| Author: | Yip, Tze-wai Albert |
| Title: | Matching ABC with BPR by the application of IT : a case study in a shipping company |
| Degree: | M.Sc. |
| Year: | 1997 |
| Subject: | Reengineering (Management) -- Case studies Activity-based costing -- Case studies Shipping -- Management -- Case studies Information technology Hong Kong Polytechnic University -- Dissertations |
| Department: | Department of Computing |
| Pages: | iii, 108, [8] leaves : ill. ; 31 cm |
| Language: | English |
| Abstract: | In this changing competitive world, it is impossible for us to do the same old stuff in the same old way and expect different results. A change of emphasis is needed which allows the business process re-engineering (BPR) to have a place. Whilst many people are greatly impressed by the dramatic improvement from the success of BPR, they may ignore the possible damage that may have been caused by the failure of BPR. Scenario is changing rapidly, thus, to have a breakthrough in an organization is a necessity. The importance and the contribution from BPR are undeniable. The thinking of business process reengineering was introduced in the book of "Reengineering the corporation : A manifesto for business revolution" which was written by Michael Hammer, the founder of BPR. However, some researchers like Davenport (1993) found that the underlying approach remains to be an art of management rather than a scientific methodology. Naturally the quest for a successful BPR should have a clear direction. The direction, of course, should concern on both qualitative and quantitative issues. The concepts and theories of reengineering are now well developed and documented. In contrast, practical aspects such as how to implement an BPR exercise and how to manage the BPR exercise in a quantitative approach are less well understood and have been virtually undocumented, particularly the performance measurement of BPR. A lot of successful cases are heard, but it seems that there is no rigorous study of the performance measurement aspect for the implementation of BPR. Nevertheless, even Michael Hammer admitted that : "90% of re-engineering failure is showing up, but with wrong attitude, leaderships, and approaches." At the time when those companies start for BPR, they always ask themselves "Why do we do what we do at all?". Some companies ignore the next question of "How do we implement what we want to re-engineer?" and consequently lose their directions and focus on the BPR exercises. Matching activity based costing technique (ABC) with business process re-engineering (BPR) by the application of information technology (IT) may be the answer to the latter question. The dynamics of today's business needs look for something more than the conventional BPR. The need of performance measurement to reevaluate the core competencies, to ascertain company performance of key elements of the business to understand where your resources are utilized and how well, have become the obvious extension of traditional costing method for the BPR exercise. Moreover, the world of electronics and computing symbolize the paradigm shift of information technology. Without any doubt, the future world will focus increasingly on IT-enabled redesign of business process. Referring to Ma, L (1996), in the 1990s, business shifts its focus to business intelligence (ie. managing chaos, evolution and metamorphosis) from business transformation (ie. BPR, etc.). IS starts to focus to integrate multiple streams of traditional and emerging systems. By means of performance measurements, we were able to measure the efficiency and effectiveness of these systems. For instance, if the value of Pre-BPR is greater than Post-BPR, it is suggested to retain that meaningful traditional process rather than abolish it. We should eliminate those silo effects and abolish the outdated processes but not the traditional and conventional one. However, most of the cost planning and control system for today's BPR exercise are based on traditional techniques developed decades ago when the direct costs and overhead could be easily traced for the cost and benefit analysis. Because of the underlying approach of BPR, the ABC techniques are now in widespread use and employed as an effective cost planning and control system for the implementation. It is not surprise to see that BPR is going to be faded out. At the time when Michael Hammer introduced BPR into this commercial world, many professors regarded the Continuous Improvement and Total Quality Management (TQM) as passing fads. Perhaps, it is now the time for us to re-engineer the thinking of BPR. When we apply BPR, we should not be overwhelmed by its advantages but to carefully consider all possible pitfalls. It is important to note that both ABC approach and BPR approach are not a remedy. Their full implementation requires a lot of work. This includes an appreciation of the fact that the system environment for delivering activity-based information may not be achieved easily without significant development. IT is therefore one of the major critical success factors for ABC as an effective cost planning and control system for the implementation of BPR in an organization. The major goal of this dissertation is to develop a relationship model which will be tested between ABC and BPR. When applying the model on the case example, an international shipping company, it is expected to benefit from the possible advantages and to analyze the findings while matching ABC with BPR. Of course, IT is exploited to be the enabler of BPR as well as ABC. At the same time, during the case study, the proposal will also highlight the limitations and drawbacks of ABC/BPR. There is no universal formula in the world. The author-researcher divided the dissertation into the following chapters: Chapter One highlights the objectives of the dissertation and the background of the research. The company profile and relevant historical changes were mentioned; Chapter Two explains the reason why the participate case study research methodology was adopted. The limitations of the research and the solution to overcome these limitations were discussed; Chapter Three elaborates the project methodology of the dissertation. It summaries the literature review for the implication of ABC, BPR and IT, the development of the relationship model ABC/BPR, and the implementation plan for the relationship model; Chapter Four documents the details of the implementation in accordance to the plan that designed at the third chapter. The results and findings are reported accordingly; Chapter Five analyses and summarizes the ABC/BPR model in terms of its design, structure, and findings discovered in chapter four; Chapter Six finalizes and concludes the testable objectives and theory extensions of the dissertation. Future researches are proposed in this chapter. ... But not all who implement ABC win. The winners are those who recognize the inherent power of integrating ABC into the information systems found within their companies. These companies identify and enable three main views of ARC; a financial view, an operational view and a technology view, as Mohan Nair explains.1 1 The Journal of the Hong Kong Society of Accountant 96. |
| Rights: | All rights reserved |
| Access: | restricted access |
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