EVOLUTION OF BPR

Economics of Business Process

Posted on the February 15th, 2008 under Value of BPR by Gregory Yankelovich

“Money is always there, but the pockets change.”

- Gertrude Stein (1874 – 1946)

We use different terms to describe initiatives to Optimize and Automate Business Processes which conceived to support Organizational Transformation. The following are just a few examples, and virtually every company invests into these initiatives on one scale or another:

• Business Applications software implementation
  
• Business Process Re-engineering;
  
• Enterprise Software implementation
  
• ERP, CRM, etc. deployment

I estimate that at least US$ 500B was shelled out last year alone (2007) globally to buy software licenses and implementation services from the suppliers of business application software and integration services. This estimate does not account for any hardware and Change Management costs incurred in the process. One may disagree with a methodology or assumptions I have used, and I welcome suggestion for improvement, but hardly anyone would dispute that there is a lot of money being spent on these initiatives.

There is a mind numbing number of books, articles, and white papers that can be found in the Internet searches that attempt to shed light on issues of Economics and Return on Investment for these initiatives, but they largely focus on efficiencies of software engineering projects, but I have failed so far to find any material explaining an economical rationale for such a massive investment. I would greatly appreciate if anyone points me to the right source. I understand of course that the quest for higher productivity and competitive pressures are closely associated with these initiatives, but I would like to learn how successful they are and how do we know when we succeed or fail.