Understanding organizational routines to improve business
process management initiatives
Ali Al-Bouawad (10812504)
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN BUSINESS INFORMATION SYSTEMS
University of Amsterdam –Thesis Master Information Studies: Business Information Systems Ali Al-Bouawad (10812504) – Supervisor: dr. E. de Vries – Final version: July 1, 2016
Abstract
Routines essentially describe how organizations perform their tasks. In the literature, routines are often conceptualized as a source of different organizational phenomena such as organizational stability, change, inertia, mindfulness and mindlessness. This qualitative study analyzed the concept of routines and sensemaking to understand how organizational change, specifically business process management initiatives can be improved based on a case study. By understanding routine theory and related theories such as sense-making new critical success factors for BPM are proposed. Structured interviews were held with employees that have been gone through a process change. A case study of a failed process change implementation was conducted. The findings of this case study was that the old routine was stronger than the new proposed routine. The findings of the literature and case study were then used to propose the following critical success factors for BPM. The first two CSFs are based on the concept of routines. The first CSF suggests that the BPM team has to decide whether to identify and incorporate a routine in the new design if it is aligned with the organization’s vision. The second CSF focuses on unlearning routines, in cases were current routines are misaligned with the organization’s strategy or vision. The final CSF is based on sensemaking and suggests adding more visual representations of the actual change so that key stakeholders are able to realize its actual value. Adding visual representations is beneficial for (shared) sensemaking and reduces uncertainty.
Keywords: organizational routines, sensemaking, business process, BPM, change, meta-routine
Acknowledgements
I would like to take this opportunity to thank my supervisor dr. Erik de Vries for providing valuable support throughout my thesis project. His feedback and insights are greatly appreciated and helped me in numerous occasions. I have been fortunate to have a supervisor
that gave me the freedom to explore and create my own work while providing guidance whenever needed.
I would also like to thank everyone for their time and effort in participating with the interviews and observations that allowed me to view practical work situations through a
Table of Contents ¶ p. -I. Introduction 5 1.1 Background 6 1.2 Research question 8 II. Methods 9
III. Literature Study 11
3.1 Organizational routines 11
3.2 Routines as dispositions 12
3.3 Routines as generative systems 12 3.4 Routines as a source of stability 13 3.5 Routines as a source of change 14 3.6 Routines as a unit of analysis 14
3.7 BPM as a meta-routine 15
3.8 CSF for BPM 16
3.9 Current state of BPM 17
3.10 Sensemaking in organizational change 18
IV. Case Study 20
V. Findings 24
5.1 Findings of the case study 24
5.2 Findings of the interviews 25
5.3 Proposing critical success factors for BPM 27
VI. Conclusion 32 VII. Discussion 32 7.1 Limitations 33 7.2 Future research 34 7.3 Critical reflection 35 VIII. References 36 IX. Appendices 39 9.1 Interview questions 39 9.2 Transcriptions 40
I. Introduction
odern organizations often find themselves in a highly competitive environment in where their adaptive and dynamic capabilities are tested in order to sustain or create competitive advantage. These changes can be exogenous by nature such as technological developments or new business trends that the organization needs to react on. In contrast, changes can also be of endogenous nature whereby change is introduced from within the organization. An example of organizational change is business process management. Business process management (BPM) is a set of techniques, methods and tools to support the (re-)design, management, enactment, analysis and improvement of operational business processes (Van Der Aalst et al., 2003). Despite its popularity, many BPM initiatives are unsuccessful (Trkman, 2010). Some of these failures were caused by lack of strategic alignment (Trkman, 2010), no or insufficient alignment of the IT and business strategy (Ariyachandra & Frolick, 2008), lack of performance measurements of replaced and redesigned processes (Hoque, 2004) or lack of use of a continuous improvement system and lack of employee involvement (Trkman, 2010). These critical success factors, amongst others, are crucial for the long-term success of BPM initiatives.
In order to improve business process management initiatives one needs to better understand how organizations and their individuals currently perform their tasks. The concept of organizational routines describes how organizations perform most of their tasks, or in other words: routines describe how organizations get their things done. Feldman & Pentland (2003) define organizational routines as a repetitive, recognizable pattern of interdependent actions that involves multiple actors. Routines have been conceptualized as a source of inertia and stability but also as a source of flexibility and change. Thus, by analyzing routine, we can better understand organizational change (specifically business process change).
In this thesis a literature and qualitative study shall be conducted to understand how organizational routines can be analyzed to improve BPM initiatives. This shall be done by conducting a case study along with interviews with a BPM practitioner and employees of organizations that have been gone through a BPM project.
1.1 Background.
M
1.1.1 History and structure of BPM
Business process management emerged from the successes and failures of previous attempts at increasing organizational efficiency with process-based thinking. Examples of past attempts are Total Quality Management (TQM) which emerged in 1988 and Business Process Re-Engineering (BPR) which emerged throughout the 1990s. TQM was successful for its orientation on manufacturing organizations while BPM focuses on service organizations (Dumas et al., 2013). BPR is a business strategy that focuses on the analysis and (re-)design of business processes and workflows within an organization. BPR was very popular1 but could not live up to its hype due to several factors. According to Dumas et al. (2013), BPR suffered from concept misuse whereby organizations labeled change programs as BPR while business processes were not the main issue. Another critical failure factor is over-radicalism in where business processes were completely redesigned without considering the status quo of the process. Lastly, problems arose because of lack of support. This became clear when the used tools and technologies were not powerful enough to implement the proposed design. BPM emerged after the rapid developments in the information technology sector with innovations such as Enterprise Resource Planning and Workflow Management Systems that collected data in a central database which allowed for better process improvements. BPM also focuses on an incremental rather than a radical approach. Consequently, this difference in approach naturally lowers the risks and costs of process improvement projects.
The BPM lifecycle (Figure 1) is structured as follows. First, the process identification phase starts to select eligible processes that need to be redesigned. These processes are selected based on their importance, health and feasibility (Portougal, 2005). The second phase is process discovery in which the chosen process is analyzed and modelled. Then, during the process analysis phase the weaknesses and impact are identified. In the process redesign phase, the new design is created and modelled in BPMN2. During the process implementation phase an executable process model is created and is the new process design live. Finally, the process monitoring and controlling phase monitors the new process for conformance and performance (compared to the old design). Because BPMN emphasis continuous improvement this lifecycle repeats itself after other processes are identified for improvement.
1 According to Hamscher (1994) in AI in Business-Process Reengineering an estimated 60% of Fortune 500
organizations have had initiated a BPR project or were interested in BPR
Figure 1 BPM life-cycle (Dumas et al., 2013)
1.1.2 Defining success of BPM.
Organizations each have their own reasons and goals to start a BPM initiative. This consequently means that success is defined by different units of analysis based on the organization’s needs (Table 1). Because of the variety of units of analysis, a general definition of BPM success is needed. The following definition of success (in the context of BPM initiatives) is therefore adapted: “Since BPM can be initiated for a variety of different reasons […] a very general definition is proposed: BPM is successful if it continuously meets predetermined goals, both within a single project scope and over a longer period of time” (Trkman, 2010).
Unit of analysis Example of verifying success
Process efficiency Key performance indicators Customer satisfaction Customer satisfaction survey Employee satisfaction Employee satisfaction survey Employee engagement Time-to-Market monitoring Return of Investment Costs savings
Strategy goals Management reviews Regulation compliance Independent audit
Competitive advantage New and/or returning customers Sustained adoption Policy compliance
Table 1 Examples of units of analysis to define BPM success
1.1.3 Organizational routines
Every organization performs tasks in a certain manner or time. These so called routines define how organizations handle repetitive tasks such as the hiring process. According to Feldman & Pentland (2003), organizational routines can be defined as a repetitive, recognizable patterns of interdependent actions, carried out by multiple actors. An organizational routine consists of
an ostensive and performative aspect (Feldman, 2000). The ostensive aspect of a routine is the generalized form of the routine while the performative aspect describes how, when and by whom certain actions are performed. For example, the ostensive aspect could be the procedure on how to handle with security incidents while the performative aspect entails the actual activities that should be done by certain individuals in case of a security incident. Thus, organizational routines can be considered an important value for organizations to maintain consistency and store knowledge. According to Feldman (2000) routines are a source of continuous change even though they are perceived as unchanging. Howard-Grenville et al. (2015) states that change in routines can occur for several reasons. First, participants in the routine may not perform the task identically every time it is enacted. And, organizational routines are enacted by multiple individuals and lack of agreement on how to perform the routine could lead to change. Routines are representations of the knowledge an organization has. Tasks are performed based on the best approach according to the organization and its agents. However, when improvements can be made to certain tasks a new or modified routine will be created. The creation of a new or modified routine can occur externally or internally.
Routines are a main concept of this research and are conceptualized in different ways in the literature. The literature study will therefore first discuss several conceptualizations to provide a better understanding which allows us to apply the concept to BPM.
1.2 Research question
Based on the above problem definition the following research question is formulated: In what way can organizational routines be analyzed and applied to business process management initiatives to improve its success?
To answer the main research question the following sub-questions have been defined. The first three questions can be answered after conducting a literature study. The last sub-question requires a more in-depth analysis and is answered after conducting interviews with BPM experts and individuals that have been gone through a business change.
1.2.1 Sub questions:
1) How can organizational routines be analyzed? 2) How is success in BPM defined?
II. Methods Literature study
A literature study was first conducted. The literature study contains an in-depth study on the concepts of organizational routines and the current state of BPM. This allows us to answer the first two sub-questions. The study also allows us to understand the many conceptualizations of routines and how they can be used later on to understand organizational phenomena. The study also contains a review on BPM and its current state. This review is required to identify factors that can contribute to a higher success rate of BPM initiatives.
Case study
A case study was then conducted at a small IT firm that sells services and products for a wide variety of clients. The case study is descriptive of nature and covers a single case. This case is a BPM initiative that started in the first quarter of 2015. Specifically, the system maintenance process and its employees are analyzed to discover why the BPM was not successful in the long-term. Identifying weaknesses of a new routine or strength of the old routine allows us to understand the effects or organizational change or inertia.
The case study is conducted using the ostensive-performative-artifacts approach (Pentland & Feldman, 2005). This approach allows researchers to analyze the internal structures of a routine. This conceptualization was routines is operationalized by identifying the ostensive aspect (general or abstract pattern), the performative aspect (actual work) and artifacts (such as policies or process documents). The ostensive aspect of a routine is identified by conducting structured interviews with employees of the organization. Then, the performative aspect is identified by interviews and by observing employees when they are performing their tasks. Artifacts are then finally identified using document analysis and observation.
Interviews
Structured interviews were conducted throughout the period of the case study. The first interviews were employees that have been gone through a BPM initiative in their organization. These structured interviews took approximately one hour and the participants volunteered to answer 15 questions that related to their current work and their experience with the process change in their organization. The protocol was a follows. The participants were quickly introduced about the research and its goals. Then, the participants answered the questions and
were recorded digitally for analysis purposes. The interviewer also made sure the participants knew all information would be anonymized.
A BPM professional was also interviewed after conducting the case study and proposing new critical success factors. These structured interviews are used to understand what the view is of practitioners on these new CSF based on academic literature. The protocol for this interview is as follows. The BPM practitioners have read the thesis before conducting the interview. Then, the structured interview is conducted to gather insights in the experience and feedback of a BPM (change) professional.
III. Literature Study
3.1 Organizational routines.
Organizational routines are a concept first coined by Nelson & Winter (1982) that can be defined as an executable capability for repeated performance in some context that has been learned by an organization in response to selective pressures (Cohen et al., 1996). Routines can be seen as the engine of an organization where tasks are performed by certain agents during certain periods of time. These routines store knowledge of the organization, either explicitly by rules, policies and standards or implicit by norms, values and culture. According to Feldman (2003) routines can be seen as a source of organizational change. One of the greatest distinctions made in this discourse follows a train of thought established by French philosopher, anthropologist, and sociologist of science Bruno Latour. Pentland and Feldman sought to explain “why routines are a source of change as well as stability” by adjusting Latour’s definition of ostensive and performative (Feldman, 2003). Performative, as conceived by Latour, is used to describe society as “a practical and revisable matter” (Latour, 1984) and counters this with his definition of ostensive thusly: “the object of the ostensive definition remains there, whatever happens to the index of the onlooker”. This is applied to Pentland and Feldman’s work in organizational routines in order to explain that organizational routines can use
“the relationship between ostensive and performative aspects of routines [in order] to create an ongoing opportunity for variation, selection, and retention of new practices and patterns of action within routines and
allows routines to generate a wide range of outcomes, from apparent stability to considerable change”. (Feldman, 2003)
The concept of routines however has been used in literature to describe or explain a variety of other phenomena besides a source of change. According to Becker (2004) there is no clear definition of the concept of organizational routines – it has been used to understand organizational change (Feldman, 2003), rules (March & Simon, 1958), decision-making (Allison & Zelikow, 1999), organizational behavior (Nelson & Winter, 1982), mindlessness and mindfulness (Feldman, 2003; Weichbrodt & Grote, 2009) and so and forth. Organizational knowledge is socially embedded and rooted in routines. Tacit knowledge is an integral part of routines which refers to knowledge that cannot be transferred because it is context specific and not codified. The importance of tacit knowledge has been brought up in research for sustaining firms’ competitiveness, its role in technological innovation and organizational learning (Lam,
1998). Routines are therefore performed by actors based on the knowledge of how they think tasks can be best performed.
3.2 Routines as dispositions
Routines are used to understand how agents in an organization carry out tasks. It has also been applied to understand the behavior of organizations and was a key motivation in introducing the concept (Becker & Zirpoli, 2008). According to Becker & Zirpoli (2008) routines are a good unit of analysis to understand organizational behavior because they capture systematic performance drivers rather than unique cases or situations. However, many researchers adopted the notion of routines as disposition rather than behavior itself (Becker & Lazaric, 2009; Hodgson & Knudsen, 2004). A disposition can be defined as the cognitive processes that leads to certain behavior, rather than the behavior itself as previously accepted by scholars (Becker & Lazaric, 2009). Accordingly, because disposition follow an if-then structure they can be considered as a subset of rules (e.g. if circumstance C, then energize behavior B, which is a subset out of all behaviors S) (Knudsen, 2004). According to Hodgson (2008), routines cannot be both generative structures (generating behaviors for example) and outcomes of such structures. Meaning, routines cannot be conceptualized as both behavior and the engine that generates behavior.
3.3 Routines as generative systems
Pentland & Feldman (2008) make a distinction between dead and live routines. According to them any routine that involves agents that are capable of learning and improving based on their experience is a live routine. Live routines are different compared to dead routines because those types of routines can be “designed by whatever means seems convenient and adequate” (Pentland & Feldman, 2008). They further define live routines as generative systems, meaning that the enactment of such routines enables new actions or even patterns of action. In this conceptualization, generative systems denote the fact that routines are able to produce performances based on specific circumstances. As stated before, a routine has two aspects – the ostensive and performative aspect. The ostensive aspect of a routine refers to the “generalized pattern” (Pentland & Feldman, 2005) and can be described as how agents in an organization think a task should be executed. In other words, the ostensive aspect of an organizational routine is the ideal form or general idea of the routine. The performative aspect however refers to the actual performance by specific agents at a specific time and place. The performative aspect represents instances of the ostensive aspect. Thusly, the performative
aspect of a routine is the routine in practice (how tasks are actually performed) specified by agent, date and time. Figure 2 shows a visualization of an organizational routine.
Figure 3 Parts of an organizational routine (Pentland & Feldman, 2008)
According to above visual representation of a routine, artifacts influences or even enables routines. Examples of artifacts of the ostensive aspect can be written rules, standard operating procedures or policies. Examples of artifacts of the performative aspect can be information output such as an overview of transactions or workflow items.
3.4 Routines as a source of stability
The conceptualization of routines as a source of stability or inertia is one of the first (March & Simon, 1958). This property has been attributed to routines because, according to Cohen et al. (1996), stability occurs when a learning process does not lead to new and a more efficient set of rules. One of the reasons routines are a source of stability is also because the current way of performing tasks is suited best by individuals in an organization. This consequentially means that because the tasks provide a satisfactory result, no or little incentive exists to find another approach in achieving the tasks. This behavior however could lead to mindlessness in where new information is devalued because any type of change can be seen as a risk or threat causing instability or possible performance threats. In this case, tasks in a routine are performed subconscious and “do not draw on substantial cognitive resources” (Becker, 2004). According to Becker (2004) another argument for stability in routines are costs. Changing processes or tasks in a routine requires additional costs while the result is not immediately visible which leads to uncertainty and is thus avoided.
Another perspective on stability in routines is given by Orlikowski (2000). Orlikowski states that routines are a source of stability because they are built around the use of existing technologies (that are possibly not compatible with frequent changes). This view, while
possible outdated, emphasizes the lack of dynamic capabilities of IT artifacts that supports stability (no change or innovation) in routines.
3.5 Routines as a source of change
Routines have also been conceptualized as a source of change (Feldman, 2003; Feldman, 2000; Cohen, 2007; D’ Adderio et al., 2012). Traditional conceptualizations described routines as a source of inertia (Hannan & Freeman, 1983) and mindlessness (Ashforth & Fried, 1988) amongst other negative phenomena. However, the relationship between the ostensive and performative aspect of routines enables the selection and creation of new practices. These practices allow routines to generate several outcomes that can lead to stability and change (Feldman & Pentland, 2003). March & Simon (1958) present a top-down (e.g. hierarchical) perspective of routines. The authors state that routines consist of a nested hierarchy that has smaller routines. The high level routines are put in place by the organization to revise or improve lower level routines. Winter (2003) built on these insights used literature on organizational dynamic capabilities whereby these capabilities are viewed as top routines that enable or support change of lower level routines. Additionally, Winter (2003) made a distinction between ordinary or zero-order and first-order capabilities. Zero-order capabilities are “those that permit a firm to make a living in the short term” (Winter, 2003). In contrast, first-order capabilities are routines that have an influence on the product or process of an organization. Espedal (2006) adopts a learning perspective to analyze how routines change or cease to exist. According to this view, organizational routines are able to change if they are frequently updated based on experience. Agents in an organization act and learn from experiences which reflects changes to be made in a current or entirely new routine.
3.6 Routines as a unit of analysis
Routines can be used as a unit of analysis that capture “a level of granularity significant for organizational change” (Becker et al., 2005). An analysis to understand change on a macro-level is not capable of collecting interactions of (implicit or explicit) routines and the relation with agents in the organization. When using routines as a unit of analysis a micro-level perspective is possible of the dynamics of the routine and also allows change agents to discover driving forces for organizational change or inertia. According to Feldman & Pentland (2003) routines can be used to analyze (lack of) organizational change by capturing the ostensive (abstract or general idea of the routine) and the performative (actual performances) aspect of routines. Continued on the work of Feldman & Pentland is viewing routines as effortful
accomplishments and repetitions of sensemaking. Before one analyzes organizational behavior by using routines as a unit it is important to understand what influences the changing of routines. Routines can be altered by exogenous factors such as managerial influences or by endogenous factors because agents are the ones who actually are involved in performing tasks in a routine and have, to some degree, the ability to alter the way tasks are carried out.
Routines however are carried out by agents that can enable or support a (new) routine only if their interests are preserved, if it makes sense according to the agent’s rationale or the routine causes no risk or threat in comparison to the status quo (Feldman, 2000).
3.7 BPM as a meta-routine
BPM can be conceptualized as a routine according to the definition by Feldman & Pentland (2003). It is repetitive considering business processes are evaluated and monitored continuously according to the BPM lifecycle. The lifecycle then restarts in cases where improvement can be made. BPM also has a recognizable pattern of interdependent actions. Specifically, a business process will always be analyzed and redesigned first before the implementation phase can begin. The performed activities are indeed interdependent. For example, the activities performed in the process discovery phase directly affect the activities that need to be done in the process analysis phase. Thus, the actions of one phase are the input for the next. The final characterization of routines is that they “involve multiple actors”. A BPM initiative involves many different stakeholders such as domain experts, process modelers, employees and (executive) management.
BPM can then be further conceptualized as a meta-routine. Meta-routines are routines for changing other routines (Adler, Goldoftas & Levine, 1999). Such routines are used by organizations to change established routines but can also be deployed in creating entirely new routines. Other examples of meta-routines are total quality management, ISO 9001 and Six Lean Sigma. Meta-routines are, according to Adler et al. (1999) also a source of organizational rigidity. Defensiveness by agents in an organization can arise in cases where the new routine is seen as a threat. New routines can be seen as a threat because routine work is easier measurable, focuses more on a reward-punishment regime or the added value is not recognized by the ones that need to adopt the new routine.
3.8 Critical success factors of BPM
As previously stated, the success of BPM can be measured by different means such as customer or employee satisfaction, competitive advantage, sustained adoption and many other
measurements. Because BPM can be initiate for several purposes and reasons, the definition of success depends on the unit of analysis. We therefore adopt a broader definition of success in BPM. Specifically, BPM is successful when predetermined goals are continuously met over a longer period of time. In order to make suggestions in improving BPM a brief overview of critical success and failure factors of BPM follows.
A number of critical success factors (CSFs) have been developed and categorized from a theoretical perspective by Trkman (2010). The first CSFs category is the need for a fit between business environment and business processes which is drawn from contingency theory. The contingency theory explains that there is no best way in creating the best organizations because different situations require different organization. There are specific situational factors making it not possible to structure an organization and solve all problems (“one-size-fits-all”). Instead, organizations should use a trial-and-error approach to discover how organizations should act in different situations. Other CSFs that belong in this category are level of IT investment (Ariyachandra & Frolick, 2008), performance measurements (Lee & Ahn, 2008) and level of employee’s specialization (Mulyar & van der Aalst, 2005). Secondly, an organization needs to continuously improve to assure sustained benefits from BPM. This CSF is drawn from the Dynamic Capabilities theory that “attempts to bridge the shortcoming of a resource-based by adopting a process approach” (Trkman, 2010). The last CSF is drawn from the Task-Technology fit theory and states there needs to be a fit between IT and business processes. According to Goodhue & Thompson (1995) the Task-Technology Fit explains that IT has a positive impact on individual performance if IT’s capabilities match the tasks the individual performs. Table 2 contains an overview of the CSFs and related theories.
Theory Main idea CSFs
Contingency Theory Fit between the business environment and business processes
Strategic alignment, level of it investment,
performance measurement, level of employee’s specialization Dynamic Capabilities Continuous improvement
to assure sustained benefits from BPM
Organizational changes, appointment of process owners, implementation of proposed changes (quick-win strategy), use of a continuous improvement system
Task-Technology Fit Fit between it and business processes
Standardization of
processes, informatization, automation, training and
empowerment of employees
Table 2 Classification of BPM CSFs and theoretical perspective (Trkman, 2010)
3.9 Current state of BPM
BPM is steadily growing over the past few years with an expected yearly growth of ~10% worldwide (Club-BPM, 2015). The financial services and industry are amongst the top branches that participate in BPM initiatives according to a recent survey. Organizations are constantly changing their business requirements due to internal and external developments or challenges such as cost reduction, competition and decreasing product life cycles. Consequently, BPM is increasingly popular given the fact that it provides an agile adaption to changing business needs. Recent research shows that many companies are unaware of BPM’s advantages and reasons for adaption (Club-BPM, 2015). However, “the majority of the interviewees of [the survey] believe that BPM is rapidly gaining importance in business life which implies that the topic BPM is still on the top of decision makers’ agenda” (Neubauer, 2009). According to Dumas et al. (2013), automatic process discovery (APD) is steadily growing in popularity. APD is a type of process mining technique that aims to construct a process model based on an event log or other type of process documentation. Algorithms, such as the alpha-algorithm, are used to identify a potential process and replay different cases without unexpected behavior that is not found in documents.
Figure 4 Automatic Process Discovery (Van der Aalst, 2011)
The increasing growth of IT-driven BPM could pose problems because there is little or no consideration for social aspects that are important for the success of a BPM initiative. A more holistic approach is required to identify other success factors such as culture, behavior and
preferences of individuals that cannot be captured by IT systems (Rosemann and vom Brocke, 2010). Herein lies opportunities for improvements based on Routine and Sensemaking theory.
3.10 Sense-making in organizational change
Sensemaking is the process through which individuals try to give meaning to experience such as ambiguity or uncertainty. The concept of sensemaking (Weick et al., 2005) is defined as a process theory that is concerned with mapping mechanisms and sequences within a general perspective. In other words, the sensemaking process indicates effort to interpret and create an order for occurrences (Lüscher and Lewis, 2008; Berente et. al, 2011). Sensemaking is defined by (Maitlis & Sonenshein, 2010) as “the process of social construction that occurs when discrepant cues interrupt individual’s ongoing activity, and involves the retrospective development of plausible meanings that rationalize what people are doing”. This means that the sensemaking process in BPM starts when a new process or routine is implemented.
One of the characteristics of a routine is a recognizable patterns of action. Organizational change interrupts these patterns of action, forcing individuals or other entities in an organization to re-enact their environment. When change is proposed, an individual will interpret this disruption based on his previous experiences and rationale. The performative aspect of a routine explains what individuals are doing and provides a lens for accounting (Feldman, 2003). March (2003) states: “Connecting the behavior of an individual to a routine legitimates the behavior if it is understood to be part of the routine and de-legitimates [the behavior] if it is not. This is essentially a sensemaking function”. The sensemaking process starts as stated before with a cue in the environment that has been altered, such as a business process change. The individual then identifies so-called signaling cues from the environment. These cues create an unknown anomaly in which the individuals try to make sense of the changes based on their experience.
Sensemaking reacts to situations were ambiguity or uncertainty arises (Weick, 1995) and likely occurs during meetings or other group activities. The sensemaking process is summarized by Weick et al. (2005) as follows. An ambiguous situation emerges which results in the members of a group reacting to it. The sensemaking process than extract cues from the available information to answer questions regarding the emergence of a new situation. Members of a group then unite around an explanation that seems plausible. According to Weick et al. (2005): “Sensemaking is driven by plausibility rather than accuracy. It creates understanding through approximations or plausible images”. The last step of the sensemaking process is concerns action. After members of a group understand what has happened the next
question that arises is what they should do next. The explanation that is most likely plausible will lead to action.
Krogstie et al. (2008) state that business process models are (amongst other reasons) used for human sensemaking to make sense of an aspect of change between different stakeholders. However, if visual representations are not fully understood it will consequently affect the sensemaking process. It is therefore important to present visualizations that are understood so that the true value of change can be understood. As per the BPM lifecycle, the visual representations of a business process change are the as-is and to-be BPMN models.
IV. Case Study
The following section contains a case study of a business change in a small IT firm. A business process change was needed for several processes in order to qualify for an international quality management system standard known as ISO 9001:2008. Yin (2003) recommends three criteria in choosing for a proper case study type. These recommendations are:
Case study types (Fisher & Ziviani, 2004)
o Exploratory: can be used for a problem that has not yet been clearly defined or can be used to determine feasibility of research.
o Explanatory: can be used to explain casual relationships between concepts.
o Descriptive: can be used to describe interventions, processes or a certain phenomenon.
Single or multiple case design: choosing a single or multiple case design depends on whether the phenomenon can be understood when conducting a single case. Time and resources available also account for the decision.
Holistic or embedded design: entails the decision whether to choose for a holistic (one unit of analysis) or embedded design (multiple units of analysis).
A descriptive single case study will be conducted for this thesis. The decision to conduct aforementioned type of case study derives from the fact that the business change at an (small IT) organization allows us to study in-depth what the effects of BPM were and how future BPM initiatives can be improved by understanding the concept of organizational routines. For the case study two data sources have been used. First, internal documents (policies, processes, etc.) have been used to understand how agents in the organization perform their tasks. Second, structured interviews have been held with several individuals that have been gone through the business process change. The ostensive-performative-artifact approach (Feldman, 2005) allows us to draw conclusions on the nature of change or stability in routines and is constructed as follows:
1. Performative aspect: observing actual work and order (observation)
2. Ostensive aspect: rules for actions and related norms and values (interviews) 3. Artifacts: written protocols, policies, procedures and IT systems (observation)
Case study: business process changes in a small IT firm
Introduction
The organization chosen for the case study is a small IT organization that (re)sells IT products and services. It has been founded in 2001 and currently has ambitions to grow by entering new markets such as health care and government. In order to grow, however, the organization needs to improve the quality of its business processes. Executive management therefore decided to improve certain business processes to qualify for international standards such as ISO 9001 (quality management system) and ISO 27001 (information security) which several large organizations require of their IT provider. The services this organization provides are:
System maintenance Business e-mail services Network monitoring services Teleworking
Hardware and software implementation and management Firewalls and security
Business process change: System maintenance
One of the improved business processes was one of the organization’s core processes. The process System Maintenance is performed by junior and senior system administrators. Some of the tasks were (but not limited to) monitoring IT systems and networks of clients, creating and restoring backups, security penetration testing and software management. These tasks were discovered by observing the junior and senior system administrator. The aim of management was to increase the quality of the process by using an IT registration system to keep up with changes and other records (other improvement aspects for processes are flexibility, costs and time – see Figure 3).
Figure 5 The Devil’s Quadrangle (adopted from Jansen-Vullers et al., 2007)
Some of the actual changes of the as-is and the to-be situation were the usage of an incident management system to register any exceptions or complaints that previously were not recorded. Another change was the periodic auditing of IT security policies (that included testing of exploits, viruses or breaches). The redesigned process allowed management to include key performance indicators (KPIs) to quantify and analyze the performance of each of their processes. The incident management system was also put in place to generate higher customer satisfaction since exceptions or errors were now easily registered and retrieved.
Before the business process change there were no or insufficient internal documents that described what tasks an employee had and how they should be performed. There was also no way of knowing how the process performed since there was no monitoring or feedback, with the exception of contact with customers. The organization could be described as an informal one, given the fact that decisions are made with the involvement of employees, there is no strong emphasis on hierarchy and roles, and all individuals were encouraged to be involved with the process changes. Employees however were not involved with the changes as can be observed in the weekly staff notes and audit documents.
Another observation was that there was no, at least up to date, documentation of how processes and tasks should be performed and by whom. This means that tasks in the routine were performed based on tacit knowledge and by the individuals’ understanding of how they think the tasks should be performed. An example of such artifacts are “Systeembeheer Process” which was an outdated document describing the tasks and execution of a system administrator. This document was introduced by management and never updated by the actual employees performing the job. Other artifacts, besides documents, were IT systems that were updated to reflect the changes in the routine. These new functionalities in their IT systems however were not being used (Interviewee, personal communication, 2016). The IT system in this case was
the “Ticketregistratiesysteem” which was used to register and monitor incidents. After checking the data in that system it became clear that none of the new required information to be registered was not actually in the system. The employees also stated that their interpretation of the abstract or general idea of the routine was formed mainly by experience instead of artifacts.
Results of the process change
The business change allowed the organization to monitor process performance and set goals for core processes. The business change initiatives were also required to achieve an international quality management system standard (ISO 9001). The organization was qualified for the quality standard after the changes were introduced and internal and external audits were held. Artifacts were put in place such as updated policies and process documents and improved IT systems. However, only the artifacts were updated to be compatible with the newly introduced routine while the ostensive and performative aspect of routines remained unchanged in the long term.
Months after the changes the old routine of the individuals maintained and the process was not performed according to the newly introduced routine which also included artifacts such as policies and process documents and models. While the information systems were aligned for the new routine the employees were not. BPM, as a meta-routine, introduced a new routine whereby the ostensive (abstract or general) aspect of the routine remained largely unchanged. However, the performative (actual performances) aspect of the newly introduced routine had several changes. The newly introduced routine could have been rejected by employees because they do not see the added value, see risks or threats in the new routine or because
“…they are implied, accepted and understood they can be ways of working that are so obvious that individuals experienced in the organization could not conceive of other ways in which things could be done.” (Bowman,
1994)
Thus, the BPM initiative was only successful in the short-term while old routines restored their position. In this case, a revised BPM implementation in where old routines are incorporated or taken into account could be used to have a more successful BPM initiative in the long term.
This descriptive case study was a useful approach in understanding routines in retrospect of a business process change. A meta-routine was introduced by top management to change existing routines because the management team has a different interpretation of how tasks should be performed. However, this exogenous change was incompatible with the interpretations and perspective on work of agents in the organization. This course of action
eventually led to a form of resistance by the agents, in where their old routines retained their position. Ironically, a meta-routine is a source of organizational change that generates or modifies routines. However, the old routine kept its position and was in this case study a source of organizational inertia (or, one could argue a source of stability).
V. Findings
5.1 Findings of the case study
As previously stated many process change initiatives fail due to a number of social and technological factors (Hammer & Champy, 1993). According to their study, one of the reason these initiatives fail is due to employees “clinging on the old way of working”. The decision was therefore made to conduct a descriptive case study that would describe how and why a BPM initiative did not meet pre-defined goals of the organization. The concept of organizational routines applied to this case study provided valuable insight that can be used to propose improvements for BPM’s current lifecycle. The case study studied routines by analyzing documents of the organization and the actual work performed by the employees.
A finding of this case study was the rejection of the routine that was generated by BPM, a meta-routine. According to one of the employees the reason for lack of long-term BPM success was the exogenous nature of the routine (Interviewee, personal communication, 2016). However, observations suggest that employees were also not positive about a radical change (continuous change nature of BPM). This is one of the CSF stated by the BPM professional in the interview: “There also has to be a cultural fit that supports continuous change and does not show resistance” (BPM Interviewee, personal communications 2016). Another perspective is the reason why a BPM initiative was started. In this case, management introduced these changes and were a source of ambiguity. In contrast, many BPM initiatives begin by “establishing a sense of urgency based on business’ needs. Then a guiding coalition is made to develop a vision and strategy for the change. From that point we have a plan to improve a business process.” (BPM Interviewee, personal communications, 2016).
Furthermore, the employee stated that there was no incentive to accept the modified routine because there was no employee involvement and thus no understanding of the changes and its goals. Employee involvement is described by the BPM professional as follows: “You have to create process awareness on the part of all employees in the organization. The driving forces behind increasing the involvement of employees are the conviction that more brains are
better and that involved employees will be more motivated to do what is best for the organization” (BPM Interviewee, personal communications, 2016).
The result of this case study is the discovery of a strong routine that maintained its position due to several factors. Analyzing routines allowed us to understand how in this case organizational change was rejected by its agents. From management’s perspective these routines are thus seen as a source of inertia, because their change project was unsuccessful in the long term. The employees however saw the new routines as either a threat or risk and therefore viewed their current routine as a source of stability. By analyzing the internal structures of a routine according to the ostensive-performative-artifacts (OPA) approach (Feldman, 2005). The performative aspect of routines was captured by observing the tasks of the system administrator. The ostensive aspect however is more difficult to identify and required interviews to discover how agents in the organization perceive the abstract pattern of the routine. Artifacts such as process documents or policies can be seen as indicators that form the ostensive aspect of routines. However, interviews made clear that their routine is not formed by artifacts such as IT systems, standard operating procedures or rules but is rather formed by experience.
5.2 Findings of the interviews
Interviews were first held with three employees all from different job functions and/or organizations and a BPM professional. A successful pilot interview was conducted to verify whether the questions were understandable and in logical order. The interviewees all have been gone through a BPM initiative and personal information has been removed from the transcriptions.
When asked what common tasks are for their job function all three interviewees described their day-to-day work in an abstract manner without specifying how these tasks are performed. This could be either because of how the question was phrased or because presence of the interviewer can affect the subject’s response (Anderson, 2010). Interestingly enough, when asked how they learned to perform the tasks they mentioned all three interviewees said they work according to their own experience and interpretation. This means that the interviewees performed work is not based on (process) documents or a form of training: “I had no formal training and there are no documents describing how I should exactly perform my tasks. Before working here, I was an intern and during that time I used a trial-and-error approach, which allowed me to pick the best approach now that I am an employee” (Interviewee, personal communication, 2016).
There were mixed reaction when asked whether procedures or processes were regularly updated. For example, the third interviewee answered: “I know there are some documents but I haven’t read most of them nor was it ever asked of me to read and apply them to my work” (Interviewee, personal communication, 2016). This implies that managerial control is limited on the low-level routine and agents can create their own routine as they see fit.
When asked whether employees perform tasks different compared to documents related to their work all employees answered positively. The performative aspect of routines is unaffected by (IT) artifacts that try to standardize tasks. It also became clear that the interviewees cling to their routines after asking whether they often change the way they perform tasks under their responsibility. Despite the fact that they seem to cling on their old routine, the interviewees all had a direct answer on how their process could be improved and what their own contribution is in improving their process:
“Whenever an error or incident pops up I make sure to understand its root and try to the thing that caused the incident at the first place.”
“Every year we follow training that is relevant to our job function. If I get new insights I try to incorporate it into my work but as of yet little has changed. I do try to improve the time aspect you
just mentioned by finishing more incidents but there is a huge trade-off with quality and time. An example that I just remembered is from one of our clients. I tried to fix his issue with less communication but with the same end result, he was surprised with the change. This made improving
some of the tasks I have a bit harder, yeah.”
“Well our clients are very satisfied with our quality at {retracted} and are also satisfied with our planning… at least according to the latest customer satisfaction survey! I don’t have insight in the costs of our processes so I would have to say flexibility. There are many cases where changes to a
default workshop for example causes issues that shouldn’t be there.”
Furthermore, two out of three interviewees were not actively involved with the BPM initiative. This could have been one of the reasons there was no long-term success. Employees were not involved which renders the change as a possible threat or risk. Additionally, three out of three interviewees identified the value but also risks that came with the BPM initiative. Some of the risks were “risk of losing jobs”, “employees do not know the changes in a process” and one threat, namely the “external consultant added key performance indicators”. The interviewees also came up with ideas on how to improve BPM in their organizations. Those ideas were introducing smaller changes instead of radical ones, continuous management commitment,
adding a clear mapping of all changes and involvement of senior employees (Interviewees, personal communications, 2016). When asked whether BPM needs to take into consideration old routines of individuals two out of three responses were negative because “old habits are not necessarily aligned with organizational goals” and because “it would require a lot of effort and time”. Finally, the interviewees were asked what they though the most important CSF is for BPM. Training people, involvement of employees, culture supporting change, management commitment and keeping old routines.
5.3 Proposing new critical success factors for BPM
Before proposing additional critical success factors a quick reflection of the CSFs proposed by Trkman (201) is needed to understand whether the new CSF will replace or complement them. The first CSF is based on contingency theory and states that there needs to be a fit between business
environment and business processes. This CSF aligns with the CSF based on organizational routines in where routines should be incorporated into the new process design. This means that routines (environment) should be compatible with the newly designed process. The second CSF is based on dynamic capabilities theory and states that continuous improvement is needed to assure sustained success of BPM. This CSF complements other CSFs in the sense that regardless of the approach taken, a continuous improvement system should be in place. The final CSF is based on the task-technology fit and states that there should be a fit between IT and business processes. This CSF also complements other success factors and does not contradict the new proposed CSFs. However, it should be noted that future IT development should be designed with a participatory approach to include individual’s routines.
As presented in the findings of the case study and interviews routines can affect the outcome of a BPM initiative. Routines of individuals in an organization include their abstract idea of how work should be performed, artifacts that form or guide this abstract idea and the actual work that is performed. BPM is a set of techniques, methods and tools to manage and improve business processes and there is no standard way of implementing BPM. Some organizations may require all techniques and tools that BPM offers while other organizations only use certain parts. Routines however exist in every organization, either implicit or explicit. Even in organizations where managerial control is high agents can still form their own routine. Based on these findings two proposals to improve BPM are presented. Organizations and BPM practitioners can either incorporate individuals’ routines in the business redesign phase or they
can choose to forgo these routines. When doing the latter, the organization’s agents need to unlearn what they know to allow changes. Organizational unlearning is widely considered an important condition for successful adaption to environmental changes, promoting organizational learning and enhancing a firm’s performances (Tsang, Shaker & Zahra, 2008).
(1) Incorporating routines in BPM
In some cases, BPM practitioners and executive management can choose to not force a new routine but rather accepting old routines and incorporate them in the new business process design. While BPM currently already has a process discovery phase in where it attempts to automatically or manually discover a process it does not take into account the performative and ostensive aspect of routines. This phase therefore needs to include the identification of routines. This can be done by the aforementioned OPA approach. This approach uses interviews and observations to capture the ostensive part of routines. The performative aspect of routines is captured by observing actual work activities and their sequences. Finally, artifacts are not only discovered but also analyzed for their relationship and usage by making use of observations and document analysis. Using this approach allows change consultants to discover different aspect of routines instead of just the business process. These old routines can then be retained if they are proven to be valuable which can be the case in an organization with specialists that may have better knowledge on how to perform technical tasks. It should be noted that incorporating routines during the redesign phase of BPM is time consuming and not realistic for many organizations. It is therefore necessary to identify not individual but shared (part of) routines that can be adopted to the new process design.
(2) Organizational unlearning to stimulate routine change
BPM practitioners or executive management of an organization can choose to unlearn the organization of their old routines. This is the case when old routines are proven to be ineffective or incompatible with organizational goals. According to Tsang et. al (2008), unlearning refers to the case in where organizations have a certain routine and one point in time and no longer possess it in later period of time. The process of unlearning starts when individuals are presented with a new routine. Before this new routine is presented, individuals need to receive information on the changes, its purpose and goals which could be done in the form of training or workshops. If organizations remove artifacts that support the old routines, employees will
have to learn the new routine and forget old practices. Recall that routines hold tacit knowledge. This knowledge will naturally fade away as time passes and “any traces of organizational memory related to the ostensive aspect and experience of performing the old routine will naturally fade away, the speed of which depends on the characteristics of the firm’s memory” (Tsang et. al, 2008). BPM is a meta-routine that is source of continuous change, which makes it easier for the process of organizational unlearning in comparison with infrequent and discontinuous changes.
(3) Improved visualization to stimulate the sensemaking process
As previously stated the sensemaking process starts when there are disruptions in the individual’s established way of working. When a new process design is proposed the sensemaking process of an employee starts to relate the changes to their own experiences. However, the changes are in some cases not always clear to its stakeholders which could endanger the sensemaking process. In order for stakeholders to realize the true value of a change more visualization methods should be presented. Visualization supports sensemaking and can serve as a communication medium, a knowledge management means and a decision support instrument (Al Kasaab et al., 2014). Typically, BPM projects create BPMN models of their redesigned process. However, these BPMN models are not understood by all stakeholders and many of them cannot realize the true value of the new design (Aitken, Coombs & Doherty, 2015). An example of a visualization method that stimulates the sensemaking process is proposed by Aitken et al. (2015). They propose the use of a benefit orientated BPM model that includes benefits of the current process and what changes are made to remove those dis-benefits. This model allows affected stakeholders to see the changes and reasoning behind the changes in a clearer way (Figure 5). Adding visualization helps achieving situational awareness, a key characteristic of sensemaking according to the definition by Endsley (1995): “Sensemaking is a process, a design, or a technique of fusing information, achieving situation awareness”. Adding visualization representations of change has the advantage of making important information more accessible and easier to process. Another advantage is that visualization supports shared sensemaking. It is therefore a vital method for BPM professionals and other stakeholders to reduce uncertainty or ambiguity of a change project. Other examples of visual representations can be a process simulation or interactive training videos.
Figure 6 Benefit oriented BPM model (Aitkin et al., 2015)
In conclusion, three new critical success factors for BPM have been identified based on the literature review, case study and interviews conducted. Two CSF are based on the concept of routines in where an organization and the BPM team have to choose to either identify and incorporate strong routines into their new process design or where they have to choose to start the unlearning process so that old routines will be forgotten. The unlearning process for BPM is relatively easy because of its frequent and continuous nature. The third CSF is based on sensemaking theory and suggests that the sensemaking process of individuals can be stimulated to reduce uncertainty by adding visual representations of the change in a simpler and clear way. Table 3 provides an overview of the newly proposed CSFs.
Based on (theory) Main idea CSFs
Routine Incorporate strong shared routines
Identify the existence of strong shared routines (OPA approach) and incorporate them into the new redesigned process Routine Disband existing routines Identify and disband the
existence of routines by applying the concept of organizational unlearning Sensemaking Stimulate the sensemaking
process of an individual
Add more visualizations to the process change (such as
Benefit orientated BPM3) to
realize its true value to stakeholders.
Table 3 New proposed CSF for BPM
While BPM is still a popular set of techniques the current approaches are suffering from a relatively high failure rate. One could argue that the analytical or technical approach of BPM (for example, automatic process discovery) should be reconsidered. A different approach can be found in design thinking and more specifically participatory design (PD). PD involves “the direct involvement of people in the co-design of tools, environments, business [processes] and institutions” (Robertson & Simonsen, 2012). This approach involves employees that actually perform the work much more instead of an (external) BPM team that is not always able to capture the entire process and routine. While the initial costs of BPM will increase with this new approach, one could argue that a failed BPM initiative will cost much more.
VI. Conclusion
Business process management is an increasingly popular set of techniques and methods to improve and monitor business processes. This popularity exists due to a number of factors, such as the rapid changing business environments in where organizations find themselves. BPM has utilized IT systems more and more over the recent years and neglected the social aspect of BPM. Despite its popularity, BPM suffers from a high failure rate. One of the reasons for this lack of success is that organizations in many cases do not actually involve employees during the BPM projects. Employees are a key stakeholders and possess valuable information that cannot be identified by computerized tools. For example, their behavior and work routines are not captured by these systems while they are essential to the long-term success of a change initiative.
Routines can be seen as the engine of organizations – they are credited for the actual work that is done in organizations. However, existing research on the concept makes it clear that our understanding of routines is not uniform. Researchers attributed routines as a source of organizational stability, inertia or even mindlessness. Recent research of routines however counters this understanding and conceptualizes routines as a source of change, flexibility and see them as “effortful”. When an individual’s routine changes, the sensemaking process starts to understand the changes based on previous experiences. A case study in a small IT firm was conducted to understand how routines can be identified as a source for either change or stability. Based on the literature and case study and interviews a set of new critical success factors are proposed based on routine and sensemaking theory. Our understanding of routines as a multi-aspect concept can thus be analyzed to understand its strength and source of organizational phenomena. Routines can be applied to understand how BPM should be deployed with roughly two options: either incorporate the routines if possible and applicable or unlearn the routine in order to improve the long-term success of BPM.
The first CSF is based on the concept of organizational routines and suggests that routines should be identified (using the OPA approach to analyze routines) and then incorporated if they are compatible with the organization’s long term vision. The OPA approach by Feldman (2000) consists of observations and interviews to identify the ostensive and performative aspects of routines and artifacts such as policies or standard procedures that are being used. The second CSF is also based on the concept of organizational routines and suggest that that routines that are not aligned with the organization’s vision and strategy should be identified and the unlearning process can start. Organizational unlearning occurs when frequent and continuous changes are being deployed to disband the old routine. These changes will naturally fade away existing routines to allow the establishment of a new routine. Finally, the third CSF is based on sensemaking theory and suggests that the sensemaking process of individuals can be stimulated by adding (more) visual representations of the actual change. Currently, BPM professionals mainly present the as-is and to-be BPMN model that is not always understood by key stakeholders such as the employees. Using a visual representation that is simple to understand allows the stakeholders to realize the true value of the change which supports the shared sensemaking process of the employees and the organizational unit that has been affected by the process change. Given the dynamic of BPM there is no single definition for success. Generally, success is when pre-determined goals are met thanks to the BPM initiative. However, there is not only one way to start a BPM initiative. BPM is a set of techniques that are used differently depending on the sector, professionals and goals. These
CSF are therefore based on the life-cycle of a typical BPM project based on the work of Dumas et al. (2013). These proposed CSF are based on existing theories and require more empirical data to verify their long-term success. The following section discusses limitations, opportunities for future research and a critical reflection on this research.
VII. Discussion 7.1 Limitations
As anticipated before the research started a number of limitations remain. For instance, the literature is based on a significant amount of relevant literature but it is quite possible (and likely) that other relevant research has not been included in the literature study. This is partly caused by the many conceptualizations of organizational routines. It was therefore needed to select the most relevant and recent conceptualizations.
There second limitation is the lack of reliable and available data gathered from the case study and interviews. Given the qualitative nature of this research, the observer’s interpretation plays a large role in discussing the findings and presenting new CSFs. Another limitation of this type of study is the limited amount of interviewed people due to the time intensive nature of interviews (and analysis). The data can be subjective and it is therefore difficult to make systematic comparisons based on these results. Consequentially, generalizing the results of a case study is not possible due to the nature of routines. For example, the findings cannot be generalized to a different organization or even a different unit of the same organization. This is true for organizations in where managerial influence is strong and thus less room for own routines is available. Another important limitation is the fact that the researcher is present during observations and interviews, which can influence the response or behavior of participants, even in cases where information is anonymously collected. Lastly, the relevancy for actual BPM projects have not been tested given the fact that the newly proposed CSF have not been validated in practice.
