking back from a general perspective, we can label Romania’s first BPR study as

a first major step towards developing process management competencies. We hope Ensight’s initiative will promote constant talk among Romanian companies interested in BPR and that this study will be the basis of a nation-wide larger

movement.



4. Key findings The first Romanian BPR study is centered around the answers of 41 companies.

The spread is evenly divided between small and medium as well as large companies. Of these, nearly 80% are or have been undergoing BPR processes. The industries that were predominant in this study are financial (15%) and professional services (10%).

FIGURE 1 – COMPANY DISTRIBUTION BASED ON INDUSTRY

14.6%

9.8%

7.3%

7.3%

7.3%

7.3%

4.9%

4.9%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

2.4%

4.9%

2.4%

0% 5% 10% 15%

Financial services/Insurance

Professional services

Other

Constructions/Real estate

Retail

Food industry

IT (software & hardware)

Heavy manufacturing

Light manufacturing

Oil & gas

Management consultancy

Consumer electronics

Energy and utilities

Telecommunications

Companies with BPR projects Companies without BPR projects

Over 70% of company representatives who cordially assisted us in the study are part of management, while over 90% of those involved have at one point been involved with the analyzed BPR projects.

FIGURE 2 – RESPONSIBILITY DISTRIBUTION BASED ON BUSINESS ROLES

36.6%

17.1%

7.3%

7.3%

4.9%

4.9%

14.6%

4.9%

2.4%

0% 20% 40% 60%

C-Level Executive (CEO, CFO, etc.)

Department/Service Manager

IT Manager or IT Developer

Business Analyst or Process Practitioner

Quality Management Practitioner

Other (please specify)

Companies with BPR projects Companies without BPR projects



The latest study of similar complexity was done by the international organization BPTrends and had an upper-management reply rate of only 29%. The largest percent of the study’s 74 repliers consisted of business analysts (39%). The project

was conducted on an international scale.

Given the close attention management pays to BPR initiatives we can conclude that our numbers represent a guarantee for the quality of the data we present in our

study.

We can also confirm that BPR projects are usually more likely to be initiated in industries that manifest a high degree of competitiveness and where customer interaction is a given.

Our analysis also indicates that “client focus” is part of the top three objectives of BPR initiatives, while the first two share an equal amount of importance, as follows:

� Preparing companies for a sustained future development/strategy

� Better screening of company activities (process performance)

The classic objective of BPR initiatives for mature markets, cost reduction, is a close fourth.

FIGURE 3 – TOP BPR OBJECTIVES

53.1%

53.1%

46.9%

43.8%

37.5%

25.0%

18.8%

9.4%

9.4%

0% 20% 40% 60%

Preparing the company for future development/strategy (organization, workflows etc.)

Improved monitoring of company activity (measure process performance using key performance indicators)

Client-focus

Cost cutting

Improving the product/service quality

Increase in competitiveness/reducing the pressure coming from the competition

Improving the internal/risk management control level (other than legally imposed)

Legal requirements (e.g. SOX, Basel II, etc.)

Other

Performance monitoring at each and every level is considered very important by

many companies and consequently many BPR initiatives (56.3%) have

incorporated specific activities to reach this goal.

This type of projects can be found in top three BPR initiatives while first place focuses on making processes more efficient through small or medium adjustments (65.6%). Third place focuses on automating processes through integrated

information systems such as ERP, CRM etc. (46.9%)



FIGURE 4 – MANAGEMENT INITIATIVES FOR ONGOING OR FINALIZED BPR PROJECTS

65.6%

56.3%

46.9%

46.9%

43.8%

37.5%

34.4%

75.0%

36.0%

24.0%

33.0%

31.0%

56.0%

45.0%

0% 20% 40% 60% 80%

Improving existing processes (minor or major changes)

Monitor and measurement activities

Process automation using integrated business software (ERP, CRM, SCM etc.)

Process automation using BPMS software

Delivery of process performance data to senior executives (example: cost analysis of certain activities)

Redesigning a major business process(radical process changes)

Graphic representation of the processes at a company level (drawing process maps)

Romania 2008 BPTrends 2007

The project scope for most initiatives is designed to impact the company on a

general level or for a limited number of departments (over 60% of BPR projects). A few projects though, focus on business transformation (approx. 17%). The majority is focused on improving processes on a departmental level (65%), or

improving the interdepartmental ones (52%); most often these represent small or medium changes in the actual processes.

FIGURE 5 – BPR PROJECTS’ SCOPE

Entire enterprise

62.5%

Business divison

25.0%

Department

12.5%



The processes that are most often contracted for redesign/reengineering are the ones pertaining to commercial activities (client relations management – CRM, sales and marketing) as well as IT management. Although this last area was a bit

of a surprise to us, we assume local companies have understood the impact IT plays in a modern organization by showing their commitment to effectively improve their IT systems.

Other processes, mostly dealing with cost reduction (logistics, financial processes,

HR, manufacturing or providing the service) are closely following the commercial ones in terms of ongoing projects. However, the future implies (or will see) an increase in commercial and IT initiatives.

FIGURE 6 – TYPES OF PROCESSES INCLUDED IN ANALYSIS/REDESIGN

25.9%

25.9%

18.5%

37.0%

44.4%

44.4%

48.1%

55.6%

55.6%

74.1%

33.3%

37.0%

48.1%

33.3%

25.9%

25.9%

22.2%

22.2%

25.9%

14.8%

40.7%

37.0%

33.3%

29.6%

29.6%

29.6%

29.6%

22.2%

18.5%

11.1%

0% 25% 50% 75% 100%

IT processes and management of informational systems (e.g. providing IT services)

Customer service

Sales and marketing

Supply chain and logistics

Financial processes

Manufacturing and fulfillment

Human resources (payroll, benefits etc.)

Research and development (e.g. developing a new product)

Risk management (other than legal requirements)

Compliance management (e.g. SOX)

Not planned Planned Work in progress

Project duration for our study’s BPR initiatives varies between two months and

three years, with over 80% lasting less than one year. If we choose to take out the sides, we can conclude that a project of average complexity would last for approximately six months3.

BPR initiatives are subject to the constraint triangle: time-cost-quality just as any

other project. Consequently, the BPR’s project duration will depend on the cost and quality a company can or wishes to incur.

With that in mind, the duration of BPR projects included in this study depends on:

� The complexity/scope of project

� Human and technological resources available

� The desired level of quality

3 Median value



� The allocated budget

Ideally, based on our consultant’s experience, a BPR project should not last more

than four months. One of the main reasons the projects’ duration has to be limited is change. The logic is simple: if a project expands over a longer span of time it is inevitable that the organization will change. As a result, the analysis done at the start of the project will no longer be relevant.

Another important aspect, one that deals with the changes generated by BPR initiatives, is the degree in which the project manages to capture the organization (especially the employees). Usually, employee motivation is inversely proportional

to the projects’ duration. As a result, the project will be harder to implement if it expands over too great of a time.

FIGURE 7 – PROJECT DURATION

0%

20%

40%

60%

80%

100%

0 4 8 12 16 20 24 28 32 36

Number and cummulative share of

respondents

Project length (months)

Based on the surveyed companies’ experience we found that most projects do

result in delays. Only one in five companies managed to finish within the scheduled

deadline while almost half of the companies had delays of up to 20% of the initial time estimates.

FIGURE 8 – OVERDUE PROJECTS (PERCENT OF THE INITIAL ESTIMATES)

The initial time

graphic was not

exceeded

22,2%

Delay of 0-10%

22,2%

Delay of 10-20%

33,3%

Delay of 20-30%

11,1%

Delay of 30-40%

3,7%

Delay of over50%

7,4%



We also have to mention that both projects that had a delay of over 50% were

scheduled to last only three months. These delays may be a consequence of a large under scaling of the effort needed to achieve the proposed objectives.

In terms of organizing the BPR’s steps, we notice the reiteration of the classic structures. That means (re)defining the strategy is a first necessary step for a process redesign project. This first phase is followed by an analysis of the current

processes (“as-is”), and then by the difference between actual and desired status, and finally by modelling future processes. Process simulations and/or pilot implementation may be included in the project.

FIGURE 9 – DEGREE OF DIFFICULTY PERTAINING TO EACH PHASE IN THE BPR PROCESS

8%

8%

4%

8%

4%

36%

28%

28%

28%

32%

20%

20%

4%

40%

36%

28%

44%

16%

16%

28%

24%

28%

32%

16%

48%

32%

40%

4%

12%

12%

16%

Selecting the processes that will be analyzed and the project planning

Defining the company’s vision regarding the future state of processes that are to be analyzed and

redesigned

As-Is analysis of business processes (current state)

Gap analysis between company’s vision and the current state of business processes

Design of To-Be business processes (future processes)

Simulation of To-Be design using dedicated software tools in order to identify the feasibility and the potential benefits of new business processes

Pilot implementation of a set of To-Be process included in the project scope

Not applicable Not difficult at all Slightly difficult Difficult Very difficult

Respondents have labeled the last three phases as being the most difficult ones while the last two are most often not even included in the BPR projects. As far as

effort allocation per phase, the average values pertaining to the study show little variation from what Ensight consultants drew from personal experience. The most effort intensive activities are analyzing the “as-is” and defining future processes,

both of these cumulating an average of 20% (each) of the total effort put into a project.

The most often used practices in BPR initiatives deal with organization, IT, HR, and

document management. The study thus confirms the necessity of paralleling the analysis of the workflow with the necessary components for running a process: IT applications, the human resources needed as well as the pertaining forms and documents. This type of approach significantly increases a project’s chances of

success.

Including HR and IT components into a BPR project is very effective as it allows for developing a complete solution. An ideal workflow, that doesn’t take in

consideration IT components (business software, network performance etc.) as well as HR components (number of employees and their respective competences, evaluation procedures, rewards and bonuses etc.) will remain ideal solely in



principal. A process cannot function as long as it lacks the required tools and qualified, well motivated personnel that can perform the necessary activities according to the new rules.

Study results have also allowed us to confirm certain success factors pertaining to BPR projects. Among these, the critical success factors necessary for the success rate of a BPR initiative are listed as follows:

� The involvement of external consultants

� Applying change management principles

� Management’s degree of maturity in understanding and dealing with the company

� Almost 65% of the projects have used external consultants as technical or functional experts for the analyzed processes. This role, followed by that of

trainer and communication facilitator makes up the top three roles of external consultants in BPR projects.

FIGURE 10 – EXTERNAL CONSULTANTS’ ROLE IN BPR PROJECTS

86.7%

53.3%

46.7%

26.7%

26.7%

20.0%

0% 20% 40% 60% 80% 100%

Technical or functional expert for the analyzed processes

Trainer

Communication facilitator

Change driver

Project manager

Extra “pair-of-hands”

Of the total effort put into a project, an average of 40% is allocated to consultants.

We can thus conclude that these have been actively involved for the whole duration of the process.

Although using internal resources allows employees to get a better understanding

of the company and of the industry, BPR projects still require external consultants for several reasons.



FIGURE 11 – EXTERNAL CONSULTANTS’ IMPACT ON A BPR PROJECT’S RATE OF SUCCESS

Critical factor for

project success

20.0%

Significant

impact on

project succes

60.0%

Impact just on

certain elements

of the project

20.0%

Using internal resources for BPR projects most often requires the involvement of

key people and this can negatively affect current operations (the resource cannibalization effect).

In addition, consultants often bring a plus of credibility as well as an impartial and

independent opinion regarding the state of current processes. The “external” attribute allows him/her an easier and more effective communication between different departments involved in the BPR process.

The importance of involving external consultants in BPR projects was reconfirmed

by the positive feedback (good and excellent) for their services (100% of respondents who used external consulting services). Also, 80% of the same group of respondents considers the consultants’ role to be important or critical for a BPR

initiative’s success rate.

FIGURE 12 – CHANGE MANAGEMENT IMPACT ON THE PROJECT’S SUCCESS RATE

No change

management

39.1%

Project critical

success factor

13.0%

Positive impact on

the project

34.8%

Impcated only

certain areas of

the project

13.0%



Similar feedback was provided by the surveyed companies with regards to change management. These represent approx. 60% of the analyzed projects.

For almost half of the projects, change management was considered as having a

significant role or as being a critical factor for the projects’ overall success. At the same time, over 65% of the companies that gained major successes have used change management instruments as opposed to 40% of the companies who only

registered moderate success rates.

Open choice answers revealed that the most often used activities are training sessions, closely followed by project briefs and formal communicates.

One of the major roles of change management is to prepare the

employees/organization to adapt to the new processes/organizational structure by providing the necessary information. Another key objective is to assist employees in accepting the changes generated by the BPR project (or at least no to manifest

resistance).

Should the first objective be readily accessible by using trainings and official communicates, the second is harder to reach due to the complex inner structure

and social networks that people develop.

To achieve the second objective, project briefings, question and answers sessions and other more subtle activities are appropriate. As shown in the study, these

approaches are less frequently used by Romanian companies. Still, the advantage of using such techniques is not only that they eliminate adverse reactions, but they transform employees into promoters of change.

A detailed analysis shows major differences in the management approach style used by companies who were successful in their BPR projects and those who were not. Companies that succeeded in their projects were constantly more effective in aligning BPR initiatives with company strategy, client focus, and prorogating

innovation. At the same time these companies are constantly trying to downgrade their reactive management style or ad-hoc solutions.



FIGURE 13 – MANAGEMENT COMPARISON BETWEEN COMPANIES WITH SUCCESSFUL BPR PROJECTS AND THOSE LACKING IN SIGNIFICANT RESULTS

1.0 2.0 3.0 4.0 5.0

Ad-hoc improvement

Reactive management

Crisis management

Continuous improvement

Customer focus

Strategic direction

Innovation

Present (without BPR) Future (without BPR) Present (with BPR) Future (with BPR)

Immature

management

approach

Positive management

approach

Generally, as a company grows more mature in terms of organizing itself (processes and beyond), the need to implement ad-hoc changes or to constantly struggle against overnight crisis reduces.

For that reason, our survey tried to understand the means by which Romanian companies manage process efficiency improvement projects, as well as what are their plans for the future.

With that in mind, we asked respondents to classify how often they use the managerial approaches described in the following Figure by scoring from 1 (very little) to 5 (very often).

We can now confirm our hypotheses referring to the evolution of management’s approaches, based on the study’s results. We see that in companies with successful BPR projects the “immature” (ad-hoc problem solving, reactive management) tend

to decrease in the long run while “positive” tendencies (improvements, the correlation with strategic initiatives etc) are considerable growing.

Overall, the number of very successful BPR projects tends to be relatively high (over 75%).



FIGURE 14 – EVALUATION OF SUCCESSFUL BPR PROJECTS

Have a very

successful enterprise BPM

Program21.7%

Have leveraged

early successes

and translated

them into

repeatable process

improvement

initiatives

30.4%

Have experienced

departmental or

discrete success

with BPR but have

not experienced

enterprise-level successes

26.1%

Initially

experienced

significant

difficulties but now

experiencing some

successes

21.7%

From the respondents’ point of view, the most notable benefits following BPR

projects tend to be decreased process time, faster product/service delivery, and an increased company focus for processes.

FIGURE 15 – EXPECTED VS. ACTUAL RESULTS: ROMANIA VS. GREAT BRITAIN

Expected

Benefit

Achieved

Benefit

Delta (expected

vs achieved)

Expected

Benefit

Achieved

Benefit

Delta (expected

vs achieved)

Better process times 3.9 3.0 0.9 3.3 3.1 0.2

Better delivery performance 3.4 3.0 0.4 4.0 3.4 0.6

Process focus 3.5 2.8 0.7 3.6 3.4 0.2

Product/service quality improvement 3.4 2.8 0.7 4.1 3.5 0.6

Higher customer satisfaction 3.6 2.7 0.9 4.3 3.6 0.7

Increased flexibility/responsiveness 3.6 2.7 0.9 3.9 3.5 0.4

Higher productivity 3.5 2.7 0.8 3.7 3.3 0.4

Increased competitiveness 3.4 2.7 0.8 3.8 3.6 0.2

Improved internal communication 3.2 2.6 0.6 n/a n/a n/a

Better financial performance 3.3 2.6 0.8 3.9 3.1 0.8

Cost reduction 3.4 2.5 0.9 3.6 3.0 0.6

Higher organizational flexibility 2.9 2.3 0.6 3.9 3.1 0.8

Employee development 2.9 2.2 0.7 3.6 3.3 0.3

Organizational restructuring 2.6 2.1 0.4 3.5 3.3 0.2

Increased level of innovation 2.6 2.1 0.5 3.4 3.3 0.1

Analyzed benefit

Romania 2008 Great Britain 1995

* This category was added by the Ensigh team and was not integrated into the 1995 study.

As a rule of thumb, expected benefits surpass the actual ones. However, our study reflects that this gap is mostly due to inefficient utilization of BPR generated opportunities. From a statistics point of view, the average benefits of Great Britain companies in 1995 exceeded the average benefit expectations Romanian

companies had in 2008.

The study shows that the most common used tool to quantify the success level of a BPR project is the decrease of process duration.



FIGURE 16 – METRICS UTILIZED TO QUANTIFY SUCCESS

73.9%

30.4%

30.4%

21.7%

13.0%

8.7%

8.7%

0% 20% 40% 60% 80% 100%

Decrease of process time

Return on Investment (ROI)

Cost permanent index

Economic Value Added (EVA)

Other

Internal Rate of Return (IRR)

None/not applicable

Although approximately half the respondents have not made a return on investment analysis, 40% of these expect a return on investment the following

year. In that respect Romanian companies’ approach is different than that of foreign ones. Market studies show that most foreign companies tend to allow a margin of two to three years to reach a positive return on investment.

FIGURE 17 – TIMELINE SHOWING THE EXPECTED RETURN ON INVESTMENT PERIOD

39.1%

13.0%

21.7%

8.7%

8.7%

8.7%

20.0%

16.0%

27.0%

20.0%

18.0%

0

0% 15% 30% 45%

Profitable within 12 months

Break-even within 12 months

Positive ROI within 2 years

Positive ROI within 3 years

Other

Not sure

Romania 2008 BPTrends 2007

The biggest challenges for the overall project are the lack of time and of

internal resources. Deficient communication follows next, being the result of inadequate project management skills and poor change management.

Lack of personnel availability is also cited as one of the biggest challenges for

internal teams when running a BPR project. The next challenge to overcome is one that we discussed earlier, organizing. To overcome these heartaches companies often resort to external consultants.



FIGURE 18 – MOST COMMON CHALLENGES FOR INTERNAL TEAMS

Unavailablity ,

27.3%

Organization,

22.7%

Poor project

Understanding,

18.2%

Others,

13.6%

Lack of

communication, 9.1%

Change resistance,

9.1%

Rigorous organizing, combined with the pressure exerted by consultants in order to follow the agreed optimal planning often translates into adverse reactions from employees. Therefore, one of the biggest challenges associated with the

external teams has to do with consultants’ tendency to pressure achieving the deadlines. We assume this has to do with the different work styles as well as the lack of availability manifested by the internal teams. Another often seen challenge if the expertise level in dealing with processes of certain companies/industries.

However, as seen before, this fact does not influence the quality and importance consulting services provide in the eyes of companies.

In order to address the above challenges, the respondents have suggested a

series of critical factors needed to make teams more efficient. Aside from the self-evident solutions pertaining to better communication and more availability, one of the most important factors is adequate training.

If mobilizing resources can provide a bit of difficulty, the other two components are easy to implement and require little resources. Still, based on our experience we have noticed most companies tend to neglect them and consider them

unimportant. The common practice is to reduce training times (the most cited reason being lack of personnel availability) while internal communication is simply looked over.

In order to increase the project teams’ efficiency, companies could focus on those

factors that are easily available/developed. This way, the company can compensate for those factors that are not under its’ direct control or that are harder to develop (being proactive, team spirit, being innovative). In the end, management and the

current situation will decide the priorities.



FIGURE 19 – CRITICAL FACTORS FOR AN EFFICIENT TEAM

Key factors for team efficiency Ranking by importance

(average value)

Total

counts

Number of counts by importance ranking

#1 #2 #3 #4 #5

Adequate training 1 2 2 0 0 0 0

Availability 1 5 3 0 1 1 0

Process knowledge 1.5 8 4 2 1 1 0

Efficient communication 2 11 4 4 2 0 1

Flexibility/accepting change 2 8 0 5 1 1 1

Process vision and analytical capabilities 2.5 2 0 1 1 0 0

Proactive 2.5 8 2 2 1 1 2

Vision 3 2 0 0 2 0 0

Innovative spirit 3 2 1 0 0 0 1

Team spirit 3 2 0 0 2 0 0

Leadership/ management support 4 5 2 0 0 2 1

Well defined objectives 4 3 1 0 0 1 1

Planning/ organizing/ following deadlines 4 13 1 2 3 5 2

Training, alongside communication are some of the top factors that have led to a successful BPR project development. Still, and this coincides with our consultants’ opinion, good leadership is considered to be the most important facilitator. Among

the biggest inhibitors we have management systems and existing organizational structure.

FIGURE 20 – FACTORS THAT INHIBIT/FACILITATE BPR PROJECTS

0% 25% 50% 75% 100%

Leadership

Project targets

Communication

Team make-up

Available IT expertise

Customer focus

Training

Organizational culture

Investment

Process knowledge

Management of change

Performance measurement

Existing IT systems

Time frame for projects

Organizational structure

Management systems

Inhibitor Facilitator

A comparative analysis between the study results from Romania 2008, and Great Britain 1995, shows that little to no difference exists between Romanian and

English companies in terms of evaluated factors and their perceived level of importance.



We see that management’s role is decisive in ensuring a BPR project’s success rate. With that in mind, there is little surprise that the question “what can management do to determine the success of a BPR project?” received an

overwhelming “get involved/support/mobilize”. Aside from this rather general answer, the majority of answers placed as number two a more specific factor, project monitoring. We want to mention that, based on our consultants’ experience, the latter of the above factors refers to a high level monitoring rather

than day by day project surveillance.

FIGURE 21 – WHAT CAN MANAGEMENT DO TO ENSURE THE SUCCESS RATE OF A PROJECT?

Getting

involved/support/

focus,

44.4%

Defining

vision/scope,

11.1%

Active

communication,

11.1%

Unlocking/Ensure

resources,

11.1%

Process

monitoring,

14.8%

Planning,

7.4%

For companies that have never been involved in BPR initiatives and have participated in the study, the previous reply characteristics remain generally true as well. Overall the respondents are aware of the benefits a BPR project can bring.

Half of them have not yet initiated such a project either due to inadequate company readiness to BPR or due to insufficient resources. Just one company considered this type of initiatives brings no added value.

Still, notable differences exist between the level of maturity of the two types of

respondents and their respective perceptions of what benefits a BPR project can bring.

Therefore, companies lacking BPR initiatives have lesser expectations from these

projects compared to companies that are undergoing one.

Companies that have yet to initiate a BPR project are usually less client focused, less innovative and assume a lesser correlation between BPR initiatives and

strategic initiatives (as compared to companies with BPR projects). We can draw the same conclusion if we compare the Romanian and British companies that have been involved in BPR initiatives.

At the same time, companies that are not undergoing BPR projects can be characterized by a reactive management style, (as opposed to a preferable pro-active one, that is based on a more rigorous planning), as well as ad-hoc problem

solving in the long run.

The overall conclusion of this study is that Romania presents great potential for performance improvements by means of BPR projects, and that their success rate



is high. Still, the level of BPR competencies in Romanian companies is relatively low and the overall BPR concept is still in its’ infancy. Because of this, once markets become more competitive, the degree of success for BPR initiatives is going to

diminish more and more unless these competences are rigorously developed or unless specialized consultants are used.



5. Study approach When developing our custom designed questionnaire we had two important things

in mind, things that would increase the value brought to companies taking the survey. We wanted the study to best reflect the current situation of Romanian companies and at the same time to allow for comparison with international BPR experiences.

Because of this, the survey was comprised of questions designed by our experienced Ensight consultants, as well as two international BPR surveys that were tailored to fit this particular research.

One of these studies was done in Great Britain, 1995, on a sample of 65 candidates (with a rate of reply of 13%). The purpose of that study was to analyze how BPR concepts were used and if there was any correlation with total quality management

(TQM) initiatives.

The second study was done by Business Process Trends4 association and published at the beginning of 2007. The study was based on 74 surveyed companies from

around the world. Its’ main purpose was to analyze how BPR principles ware being used. Complementary to that, the study aimed to analyze the degree by which companies used process management and analysis information systems in doing

business. The standard used abbreviation labeling this study is “BPTrends 2007”.

Ensight’s questionnaire is made up of the following parts:

� Respondent identification data

� BPR initiatives purpose and the organization style of such projects

� Critical aspects of a project

� The status of BPR initiatives

� The means to quantify a project’s success

� What are the used approaches

� Used software applications as well as their perceived value

The questionnaire was designed so that it can collect data from both companies that are or have been involved in BPR initiatives as well as companies that are interested in the topic, but have yet to launch this type of projects.

For that purpose, the questionnaire was designed with two special sections that allowed companies with no previous BPR experience to provide their input.

The questionnaire that was administered to companies undergoing or having

undergone a BPR project includes 47 questions (including those dealing with respondent identification), while over 80% of the questions are multiple choice. The questionnaire designed for companies never involved in BPR projects is made

up of 22 questions, of which 95% are multiple choice.

4 www.bptrends.com



The organizations chosen for the study were selected using Capital’s “Top 100 companies” (local companies) in 2007. From that catalog we have selected over 200 companies (usually top ten for each section) to which we added 150

companies from Ensight’s database.

As a result of this campaign we have received 50 positive answers, of which only 41 could be counted for during the actual study. The overall rate of reply was

17.5%. Data used in the report was gathered at the end of 2007 till March of 2008.

The final study is based on the analysis of 41 relevant answers. The answers were received via electronic questionnaire. Of the applicable companies, 9 never underwent BPR projects while the remainders of 32 are or had been undergoing

BPR initiatives.

Both the data gathering and the analysis were done solely by Ensight consultants.



ENSIGHT’S BPR COMPETENCES

Ensight is a management consulting company based on 100% Romanian equity that has been in existence since 2000. Today, we are the biggest local management consulting company in terms of both total sales and number of employees.

Our eight years of experience in transforming Romanian companies represent a guarantee for the quality services offered by Ensight Management Consulting. Because of our highly experienced and multi-disciplined team we are capable of

offering you integrated business solutions.

� Envisioning the

future

� Designing the transformation

� Increasing company value

� Supporting

Mergers & Acquisitions

Strategy Operations People Technology

� Developing

Marketing

� Optimizing Supply Chains

� Reengineering business

processes

� Reducing costs

� Transforming

Human Resources

� Managing

performance

� Managing

change

� Developing capabilities

� Defining IT

strategies

� Implementing ERP

� Selecting systems

� Auditing IT

� Improving IT operations

Finance

� Enhancing

Finance and Controlling

� Evaluating

Financials

� Auditing

Financials

� Advising on taxes

Our constant focus in assisting local companies through their transformation initiatives has led Ensight to develop strong BPR competencies. As a result, BPR

projects are among the most important services our company has to offer.

Eight years of extensive experience allows us to provide our clients a wide variety of process management services.

Prepare to externalize support functions

Develop a management

processing system in order to get ISO 9001

certified

Define/Structure processes in order to implement an

ERP, CRM etc

Provide support for developing and

implementing Balance

Scorecard or Controlling systemsSupport for

complex strategic transformations on a national level

Audit process efficiency and improve where

possible

Classic BPR

A variety of companies from different industries - such as financial services, oil and gas, heavy industry, food industry, communications and retail - trust our services

and continue to rely on the services of Ensight Management Consulting.



ACRONYMS AND TERMS

ACRONYMS

BPR – Business Process Reengineering or Business Process Redesign – redesign business processes in order to increase efficiency.

CRM (application) – Customer Relationship Management – information systems used for managing customer relations.

ERP (application) – Enterprise Resource Planning – integrated information systems used for managing a company’s different operational areas. Most of them offer the possibility to record business processes transactions as well as automate certain

activities within processes.

IT – Information Technology

HR – Human resources

TQM – Total Quality Management

SPECIALIZED TERMS

Process Mapping – detailed representation of a workflow using standardized graphical notations.

Process Management – a holistic management approach that promotes business

efficiency and effectiveness by constantly increasing process performance. A process management life cycle can usually be divided into the following five steps: design, modeling, execution, monitoring, optimizing processes.

Project Scope – the set of/the type of activities that are going to be analyzed by the project

Process – a series of inter-linked activities that transform inputs into outputs;

processes require resources and a clear set of standards/rules to ensure a constant level of performance; the processes are guided by system controls that set the quality, the frequency and the cost associated to the desired performance level.



FIGURE SUMMARY

Figure 1 – Company distribution based on industry.............................................9

Figure 2 – Responsibility distribution based on business roles ..............................9

Figure 3 – Top BPR objectives........................................................................ 10

Figure 4 – Management initiatives for ongoing or finalised BPR projects.............. 11

Figure 5 – BPR projects’ scope ....................................................................... 11

Figure 6 – Types of processes included in analysis/redesign .............................. 12

Figure 7 – Project duration ............................................................................ 13

Figure 8 – Overdue projects (percent of the initial estimates) ............................ 13

Figure 9 – Degree of difficulty pertaining to each phase in the BPR process ........ 14

Figure 10 – External consultants’ role in BPR projects ....................................... 15

Figure 11 – External consultants’ impact on a BPR project’s rate of success ........ 16

Figure 12 – Change management impact on the project’s success rate ............... 16

Figure 13 – Management comparison between companies with successful BPR projects and those lacking in significant results ................................................ 18

Figure 14 – Evaluation of successful BPR projects ............................................ 19

Figure 15 – Expected vs. actual results: Romania vs. Great Britain ..................... 19

Figure 16 – Metrics utilized to quantify success ................................................ 20

Figure 17 – Timeline showing the expected return on investment period............. 20

Figure 18 – Most common challenges for internal teams ................................... 21

Figure 19 – Critical factors for an efficient team ............................................... 22

Figure 20 – Factors that inhibit/facilitate BPR projects ...................................... 22

Figure 21 – What can management do to ensure the success rate of a project?... 23

Documents

The first national study of Business Process Redesign in Romania … · The first national study of Business Process Redesign in Romania ... Ensight’s study into BPR can be seen