From literature review, it has been identified that, BPR entails activities of business processes renovation, automation and networking in improving business processes. These attributes enable to study BPR scientifically. The attributes are presented here below Business process renovation. Before automating the functional units, the elementary business processes are rearranged to form higher-level work process including technical linkages and interfaces of different systems. Business process renovation allows process redesign for the purpose of improving business operations. In the renovation activity, several jobs need to be integrated and compressed into one so that a single worker at that work station need to assume full responsibility of all works BROERSMA, BPR compresses processes horizontally as well as vertically.
Furthermore, BPR empowers workers to make their own decisions with less interaction with their managers.
The business process renovation sequences tasks to be done in a logical and natural precedence in which they can be performed. Through this arrangement, it allows several works to be done simultaneously. Furthermore, the sequencing of works in a logical and natural way leads to less rework of tasks, which has been a major source of delays in many organizations BROERSMA, In general, BPR through renovation involves eliminating business processes that have no values to organizations, instead increases Operational Costs. Not only that, renovation also targets on sequencing activities in a logical way in order to deliver a product or service to customers that has value ATTARAN, Business process automation.
In the business process automation, BPR modify business processes by transforming business process from manual to automated one. The automation process is achieved through the application of IT. IT plays a major role in the BPR project as it facilitates the automation of various activities of organizations. For instance, IT allows organizational activities to be conducted at different locations to enable quicker delivery of services to customers. Not only that, IT facilitates rapid and paperless transactions. In general automation allows an efficient and effective change the manner at which work is performed through standardization and centralization of business processes ZYGIARIS, In the automation process, IT directly drives the process through workflows, paperless document management and online interaction.
Automation does not only speeds up the business process and decreases cost, but also delivers a more secure and responsive service with an enhanced quality of process. Business process networking. Not only that, the networking also facilitates the workflow of activities and eliminating distances. Workers can work together even though they are located in different places. From this statement, it can be deduced that IT provides fast processing and response by automating business processes through networking CHEN, IT capabilities facilitate the networking of workers and provide ease information access and coordination across organizational units.
For instance, the internet can improve internal communication among different departments, work groups, branches and individuals. BPR facilitates also the external communication such as contact to customers, vendors, suppliers, government agencies and even competitors. BPR helps to overcome geographic barriers and thus enable broader acceptance of the process change. BPR alters the existing business process and brings cooperation between various departments using cross-functional teams instead of individuals working in isolated departments ATTARAN, Operational Cost is expenditures which are under the direct control of the manager.
The Operational Cost is made up of materials, labor and facilities. The items that contribute to Operational Cost are equipment, systems and communication costs. In lowering Operational Cost, organizations need to identify a unique way of delivering a service in order to gain a competitive advantage COVERT, For instance, service organizations have to make sure that ordering costs are minimized as possible.
The minimization of costs can be achieved by minimizing the trips to the suppliers for ordering materials. This can be minimized by networking the supplier and the service organization in their relation.
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In this case, the transfer of order will be through emails, fax, telecommunication and other software that facilitates the linking between the supplier and service organization. By so doing, it minimizes operation cost to an organization. Furthermore, service organizations have to reduce labor cost through minimization of number of employees involved in the business processes.
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The minimization of number of employee is done by reducing the non-value-adding processes, removing redundant work stations and automating business process. In reducing Operational Cost and improving delivering speed, BPR supports the linking of customers with service organizations through improved business processes. By so doing, BPR brings customer satisfaction and strengthen the domestic and international market competition among service organizations.
According to literature view, the general assumption drawn is that Operational Cost decreases if the organization adopts a proper business process improving technique. In this regard, it is theorized that BPR, through the activities of renovation, automation and networking, affects service quality and delivering speed, which in turns reduces Operational Cost of a service organizations directly and indirectly. The relationship between constructs, are presented in Figure 1 below. In summary, the research model presented in Figure 1 is hereby represented in system of null hypotheses and equations.
It should be noted that since some criterions act as predictors of other criterions, SEM was used to analyze the collected data. Figure 1: Conceptual framework. H Service quality has no correlation with Operational Cost in service organizations. H Delivering speed has no correlation with Operational Cost in service organizations.
Justification of paradigm and methodology. The structural equation modelling of the surveyed data was formulated to study the interdependence of constructs. Type of Research Design. Since the study aimed at determining the cause-effect relationship between exogenous construct and endogenous construct, the study design used in the study is a cross-sectional survey design.
Furthermore the design was selected because it enabled the researchers to collect large amount of data from a sizeable population in a highly economical way HAIR et al. Constructs and Operationalization of Constructs. The operationalization was as presented in Table 3.
Table 3: Operationalization of constructs. Renovation Ren. Automation Auto. The construct was measured using the following items: - level of use of IT, easy of locating customers detail and IT infrastructures HE, Networking Net. Delivering Speed Spe. Service Quality.
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The extent to which OP was improved by reducing damage frequency, data entry error, documentation or invoicing error, error on credit claims and number of customers returns. Service quality level was assessed by using 5 Likert scale constructed statements that were aggregated to service quality construct. Operational Cost. The extent to which OP was improved by reducing Operational Cost such as supplies costs, overhead costs, labor costs, inventory costs, facility costs and material costs. Operational Cost level was assessed by using 5 Likert scale constructed statements that were aggregated to Operational Cost construct.
Study Area and Population. The study area was Dar es Salaam city - Tanzania.
The Dar es Salaam city was been selected because it is a major commercial city of Tanzania with majority of service organizations. The study population comprised of all service organizations in Tanzania. However, from the collected data, it was identified that eight service organizations were established after the year These service organizations were retained for further analyses in order to meet the minimum sample size requirement for the study depending on the number of parameters under the study KLINE, The target population for the study was made up of banking, public utility and pension fund sectors.
Other sectors are insurance, health services, airline and communication. The selected sectors were thought to be knowledgeable with the elements of BPR. The units of inquiry of the proposed study are service organizations, however, managers of the service organizations were asked to respond to the questionnaire for the service organizations.
Sample size, Sampling method and Data Collection. Given the absence of a comprehensive sampling frame of service organizations in Tanzania, quota sampling method was used to select organizations.
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This non-probability method is a variant of stratified sampling that is recommended in scientific studies in the absence of comprehensive sampling frame NDUNGURU, In total, 95 service organizations responded to the questionnaires; being thirty 30 banking, three 3 public utility, three 3 pension fund, eighteen 18 insurance, twenty eight 28 health, seven 7 airline and six 6 telecommunication organizations.
Data were collected by using questionnaires 5-point Likert scale with items for each construct. The questionnaire collected categorical data which during data analysis were assumed to be interval scale data PERRY, Section managers were given questionnaires and they were asked to fill in. Data analysis.
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The data analysis included preliminary, descriptive and inferential. Preliminary analysis was confined to response coding, data cleaning and screening, and normality testing. In addition, reliability and validity testing and factor analysis were also undertaken. Factor loadings of at least 0. In addition, univariate and multivariate outlier analysis was undertaken by assessing Z-score and Mahalanobis distance.
Descriptive analysis was confined to computing basic statistics and frequency distributions. Both measurement model and factor analyses were done, in the measurement model analysis; items that factor loaded below 0. In this study items in each construct, were grouped as one component. Inferential analysis assessed the cause-effect relationship between constructs; testing of the association, ascertaining direct effect and model fit and testing of hypotheses SAUNDERS, et al.
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