The impacts of business process re-engineering on organizational controls

While much publicity and enthusiasm surrounds business process re-engineering (BPR), little attention has been paid to the consequential management issues, e.g. compression of responsibilities, empowerment of workers, reduction of checks and controls, and reliance on external partnerships. The important question is whether traditional management control functions have been eliminated, compromised, or rendered irrelevant amidst such dynamic organizational changes, and if so, how does the management control function in a re-engineered organization evolve? This paper seeks to explore the research question by tabulating the experiences of 28 published BPR implementation cases. The findings seem to suggest a shift in the control portfolio towards higher reliance on automated control, deferred review, self-management, and market mechanism. Managers thus face the challenges of adjusting other organizational elements to facilitate the proper operations of such controls. Effective project management must appreciate the emerging management control structure since it is often the vehicle through which BPR is implemented. Inadequate attention to these issues can result in re-engineered systems that fail to consider critical risks or are prematurely self-defeating as they run contrary to the underlying control philosophy.