Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

E-government: A Special Case of ICT-enabled Business Process Change

Hans J. (Jochen) Scholl
Center for Technology in Government
University at Albany / State University of New York
[email protected]

Abstract existing business processes in government are analyzed

The literature on Business Process Reengineering and assessed. In the absence of literature dedicated to this
(BPR) has evolved into a strand of literature which particular subject, the various literature of ICT-enabled
studies organizational change (OC), and more business process change is reviewed. The applicability
specifically, Business Process Change (BPC), induced and relevance of this literature, its similarities and
and enabled by Information and Communication differences with regard to e-government are discussed.
Technology (ICT). With the unfolding of electronic Generic strategic choices in technology-induced and
government (e-government) changes to the way enabled organizational change are laid out and related to
government works also seem to be imminent. Electronic the phenomenon of e-government. Based on the BPR
government increasingly impacts business processes and literature, propositions are presented which connect the
workflows in the public sector. The BPC/ICT research, BPR literature to the special case of electronic
hence, has the capacity to directly inform both the government. A future, more comprehensive empirical
research and practice of electronic government. In this study is briefly discussed.
paper, the findings of the BPC/ICT literature are 2. What is Electronic Government?
reviewed and discussed regarding their applicability to Since ancient times Information and Communication
electronic government. Both the theory and preliminary Technologies (ICT) have enabled and enhanced
empirical evidence suggest that electronic government government in terms of both its management and its
must be seen as a special case of ICT-enabled business services. The appearance of the somewhat phony and
process change. imprecise, however, popular term of e-government for
1. Introduction electronic Government (or even shorter, e-gov) indicates
Technological change has always catalyzed that modern electronic ICT-enabled management and
organizational change. When government began using services in Public Administration, particularly those
telegraphs and telephones, the old messenger-based which are Internet or Intranet based, have reached
processes and organizational formats were not merely relatively high degrees of public interest and demand.
conducted as before but just over a wire, they rather were Although definitions of e-government abound, no
first gradually and then radically replaced by new formats single definition has been widely accepted. Some
and processes greatly enhancing the immediacy of definitions enumerate the areas of impact on government,
government action and reaction1. But new threats co- others read like mission and vision statements. Many of
emerged. On the basis of the new technological the latter definitions emphasize a (re-)orientation on
infrastructure, messages could be spread or intercepted in citizens', business', and agencies' needs, or on gains in
new and undesired ways. Any technology not only administrative efficiency, cost savings, or on high service
enables desired and planned outcomes, but also those that availability such as 24/7. However, these definitions
are undesired, unplanned, or unanticipated outcomes. This reflect the anticipation of desired outcomes rather than the
will be no different for electronic government. particular technologies and tools used, which may or may
Since the definitions abound and the term has been not enable these outcomes. For example, the notion of
blurred, any paper on electronic government (e- citizen-centric government could have been propagated
government, e-gov) needs to clarify the meaning and use long before the advent of the Internet. If the definition of
of the compound term before dealing with it. After e-government is to bear any meaningful sense, then it
introducing the working definition for electronic needs to reflect what the term "electronic," in connection
government the implications of emerging computer- with government, stands for. Any outcomes, desired or
mediated networks such as the Internet/Intranet on not, if included in the definition only cloud the essence of
the difference between electronic government and
previous forms of government. In the context of a western
1
Thanks to our less hype-prone ancestors, this innovation was democracy, any definition of government including e-
not labeled something like t-Government even though the government will reflect on the source and the purpose of
telegraph and telephone-induced changes have been quite all government. Two definitions are proposed here, one
dramatic.

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

which (definition 1) is crafted along the lines of those for the early to mid 1990s frequently resorted to coup d'etat-
e-business and e-commerce (cf., [1]), while the other like approaches and revolutions from the top [5], which
(definition 2) has been jointly developed by academics were sometimes even acclaimed and advocated by
and government practitioners. While the first definition academicians (cf., for example, [6]). Business history
emphasizes the constitutional foundation of western indicates that the downsizing campaigns of the 1990s
democratic government and connects it to the ended in friction and even disaster for many organizations
technological progress via networks, the second and resulted in business process reengineering failures
delineates the impact of innovative information beyond the 70 percent mark (cf., [7, 8]). In fact, the
technology on how government works and interacts. Both disasters became so numerous and widely visible that
definitions overlap to some degree but also highlight BPR became almost a synonym for strategic malpractice.
distinct perspectives. Unfortunately, this circumstance bears the potential to
Definition 1: Electronic Government2 is any cloud several valuable insights the BPR literature still has
process that the citizenry, in pursuit of its to offer: (1) a business can be re-thought and redesigned
governance3, conducts over a computer-mediated from the bottom rather than only incrementally improved,
network4. (2) Information Technology (IT) might play a major
This first definition of e-government specifies the enabling role in such fundamental change processes, (3)
underlying technology of computer-mediated networks Information System Development (ISD) and BPC have to
and the processes conducted over them as the differential be treated as two sides of the same coin, and (4) the
between e-government and its government predecessors. organizational-culture context and the human interests
This definition invokes the government concept of involved in the change process matter (cf., [9]).
western democracy. It is wide enough such that it Over the years and with growing empirical evidence,
encompasses the study of every e-government-related the BPR-related literature has reflected on the original
phenomenon including possible outcomes, which might propositions in the light of the undesired outcomes. As
be neither foreseen nor desired. pointed out above, in this paper it is argued that the
Definition 2: Electronic government is the use5 resulting, BPR (or BPC/ISD) related insights are relevant
of information technology to support to the electronic Government movement. In the following,
government operations, engage citizens, and a total of 18 insights from the BPR (BPC/ISD) literature
provide government services. are discussed. Likewise, 18 propositions are presented
The second definition invokes the aspect of efficiency which relate these insights to the specifics of electronic
of government operations, while it emphasizes the government.
involvement of citizens at the same time. In this paper As Layne and Lee propose, electronic government
both definitions are used concurrently. advances through four stages of development: (1) the
3. Business Process Change: Strategy and Business (early) cataloguing stage during which governments
Process Implications establish an online presence of presentation including
It was the fanfare of the reengineering movement in downloadable forms, (2) the transaction stage in which
the early 1990s that Business Process Reengineering services are made available for online use and databases
(BPR) and Business Process Change (BPC) have to be are readied for the support of such transactions, (3) the
revolutionary to business, and that changes have to be vertical integration stage during which local, state, and
radical in order to produce any desirable results [2, 3]. federal systems in all three branches of government
However, as Markus had suggested in advance of the (legislative, executive, and judicial) serving similar
BPR movement, the more radical the desired change, the functions are linked together, and (4) the horizontal
more thorough the analysis of likely hindrances and integration phase, in which systems of all levels and
enablers of this change should be [4]. This knowledge branches, and across functions are linked in a one-stop
notwithstanding, rather than carefully rethinking the fashion [10].
business from scratch and crafting resilient strategies for While the first Layne-and-Lee stage does not yet
the fundamental changes envisioned, business practice in require any business process change, more fundamental
and substantial changes become the norm in subsequent
2
stages. Adaptations and redesigns of existing information
Also referred to as ICT-enabled Public Administration, e- systems along with the incorporation of completely new
government, or e-gov. systems become a necessity, which in turn require
3
This clause encompasses all processes by which the citizenry significant and increasing changes to the underlying
forms its government institutions, elects its representatives, as
business processes. These latter three, then, are the stages
well as how this government operates, and how it interacts with
where BPR and BPC/ICT literatures are relevant for
the citizenry.
4 understanding the implications, likely effects, and
Computer-mediated networks are electronically linked devices
that communicate interactively over network channels [1]. necessities of changes to either information systems or
5
This is meant to be the innovative use business processes or both. Government has been

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

criticized for its slow adoption of new technologies and BPC success depends on stakeholders' cooperation.
innovative practices [11]. However, in the Western Business process change typically crosses functional
system of democratic governance, which has been domains. Without cross-functional support of
intentionally and purposively designed for thorough and stakeholders who can affect and can be affected by [15]
incremental change via checks and balances, such the change, the entire process may disintegrate. Gaining
criticism, it may be argued, misses the point (cf., also cooperation among and across functional domains
[12]). Particularly, in the case of BPR, one might even therefore is of the essence [16]. Shared repositories may
want to praise the slow adoption rate since it protected the play a role in integrating functions and processes leading
public sector from those early BPR failures the private to flatter structures and improved management of
sector encountered so numerously. Among the strategy- information as an organizational resource [17]. Contrary
and policy-related lessons learned from the private sector, to the BPR practices in the early 1990s, it is now
which the public sector now benefits from, are the understood that the more organizational flexibility is
following: required or desired in BPC projects, the more important
BPC requires a holistic view of the organization. If the concurrence and active cooperation of stakeholders [9,
many variables are to be changed at the same time, it 18] and, particularly, employees become [19]. In the long
follows that management cannot assume to be able to run, this may be the more important strategic variable
directly influence them all to the extent needed. Hence it than efficiency gains leading to increased competitiveness
follows that those (frequently referred to as stakeholders, in the short run6. In the government contexts, this
cf., [9]) who can exert influence on important variables translates into
have to become part of the whole undertaking. Among Proposition # 03:
these stakeholders, various groups of employees including The success of Electronic Government depends on
middle managers and professionals can play decisive the participation and cooperation of primary
enabling or impeding roles towards the outcome of a BPC stakeholders
project. Coup d'etat-like approaches, hence, typically run Business and ICT strategies must be tightly coupled.
the risk of failing since only an insufficient number of Though business processes could be streamlined without
variables can be controlled in favor of such an approach. the use of ICT in principle, the enabling role of ICT in
A holistic view of the organization, its culture, systems BPC is emphasized within and beyond the BPR literature.
(including information systems), processes, and However, it is not technology that drives the
stakeholders has to be established and maintained organizational change process. Rather business strategy
throughout a BPC project [9, 13]. Applied to electronic and ICT strategy co-evolve (cf., [21, 22]). Business
government this leads to design and information systems design should be
Proposition # 01: integrated [23], particularly since the life cycles of
Electronic Government requires a holistic view of the information systems and of business-relevant information
(governmental) organization, its culture, systems, rarely match [24]. If business strategy does not inform
processes, and stakeholders ICT strategy and vice versa, organizational frictions (for
Dynamic and long-term vision of the change process. example, through multiple system standards at the
Viewing and understanding the organization as a whole expense of organizational efficiency, cf., [25]) are
also requires the change process itself to be understood in inevitable. The implementation of a Chief Information
its entirety. Change processes exhibit dynamic and Officer (CIO) in numerous organizations and her
unforeseeable patterns of behavior. Furthermore, for involvement in formulating a coordinated business and
change to stick, relatively long time frames must be ICT strategy is meant to addressing this problem. The
assumed. Leadership needs to be capable of developing a coupling of BPC and ICT strategies shows improved
vision for such dynamic and long-term processes [13], success rates in redesign projects [14, 26]. The integration
which must be done not only at the outset, but throughout of both strategies allows for a pre-project assessment of
the entire change process. The more fundamental the the organization's (a) overall innovative capacity along
business process change, the less likely it can be planned with (b) its ICT maturity [26]. Hence, the evaluation of
in the traditional strategic management sense. business process redesign and information systems must
Consequently, such change strategies are more loosely be integrated as well [23]. Finally, it has been argued in
coupled and must rely on coordination by feedback rather the context of private-sector firms that ICT may impact
than formal planning [14]. This also directly apply to the the boundary definition of the organization [27], both
context of electronic government: vertically and horizontally. To some extent this may hold
Proposition # 02: true also for the public sector and, therefore, requires the
Electronic Government requires long-term view and integration of business and ICT strategy. Hence,
flexible planning due to the iterative and disruptive
nature of the change process 6
Lloyd, Dewar, & Pooley also observe a tradeoff between
business flexibility and competitiveness in BPC [20].

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

Proposition # 04: demonstrate that governments have tackled this task with
Agency7 Electronic Government programs and agency varying intensity and success [32]. Hence,
ICT strategies must be intertwined Proposition # 05:
Strategic dimension of Electronic Government. In Electronic Government poses a new challenge
authoritarian or in even totalitarian societies, electronic regarding government records (in terms of creation,
government cannot have the same orientation as it almost maintenance, preservation, security, integrity, and
naturally has in democratic societies. While in democratic accessibility)
societies government is a means by which the citizenry Modest scope and objectives. As Kallio et al.
pursues its (self-)governance and its protection from demonstrate through their case studies, the more radical
internal and external enemies, governmental institutions and far-reaching the BPC projects, the higher the failure
in authoritarian and totalitarian societies serve mainly the rate, or, conversely, the more modest the BPC projects in
ruling elite's interests. Efficiency of government means scope and objectives, the higher the success rate [33].
different things under the two scenarios. Processes This finding, however, does not suggest that fundamental
performed over computer-mediated networks in an rethinking of the business and radical changes are failure-
authoritarian government context are indeed capable of destined per se, but rather that the more radical and
improving government oppressiveness. In democratic fundamental the change, the more variables (including
societies, a tension between gubernatorial efficiency hard-to-measure ones such as cultural readiness for
needs and citizens' needs and interests [10, 28] is not the change) come into play at the same time which makes
exception, but rather the norm. The constitution provides their management and control an exceeding and
powerful safeguards for the preservation of such a oftentimes impossible task to perform successfully [13].
democratic equilibrium. However, the question remains But even modest changes in business processes can affect
for a democracy-based electronic government how much any combination and depth of organizational tasks,
vertical and horizontal integration in government should structure, information systems, and culture [6] with an
be sought? When, where, and how might citizens' inherent complexity that defies straightforward planning
constitutional rights be at stake in this evolution which and execution.
has the potential for changing the way government works Another tenet of the early BPR movement has not
[29]? Hence, it has been argued that business process stood the test of practice, either. While Hammer and
change for the sake of developing electronic forms of Champy propagate the "clean slate approach" to BPR [2],
government encompasses a conceptual change and it has become obvious in projects following this approach
rethinking of democratic government as such [28]. This is that the risk of failure also dwells in this particular
even true for basic technical reasons. As laws, statutes, proposition. As O'Neill and Sohal demonstrate, at least
and other rules require, almost every government action, three problems arise: (1) another inefficient system can be
transaction, and interaction has to be documented for the result, (2) important and valuable knowledge
audit, review, oversight, and other after-the-fact evidential embedded in the current system and processes can be
purposes. In this context, electronic government poses a ignored, and (3) the scope of the problem may be
major new challenge regarding creation, maintenance, underestimated [34].
preservation, security, integrity, and accessibility of Proposition # 06:
government records [30]. Modest objectives and scope more likely lead to
Even in terms of Layne and Lee's first stage of electronic- government project success than
electronic government (cataloguing), while it may aggressive objectives and wide scope
formally resemble the equivalent phase that private-sector 4. Motives, Focal Areas, and Methodologies of
organizations have gone through, this stage is different in Business Process Change
that governmental documents and forms once they are Motives. Since overcoming inertia and resistance
made accessible over the Internet not only enhance the presents a major challenge to any major organizational
dissemination of information at low cost and in timely change project, it has been argued that (real or artificial)
fashion [31], but also constitute full governmental crises may help increase the stakeholders' willingness to
authority, accountability, and liability in the constitutional embrace the proposed change (cf., [35, 36]). However, as
sense which gives them a heavier weight than those the BPR literature unveils, in particular, business process
documents a private-sector organization makes available change seems to be problematic under circumstances of
in technically the same electronic fashion. Gant & Gant organizational crisis [37]. When a number of variables
has already gotten out of hand, as is typically the case in a
crisis, adding a few more, which cannot be controlled,
7
Here, the term agency acts as a placeholder referring to may set up the organization for disaster. In other words,
an agency, department, office, or other entity at any level business process changes may best be pursued in times of
or in any branch of government normal or thriving business. However, this, in itself,
presents a challenge to argue for as the necessity for

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

(costly) change may be questioned by the decision- Focal Areas of Application. Among successful BPC
makers. projects, one particularly finds those that focus on
Therefore, three efficiency-oriented arguments or overcoming internal inefficiencies rather than external
motives have mainly fueled business process change pressures [33]. In the electronic-government context, the
projects: Expected or desired (1) cost savings, (2) same three motives may prove as plausible for justifying
speedups of the business, and (3) customer service business process changes as in private-sector settings.
improvements [16]. The (direct) cost-savings argument, According to Hammer and Champy, many, if not most,
despite its popularity in justification efforts–in particular existing business processes are fragmented, unnecessarily
when advocating for ICT projects–has frequently not complex, and not conducive to the "natural" flow of work
stood the test, and rather provided evidence to the from start to finish [2, 3]. As a number of scholars have
contrary. In BPC/ISD failure analyses, significant cost pointed out, the mirror-image, ICT-based automation of
overruns rank among the premier causes of project failure business processes as they exist is no longer seen as an
(cf., for example, [38]). Even information systems text acceptable practice [2, 42], since the existing processes'
books now suggest, that cost-based arguments in fragmentation, complexity, and distortion are just carried
justifying ICT investments may present a rather weak line over to the ICT-based mirror-image processes, which
of support (cf., [39]) and may need to be reduced to the Mohan and Holstein enjoy to call "manumation" efforts
opportunity cost argument (of doing business). ICT [43] . Before any implementation of ICT-based support
investments typically do not produce, by and in for existing business processes, they must be analyzed
themselves, above-normal profits, that is, Ricardian rents, and, if fragmented, be redesigned and streamlined [2].
whereas they might be expressed in terms of shareholder Prior to change, the status quo ante has to be established
returns [40]. Some evidence is found for the reduction of and documented [37]. This is typically done by taking
external coordination costs by means of ICT [27]. By and detailed inventory of all business processes, ICT
large, the direct cost savings argument in favor of BPC hardware, ICT software, ICT skills, internal
and related ICT investments might be viewed as the organizational characteristics as well as external
weaker argument. The other two arguments (speedup of environmental conditions (ibid.). Only such thorough
business through streamlining and improvement of analysis and documentation provides the basis for a
customer service), of course, may translate into certain careful redesign of the business process structure which
cost savings at some point, however, these savings are needs to antecede any related ICT investment decision [9,
hard to quantify ex ante and equally hard to measure ex 17].
post, such that in practice many of BPC and ICT-related Various approaches to BPC have been proposed which
investment decisions are made in good faith or on the may differ regarding (a) the radicalness of process
basis of another rationale (seizing a perceived change, (b) the process structuredness, (c) customer focus,
opportunity, reacting to or preempting competitive and (d) the expected potential for ICT enablement8 [45],
pressure, or addressing customer demand, etc.). This leads cf., also [21]. One of the "clean-slate"-type approaches to
to BPC and information systems development (ISD) has
Proposition # 07: become known under the "new venture" label [46], which
Speeding up business processes and improving goes through the stages of brainstorming, designing, and
services are among the major motives for launching building (ibid). This latter approach, however, runs the
electronic-government projects risk of creating systems that are as inefficient as those
However, information systems (and, hence, the they are meant to replace. Also, a horizontal perspective
anteceding or ensuing change in business processes) are of processes has been proposed, so the process analysis
not only developed and deployed for entirely rational may be more efficient and lead to more robust design
purposes as Markus observes [4]. Rather, non-rational strategies [23]. In government, this can be expressed as
purposes play a role in the decision-making in any socio- Proposition # 09:
technical context (ibid.). In a similar vein, Tillquist finds In order to be successful, before a major electronic-
that advocacy in favor of BPC/ISD projects may also root government project is launched. a thorough
in self-interest of project planners rather than in the understanding and a detailed inventory of business
pursuit of the public good [41] or the shareholders' best processes, ICT hard- and software, skills, internal
interest. The agency problem he points to can be and external conditions
minimized, in his view, when stakeholders of the project Identifying the "right" processes to be analyzed and
have sufficient opportunity to influence its trajectory streamlined and, also the "right" BPC methodologies for
(ibid.). Therefore,
Proposition # 08: 8
Multiple (also personal) interests can affect the Some scholars even doubt that the use of ICT benefits BPC
altogether [44], while others see declining unit cost in process
development of electronic-government projects
coordination as a major driver for ICT investments and process
change [27].

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

doing so, as it has been proposed [16], however, is easier processes are primary candidates for electronic-
postulated than done. Obviously, the cultural context, government projects
which will be addressed in detail below, plays a major Since organizational conflict can emerge with any
role as well as the level of experience an organization change in these types of business processes, formal
possesses in regard to BPC. Both the process of modeling methods (for example, by means of cognitive
streamlining as well as the final result–the streamlined maps, workflow analysis systems, system dynamics
business processes and their embedded workflows–rely among others) may assist in uncovering such potential
on ICT [47], they are ICT enabled [14], however, not ICT frictions, while at the same time they may also increase
driven [48]. While business processes are typically the organization's understanding about its core activities
described and analyzed at a relatively high level of before the change process is even launched. This
abstraction, information system design deals with the organizational experience, though it may be
detail complexity of single or multiple workflows. In complemented and enriched by external knowledge, is
other words, from the high-level viewpoint of business unique for every organization and a prerequisite for the
process analysis, conclusions regarding the specific change process. Because it has to be accumulated within
design, functionality, and other characteristics of those the organizational context, it follows that an organization
information systems, which eventually will enable the cannot hope to replace it by using external change agents
streamlined businesses, cannot be drawn. This can, and instead. Further, since BPC is a complex undertaking
therefore should, only be done after the analysis of involving and impacting many stakeholder interests, a
business processes has cascaded down to the analysis of stock of technical and organizational experience has to be
single workflows, of the information systems used, and of built up before change efforts are pursued on a larger
the underlying data structures [9]. Despite these scale [48]. In other words, careful and systematic
differences regarding their levels of detail, the design preparation, as well as the continual monitoring and
efforts in BPC and ISD need to be closely coupled since measuring of BPC progress and performance, are key
they significantly influence each other [20, 23]. elements in a successful change process (ibid.). The
Proposition # 10: monitoring of stakeholder-related process changes and
In order to be successful, any major electronic- their results is an essential part of BPC management
government project requires a detailed workflow (ibid).
analysis beyond the high-level business-process BPC/ICT projects also have the quality of redefining
analysis the boundary definition of the organization. If ICT allows
Among the primary focal areas for BPC, the for processes that smoothly and efficiently integrate
organization's core processes and those crossing internal and external contributors independent from
functional and organizational borders have been proposed geography and time zone, then a variety of organizational
as good candidates [49]. In the government context, the formats may arrive at equivalent results under a
transactional domains in all three areas inter- and intra- transaction cost perspective. As Malhotra et al. find,
government (or government-to-government, also referred interorganizational teams, which are connected via ICT
to as g2g), government-to-business (g2b), and and work across a value chain, share content-specific
government-to-citizen (g2c) may provide opportunity for information and have the capacity of superior
the introduction of electronic government. However, the performance compared with conventional, internal, and
g2g domain has the highest volume of transactional local teams [51].
processing [50] and may hence become the primary target Nevertheless,
for electronic-government applications. Layne and Lee Proposition # 13:
hold that electronic government truly comes into For electronic-government projects to succeed,
existence with the second stage of their model (the organizational knowledge and experience regarding
transaction stage). In this stage, the two authors anticipate electronic government must be developed internally
a change in the relationship between citizens and Methodologies, Techniques, and Tools in BPC. When
government [10]. This, then, invokes the necessity for discussing the techniques and methods in BPC (and, as an
business process change, which, as argued earlier, is outcome and enabler, also ISD), Kettinger, Teng, & Guha
intertwined with ICT investments and ISD. In the propose the use of the stage-activity framework (envision-
electronic government context this yields initiate-diagnose-redesign-reconstruct-evaluate) [45]. For
Proposition # 11: each sequential stage of this framework, the authors
Agency core business processes are primary enumerate and discuss techniques taken from various
candidates for electronic-government projects fields such as industrial engineering, total quality
And management, creativity techniques, organizational
Proposition # 12: behavior, human resource management, and information
Government-to-government (g2g), government-to- systems analysis and design. The stage-activity
business (g2b), and cross-functional business framework serves as both a practitioners' guide to

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

appropriate methodologies, techniques, and tools for BPC wayside when opting in favor of off-the-shelf ERP
as well as a frame of reference for scholarly inquiry on systems [54].
BPC-related methods research. Grover et al. also propose Proposition # 14:
incorporating into BPC technologies which (1) facilitate Off-the-shelf electronic government systems are
better communication among organizational members, (2) inadequate if they do not support all existing
allow for common repositories of documents, (3) provide organizational and process knowledge
an infrastructure for applications, and (4) enable 5. The Cultural and Social Framework in Business
information system development and implementation. In Process Change
a similar vein, ICT is portrayed as a potential mediator in A growing body of literature suggests that the success
BPC projects [21] that helps tie together geographically of BPC is largely dependent on the organizational culture
and organizationally remote entities fostering cross- and context [9, 55]. The organizational culture may act as
functional/cross-organizational collaboration and a strong impediment to any type of BPC [34]. Also,
cooperation as the indispensable basis for BPC. successful change strategies and tactics, which have
In this context Homburg & Bekkers argue that BPC worked in one organizational context, may not work in a
projects (including the methodologies, techniques, and different one [19]. It follows that organizational cultures
tools used) may be better understood from a process which are not conducive to change may not be suitable for
rather than a project management perspective. In terms of either revolutionary or (forced) evolutionary BPC
goals, cultural orientation, organization, the environment, approaches [42]. A cultural assessment of the target
as well as conventions and procedures, BPC projects organization, hence, appears as an adequate first step to
escape the scope and scale of traditionally managed any BPC project [19]. In other words, rather than
projects in many ways, and in particular, in that they are beginning with a technical systems or workflow analysis,
geared to changing the very environment in which they a social and political context analysis is in order [4, 56].
are rooted. This leads to organizational ambiguities, Therefore,
multiple goals, and long-term dynamics that may not be Proposition # 15:
readily translatable into a stage-activity model [52]. In order to avoid failure, major electronic-
Alongside the Homburg & Bekkers argument, government projects require the up-front assessment
empirical evidence also suggests that active stakeholder of the organizational culture context
involvement in the business process redesign is essential As seen above, in the heydays of the reengineering
for a smooth ISD process and vice versa. Discussing the movement, revolutionary, top-down approaches to BPC
alternatives and evaluating the redesign and development were heralded, while in recent years less radical, less
results in both areas with stakeholders throughout the single-handed, more inclusive, evolutionary approaches
change process makes BPC/ISD projects less failure- have been pursued.
prone [9, 24]–see also Proposition #03. In the revolutionary approach, there is an emphasis on
While some see the greatest risk for a BPC/ISD failure external change agents, an intentional exclusion of
in the elements of the ICT infrastructure, that is, the internal players, a preference for single-handed decision-
technologies, the sourcing arrangements, and the policies making from the top, the establishment of and attendance
[14] or mainly on the technical side, that is, the new to well-defined milestones, and the selective qualification
process would not work [34], others take a different and involvement of employees [6]. The organization as a
perspective: (1) the informational demand of users social system as well as its technological underpinnings
(stakeholders) was incorrectly assessed, or, (2) behavioral are attempted to be changed with new business processes
or habitual patterns were attempted to be changed, or, (3) at the same time. This is also referred to as the coup d'etat
ICT literacy was insufficient, or, finally, (4) the or revolution-from-the-top approach to BPC.
managerial direction was discontinued [53]. These latter In the evolutionary approach, current employees and
three factors may play a role, for example, in the failure managers are entrusted with bringing about the necessary
of BPC by means of implementing an Enterprise change, plans are broadly shared, internal stakeholders are
Resource Planning (ERP) system. When introducing BPC motivated to pursue self-improvement, milestones are
through ERP systems, the organization's new business treated in a flexible fashion, and the existing social system
processes are tailored along the processes embedded in is not disrupted but gradually modified (ibid.). Employees
the systems, that is, they are foreign to the organization. are encouraged [49] rather than intimidated. The
Valuable process knowledge may be lost because the new evolutionary approach relies on the principles of
system cannot represent it. As Tang et al. observe, since inclusiveness and shared purpose (see proposition #03).
ERP systems have a reputation for allowing "panoptic" Both approaches can lead to the radical redesign of
control and supervision, some prerequisites for successful business processes. However, according to the literature,
BPC projects, such as the development of shared the evolutionary and inclusive approach (cf., [42, 55]) has
understanding, stakeholder involvement, and employee produced superior results compared with the top-down
empowerment, may, intentionally or not, fall by the approach, while it may present a more difficult and

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complex task to master. While the creation of shared Further, among conditions which help the information
meaning and orientation among primary stakeholders in system and, hence, the business process change succeed
the change process is indispensable [52], the practical and stick are (1) a low perception of potential threat by
alignment of the various perspectives, the social, the the project, (2) employee satisfaction, (3) self-training, 4)
functional-technical, and the organizational [13], is a high degree of integration between the old and the new
anything but trivial (cf., [37]). Disruptions of relations (for example, in terms of legacy systems), and (5) a
within all three dimensions are inevitable in a BPC profound technology and know-how transfer (ibid.).
project and have to be carefully observed and managed Business process and cultural change in the public
[57]. Anticipation and planning for these disruptions help sector is not very different in this regard. In the
avoid or reduce the need for playing catch-up with the democratic system of checks and balances, in general, any
aftermath [24]. In this regard, Cooper presents the change depends on building coalitions with both internal
argument that it is not the culture-, politics-related, or and external stakeholders [12]. Electronic government,
other social issues per se that embody the real obstacle, with its potential for transformation of the inner workings
but the lack of creativity to deal with them [58] (also, see of government, has to seek and rely on a broad consensus
proposition #02). among government officials as well as the citizenry. With
As Kraatz and Zajac point out, inasmuch as an commitment and ownership at all levels, electronic
organization's historically valuable resources may government-related business process changes are
function as facilitators in a change effort, they can implementable (cf., [60]). Hence,
likewise act as barriers to learning, as buffers shielding Proposition # 16:
the organization from environmental influences, or as For the success of electronic government, a broad
long-term commitments, which organizational members consensus among officials and citizens is necessary
may not want to abandon easily [59]. In successful ICT- 6. Roles and Players
enabled BPC projects, a major focus, hence, has been put As seen in the evolutionary approach to business
on the development and change of the stakeholders' process change, inclusiveness and openness towards all
mindset [60]. BPC can also be seen as a collective stakeholders build a cornerstone of the undertaking. The
organizational, social, and technological learning process, literature heavily emphasizes the role of senior
in which the acquired new knowledge needs to be management in this context. This continued, personal,
disseminated and leveraged (ibid.) (cf., proposition #03). active involvement, and "championship" [63] of senior
With the growing internal and external experience executives is portrayed as critically necessary [57, 62],
garnered through BPC projects an opportunity for up- indispensable [37], and mandatory [22]. Even though
front, pre-project learning and training arises such that the senior management still typically lacks a sufficiently high
organization does not have to rely on learning-by-doing degree of ICT literacy and expertise, organizational scale,
exclusively but rather can also employ a learning-before- scope, and importance of ICT-related decisions demand
doing approach [61]. Another opportunity generates from an increasing proficiency and knowledge on behalf of
frequent interaction across functional boundaries via these decision-makers [25], which they cannot leave to
interdepartmental integration and structural overlay as an others. Uninformed decision making may have serious
essential part of developing the required innovative negative consequences regarding the effectiveness of ICT
capacity in BPC [26, 51]. Such integration and overlay development and deployment and, by the same token,
also may help address the interdependency between regarding the overall BPC project. The visible and more
BPC/ICT and human resource planning [62]. than symbolic senior management support is also critical
Since BPC relies on enablement via ICT, a in overcoming initial resistance to the required learning
technology-tolerant or even friendly atmosphere has to be involved, when identifying and developing electronic
created so that it can positively impact the creativity of services in government, and for the solicitation of
both individuals and groups [58]. As has been known for interdepartmental and interagency cooperation [64]. In
a long time–so also in the BPC/ISD process– poor system BPC projects, the roles of senior managers can take on the
design typically leads to rejection of new information forms of leader, group member, advisor, sponsor, and
systems. However, users may have other, non-system steering committee member [49]. Many organizations pay
related reasons to reject a system [4]. As Markus tribute to the necessity of senior management's
emphasizes, there is also a third, little-studied source for involvement by installing a Chief Information Officer
system rejection which lies in the interaction of system (CIO) whose primary role is to build and manage the
features with certain aspects of their use in the organization's ICT infrastructure, the skill base, and the
organizational context (ibid.). Hence, the structuring of relations between ICT-related organizational stakeholders
tasks and personal relationships between users, on the one [65]. The CIO is typically chartered with the tasks of
hand, and designers and developers of new systems, on devising, implementing, and improving ICT-related
the other hand, is a major determinant of success (ibid.). management processes (ibid.). However, the strategic
nature of ICT related decisions necessitates increased

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

understanding and expertise also from non-specialized Kogut and Zander find three elements governing the
senior managers. make-or-buy decision: (1) "how good" is the organization
Proposition # 17: already "at doing something," (2) "how good" is it "at
The active involvement and continued commitment of learning specific capabilities," and (3) how well do these
senior government leadership is indispensable to the capabilities serve "as platforms into new markets" [68,
success of any major electronic-government project 395]. The two authors argue that "{f}irms make those
The importance of stakeholders and their roles in components that require a production knowledge similar
BPC/ICT-related projects have been highlighted by to their current organizing principles and information"
various authors. If, for example, primary stakeholders are (ibid.). Even if the new capabilities are distantly related,
not taken into account, any project almost inevitably runs firms tend to make, rather than buy according to Kogut
the risk of failure [9, 41, Halachmi, 1997 #61]. Pardo and and Zander. Only "{i}mmediate survival pressures
Scholl, for example, when presenting an enhanced encourage firms towards a policy of buying" (ibid.), or a
framework of the BPC/ISD cycle, call the omission of situation in which "suppliers have superior knowledge,"
stakeholder inclusion and the neglect of stakeholder needs which cannot easily be codified (ibid).
analysis a shortcut to failure. Tillquist argues that a In Information Systems Research, the make-or-buy
project's trajectory can be severely and conceptually decision has been discussed with mainly the cost
constrained if major stakeholders' voices remain unheard argument in mind. Ewers and Vessey, for example, argue
[41]. Kwahk and Kim propose the analysis of cognitive that homegrown systems foreclose the introduction of
maps and causal paths which stakeholders follow [66]. productivity tools and off-the-shelf system components
The norms that stakeholders hold influence any BPC/ICT because professional ICT staff may obstruct such a
project to a high degree, since they provide the social decision and treat it as an encroachment on their territory
context which defines the potential spaces in which any putting the organization at a cost disadvantage [69]. Webb
action takes place [41]. As pointed out above, stakeholder argues that (in the case of real time operating systems)
analysis leading to their active involvement in the BPC commercial packages typically have the advantage of
project also may minimize the agency problem, that is, being more scalable, more modular, more reliable, and
the risk of biased or even selfish behavior on behalf of provide a far better support structure compared with
project advocates or other immediate beneficiaries (ibid.) homegrown systems, which rely on the expertise of a few
(see also, proposition #08). individuals [70]. However, Sandrick maintains that in-
7. The Make or Buy Decision in the Context of house system development does not necessarily start from
Business Process Change scratch, but typically incorporates generic off-the-shelf
A hidden or sometimes neglected aspect of business tools and components into a tailor-made system [71].
process change and the employment and deployment of How well do these arguments translate into a
ICT is that, more often than not, it confronts the government context? To some extent public-sector
organization with a make-or-buy decision. The strategic business processes are sanctioned and prescribed by laws,
appropriateness of this decision represents a critical statutes, and regulations. Other business processes appear
success factor for every major BPC/ICT project. Any to be similar to counterparts in the private sector.
decision in favor of an off-the-shelf information system, However, generic business processes such as contracting
for example, implicitly is also a decision in favor of the (purchasing) or revenues differ significantly between
workflows, and hence, the business processes this system government levels and branches, and also between states
embodies. While in one scenario, a buy decision may be and municipalities. Government systems are required to
the proper choice, in another it may turn out to be be conducive to legislative and statutory change. Many
disastrous. This is also true for electronic government. A governments, hence, have traditionally opted in favor of
short discussion of what might need to be considered in mostly homegrown systems for supporting their core
BPC/ICT projects appears thus adequate. business processes, for example, even those as mundane
Economists have discussed the make-or-buy problem as accounting.
for decades, if not centuries. Coase, for example, finds ICT has become a major pillar of business not only in
that the private firm exists because the internal combining the private sector but also in government. Capabilities
of inputs provides it (up to a certain point, of course,) have been developed over long periods of time. Business
with a superior transaction-cost position compared with processes are ICT enabled in many ways, also in
combining these inputs via an exchange market [67]. In a government. Government officials possess a profound
public sector context, the relative transaction cost position know-how about their business processes and the
certainly might not provide the defining distinction for the enabling ICT infrastructure. In the context of electronic
make-or-buy decision. However, these considerations, government, hence, the question arises, to what extent can
though pertaining to the private sector, may still have the or must governments rely on homegrown systems, and
capacity to inform public sector scenarios. how far can they go in using off-the-shelf ICT in this
endeavor?

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

The author hesitates to provide clear-cut answers to UPS or FedEX) or is inevitable for legislative or statutory
these questions. However, some considerations may help reasons as in the case of systems in public administration
find answers in a specific case. Kogut and Zander (for example, military or accounting), then making and
maintain for the private sector that how good an maintaining such systems may foreclose any buy option.
organization already is at performing a core capability Since an organization's specific (and, hence, strategic)
determines the options in the make-or-buy scenario. In capabilities become more and more ICT-enabled, off-the-
other words, if no supplier can make available a superior shelf systems seem less suited to support these critical
product or service, then this capability must be considered capabilities. Of course, combinations of standard and
strategic, typically demanding a make rather than a buy tailor-made components are possible, however, as a norm,
decision. If the organization is good at learning, then the investment into the development and maintenance of
strategic capabilities can be even further expanded, which homegrown ICT capabilities and systems appears
again strongly supports a make decision. In government, increasingly mandatory, the more strategic the business
furthermore, there are certain functions where a buy processes and their underlying infrastructure are to the
decision is precluded by law or statute (for example, organization.
military defense cannot be contracted). Government A third dimension influencing the make-or-buy
business also has other idiosyncrasies which private decision is whether or not skilled human resources can be
sector business does not have. Accounting, for example, found and retained for sustaining a make decision. In the
in a statewide system is different from accounting in a absence of qualified ICT personnel, a make decision
multinational firm. Systems used in one context cannot be would not be rational. Government, for example, has long
readily transferred into the other. suffered from low retention rates of ICT experts.
Electronic-government projects, particularly, those in the
stages 2 to 4 in the Layne and Lee framework [10],
however, can be expected to depend on the availability of
highly skilled ICT experts. In electronic government, off-
the-shelf, standard systems may become available over
time for a number of areas, however, it remains to be seen
which areas such systems would cover. Government must
master the challenge of competing with the private sector
for highly skilled ICT experts, especially, in the stages of
vertical and horizontal integration of ICT-enabled
government business processes.
The strategic nature of a BPC/ICT project can also be
determined in terms of the expected length of productive
life of the resulting ICT systems. Experience indicates
Figure 1 Aspects of a Build or Buy Decision that backbone-ICT-systems typically have life spans of 25
In Figure 1, the aspects of a make-or-buy or build-or- years or more. This is due to the fact that architectural
buy decision in BPC/ICT scenarios are shown which also commitments to both the business process and the ICT
apply to electronic government contexts. The more design cannot be reversed easily. In other words, the
strategic (and also, the more unique and specific) to the investment and the bias towards it escalates over time. At
organization the business processes and the respective Request-for-Proposal (RFP) time, however, such long-
ICT are, the less likely is a buy decision. Further, the term projections are rarely made. Instead, unrealistic five-
more changes to the business processes and the to-ten-years projection is used in many cases. Not only is
supporting information systems that can be anticipated, this life span projection wrong, it also dramatically
the more an overarching dependency on outside camouflages the locus of the lion's share of the total costs,
fulfillment becomes questionable. Examples may which reside in the later approximately 85 percent of the
illustrate the dimensions: Productivity tools such as word usage period. It also calls into question cost
processors or spreadsheet programs will not have any considerations and comparisons that overemphasize
strategic dimension to most organizations, they will not differences in the early stages of a BPC/ICT system's life
be customized to specific needs in most cases, and they cycle, while grossly underemphasizing the total costs of
will not change frequently. These tools are readily ownership. In the government context, this leads to
available in standard formats from the market, and there is Proposition # 18:
no specific need for developing and maintaining them in- Areas of strengths and core competencies predispose
house. an agency to make rather than buy its electronic
However, when high system specificity is desired as in government systems
the case of tailor-made logistics systems (for example,

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 Proceedings of the 36th Hawaii International Conference on System Sciences - 2003

8. Conclusions [21] O. A. El Sawy, A. Malhotra, S. Gosain, and K. M. Young, “IT-intensive

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