International Journal of Project Management 22 (2004) 213–223 www.elsevier.

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Managing a public sector project: the case of the Italian Treasury Ministry
Michela Arnaboldi*, Giovanni Azzone, Alberto Savoldelli
Dipartimento di Ingegneria Gestionale, Politecnico di Milano, Piazza Leonardo Da Vinci, 32, 20133 Milan, Italy Received 15 November 2002; received in revised form 24 January 2003; accepted 5 June 2003

Abstract Project management strategy in the public sector has attracted the interest of many scholars since the late 1980s, following the growing pressure on governments to abandon bureaucratic organisations in favour of leaner structures. Though Italy is considered a late developer in this movement, its scope, speed and consistency of reforms is considered remarkable [OECD, (2001), Reviews of Regulatory Reform in Italy]. Within this context many projects have been undertaken trying to implement the ideas of New Public Management (NPM) [Public Administration (1991) 69:3; Accounting, Organizations and Society (1995) 20:93]. This paper reports on a reengineering project carried out at the Italian Ministry of Treasury which tested a methodology drawn from the literature of process engineering. Multiple dimensions and actions proved to be crucial in managing the project: the paper discusses them and their relative importance over the life of the reengineering project. # 2003 Elsevier Ltd and IPMA. All rights reserved.
Keywords: Reengineering; Project management; New Public Management; Public sector

1. Introduction Since the beginning of the 1980s many countries have been trying to change public organisations, responding to the mounting pressure to reduce budgets and increase the quality of services provided. This widespread movement is often labelled as new public management (NPM) [2,3] and many scholars (see for example [4–6]) attribute its origin to the British initiatives of Thatcher’s reforming conservative government in the UK from 1979 on. The movement has been a driving force for governments for downsizing and elimination of waste, and it has led many public organisations to revise their procedures and structures for complying with the principles of economy, efficiency and effectiveness. The application of business techniques is one of the more significant elements which has led many public institutions to undertake major, modernising projects. This trend has attracted the attention of many scholars who are interested in different issues. First of all, a
* Corresponding author. Tel.: +39-02-23992796; fax +39-0223992720. E-mail address: michela.arnaboldi@polimi.it (M. Arnaboldi). 0263-7863/$30.00 # 2003 Elsevier Ltd and IPMA. All rights reserved. doi:10.1016/S0263-7863(03)00067-X

general concern has been shown for the difficulties of managing a project in the public sector: are business methodologies appropriate to these organisations? Which are the critical success factors? Second, a recent trend in public sector research has focused the attention on the ‘‘reality’’ of this change; some authors [7,8] suggest that projects and more generally the use of business techniques is a way for adapting to the external environment in an isomorphic way [9]. This means that organisations use projects as a facade for legitimation ¸ and for picturing themselves as modern to the external environment. According to this perspective after the completion of the project, public entities continue to use old practices and present the new one in the facade ¸ emerging, which is their formal structure. Third, after 2 decades since the first attempts, an emergent field of research poses the question whether the rise of different projects, at different levels, at different times is an answer to the reforms or are they elements of a failure to achieve the comprehensive change claimed by governments. The present paper addresses the overall problem of implementing a project within the public sector, presenting the analysis of a reengineering carried out in the

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Italian state administration as an action research intervention. The idea of the research is to first draw on the existing literature to identify the main issues of managing a project, and in particular a reengineering intervention, in the public sector. The theoretical framework used refers to three streams of research: (1) NPM, business process reengineering (BPR) and project management. The NPM literature helped in pointing out and analysing the most relevant issues implied in the change of public sector institutions; (2) business process reengineering offers both theoretical and empirical studies, which have been the basis for developing a methodology suitable for state administrations; and finally (3) the project management literature which integrated the definition of the ‘‘action’’ approach. The combined approach to the analysis highlighted the major problems and the main instruments in undertaking such a project. This led to the definition of the methodology which was subsequently applied in a public organisation, the Ministry of Treasury. This organisation represents the ideal field for such an application. Its critical role as a change agent, the dynamic legislative context in which it is embedded, and the increasing pressures from different stakeholders, reflect the typical situations discussed by NPM researchers which all make the Ministry of Treasury a relevant example for testing the methodology. Furthermore, the intervention addressed a process, the management of European Structural Funds, which is under scrutiny itself and contributes to the creation of the complex situation in which many public institutions operates. The paper starts with an introduction to the Italian situation to provide an understanding of the context in which the research was conducted. The second part is an outline of business process reengineering that has served as a background in the definition of the methodology and for preparing the empirical application. The central part of the article is devoted to the findings. Finally the last section sets out the conclusions of this study.

adopting mechanisms which reduced the administration’s capacity to delay and stop action. A second step was made in 1993 (Law 537/93), where attention was directed to reducing the duplication of functions among ministries and governmental bodies and improving customer relationships. In 1997, the government launched a third phase under the so-called ‘Bassanini laws’, which are considered a real breakthrough within Italian management reform [1,10,11]. These laws aim at re-balancing powers between the centre and subnational governments, and re-launching the administrative simplification policy based on processes of continuing accountability and an aggressive reorganisation of government to improve coherency and efficiency. Decentralisation accelerated, the legal system was reorganised, and horizontal central units were created to promote and monitor reform. This context has been a fertile field for the implementation of NPM techniques; particular attention has been paid by government to business process reengineering (BPR), as a change technology. An example of this, which stems from technology, comes from the Authority for the Informatization in the Italian Public Administration (AIPA): The AIPA interest in process reengineering issues rises from the observation of the widespread difficulty within the public administration in defining, starting and realizing information technology projects able to obtain evident and tangible results in terms of improvements in the services offered to citizens and in expensiveness in the operations [12]. This indirect pressure and the promotion of ‘Reinventing Government’ experiences [13] have driven institutions to make several attempts to revise the processes. The next paragraph gives an overview of BPR and its evolution, which is the basis for the empirical application at the Ministry of Treasury. 2.1. Business process reengineering The original idea of BPR came from Hammer [14], who defined reengineering as the ‘radical redesign of business process to achieve dramatic improvements in critical contemporary measures of performance performances’. Since this first concept BPR has evolved and a number of approaches have been developed during the years. Though it is not possible to identify a completely uniform methodology, reengineering can be divided into six phases, which contain the essential elements for definition, design, implementation and consolidation. The phases are: (1) the reengineering strategic definition, (2) the ‘‘as is’’ process analysis, (3) the ‘‘to be’’ process definition, (4) improvement interventions design, (5) implementation, and (6) monitoring and continuous improvement.

2. The Italian context Italian central government started its reforming process at the beginning of the 90s, following the example of many OECD countries. Though Italy is considered a follower of the ‘higher reformers’, such as the UK, New Zealand and US [4], its actions are remarkable both for its speed and its scope. The initial struggles of central government were directed towards state- citizen relationships. Following the NPM principles and policies of other countries, an administrative procedure law of 1990 (Law 241/90) was approved for simplifying procedures. It focussed on improving procedures, and

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The goal of BPR is redesigning cross-functional processes that determine the competitive success of an organisation. It appears evident that the first step is necessarily the definition of the intervention at a strategic level through the following steps: strategic objectives identification, strategic context definition, top-down mapping of organisational processes, and definition of reengineering breadth. Once the process to be revised has been defined, the objective of the second phase is the representation of the process workflow. The third phase, the ‘‘to be’’ process definition, is theoretically examined separately from the ‘‘as is’’ process analysis. However, in the practical development of the interventions, these two phases become inseparable: often ideas and hints for the redesign emerge when the project team makes its survey of the existing process. The last step of this phase is the choice of which alternative to implement. Contrary to the other steps of this phase, the alternative choice is not a task performed by the project team: the final decision needs significant project commitment from the organisation itself. Once the project team has identified an alternative process to implement, the succeeding steps are set in motion to specify the interventions necessary to make the new reengineered process operational. According to this approach the implementation means carrying out the plans previously specified. The last phase, monitoring and continuous improvement, has proved to be a fundamental prerequisite for controlling and improving final performances in the future: it facilitates the anticipation of possible difficulties of the organisation in adapting to the new ‘‘to be’’ process, and to tailor the new process to subsequent strategic and context changes.

3. Results The conceptualisation of the reengineering project at the Ministry of Treasury began in 1997, when the enthusiasm for this technique was high. A negotiation process was carried out before starting the project to achieve the necessary commitment among managers and elected members. The particular process addressed was the European Structural Funds (ESF). This is under scrutiny itself from the European Commission. The next section provides an analysis of ESF, its recent changes and it describes the role of the Ministry of Treasury within this process. 3.1. European structural funds and the ministry of treasury The European Structural Funds (ESF) are the main mechanism for the provision of regional aid to the member states of the European Union: they work towards the goal of achieving economic and social

cohesion. Resources are targeted at actions which help bridge the gaps between the more and the less developed regions and which promote equal employment opportunities between different social groups, according to certain priority objectives. The economic and social importance of the ESF has attracted the attention of many scholars, who have addressed both general problems and country specific issues. McAleavey and Mitchell [15] describe the ESF as a ‘‘blunt policy instrument’’ and analyse the problems related to programming and implementation, in which better-organised and advantaged groups within regions seem to be favoured. The critical nature of this issue and in particular of the programming capability is reaffirmed by a number of studies in different settings [16–19] including different countries, that might be classified as early adopters or late adopters of NPM [1,3]. This growing attention is explained by the increasing financial importance of ESF. The ESF are now the second largest item of expenditure in the EU’s budget. The major impetus for this change goes back to 1988, when five regulations introduced a new framework through which the structural funds delivered financial aid aimed at reducing economic disparities among the Union’s regions [20–22]. After that two major reforms followed in 1993 and 1999 [23]. They resulted in the entry of six new states and more rigid management and monitoring procedures. The definition of stricter management rules, the reduction of the total availability (from the proposed 218.4 billion Euros of 1998 to 195 billion Euros) and the introduction of newer, less wealthy countries into contention for ESF funds emphasised the need to use resources better than before. This change put an additional pressure on the member states which are, more than before, competing for the remaining resources. This situation created a new regime of constraints in which the proposal to revise the ESF management process appeared as an important opportunity for Italian Ministry managers, which is the Italian core organization within the ESF management process. The Italian Ministry of Treasury (MoT) is a political body, which determines financial and economic guidelines and programs. It is structured in several staff offices and four operative departments: Treasury Department, General Accounts Department, Development Policies Department, General Administration, Personnel and Periphery Services Department. Each Department has more Directorates (or Inspectorates or Services), within these Offices. The main competencies attributed to Treasury Departments are: supporting economic and financial decisions of the Government, managing public debt and sharing public resources, dealing with international economic, financial affairs and currency affairs and

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supervising the banking system and financial markets (together with Italian Central Bank). Concerning the ESF the MoT has the responsibility for budgeting and controlling European balances, including the execution of payments, the monitoring of financial flows and the execution of EC controls. The role of MoT is therefore crucial in the overall process of managing ESF both in funds planning and in grants payment. Often the bureaucracy of its activities has caused delays in action, preventing the possibility of obtaining funds and reimbursement. The financial importance of ESF, the clear urgency to improve the efficiency of the whole process and the legitimation of these needs in the major principles of Italian reforms accelerated the negotiation process which ended in 1998 with the official start-up of the project. 3.2. Dimensions and actions The project was carried out over a three year period in close collaboration with the Ministry staff. Three levels of groups, lead by the project manager, supported the reengineering: the steering committee, the project team and the project groups. The first was devoted to defining the strategic purpose of the intervention and maintaining the commitment on the project and was devised by the project manager and the director of all the Ministry divisions involved. The project team consisted of academic researchers. The implementation followed the six phases described in the BPR section: the strategic definition, which led to the selecting process to be revised, the ESF payment process mapping, the definition of the ‘‘to be’’ process and the detailed interventions and finally the setting of a monitoring and control system. Fig. 1 shows the phases of the project, people directly involved. This empirical application at the Ministry of Treasury (MoT) offers the possibility of identifying the variables and the factors which affect project and project management success in public institutions. The empirical study at the MoT stressed in particular the importance of seven dimensions (D) of the public sector, that can be faced with seven actions (A). Table 1 reports a summary of these characteristics and actions. This paragraph discusses these dimensions following the sequence of reengineering phases. However as suggested, where characteristics and actions related to a particular phase can influence all the following ones. The reengineering process has been depicted in a number of discrete stages. The first is the strategic definition in which the project team identifies the processes to be revised. Since the beginning it was clear that the political nature of commitment (D1), as reported also by many authors [24–26], is a first important difference.

The need to select the proper process to review, the difficulties of gaining and guaranteeing leadership on the project, and the necessity of securing and focusing human resource efforts required a high commitment from the organisation. This factor is recognised as crucial in the project management literature [27,28] and more specifically amongst reengineering supporters and detractors [30,31]. Top management commitment helps anticipating problems in driving the project to its completion. The definition of a steering committee was considered an appropriate instrument for directing internal attention to the project and formalising negotiation and interactions among involved parties. However, in public sector institutions, top management support is not enough. Politicians have an influence on organisational life and their exclusion has often driven the project to failure [17]. The consequent action is defining a steering committee composed by three spheres: public managers, politicians and project team leaders (A1). The appropriate definition of the steering committee and its involvement in the project has an influence on all the phases: the active participation of the steering committee put pressure on the human resources involved, helping to achieve the completion of the project and the incorporation of new routines. It is also important to carefully evaluate the coherence between the influence of the steering committee and the scope of the project: the wider the scope of reengineering, the higher the commitment needed. At the MoT the steering committee was defined from the beginning, but before starting the implementation some actors, not previously involved, interfered with the project implementation: the project manager needed almost three months to involve them and restart the implementation. The creation of such a steering committee should not be seen essentially as an additional problem but also as an opportunity. The involvement of political parties guarantees the possibility of promoting and starting a policy change, which could not be achieved without political support. Obviously one consequence is the time spent on reaching decisions is longer, especially because the actors involved often have contrasting interests. Another important dimension of the public sector is that objectives are not linked with profit (D2). It is evident that this factor influences reengineering from the strategic definition at the outset. Also private organisations pursue different objectives, nevertheless they are shaped by the final goal of creating economic value: instead in public institutions it is often difficult to find a unitary vision. The lack of convergence on explicit, measurable goals allows different interpretations and creates problems in negotiating with contrasting actors. This is further complicated by the difficulties in marking out the process users (D3). Who are the users of a public institution’s process? As Thompson and Jones [32] suggest a user in the public sector is someone who immediately

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Fig. 1. Project phases.

presents themselves for the service, those who may be waiting for the service, those who may need the service even though they are not actively seeking it, future generations of service recipients, relatives and friends of the immediate recipients, state and local governments or entities that assist in service provision, legislators, citizens who oversee the agency’s performance, and citizen as taxpayers. These two characteristics were matched during the strategic definition at the MoT generating a possible solution. Each steering committee member was asked to make goals clear and link them to possible advantages for different users, defining a formal relation between them. This user/goal map (A2) was then discussed in several meetings and finally the agreement on the scope of the reengineering was achieved. The formal instrument enhanced and accelerated the negotiation process, but also allowed a narrowing the breadth of reengineering project, which is a prerequisite for project success [33]. Realistic and definite goals, and

client satisfaction played a fundamental role in all the following phases, and the formalisation of procedure can be seen as an insurance against future opposition. The definition of the map was particularly useful in defining the scope of the project at MoT. The analysis of ESF management highlighted two critical processes: programming and payment. The discussions with the steering committee and the definition of the goal/user map stressed the difficulties in revising the first one. The negotiation drove the team to narrow the scope of the project and focus the reengineering on the payment process. This situation mirrors, partially, the complexity that characterises public institutions. They are not the result of rational planning, they usually emerge from a weak balance of political relations where any change in one part of the organisation is likely to have an effect on the other [25]. The political origin of public organisations is further reflected in their usually decoupled structure (D4); this

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Table 1 Dimensions and actions
Dimension Action Implications on reengineering phases

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Strategic Definition D1 Political Commitment A1 Steering Committee Enlargement Definition of a Map of goals and users Involvement of political actors; Goal negotiation Formalising negotiation on goals

‘As Is’ process analysis Major helpfulness of internal staff Facilitating in defining process performance indicators

‘To Be’ process definition Negotiation on new process possibility Possibility to control alignment between strategic goals and ‘To be’ process performances Possibility to verify user satisfaction

Intervention Design Motivation and supervision

Implementation Motivation and supervision

Monitoring Motivation and supervision Facilitating in defining control system

D2

Not profit objectives

A2

D3 D4 D5

Multiple and various users Decoupled structure Legislative constraints

A3 A4

Definition of Formal and Informal structure Identification of legislative constraints Legislative plan Training

D6

Lack of expertise

A5 A6

Formalising user requirements Involvement of all stakeholders Analysis of macro legislative constraints Possible Project revision Training on Negotiation tool and use of results Definition of goals and architecture

Identification of informal practices Analysis of procedural laws Definition of timescale Training on new process tools and functioning (e.g.: IT) Definition of performance indicators/ responsibility

Training on techniques (here BPR)

Training on MCSs

D7

Scarce management control systems

A7

Parallel design of MCSs

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means that institutions have a formal structure that satisfies the external environment and a different internal routine that constitutes the real management practice. This characteristic has a strong influence on reengineering. Decoupled organisations generally act differently from what formal tasks suggest; this highlights the need for reengineering teams to analyse a dual structure identifying the real and the formal routine (A3). At the MoT this action was first performed during the strategic definition. With the help of internal members the project team drew the map of formal and informal actors related to ESF payment process. Gathering this information facilitated the recognition of possible ‘organisational’ constraints and enabled tailoring a strategy for involving these ‘hidden’ stakeholders. The double analysis of the decoupled process was essential also during the ‘as is’ process analysis. Originally this second phase was proposed as marginal in the reengineering process [34]. The essence of reengineering was a problem solving, creative and iterative process, starting from a so-called ‘‘blank sheet of paper’’. To identify the explicit and the hidden needs of customers, and define organisational potentialities, reengineering (according to this radical approach) had to start from an empty field. In such interventions the detailed analysis of the existing process becomes superfluous, nothing of what the ‘‘as is’’ process included is assumed as constraints for the redesign. For earlier BPR proponents bottom-up analysis was conversely seen as counterproductive, because it could determine a conservative influence on the creative process, bringing little difference to the initial situation. Analysing the literature (regarding both the most recent methodology and implementation cases) a mitigation of this radical approach emerges, together with a greater attention to mapping existing processes [12,30,31,35–42]. The project at the MoT followed this recent approach, identifying a detailed map of the activities, responsibilities, and information technology. The use of project management instruments was particularly useful. Two different teams were established to carry out this task. The first group (composed of three members) was devolved to mapping the management issues and the second group (composed of two IT engineers) was devoted to investigating information and communication. The initial stage of the mapping required the involvement of both teams in every interview; then the two teams focused on different group of actor. Another important element of project management was the definition of frequent and regular meetings for continuously revising the map of the process. In this way the coherence between the teams was guaranteed, and at the same time a triangulation of data was achieved. The geographical concentration of all the internal people involved in one building facilitated

the organisations of meeting and the circulation of information. This also activated a process of informal conversation on the project issues which was particularly useful for the project team in capturing problems and opportunities without the barrier of formal interviews. A further struggle was made in this phase in highlighting the overlapping of formal and informal relations and routines. This is a peculiarity of public organisations that needed a careful approach from the teams; this increased the time for carrying out the ‘‘as is’’ process analysis. A further important difference of projects carried out in public sector is the presence of legislative constraints (D5). Laws and procedures are central elements of public organisations, which regulate routines and changes, and consequently affect reengineering interventions. During the intervention at the MoT the project team decided to tackle this problem formally, making a parallel analysis of legislative issues (A4). Firstly the problem was addressed during the reengineering strategic definition. Some interventions for example were excluded because they implied a significant change in legislation: this was considered by the steering committee to be outside of the project. Then the legislative analysis proceeded during the ‘as is’ process mapping where the project team identified necessary changes in regulation. The third phase carried out at the MoT is the definition of the ‘‘to be’’ process design. As suggested previously this phase was almost concurrent with the process mapping and performed by the project team. The interaction with the internal structure and specifically the involvement of the steering committee was essential in choosing the alternative to implement. The complex environment of a public organisation required a long negotiation to convince people of the appropriateness of the suggested interventions and the use of simulation software was particularly helpful because it showed cost and time savings. The need to support alternatives with software simulation required the detailed definition of each intervention, which implied a longer time for this phase but increased the desire to proceed with the project. It is finally important to say that the alternatives involved some procedural and legislative changes. This led to the definition of a legislative implementation plan (A5) with a timetable agreed by the steering committee. This step is a peculiarity of public sector organisations and it can be critical for the success of the project. The duration for implementing legislative change is not always foreseeable and this could delay the implementation of new procedures. Before starting the implementation the project managers in accordance with the steering committee defined four work groups within the MoT, supported by four external team leaders. Each group was devoted to follow a specific intervention and report the results on a

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regular basis. The project management was supported defining a precise path with a number of milestones and frequent reviews in order to support the both the external and internal implementers. The creation of these mixed groups was particularly helpful in facing another public sector issue that is the general lack of expertise (D6). This is particularly true in Italy where managers traditionally have a legal rather than management background. Training (A6) is suggested as an appropriate tool to address this issue in the project management literature [43]. The experience at the MoT suggests that training should be provided on: (1) the background of techniques and tools used during the project, (2) the use of information systems (if defined), (3) the operationalisation of the new process. In the last phase of the project—monitoring and continuous improvement—another difference highlighted is the general absence or scarcity of management control systems (D7). Nevertheless the consolidation of the process and its improvement needs a system which is able to report on performances. This implies often designing a control system ‘ex novo’’ (A7) together with the redefinition of the process and the identification of a responsible for managing and reporting its results. This is the case of the MoT, where the payment process has never been evaluated through specific indicators. An incremental approach was followed, designing an initial control system with simple indicators (time and costs) and reports. Finally it is important to highlight two elements, which are not considered peculiar to public institutions but which were crucial in carrying out the project successfully: leadership and software support. Leadership has been a fundamental element during all the phases of the reengineering. Indeed this element is not new for private organisations; authors agree that leadership strengths and enthusiasm will provide an example and will aid the project success. In public organisations, especially in recent years, maintaining a sharp focus is sometimes very difficult. Human resources struggle everyday with new tasks, initiatives and new services to deliver: this could give a project affecting management practice a lower priority. The solution suggested for private organisations fit: that is the presence of a continuous open and frank communication. Finally it is important to say that the use of software was useful, in particular during the process mapping and the definition of the ‘new’ reengineered process. Many authors agree that the use of design and simulation software has become an essential tool for the modern reengineering approach. First these instruments allow the identification of all the possible pitfalls of the existing process, highlighting organisational, human and technological constraints. Second simulation tools offer the possibility of testing different solutions and measuring process performances more easily. Further,

at the Ministry of Treasury, the use of simulation software was revealed to be an important instrument for convincing people. As stated above, the leap from the design phase to the implementation was critical: the missing engagement of some process stakeholders created some difficulties and arose oppositions for proceeding the project. Presenting simulation results, and showing costs and time savings were fundamental for getting stakeholders support and taking the project forward.

4. Conclusions Implementing a project in public organisations has become an important issue in recent years. This interest in this context too, has been stimulated by the reforming movement that has spread across all the OECD countries in the last two decades. Though governments have started to change at a different pace, the principles of the reforms are similar and they are commonly addressed with the label of New Public Management [2,3]. Italy is considered a late adopter of this movement, starting the legislative change only at the beginning of the 1990s. Nevertheless the breadth of policy changes is remarkable and it makes the Italian context an ideal field for researchers. The increased importance of Italy is proved by the attention recently given by international researchers [44–48]. One of the implications of the NPM movement is the proliferation of business techniques applications by undertaking a project. In such a context this paper has analysed the problems of managing a reengineering project in public sector organisations. The findings of this paper are based on data from an action research approach carried out in a 3-year period at the Italian Ministry of Treasury. In this paper we have drawn on NPM, reengineering and project management literature. NPM has informed the investigation of the major issues involved in public institutions changes, informing the definition of a tailored approach to reengineering in such organisations. The available literature on BPR was essential in defining the methodology. However project management contributions to the literature completed the framework, adding cross-fertilisation of elements which were fundamental in the empirical phase. The specific interest in Structural Funds was raised by the recent changes in their legislation: (1) the increased number of eligible countries, (2) the definition of stricter monitoring procedures, (3) the reduced overall budget. These changes stressed the need of achieving a more efficient process management. The complexity of the process and the huge number of stakeholders involved have allowed an investigation of a complete range of critical dimensions and identifying possible actions for

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facing these situations. The results presented in the paper are not generalisable to all public organisations elsewhere. However the process of change studied may have a wider interest for other public sector organisations. The major theoretical findings of the paper cover three dimensions; first insights from, and the limitation of BPR available methodologies in approaching a public sector redesign; second, strictly related to the first, the identification of possible actions on the implementation of reengineering in government settings; third the importance of project management issues throughout the project. Further the action research rationale has given empirical evidence of the real applicability of the above approach. A major finding of this study relates to the insights gained from and the limitations of business reengineering methodology. Though some authors suggested that public sector projects can be managed following business approaches, literature and the experience at the Ministry of Treasury proved that a tailoring is needed. The adaptation of the methodology has been discussed using seven dimensions (D) and seven actions (A) which are considered to be relevant. As shown in Table 1 a single action can influence many phases of a reengineering project. The first issue is the enlargement of the social system governing the project. The political nature of public institutions generates the necessity to involve on one hand elected members and on the other hand stakeholders that apparently are not related to the process under revision. The structure of these institutions is the result of subtle negotiations, which can disappear in the formal facade though remaining at the core of the organisation. Revising a process in public sector means revisiting this network of relations, creating possible tensions; for this reason the involvement of all stakeholders is essential. Involving all the actors is necessary but it is not enough: when actors with different interests are involved the negotiation on goals can become never-ending. The empirical experience at the MoT suggested that the use of a formal instrument enhanced this process. The particular instrument adopted here is a map of goals and users, which was defined by each member of the steering committee and subsequently agreed with them. Another important element for avoiding problems during the reengineering project was the definition of constraints. Recent approaches to BPR have stressed the importance of anticipating problems from the beginning, abandoning the radical Hammer and Champy’s approach [34] which advocated forgetting all constraints and starting from a blank sheet. Our approach is more relevant in public institutions where constraints are more difficult to remove. In particular the analysis should tackle the legislative sphere, underlining possibi-

lities or additional struggles for achieving the project completion. The last two actions introduce the third major findings of this paper: the importance of project management issues. The first element is training; human resources in public administration, but particularly in Italian institutions, did not have a management background. The introduction of business techniques causes defensive resistance and negative behaviour which could prevent the success of the project. Though the involvement of internal staff is important, providing the proper training is essential from the initial phases of the project, because it allows a full immersion of people in the project proceedings. A second important element is the control of the project and results. Defining achievable milestone and emphasising the need to maintain a timescale helped to address behavioural struggles in the reengineering, minimising the risk of people being diverted and trapped by their routine activities. Two further instruments helped in avoiding project failure: continuous communication and the definition of a management control system. Both formal and informal communications, such as official reports and frequent meetings, allowed the circulation of information at all levels, informing constantly on the results of the project. The defined measurable indicators was fundamental: particularly for convincing the steering committee and maintaining the needed commitment [28]. It is important to highlight that all these instruments were more effective because they were supported by the use of formal structured groups: the steering committee, the project team, the work groups. This approach helped in rationalising the change process: first the groups represented a reference and discussion point for internal staff, all along the project duration; second their presence enhanced the process of legitimation within the organisation diminishing the potential for conflicts. The approach was successfully applied at the Ministry of Treasury and the ESF payment process revisited. The new procedures have been tested for a 3 month period and different benefits have been so far shown both by final user and internal staff. First the new process and the rationalisation of activities prevent the duplication of documentation and reducing the need of documentation cross-checking, which had caused considerable delays in the past in the payment process. Second the reduction of payment time allowed more rapid reimbursements for the Italian regions, which began to reduce their financial exposure. The management control system implemented allowed a reduction in cost around 35%, on average, and in time of 48%. At present the full implementation of the procedure on a routine basis needs the final approval of an already proposed law which is under discussion at the Parliament.

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