| Abstract: | Purpose – The purpose of this paper is to empirically investigate and compare the moderating
effects of the two basic business process change paradigms – business process reengineering (BPR)
and total quality management (TQM) – on the business value generated for firms by their information
and communication technologies (ICT) investment.
Design/methodology/approach – Using data collected through a survey of 271 Greek firms,
moderated regression models founded on the Cobb-Douglas production function are estimated, which
have as the dependent variable the firm value added (objective measure of business performance), and
as independent variables the yearly labour expenses, the value of the non-computer capital, the value
of the computer capital and BPR (TQM) measures.
Findings – From the above models it is concluded that both BPR and TQM have considerable
positive moderating effects of a similar magnitude on the relationship between ICT investment and
firm value added. Also, different BPR and TQM activities have different moderating effects on ICT
business value; process simplification, process improvement and the creation of a horizontal
interdepartmental process are the BPR activities with the largest moderating effects, while
measurement of employee satisfaction and simplification of work methods for quality improvement
are the TQM activities with the largest moderating effects.
Research limitations/applications – The basic limitation of this study is that it is based on data
from Greek firms. Another limitation is that only one business performance measure, although quite
important and theoretically fundamental (i.e. firm value added), is used.
Practical implications – Both BPR and TQM are important ICT “complementary factors”, which, if
combined with ICT, can increase the business value it generates. Therefore ICT should not be used
simply as a tool for automating existing business processes, but for creating and supporting new
business processes and practices, such BPR and TQM.
Originality/value – This study investigates and compares the moderating effects of the two main
business process paradigms – BPR and TQM – based on reliable measurement of both through
validated multi-item scales, and also on theoretically sound models, founded on the Cobb-Douglas production function. |
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Greek