Business Process Orientation in Croatian Companies:
a Multi-site Case Study
Vesna Bosilj Vuksic1, Mirjana Pejic Bach2 and Olivera Marjanovic3
1, 2
Faculty of Economics and Business, University of Zagreb, Trg J.F.Kennedya 6, 10000
Zagreb, Croatia 3Business School, University of Sydney, Australia
E-mail(s): vbosilj@efzg.hr, mpejic@efzg.hr, olivera.marjanovic@sydney.edu.au
Abstract: Business Process Management
(BPM) has been recently adopted as a
mechanism for achieving competitive advantage
thorough process-related performance
improvement. In order to analyze the current
level of BPM adoption, and thus improve it,
contemporary organizations use the concept of
Business Process Orientation (BPO). This
research uses a multi-site case study approach is
to analyze how five Croatian companies have
implemented BPO as a tool for ongoing
improvement of their business processes.. The
selected case organizations have introduced
BPO several years ago, and all have mature
BPM systems in place. Having achieved a high
level of BP automation, this study confirms that
each organization is now turning their attention
towards process-related performance. This in
turn has created the need for additional process-
related information that could be only achieved
through better data integration between BPM
systems and companies’ information systems.
Keywords: business process orientation,
business process management, performance
management, Croatian companies, case study
1. Introduction
Business Process Management (BPM) is
increasingly being seen as a mechanism for
achieving competitive advantage through
performance improvement by adopting a process
view of business [4]. While there are many ways
to analyze a current level of organization’s BPM
adoption, as a starting point this paper adopts the
concept of business process orientation (BPO).
According to Reijers [16] and McCormack and
Johnson [11] BPO enables organizations to focus
on business processes ranging from customer to
customer, instead of placing emphasis on
functional and hierarchical structures. A level of
BPO adoption is typically expressed as BPO
maturity. Maturity models are often derived from
the Capability Maturity Model (CMM),
originally designed for the software development
process by the Software Engineering Institute
Carnegie Mellon University in USA [5]. For the
purpose of this paper we adopt the extended
McCormack’s and Johnson’s maturity model,
previously suggested by Lockamy and
McCormack [8].
The main goals of this paper are (1) to
analyze the current level of BPO maturity in 5
Croatian companies and (2) to investigate if
these companies use process-related performance
management within their BPM initiatives and to
what extent. This research is motivated by the
outcomes of previous research [22,20]
confirming the overall level of business process
orientation (BPO) maturity across Croatian
companies to be at level 2. Our research aims to
determine the underlying reasons for the attained
maturity level, through an in-depth multi-site
case study of the BPM practices in five Croatian
organizations. In this context, we are interested
in the level of adoption of performance
management within the case organizations, their
respective business performance management
systems (BPMS) and the ways these systems are
used to measure BP-related performance. In
general, performance management involves
performance planning, job design, performance
measures and reward systems designed to ensure
successful implementation of strategy [9].
The paper is structured as follows. Section 2
provides an overview of the related literature on
BPM, BPO and performance management and a
problem statement that outlines the intent of this
research. Section 3 introduces the research
design and chosen methodology. Section 4
reports on the research findings followed by
Section 5 that offers a brief discussion of study
limitations, suggestions for future research and
main conclusions.
2. Business Process Orientation and
Performance Management
Nowadays companies face a number of
challenges in their attempts to make BPM more
strategic. BPM efforts involve aligning processes
with organization’s strategic goals, designing and
implementing process architectures, establishing
process measurement systems aligned with
organizational goals, and educating and
organizing managers to manage processes
effectively [1,2,13]. All these challenges require
carefully designed key performance indicators
(KPIs) that need to align business processes
performance with business objectives. When
properly implemented, BPM can impact an
organization’s performance through increased
revenue, cost reduction, cycle-time
improvement, increased customer satisfaction or
improvements in any other metric considered
important to creating value. It implies an entire
culture of methodologies to improve the overall
organizational performance.
Furthermore, according to Khan [6],
measurement and evaluation of BP efficiency
need to be supported by Business Process
Management Systems (BPMS). In general, these
complex software platforms are designed to
support definition, execution, and tracking of
business processes. More precisely, BPM
systems support design, analysis, optimization,
Figure 1: The BPO Maturity Model (Source: Lockamy and McCormack, 2004)
automation and/or monitoring of business
processes, by separating process logic from the
applications that run them. According to Pantazi
and Georgopoulos [15], investments in BPMs do
not always payoff in business performance. The
explanation lies in the fact that enterprises may
not be selecting the most appropriate business
processes to invest in. Therefore, the authors
recommend a transition toward the horizontal
process-oriented enterprise by focusing on three
parameters: (1) business process (BP) maturity;
(2) BP value for the enterprise as well as for its
stakeholders (3) BP flexibility allowing ongoing
changes. A process-oriented organization is the
one that comprehensively applies the concept of
BPM [7], typically measured by BPM or BPO
maturity. The relevant literature confirms a a
number of models and approaches used to
measure BPM and BPO [17,12,24,20]. In
general, BPO model includes several process-
related dimensions. It could be also seen as a
scale starting with one and ending at the
maximum level of process orientation. For
example, according to deBruin et.al [3] the most
popular way of evaluating maturity is five-level
BPO maturity model. As a starting point, our
research adopts the BPO model developed by
Lockamy and McCormack [8] that consists of 5
maturity levels (Figure 1).
 A BPO model encompasses several
dimensions and there are many diverse
interpretations of its key elements. Skrinjar et al
[20] conducted in depth literature review in order
to determine different terms that have been used
to define these key elements. The outcomes of
this study are the following nine elements : (1)
strategic view; (2) process definition and
documentation; (3) process measurement and
management; (4) process organizational
structure, (5) people management; (6) market
orientation; (7) supplier view; (8) process
organizational culture and (9) IT/IS support.
In addition to organization’s BPO and its
measurement another key perspective of our
research includes BP-related performance
measurement. Traditionally, organizational
performance has been measured by using
financial indicators [19], but nowadays several
non-financial categories are added to
performance measurement systems. When it
comes to process-related performance, most
companies are still experimenting with the
specification of process-based performance
measures [4]
Furthermore, the logic of models needs to be
modified [23] in order to enable a translation of
process-related measures into effective tasks.
This particular context has attracted the attention
of many researchers interested in BP
measurement, as confirmed by the recent
literature [21,18].
Starting from the above reported research
that confirms that BPO has a positive influence
on organizational performance, this research
focuses on process measurement and
management dimensions of BPO maturity model
have been in a focus of this research. The
following section focuses on the research
method, adopted to study these dimensions in the
chosen case organizations.
3. Research Methodology and Design
The research methodology used in this
project was a multi-site case study, involving
semi-structured interviews with business experts
in five Croatian companies. The study took into
the account the previous published studies on
BPO maturity levels in the financial and
telecommunications sectors in Croatia. The case
organizations for this research were chosen
because of their BPM initiatives already in place.
Furthermore, three out of these five companies
had had previously participated in the related
research projects. The case organizations came
from three industries: telecommunications
(Companies A and B), banking (Companies C
and D), and financial services (Company D). All
companies were included in the list of 400
largest Croatian companies for 2010.
The reported research was conducted
between September 2010 and November 2010.
The primary sources of data included semi-
structured interviews. All interview questions
were piloted with a group of postgraduate
students before taken to the organizations. The
interviews were then conducted with the
representatives from different organizational
units: BPO Division Executive Directors and
IT/Business Intelligence (BI) Experts. All
interviewees were informed in advance about the
targeted BPO dimensions to be discussed in the
interviews.
Each case was structured, and interviews
conducted following the previously established
and examined methodological approach for
business process orientation and business process
management maturity evaluation [20,24]. In
addition to the BPM aspects that were originally
incorporated into the methodology, the extension
was made toward BI, because of its close
relationship to performance management. Thus,
the same issues were examined from both
perspectives: BPM and BI.
Given the stated objectives, this paper will
focus only on three out of five sections of the
interview questions. They are: (A) Introduction -
About BPM and Performance Measurement; (B)
BPM Maturity Dimensions; and (E) General
company data (as shown in Table 1).
Furthermore, section (B) was designed to cover 4
different dimensions, as previously described by
Trkman, et al (2010): (1) Business Enablement &
Strategy (BE&S); (2) Analytics & Performance
Measurement (A&PM); (3) Organizational
Readiness (OR); (4) Data & IT – Level of
Integration (D&IT).
The case descriptions are based on the
transcripts of the interviews which were
validated in January 2011 and approved for
publishing by the interviewees. The studies have
been analyzed using the theoretical framework
presented in the earlier sections of this paper.
Due to the limited paper size, only selected
answers are presented here.
4. Case Studies: Findings and Results
4.1. BPM orientation of the companies
The aim of the Section A of the interview
was to collect basic data about BPO and
performance measurement in the case
organizations. Table 1 shows a historical aspect
of BPM initiatives of the participating
companies. These initiatives started during the
last decade and were initiated by the top-
management. Their main goals were business
process optimization and improvement. It is
interesting to observe that, the companies self-
evaluated their level of BPO maturity rather
differently, ranging from 2 (Company B and
Company C), to 4 (Company A and Company E)
and even 5 (Company D). The results of this
evaluation will be analyzed and discussed
further. Furthermore, all companies confirmed
their performance measurement efforts, as stated
in the introductory interview questions.

Table 1: BPO Initiatives in Participating Companies

Company
BPO Initiatives
A B C D E

When did the BPM 2001 2007 2008 2000, finished in 2004
initiative in the company (9) (3) (2) 2005 (6)
started? (10)
(years recalculated)

Who initiated it? Board of CEO Director of IT&Operations Board of directors

directors Direction for Management
Organization Board Member

What was the main Process Business process Business Main goal: IT Business process
reason to start it? management and identification and process implementation optimization,
eTOM documentation optimization supported by BPR monitoring and
framework improvement
implementation

What is the level of your 4 2 2 5 4

BPO maturity?

Is your company more Yes Much lower than Slightly lower Yes Yes
process oriented than competitors than
your competitors? competitors

4.2. BPM Maturity Dimensions
Section B of the interview included 4
dimensions, designed to cover 9 BPO elements.
They are briefly described as follows:
The first dimension is called “Business
Enablement and Strategy” since it describes
process definition and documentation taking the
strategic view of BPO. The most important
answers are selected and shown in Table 2. It is
important to point out that the answers of
Company B were significantly different from
these presented in Table 2. Business process
goals of Company B were derived from, and
linked, to the organization’s strategy, but
business process models were not used to
communicate and propagate policy and strategy
throughout the organization. Furthermore,
business processes of Company B were
measured and managed in real time, but business
process descriptions (models) were not available
to every employee in the company. Even more,
business processes were not analyzed, improved
and optimized on a continuous basis.
The second dimension “Analytics: Process
management and measurement” comprises 2
BPO elements: process measurement and
management and IT/IS support. It describes a
level and a dynamics of process performance
measurement in the companies, analyzes their
process performance management systems and
elaborates on the extent process performance
measurement influences their overall
management. Companies’ answers on their use
of process management and measurement are
presented in Table 3.
The third dimension “Organizational
readiness” is focused on the five BPO elements:
organizational structure, organizational culture,
people management, market orientation and the
supplier view. Companies A, D and E have very
similar organizational structure. They are matrix-
organizations, combining elements of the old
functional structure, with process-related
positions and roles. More precisely, it is an
organizational structure that supports processes
across departments. Process owners and other
process-related positions and roles are clearly
defined and established, with process owners at
the same hierarchal level as functional managers.
Furthermore, these companies have established
dedicated process management units, taking care
of process documentation, administering process
improvements, documenting changes and so on.
Jobs in all five companies are
multidimensional rather than simple task-
oriented, with employees working in inter-
departmental teams and coordinating
interdepartmental activities. All participating
companies have established dedicated process-
related roles, such as chief process officer or
head of Process Office.
Furthermore, interviewees from all five
companies described their respective BPM
initiative as:
 Customer oriented: Feedback received from
customers is used systematically for the
improvement of internal processes;
Processes, products and services are
designed and developed based on customer
needs and expectations; customer
satisfaction is measured systematically and
frequently in order to improve business
processes.
 Market oriented: The activities of
competitors are monitored continuously in
order to promptly respond to competitor’s
actions by, for example, changing relevant
processes.
 Supplier oriented: Employees work in close
collaboration with suppliers to improve
processes; changes to business processes are
formally communicated to companies’
suppliers.
Employees from different departments in
companies A, B and D feel that the goals of their
functional departments are mutually aligned, and
their activities are coordinated with departments
consulting each other, when the need arises.
Employees are also encouraged to suggest
possible process improvements. All these
characteristics are usually associated with the
highest level of BPO maturity.
The fourth dimension “Data and IT- Level of
integration” describes IT and IS support for
BPM in the participating companies. Companies
C, D and E use the same business process
management platform - ARIS (IDS Scheer) -
which is one of the leading software solutions on
BPM software market. Company A uses
Casewise software (supporting eTOM
framework), while Company B does not use any
BPM software and has no BPM system in place.

Table 2: Business Enablement and Strategy (The most important companies’ answers)

Process definition and  Business processes are clearly defined and documented using inputs and outputs.
documentation  Business processes descriptions (models) are available and used by every employee.
 Business processes are defined so that most people in the organization know how they
work.

BPM life cycle  Business processes are measured and managed in a real time.
 Business process governance is implemented.

BPM strategy and policy  Sub-Process goals are derived from and linked to the organization’s strategy.
 Business process models are used to communicate and cascade policy and strategy
throughout the organization.
 BP improvement and renovation is frequently on the agenda of TM’s meetings.

BPM and leadership  BPM initiatives are strongly (4 and 5 on the scale ranging from 1 to 5) initiated,
supported and monitored by top management
 Table 3: Analytics: Process management and measurement

Process management and measurement Company

A B C D E
Level of process Process measures are defined and documented for each
 
performance process.
measurement
Performance targets are in line with process goal.   

Performance indicators are communicated on a regular basis

  
within the organization

Performance measures are used by management.   

Business processes are continuously analyzed and managed

 (a)  
using the historical data.

Dynamics of Business processes are measured “ad-hoc” when a business

   
process process management project is conducted.
performance
measurement Business processes are measured, analyzed and managed
 (b)  (c) 
continuously, based on real-time data.

Influence of Performance results are used for business process

   
performance improvement or reengineering.
management on
company Performance results are used in setting of improvement
   
management targets.

Performance results are used in decision making on a daily

 
basis (based on operational data).

Performance results are used by top management for tactical

    
and strategic decision making.

Performance results (of processes) influence employees’

 (d)
salaries.
Process performance management system (technology)

Process Business Activity Monitoring  (e)

performance
measurement is Real Time/Historical Monitoring and Analysis
a part of
Dashboards, simulation  
business process
management Balanced Scorecard   
system and
following ABC analysis   
functions are
used: Data about process performance is extracted from
    
transaction/operational IS (ERP).

BI is used to Data Warehouse and OLAP     

measure,
analyze and Dashboards    
manage
Analytical tools  (f)    
business
processes and Optimization tools  (g)    
following
functions are Data about business processes is collected manually (based on
used: activity duration measurement and interviews with  (h)    (i)
employees)

Comments: (a)- data is not integrated; (b) - not all of the processes; (c) - products and services are tracked in the real time;
(d) no, but it is planned; (e) - ABC analysis is used instead; (f) - Six Sigma; (g) – sometimes; (h) - but there is also automated
data collection; (i) for some cases

Companies A, C, D and E have implemented Process Modeling and Design; Process Analysis,
several BPMS functions, such as: Business Simulation and Optimization. Functions to be
implemented in a near future included Real
Time/Historic Monitoring and Analysis
(Companies D and E), Business Process
Automation and Workflow Management
(Companies D and E), Rapid Application
Development (Company C).
The most important process performance
information, provided by BPMS and used by top
management in decision-making processes
included: cycle time and cost, utilization of
resources, process volume and frequency.
Furthermore, the interviewees mentioned two
KPIs which were typically calculated, based on
the information provided by BPMS. The
intention to develop BPMS around the
measurement system is obvious, but strategy
maps, BSC, KPIs are still not fully supported.
Finally, regardless of their reported high
levels of BPMS maturity, the management of all
case organizations reported the need for
additional information on process performance.
More precisely, the existing Information Systems
of these companies were designed to support
end-to-end business processes and were designed
to provide relevant management information on
the performance of the organization’s business
processes. However, the information exchange
between BPMs and ISs did not exist, or was very
poor. The only exception was Company A where
Web services were used as an interface between
these systems, ensuring better data integration.
4.3. Discussion
Our qualitative analysis of the collected data on
the BPM dimensions and associated BPO
elements, confirms that Companies A, C D and E
fall in the middle of the third (linked) and fourth
(integrated) maturity level. These results
significantly differ from the companies’ self-
reported results.
The study results also confirm that managers
are fully aware of the importance of business
processes and their impact on company’s overall
performance. The definition and documentation
of organization’s processes, BPO strategy and
related policies are found to be well implemented
in all case organizations. Process organizational
structure, organizational culture, people
management, market orientation and supplier
view satisfy the requirements of the highest BPO
maturity levels.
However, “process management and
measurement” and “data and IT” dimensions” do
not meet the requirements of the fourth BPO
maturity level, because process measures and
management systems are not found to be deeply
embedded in the organizations, as proposed by
[11]. The implementation of performance
measurement within BPMS can be even
considered a challenge for the participating
companies. More precisely, all companies
expressed a strong need for a much better
support for collection and analysis of
performance-related data. This would allow the
companies to derive much better intelligence
about the performance of their key business
processes than what is currently the case.
Overall, our research also confirms the following
common characteristics of BPM concepts
observed across all case organizations: (1) a
process architecture is developed; (2) process
owners are established with the responsibility for
the overall process; (3) the organization
communicates, conducts changes and develops
strategy around business processes; (4) process
measurements are established, but still need to be
improved; (5) BPMS is developed but does not
support performance measurement due to the
lack of data integration between organizations’
BPMS and IS, in particular BI systems.
Furthermore, the great discrepancies were
found during the evaluation of the BPO
dimensions of Company B. More precisely, this
company did not formally implement the BPM
concept, but their business processes are
managed, monitored and measured in the real
time through the features, functionalities and
reports embedded in their EPR and BI
information systems. The enabling software
architecture was developed by the external
consultants. During the implementation phase of
this project, Company B’s business processes
were modeled and documented. However,
process-related organizational structure was not
developed and process owners were not
established. Consequently, Company B falls in
the middle of the first (ad-hoc) and the second
(defined) BPO maturity level.
5. Conclusion
This paper offers an in-depth analysis of the
current state of BPO maturity in five Croatian
companies. A qualitative, multi-site case
research was conducted to determine their
respective BPO maturity levels. The results have
been quite encouraging since four of five
companies fall in the middle of the third (linked)
and fourth (integrated) maturity level. The
research also offers interesting implications for
managers, pointing out that BPO and BPM may
result in a positive influence on organizational
performance. Our research also confirms the
importance of BI and BPM integration and its
impact on BPO level of maturity, as previously
confirmed by Marjanovic [10]. Further research
is required to explore the relationship between
ISs, BI and BPMSs, in order to propose an
integrated framework for business performance
management.
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