The concept of business process orientation (BPO) is based upon the work of Deming (Walton, 1996), Porter (1985), Davenport and Short (1990), Hammer (1993, 1996 and 1999), Grover et al. (1995), and Coombs and Hull (1996).
This body of work suggests that firms could enhance their overall performance by adopting a “process view” of the organization.
Although many firms have adopted the BPO concept, little to no empirical data existed substantiating its effectiveness in facilitating improved business performance.
McCormack (2000) conducted an empirical study to explore the relationship between BPO and enhanced business performance.
The research results showed that BPO is critical in reducing conflict and encouraging greater connectedness within an organization, while improving business performance.
The research also showed that high BPO levels within organizations led to a more positive corporate climate, illustrated through better organizational connectedness and less internal conflict.
[1] For a central concept, one that has become something of a Holy Grail for 1990s managers, BPO has remained remarkably hard to pin down.
Most of the literature on business process orientation has been in the popular press and lacks a research or empirical focus.
Although empirical evidence is lacking, several models have emerged during the last few years that have been presented as the high performance, process oriented organization needed in today and tomorrow’s world.
[2] Deming, Porter, Davenport, Short, Hammer, Byrne, Imai, Drucker, Rummler-Brache and Melan have all defined what they view as the new model of the organization.
This “new way of thinking” or “viewing” your organization has been generally described as business process orientation.
Texas Instruments, Progressive Insurance and American Standard Companies have all been reported, albeit anecdotally, as receiving improved business performance from building a process orientation within an organization (Hammer 1996).
Process orientation, and its relationship to improved cross-functional interaction, was introduced almost fifteen years ago by Michael Porter.
Hammer coined this term to describe the development of a customer focused, strategic business process based organization enabled by rethinking the assumptions in a process oriented way and utilizing information technology as a key enabler (Hammer, 1993).
Hammer offers reengineering as a strategy to overcome the problematic cross-functional activities that are presenting major performance issues to firms and cites many examples of successes and failures in his series of books and articles.
Hallmark and Wal-Mart are often put forward as success stories and IBM and GM as the failures.
The BPO concept has sufficient practitioners and researchers and has been implemented in enough companies that we now have the information we need to develop a testable statistical model.
The trick, of course, is getting at that broad range of experience and boiling it down in scientifically acceptable ways to a point where practitioners can use it easily in the field.
Using various statistical techniques (domain sampling, coefficient alpha testing, and factor analysis), we both determined the validity of various BPO variables and condensed those variables into a simpler composite list (survey instrument) that offered easy use in measuring BPO within an organization (McCormack 1999).
An observation of studies conducted into process management revealed the use proxy variables as an important indicator for PO.
Paper presented at the European Institute for Advanced Studies in Management: Workshop on Organizational Design.