An Analysis of the Business Process Reengineering (BPR) Implementation Practices and Their Impact on Customer Satisfaction in the Banking Sector

AJM Volume 4 Issue 1 2019 Amity Journal of Marketing 4 (1), (64-79) ©2019 ADMAA An Analysis of the Business Process Reengineering (BPR) Implementation Practices and their Impact on Customer Satisfaction in the Banking Sector Forbes Makudza, Gibson Muridzi & Darlington Chirima Manicaland State University of Applied Sciences, Fernhill, Zimbabwe Abstract The study analyzed the factors that affect the effective implementation of Business Process Reengineering (BPR) in the banking sector and how that affects customer satisfaction. Guided by a deductive approach, a research conceptual model was developed with four BPR implementation determinants which were measured against Customer Satisfaction. The identified determinants of effective BPR implementation were Change Culture, Information Technology, Employee Commitment and Financial Resources. Statistical hypothesised associations were formulated and literature was analysed to substantiate the validity of the study variables and to paint a clear theoretical gap which the study filled. Data was collected using a self-administered email survey from 11 banks which were in the sampling frame. A quantitative, positivist orientation was followed as the study collected data using a structured questionnaire. The study results depicted the main challenges that were detracting the effective implementation of BPR in traditional banks in Zimbabwe. The study found out that BPR implementation explains Customer Satisfaction by 47%. The banking sector was consequently recommended to enhance an agile culture, reconsider their financial investment policies and revamp their information technology hardware and software so as to enhance agile BPR implementation practices which will improve customer experience and satisfaction. Keywords: Business Process Reengineering, Customer Satisfaction, Change Culture, Financial Resources, Information Technology, Employee Commitment. JEL Classification: M15, M31 Paper Classification: Research Paper Introduction Increased competition and sophistication of customers require that companies rethink and design processes, procedures, products and services that are cost-efficient and effective with the aid of technology to remain competitive and profitable. Martin (2011) argues that part of the solution lies in redesigning, reconfiguring, automating and standardising processes. Fasna and Gunatilake (2019) opined that the design and implementation of sound business processes are important for business performance given the volatility of the business environment. ADMAA 64 Amity Journal of Marketing Volume 4 Issue 1 2019 AJM The Zimbabwean banking sector was under threat from upcoming innovative fintech companies and new competitors. Without a good understanding of BPR implementation, banks would not derive the benefits that are earned from effective BPR resulting in loss of both customers and market share to competition and upcoming disruptive banks. For instance, as at 31 December 2018, the total banking institutions in Zimbabwe were 19, yet the total financial services providers under the Reserve Bank of Zimbabwe (RBZ) supervision including banks amounted to 226 (RBZ, 2019). The increase in the number of other financial service providers depict that commercial banks were no longer considered as exclusive suppliers of banking services and products, other players had come into that space, hence, the need to re-engineer and offer competitive services. Oladimeji, Akingunola and Sanusi (2017), indicate that the main problem of BPR does not lie in merely understanding what BPR is all about, but lies on how BPR is implemented. According to Hammer and Champy (2009) as quoted by Osano and Okwena (2015), BPR projects have a failure rate of 70% due to weak implementation. With such a high and alarming failure rate, Guimaraes and Chair add that 65% of managers claim that they were reengineering their processes yet in actual fact, they were not. Surprisingly too, Hussein and Dayekh (2014) found out that out of 36 bank branches considered in their study, only 58.8% of employees were aware of the BPR projects of their bank, the remaining 44.2 were not. These disturbing statistics lead to the questions; what are the factors that can influence the successful implementation of BPR projects and how can they affect customer satisfaction? This study, therefore, aimed to address these. Objectives of the Study The key research objectives were; i. To identify the determinants of successful BPR implementation. ii. To assess the effect of BPR determinants on BPR implementation. iii. To analyse the impact of BPR implementation on customer satisfaction. Literature Analysis BPR and its Implementation Hammer and Champy (2009) define BPR as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed. The aspect of radical thinking was also upheld by Mekonnen (2019) who notes that BPR is a radical process of developing a new system from scratch. BPR calls for radicalization of the core business processes to achieve dramatic improvements in business performance (Amanquah & Adjei, 2013). A rather divergent approach was taken by Hussein and Dayekh (2014) who indicated that in BPR there is no need for radical, complete turnaround moves. Rather, companies and banks should consider BPR as an ongoing process not a once-off event. The reasoning of Hussein and Dayekh (2014) was based on the notion that process improvement is continuous, the only time the business stops process improvements is that time when the business collapses. Similarly, Zaini and Saad (2019) view BPR as an approach for improving and controlling already existing business processes, not an abrupt change of complete eradication of a previous system and replacing it with a new, unrelated system. 65 Amity Journal of Marketing ADMAA AJM Volume 4 Issue 1 2019 Ab-llah (2011) also highlighted that BPR is a by-product of business innovation. Therefore, for businesses to remain viable, there is need for continuous improvements. Hence, BPR has a starting point but it does not have an ending point. Guimaraes and Chair (2018) referred to this situation as an infinitive process of BPR. Guimaraes and Chair (2018) suggested that the process is infinite because it evolves as companies do not develop new systems but update existing systems. Hammer and Champy (2009) pointed out that there are three kinds of businesses that undertake re-engineering: those that find themselves in deep trouble, those that are not in trouble but whose management can see trouble coming, and those that are in peak condition and see an opportunity to develop a lead over their competitors. Hammer and Champy’s (2009) rationale was based on the aspect that BPR is implemented to either tap into an existing opportunity or to avoid an impending threat. Osano and Okwena (2015) reiterated that BPR implementation is driven by a business vision that can be broken down into specific business objectives like a reduction of costs, improvement of turnaround time and output quality. Zaini and Saad (2019) also indicated that environmental changes such as customer preference changes and advent of new technology can also drive the implementation of BPR. The need for organisational competitiveness and wining competition may also contribute to the need for BPR implementation (Bradley, Browne, Jackson & Jagdev, 2019). The Concept of Customer Satisfaction Gronroos (2001) viewed customer satisfaction as a consumer’s fulfillment response. Rogers (2018) adds that customer satisfaction is a judgment that a product or service feature, or the product or service itself, provides a pleasurable level of consumption. The main driving force for customer satisfaction was highlighted by Sidikat (2008) as product or service quality. Therefore, customer satisfaction is an indication that customers are intrigued by the company’s offering. Using the disconfirmation paradigm by Parasuraman, Zeithaml and Malhotra (2005), customer satisfaction can be understood by measuring the difference between customers’ expectations of service and the perception of the service received. If customers’ expectation outweighs perception, it leads to customer dissatisfaction and consumer perception of poor product or service. However, if consumers’ perception of the service rendered outweighs expectations of the service, this leads to customer satisfaction and it is an indication of quality services. Odeny (2016) noted that customer satisfaction is an applied term that determines how products and services supplied by a company meet or surpass customer expectation. It is an evaluation of emotions, reflecting the degree to which the customer believes the service provider evokes positive feelings. Customer satisfaction can therefore reflect the degree to which a consumer believes that the possession or use of a service evokes positive feelings. Role of BPR Implementation on Customer Satisfaction in the Banking Sector As a business system and process, BPR reforms and transforms business operations to achieve improved performance in the banking sector. According to Amanquah and Adjei (2013), BPR implementation helped the National Commercial Bank of Jamaica to achieve a return on investment (ROI) of more than 500%. Similarly, Amanquah and Adjei (2013) added that BPR enabled GTO Bank Inc. to move its net profit from the red to nearly $500,000. This was accompanied by a 9% increase in gross sales along with a

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