CURRENT CHALLENGESPROBLEMS FACING THE ORGANIZATION

CURRENT CHALLENGES/PROBLEMS FACING THE ORGANIZATION

This section describes current issues facing the organization. It also develops a useful set of factors that should be useful to other organizations facing similar problems.

Current Issues

The BPR effort did not produce significant performance improvements and HPT did not live up to vendor promises. From our discussions with Ron and informal interactions with other employees, it appears that the BPR effort was not well designed or planned by top management (we don't think that there was a plan). The CEO and the board seemed to embrace BPR as something that they had to do to keep competitive rather than as a holistic method to transform the organization. That is, BPR was fashionable rather than substantive.

Ron was a key player in the BPR effort, but was not able to convince the CEO of the scope required for successful transformation. Effective BPR requires people to understand the process and the role technology plays in the transformation effort. It also requires a lot of capital (which will make a big dent in the operating budget). In addition, it requires a participatory commitment from top management. Top management cannot delegate BPR. It must be actively involved in its planning, design, and deployment. In Vicro's case, BPR was delegated to people like Ron. Ron is a capable executive, but only has clout within his domain. He did not have the tremendous political clout required to change organizational processes and battle resistance to change on an enterprise basis. The only parties with enough power to implement real enterprise-wide change are top managers.

In terms of the enterprise software, Ron was never consulted about the investment in HPT nor was he ever a part of the organization-wide plan to implement the software. This was counterproductive considering that Ron is responsible for many of the enterprise systems in his area. Top management trusted the software vendor to plan and implement HPT to improve performance (even though the vendor has no experience or understanding of the Vicro business model). Ron knew that this plan was flawed, but was not consulted. Moreover, many other key people at the process level were left out of the software decision. By not involving employees at all levels of the organization, resistance to change is bound to increase. At Vicro, people resisted HPT because they didn't understand its complexities and they were never consulted for their opinions about how existing processes and systems work. Hence, there was a mismatch between what the existing processes are really doing and what the encapsulated processes (best practices) within the software itself do.

HPT has a set of business processes built into the logic of the enterprise system it touts. The vendor calls these processes ‘best practices’. There were never any discussions (at any level within the organization) with the vendors to see if its ‘best practices’ fit with what Vicro really wanted to accomplish. As such, HPT attempted to force its ‘best practices’ onto the Vicro business processes it was supposed to support. Since Vicro could not practically change its customized business processes to fit HPT, performance wasn't improved and it had to resort to using its legacy systems to keep the business going. In the end, Vicro spent 280 million dollars on software that did not work and thereby didn't improve business performance. As a result, enterprise integration wasn't improved.

Currently, Vicro is only using HPT for accounts payable (AP). This means that Vicro has maybe the most expensive AP system in the world. This debacle has caused very few organizational changes except for a revolving set of CEOs (at least most of the blame was put in the right place). Since the budget for this software is approximately 10% of total revenue for year 2000, it may put Vicro's future viability in jeopardy. We got a sense from Ron that this might be the case. He (as well as many other Vicro employees) believes that they face a precarious future with the company as a result of the BPR/HPT failure.

The reasoning behind adopting HPT in the first place was to better integrate the enterprise in terms of information sharing, reporting, standardization, and effective processes (BPR). From the case we saw that HPT was a complete failure. However, from the themes we were able to garner a set of factors that can vary from one organization to the next. Hence, we believe that analyzing these factors can help other organizations better deal with enterprise BPR and system adoption success.

Contributions to BPR Literature

Further analysis of the data by classification theme enabled us to generate three "super themes"—immersion, fluidity, and top management support or mandate. One of the principles of phenomenology is to continue classification until it cannot go any further and simplify as much as possible. This process of simplification also establishes the basis for new theory. Although we do not have many themes, we wanted to see if the negotiated themes are actually part of a simpler set of even fewer themes. As such, we were able to synthesize even further down to only three themes. Technology usage and HPT adoption reveal that Vicro Communications is immersed in technology, that is, they depend on technology to do their work. Process improvement reveals that Vicro is attempting to become a more fluid organization, that is, they want information to flow freely so that it can be shared across seamless processes that effectively support business activities, and to delight their customers. CEO mandates reveal that top management was concerned with fluidity and immersion issues and wanted to do something about it. Although their choice of HPT appears to be misguided, they realized that change must be supported from the top. Resistance to change reveals that fluidity and CEO mandates are inextricably tied to how people perceive change. Process improvement is accomplished through people at the process level who do the work. They therefore need the resources and support of management to engineer and redesign processes.

In short, Vicro is immersed in technology because people need them do to their work, that is, technology is critical and important. Technology also enables people to comply to work demands. For instance, if an ad hoc report is required within two hours, the use of technology (databases, networks, computer terminals, and printers) allows people to comply with demands. Fluidity relates to responsiveness, effectiveness, knowledge sharing, and knowledge capture. The objective of process improvement is to improve responsiveness to customers by designing and redesigning effective processes. To improve responsiveness to customers proceses must enable effective knowledge sharing and capture, reduce unnecessary costs, and save time. In addition, enterprise systems must work in alignment with business processes. Database technology, networks, software, operating systems, and desktops are the main technology components in a business. Each of these components need to be streamlined in a seamless manner, that is, desktops should be able to talk to databases through networks without concern for hardware, software, and operating system platforms.

Analysis of the Vicro case enabled the researchers to generate a set of themes and, from these themes, a set of "super themes". The BPR literature is thus enhanced because we now have evidence to support the importance of immersion, fluidity, and CEO mandate. Although the idea of CEO mandate has appeared in the literature, immersion and fluidity are new concepts at least with respect to IT-enabled BPR. Moreover, the BPR literature does not really consider the role of enterprise software in BPR (with few exceptions). Since enterprise software issues are more relevant today than in the past as many organizations buy-into HPT and other vendors, we believe that this case adds significantly to this area of research.

Summary

Vicro Communications made no attempt to analyze existing processes and systems to see if they were fluid. That is, they failed to obtain feedback and opinions from people along the process path and legacy systems experts. From the data, it was apparent that many people at Vicro were uncomfortable with HPT and BPR. Many of these same people tried to communicate to management what they thought was going wrong with planning and implementation, but were never listened to or asked for their opinions. We believe that this is the main reason for failure. Every organization has experts with legacy systems and business processes. Both systems and processes must be understood on an enterprise level if change is going to be successful. Hence, people that know the business and systems should be carefully consulted before enterprise change and software is undertaken. Vicro is immersed in technology, but fluidity is a major obstacle and probably the major reason for the failure of HPT. Business processes are not streamlined and efficient at this point so automating them with software will only speed up bad processes. Vicro went one step further. They didn't try to automate existing processes; they forced HPT processes onto a business that is too customized to client needs to work.

Through what we learned from this case study, we hope to shed light on what can happen when decision makers rely on outside vendor promises to improve performance without regard for their employees' knowledge and a comprehensive understanding of the existing state of their business processes. In the Vicro case, analysis of the data suggests that the software investment decision was paramount to the failure of the effort. Vendor promises were not kept and Vicro was stuck "holding the bag". In short, the reengineering effort failed miserably even after investing hundreds of millions of dollars in software implementation. As a result, performance was not improved and the software is being phased out.