Government

Business Process
Transformation:
From Automation to Paradigm Shift;
From Localized Exploitation to
Business Scope Redefinition
Dr. Cletus K. Bertin
‘E-Government & Sectoral Development in Caribbean
States: Charting an Agenda for Action’
Commonwealth Network of Information Technology
for Development (COMNET-IT) Workshop
February 10th -12th, 2004
Castries, Saint Lucia
 Presentation Outline
• Range and Levels of IT-enabled Change
• Drivers for Business Process
Transformation?
• Process Transformation & the Eastern
Caribbean Tourism Sector
• ‘Organisational Lag’: From Technological
Innovation to Process Innovation
 Range of Organizational Change
1. AUTOMATION: Using technology to perform
current tasks more efficiently & effectively

2. RATIONALIZATION OF PROCEDURES:
Streamline Standard Operating Procedures; eliminate
bottlenecks

3. BUSINESS REENGINEERING: Radical redesign

of processes to improve cost, quality, service;
maximize benefits of technology

4. PARADIGM SHIFT
 PARADIGM SHIFT
• PARADIGM: a Complete Mental Model of how a
Complex System Functions

• A Paradigm Shift Involves:

– Rethinking the Nature of the Business,
– Overhaul of the Organization;
– A Complete Reconception of How The System
Should Function
*
 RISKS & REWARDS

High

RISK

Low

Low High
RETURN
Levels of Organisational
Transformation
 High
Levels of Organisational
Transformation
Degree of Business Transformation

Business Scope
Redefinition

Business Network
Redesign

Business Process
Redesign

Internal Integration

Localised Exploitation
Low

Low High
Range of Potential Benefits
 High
Levels of Organisational
Transformation
Degree of Business Transformation

Business Scope
Redefinition

Business Network
Redesign

Business Process
Redesign

Internal Integration

Localised Exploitation
Low

Low High
Range of Potential Benefits
 High
Levels of Organisational
Transformation
Degree of Business Transformation

Business Scope
Redefinition

Business Network
Redesign

Business Process
Redesign

Internal Integration

Localised Exploitation
Low

Low High
Range of Potential Benefits
 Business Process Redesign

 Reengineering of key processes to derive the

organizational capabilities for competing in the
future
 Benefits from IT functionality cannot fully be
realized when superimposed on current
business processes, however integrated
they may be
 High
Levels of Organisational
Transformation
Degree of Business Transformation

Business Scope
Redefinition

Business Network
Redesign

Business Process
Redesign

Internal Integration

Localised Exploitation
Low

Low High
Range of Potential Benefits
 Business Network Redesign

 Elimination of activities where the focal

organization may not have the required
level of competence
 Exploration & exploitation of sources of
competence in the larger business network
(beyond what is available within the focal
organization)
 Business Network Redesign

 Redesign of the nature of exchange among

participants in a business network through
effective deployment of IT capabilities
 Exploiting the IT function to learn from the
extended network, as well as to enhance
coordination and control
 High
Levels of Organisational
Transformation
Degree of Business Transformation

Business Scope
Redefinition

Business Network
Redesign

Business Process
Redesign

Internal Integration

Localised Exploitation
Low

Low High
Range of Potential Benefits
 Why Transform…Why Reform?

 Fundamental question: “what is the

reason for business process redesign?
 Is it to rectify current deficiencies or to
create capabilities for tomorrow?”
 Characterised as ‘seeking efficiency’ and
‘enhancing capacities’, respectively.
 Efficiency vs Capacity?

 ‘Enhancing capacity’, as opposed to ‘Seeking

efficiency’
 Catalyst for more substantial & meaningful
organisational change
 The ‘driver’ being business processes &
eventually, ‘intellectual capital, relationships
and cooperation’
 Efficiency vs Capacity?

 As opposed to being ‘driven’ by technological

infrastructure and software applications.
 The approach needed for successful BPR
process redesign is ‘enhancing capacity’.
 This entails the creation of strategic
capabilities for future competition & increased
collaboration
 Enhancing Capacity

 Starts with the articulation of business

scope and the corresponding logic for
business network redesign, in order to
specify which business processes need
to be redesigned and under what
guiding conditions
Levels of Organisational
Transformation

Seeking
Efficiency

Enhancing
Capacity
 Why Tourism?
Economic Significance of Tourism to the OECS

90% 87%
83%

80%

70%
63% 64%

60%

49%
50%
43%

40%
33% 33%
30% 28% 27% 28%
30%

20%
13% 13%
11%
8%
10% 3% 5% 3%
2%
0%
ANG ANT BDS BVI DOM GRN MNT SKN SLU SVG

Visitor Expenditure as a % of GDP % Contribution of Hotels & Resturants to GDP

 Why Tourism?
Global Growth Sectors

35 32
30
25
20
US$bn

2001
15 12.54 2006

10 7.9
3.29 3.28 4.28
5 1.96 1.24 1.2 0.85
0
Travel Hardware Software Books Music

Source: Forrester Research, 2002

 Why Tourism?
• Average contribution of visitor expenditure to
GDP for the OECS - 45%
• Approximately three (3) million jobs
• Generated US$37.4 billion in economic
activity in 2001
• Thirty one percent (31%) of the regions’ gross
domestic product (GDP)
• The Caribbean is the most tourism dependent
region in the world (World Travel and Tourism Council, 2002).
Conception-Reality Gap Analysis
 Gap Dimensions
Management Upgrade Staff Acceptance Communication
Objectives Skills Information Technology
Sense of Urgency Integration Emphasis Processes
Money

Money 3.83
Processes 3.70
Emphasis 3.63
Integration 3.57
Sense of Urgency 3.20
Technology 2.93
Information 2.67
Skills 2.53
Objectives 2.40
Communication 2.37
Staff Acceptance 2.20
Upgrade 2.13
Management 1.73
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50
No Gap (Fit) Narrow Moderate Wide
 Gap Measure: Process

Very Wide 5

Wide 4

Process 3.70 Very Wide

Wide
Process
Moderate - Wide 3.50
Moderate - Wide
Moderate
Moderate 3
Narrow - Moderate
Narrow
Narrow - Moderate 2.5 No Gap (Fit)

Narrow 2

No Gap (Fit) 1

0 1 2 3 4 5 6
 Tourism

“ The difficulty lies in different levels of

understanding and appreciation for
technology within the organisation…this
is needed to enable a greater degree of
transformation, to take it to the next
level…but not everyone is ready for that
higher level of change”
 Management…

• Top-down management reinforces fear,

distrust and internal competition and reduces
collaboration and cooperation
• It leads to compliance, but a high capacity to
change requires commitment
 & Structure Gaps…

• Bureaucracy has been design to resist change

(Waterman, 1990).
• It is necessary for establishing consistency
and stability…but hierarchies make the free
exchange of knowledge more difficult and
thus, limit the organisational capacity to
change. (Gretzel, Yuan and Fesenmaier, 2000)
 Qualitative Data

“Top management, while

acknowledging that the Internet is
necessary, do not fully grasp how it
should be integrated into current
programmes …”
 Gap Dimensions
Management Upgrade Staff Acceptance Communication
Objectives Skills Information Technology
Sense of Urgency Integration Emphasis Processes
Money

Money 3.83
Processes 3.70
Emphasis 3.63
Integration 3.57
Sense of Urgency 3.20
Technology 2.93
Information 2.67
Skills 2.53
Objectives 2.40
Communication 2.37
Staff Acceptance 2.20
Upgrade 2.13
Management 1.73
0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50
No Gap (Fit) Narrow Moderate Wide
 ‘Organizational Lag’
• Process innovations in organisations tends to
lag behind Technological innovations
• Technological innovations:
– are more observable;
– have higher ‘trialability’;
– are perceived to be relatively more
advantageous and less complex than
administrative innovations.
 ‘Organizational Lag’

• Between ‘administrative innovation’ and

‘technical innovation’
• Between ‘technological innovation’ and
‘process innovation’
• Technological innovation is an enabler of
process innovation.
‘Organizational Lag’
Recommended Reading

Reinventing
Government in the
Information Age:
International Practice
in IT-enabled Public
Sector Reform
by Richard Heeks (Editor)
 Recommended Reading
• Bajjaly, S. (1999), ‘Managing Emerging Information Systems in the
Public Sector’, Public Productivity and Management Review, volume
23, number 1, pp. 40-47.
• Bellamy, C. and Taylor, J. (1994), ‘Exploiting Information
Technology in Public Administration-Towards the Information
Polity?’ Public Administration, volume 72, Spring, pp. 1-12.
• Benjamin, R. and Levinson, E. (1993), ‘A Framework for IT-Enabled
Change’, Sloan Management Review, Summer.
• Butler, R. (1994), ‘Reinventing Government: A Symposium’, Public
Administration, volume 72, summer, pp. 263-270.
• Grint, K. (1994), ‘Reengineering History: Social Resonances and
Business Process Reengineering’, Organization, volume 1, number 1,
pp. 179-201.
• Halachmi, A. (1996), ‘Business Process Reengineering in the Public
Sector: Trying to get another frog fly?’, National Productivity Review,
Summer, pp. 9-18.
 Recommended Reading
• Halachmi, A. and Bovaird (1997), ‘Process Reengineering in
the Public Sector: Learning Some Private Sector Lessons?’
Technovation, volume 17, number 5, pp.227-235.
• Venkatraman, N. (1994), ‘IT-Enabled Business
Transformation: From Automation to Business Scope
Redefinition’, Sloan Management Review, Winter: 73-87.
• Willcocks, L.P. and Mark, A.L. (1989), ‘IT Systems
Implementation: Research Findings from the Public Sector’,
Journal of Information Technology, volume 4, number 2.
• Willcocks, L.P. Carrie W. and Jackson S. (1997), ‘In Pursuit
of the Reengineering Agenda in Public Administration’,
Public Administration, volume, winter, pp. 617-649.
• . www.e-devexchange.org