The two BPR program illustrates how the two companies improved their operation performance and competitive advantage in accordance with the steps of the proposed methodology. Table 19 compares the stages and activities carried out by these two BPR cases. The e-SCM case executed all the 5 stages and 36 activities whereas the Pricing Management case executed 4 stages and 31 activities defined in the methodology. The differences are the bypass of Pilot stage and two activities of “Review company vision” and
“Search for benchmark” of the Pricing Management BPR.
Table 20 Methodology execution comparison of the two BPR cases
The main reasons that cause the difference are described below:
1. Strategic level: the birth of e-SCM BPR project was to respond to the industry trend of value chain integration and in the mean time to realize the concept of “Virtual Fab” for transforming TSMC from a manufacturing-oriented to a service-oriented company. To expedite the integration among key customers along the value chain and to strengthen the leadership in the semiconductor industry, TSMC actively participate the international organization of RosettaNet to lead the worldwide data exchange protocol standard definition. Unlike the potent strategic initiative of the e-SCM project, the Pricing Management BPR project in HiCom is more tactical and emphasize on internal pricing operation discipline and to improve company’s financial performance.
2. Project complexity: the e-SCM is an inter-company BPR project that initially integrates 11 e-processes of two companies and extend to more than 30 companies in the semiconductor industry in 6 years. The considerable technical and coordination efforts required by RosettaNet to structuralize, verify, and promote the data exchange protocol even increases the project complexity. By contrast, the Pricing Management in HiCom is an intra-company BPR project that impacts limited number of organizations within HiCom itself.
3. Time constraint: One of main drivers to urge HiCom to conduct the Pricing Management BPR project was to comply with Sarbanes-Oxley Acts (SOX) in 2006, which is 1 year after the project kick-off. The high time constraint demands HiCom to complete the project in 12 months otherwise would expose to SOX regulative risk.
The purpose of building pilot and referencing benchmark is to mitigate the project risk for the project of high complexity. The less project complexity and high time constraint collectively explain why the “Pilot” stage and “Search for benchmark” activity were skipped. The relatively low strategic level of Pricing Management BPR project explains
why the activity of “Review company vision” was not executed.
Although the proposed BPR implementation model provides practical guidelines for organizations plan to conduct BPR projects, no two BPR projects are exactly alike.
Because of the unique characteristics of the project and amount of change sought in different organizations, the effort dedicated to specific BPR project should be adjusted to maximize effectiveness (Kettinger et al., 1997). The experience of the two illustrated cases indicates that proper use of the model adapted to the project nature is necessary. The strategic level, complexity level, and resource constraint; such as time, budget, human resource, could be import factors to take into account while considering adjusting the proposed implementation model.
In spite of the difference of adjusting the methodology to the project attributes, there are commonalities of these two BPR projects that contribute to the project success.
1. Strong top management support at each implementation stage:
Both BPR projects were led by senior executives of the company: the e-SCM was led by senior vice president of IT and Corporate Planning and Pricing Management was led by senior vice president of Sales and Marketing. The aggressive participation of the top management not only set clear vision but provide valuable advises at critical point that in turn impact the project result profoundly. In the e-SCM BPR project, the top management sketched the concept of “Virtual Fab” in the project initiation stage and defined the high-level project implementation roadmap for the whole BPR team to follow. One critical decision that accelerated the supply chain integration solution being widely adopted by companies along the semiconductor industry was to join the RosettaNet organization and lead the task of data transfer protocol standardization.
In the Pricing Management BPR project, the critical decision made by the top management was to redefine the performance measurement indices of sales representative and delegate different levels of pricing authority to filed sales and
corporate pricing organization. Rule and Policy itself does not yield satisfying financial result but need strong enforcement by continuous monitor and corrective actions follow up. The redefined performance measurement indices, delegated pricing authority, and determinate enforcement by top management in total rectify sales behavior, shorten the pricing decision cycle time, and improve the company financial performance.
2. Active user group involvement:
The first-line user groups know the defects of current process and potential risks of future process. The active involvement of the user groups and constructive suggestions made by them help the BPR teams of both projects tackle the critical problems. In the e-SCM project, the user groups requested to incorporate both engineering and logistic key processes to complement the project scope. To multiply the willingness of key customers to implement the value chain integration with TSMC, the user groups suggested design both standard and customized data format in solution and alter the deployment sequence by approaching IDM customers first. In the Pricing Management project in HiCom, the user groups highlighted the complexity of quote-to-order relationship and inconsistent data resolution was the root cause of poor data quality, which directed BPR team to implement an appropriate solution. The field sales representatives also advocated the importance of including the key customers in the overall change management plan. All such important suggestions lead BPR team to do the right thing along the implementation life cycle.
3. Effective IT solution:
Re-engineering serves to streamline and rationalize the business processes that traverse multiple organizations, and also ultimately integrate their operational activities to achieve a seamless interface. The value of automating the reengineered processes through IT is to minimize the manual effort and, more importantly, to
provide real time visibility to the status of process operation. In the e-SCM case, the IT system integrating the in-house ERP, MES and Internet Web solutions, which in total enabled real time engineering and logistic information exchange and consequently improve the accuracy and timeliness of value chain integration. In the Pricing Management case, the IT system not only provided comprehensive pricing database and performed timely transaction validation that guarantee the operation accuracy, but also offered sufficient analytical functions that would enable the management team make informed pricing decisions. To ensure the IT solution is operated as effectively and efficiently as it’s designed, both BPR cases conducted thorough tests that covered all the critical business scenarios before the deploying the IT system to the production environment.
4. Cross organization team with strong domain knowledge:
Because the process of reengineering involves organizational design around processes, it is important that the team includes representatives from the primary organizational units involved in the process. Both the cases have broad team formation with knowledge team members. In the e-SCM BPR case, the project team is constituted of senior representatives from Demand Planning, Manufacturing, Production Control, and Order Management in both TSMC and ASE. In the Pricing Management BPR case in HiCom, the project team comprised of Finance, Corporate Pricing Planning, and Sales. In addition to team members from various business organizations, there were dedicated BPR experts to ensure the projects were implemented in accordance with the BPR methodology; and IT staff to collect business user requirement collection and build automate system.