| This dissertation addresses a number of open research questions about the optimal design of business processes. It is motivated by a series of case studies and extensive work on process redesign projects in a reengineering team at a Fortune 50 company. The first two chapters of the dissertation survey the literature on BPR, and develop a framework for modeling typical business processes. The central thesis shows how to simultaneously make an optimal choice of workflow logic, performance based-incentives and information systems, and consists of a number of parts. In the third chapter I present some new results that enable the analysis of moral hazard in a network of queues, and illustrate how these results can be used in the context of process reengineering. Chapter four analyzes models that contrast a typical functional organization with a typical process-oriented organization. Results from this section indicate that simultaneous changes in workflow logic and compensation complement one another, as do changes in workflows and information systems. However, contrary to what is popularly believed, performance based incentives and information technology appear to be substitutable drivers of superior process performance. Chapter five examines two facets of employee empowerment--decentralization and work consolidation--in conjunction with relevant supporting information systems. Again, contrary to what is commonly believed, these two facets need not accompany one another--they can occur separately, or together. I describe how the nature of competition and the sensitivity of customers to timeliness and quality affects the optimality of these changes.; The work in this dissertation comprises the first attempt at developing a rigorous and comprehensive normative theory of information-technology-enabled business process design. Many of the results enable the analysis of a variety of other research questions in information systems and operations management, management science and applied economics. |
