Business organizations play significant roles in fostering the growth of economies besides creating profits for the owners. The efficient management of business organizations is crucial for creating opportunities for growth not only for the firm but also for their respective industries and the overall economy (Ward and Peppard 72). Mostly, business administration entails organizing and coordinating processes to realize defined objectives and goals. Therefore, managers continually put efforts towards the realization of desired ends by organizing and streamlining the undertakings of different departments within an organization (Ward and Peppard 72).
Currently, the management of business values the incorporation of information technology to foster the efficiency of organizations in realizing the predetermined objectives. Thus, the integration of information systems in management has characterized the modern face of business processes. Information systems seek to enhance the aspects of decision-making, operations, and administration in an organization (Baltzan 97). As such, today, companies incorporate information and communication technology (ICT) that facilitates interactions in the working environment thereby, forming the information systems (Baltzan 97).
The integration of information technology has a significant contribution to the performance and functionality of enterprises. The fields of Business Process Management (BPM), Business Process Innovation (BPI), and Business Process Reengineering (BPR) have adopted information systems that influence business management approaches significantly (Anand et al. 4). Notably, organizations in the contemporary economies have adopted transaction processing systems, decision support systems, the web and social media analytics, and executive support systems among other technologies to foster management efficacy (Roberts and Sikes 27). Therefore, this literature review addresses the improvement of business management through the application of information systems.
Integration of Technology in Business Management
The globalized business environment in modern settings has facilitated the unprecedented integration of technology. In a study that sought to assess the degree to which technology drives business, Baltzan argued that an organization ought to consider the incorporation of technologies compatible with its business initiatives (64). In this case, the author argued that business initiatives should influence the choice of technology that an enterprise adopts. A company attains greater organization and coordination of activities by integrating the appropriate technologies (Baltzan 64). Therefore, technology-driven business management approaches should achieve significant support from various organizations today.
A survey carried out by Roberts and Sikes revealed that business management needs to embrace technology systems to cope with the highly competitive environments (27). The results of the survey indicate that the management needs to consider information technology (IT) as a competitive weapon. Therefore, organizations that pursue the fulfillment of constantly changing customer needs ought to integrate technologies (Roberts and Sikes 28). However, Roberts and Sikes claim that the additional delivery costs induced by the adoption of information systems are a considerable burden on business operations (30). As such, organizations need to consider the aspect of reducing costs as they integrate technology (Anand et al. 4).
Information systems inject capital importance in an organization. As a result, organizations show an upward trend in the increase of technology investments that seek to boost the capital. A study by Willcocks demonstrates that in the last two decades, organizations in the United States (U.S) have requested an increase in IT expenditure which averages 15% (79). The increase in spending could pose financial burdens to an organization. Nevertheless, in the long-run, such capital injections bolster success (Willcocks 80).
Furthermore, Ravesteyn and Batenburg emphasize that the integration of information systems in business management promotes the realization of the goals of the business (496). The incorporation of comprehensive IT systems creates a situation where the information technology functions and pushiness processes speak the same language thereby, facilitating the coordination of activities towards the intended outcomes (Ravesteyn and Batenburg 497). Similarly, Trkman argues that information systems enhance the implementation of a strategy designed by an organization to attain particular objectives (128). Essentially, business technology systems ensure that the management executes new advancements, manages projects, integrates frameworks, and facilitates the delivery of solutions that influence business intelligence (Trkman 128). Thus, the installation of technology systems in an organization promotes the attainment of set goals by streamlining processes.
Hermanus et al. claim that the global expansion of businesses calls for the integration of technology systems to facilitate effective communication (380). Notably, information systems ensure that companies create effective communication networks with their clients, employees, suppliers, partners, and vendors among other stakeholders. Friedman et al. hold that the fusion of technology systems in business management reinforces the communication aspects, thus promoting efficient decision-making processes (64). Therefore, the information systems that a company adopts prevent the compromise of data which is a crucial factor in making business decisions.
Moreover, technology systems have led to the expansion of management areas including Business Process Innovation (BPI), Business Process Management (BPM), and Business Process Reengineering (BPR). Amid the limited research on the fields, Anand et al. posit that the IT systems influence the efficiency of business management in a positive way (2). For instance, BPR, BPI, and BPM allow organizations to deliver quality products and services by creating environments that promote creativity, management of processes, and restructuring of management approaches to boost functionality (Anand et al. 8).
Business Process Management (BPM)
Tracing its origins in the early 1990s, business process management focuses on the organization and coordination of organizational undertakings and the application of techniques and technologies as tools necessary for the improvement of an enterprise’s functionality (Trkman 48). In other words, a BPM is a structure that enhances business procedures through the application of different techniques. They include the use of software for modeling, enacting, regulating, and assessing operational processes (Trkman 48). The business processes usually comprise individuals, organizations, and documents among other information sources. As noted, BPM relies on technological advancements to streamline business processes in a way that bolsters the flow of information in the organization.
Importantly, Goksoy et al. argue that BPM plays a crucial role in the promotion of a business’ development agenda (92). Since BPM supports the assimilation of information systems, it accelerates the identification, development, deployment, and evaluation of business processes (Goksoy et al. 93). Besides, information systems as the techniques and tools in BPM enable an organization to improve the interaction of different individuals to facilitate the success of business operations, control activities, analyze the various actions, and optimize productivity. Therefore, for organizations to witness the significant improvement in their daily undertakings, the fusion of BPM is necessary.
A study undertaken in the banking industry by Trkman reveals that the existence of information systems within an organization accounts for the success of BPM initiatives (127). Amid its limited theoretical foundation, BPM forms an integral part of business success since a company ought to fit in its environment for survival. Notably, information technology shapes the contemporary business setting. Therefore, businesses to succeed, they need to introduce the necessary developments in their processes. Trkman applied three theories including the task-technology theory, dynamic capabilities theory, and the contingency theory (129). The theories revealed that there is a great need for organizations to embrace technologies that foster compatibility with the changing environment. The theories showed that an organization enhances its success chances through business process management since the approach integrates information management systems.
Information technology influences modern culture considerably. Individuals working in different organizations have shown considerable support of IT systems amid the current cultural diversity. Vom Brocke and Sinn investigated the influence of culture on the BPM practices in organizations (360). They established that contemporary culture accepts practices associated with the incorporation of technology. Therefore, organizations that integrate such systems into their different processes enhance the conduciveness of the working environment, thus resulting in greater productivity. However, the research encountered significant limitations since it failed to address the element of change management while integrating information systems in the organizational setting. Notably, some employees could resist the change brought about by technology in their working environments thus, undermining the efficiency of the introduced BPM tools. Consequently, further research needs to fill this gap in a bid to underline the essence of technology systems in business management.
In a survey, Ravesteyn and Batenburg realized that the business process management systems not only facilitate the effectiveness of processes but also communication, participation, and governance aspects of management (494). As a result, managers should not view BPM systems as IT projects but as the bigger picture introduced by the technological tools and techniques in the management of an organization’s activities. Ravesteyn and Batenburg revealed that BPM systems foster communication among the various parties who play diverse coordinated roles in the organization (500). Furthermore, Ravesteyn and Batenburg maintained that a BPM scheme encourages the involvement of stakeholders since it requires them to take part in the implementation of the IT systems to expedite the functionality of the organization (501). Moreover, the survey unearthed the positive influence of BPM systems on the governance of an organization.
An inquiry by Habib revealed that BPM considerably contributes to cutting the costs incurred by an organization in carrying out its processes (6). The initial stages of implementing the technology aligned with BPM could create an impression that the system intends to realize the outcomes achieved via traditional technological systems such as ERP. Typically, ERP systems aim at enhancing the efficacy of the workforce by automating tedious tasks besides streamlining business processes. Nonetheless, BPM surpasses this function since it promotes knowledge sharing mechanisms as well as support collaboration required to make sound management decisions. Additionally, BPM reduces operational costs by optimizing workflows through the creation of process performance reports that facilitate the assessment of particular activities within the organization. As such, BPM integration ensures that a company adopts the best practices for its various processes thereby, resulting in the overall improvements that deliver considerable cost reduction to corporate players.
Besides promoting cost savings, BPM supports the generation of revenues that guarantee the financial stability of a particular company. According to Mohapatra, a business process management system improves a company’s revenues by amassing the output, fast-tracking cycle time, and promoting the quality of customer service (55). The information systems reinforce the accelerated delivery times that facilitate straight-through processing. Furthermore, BPM systems bolster sales by introducing dashboards that help managers to prioritize different activities. Besides, information system tools integrated into BPM help organizations to track their performance by using closed-loops to acquire customer feedback. Therefore, the IT systems incorporated into an organization have the capacity to improve its image and sales thanks to the rapid processes that meet the expectations and needs of customers.
Huang alleges that one of the tangible benefits of business process management systems is that it improves the agility of an enterprise. Technology influences business intelligence practices which help organizations to cope with the environmental transformations. Additionally, the collaborative frameworks that link departmental borders in a way that promotes timely decision-making affect the coordination aspects of the enterprise. Moreover, the in-flight process changes made possible by BPM systems ensure that the management of an organization responds to transformations promptly by rerouting operations automatically. Thus, the BPM systems assist a company to realize great competitiveness by immediately adapting to variations in the business surroundings.
Scheer and Nüttgens consider BPM as a practice that seeks to enhance the efficiency of business activities through the integration of tools and techniques based on information technology (380). As such, the adoption and integration of technology systems are usually carried out by individuals interested in fostering the efficiency of operations within an organization (Davenport 34). In this light, the optimization of business courses in line with the organizational objectives and goals, modeling systems, the workforce, and customers requires the incorporation of business process management systems.
Business Process Reengineering
The way companies incorporate business process reengineering (BPR) in the management of different processes and functions demonstrates the influence of information systems. The concept of business process reengineering entails the radical remodeling of critical organizational processes to facilitate significant progress in the areas of cyclic times, productivity, and quality (Nesrine and Habib 167). Thus, BPR focuses on the examination and the reconstruction of workflows within and between organizations for the sake of facilitating the optimization of end-to-end processes as well as the automation of tasks that add less value to the business (Nesrine and Habib 168). Business process reengineering aims at bolstering the efficiency of processes by redesigning and reorganizing a company to cut costs, enhance productivity, boost quality, manage time, and improve processes.
Essentially, the integration of BPR in an organization requires alignment with information technology systems. The contemporary IT developments form key enablers of BPR systems. Importantly, IT facilitates the remodeling of core processes with the aim of realizing substantial improvements to boost the competitive edge of an enterprise. Information technology plays three key redesigning roles that include enabling, facilitating, and implementing the automated changes in business management (Pattanayak and Roy 474). As a result, the IT introduced in BPR ensures the creation of coordination-intensive systems that reinforce an organization’s strategic advantages.
The initial processes of redesigning an enterprise unearth the “enabler” role of IT. Technology assists the organizational leadership to gain a vivid comprehension of the trends in competitive directions, industry, market, and the changing needs of customers (Schniederjans and Kim 421). In other words, the capabilities of IT systems offer considerable insights into the prevailing conditions in the enterprise environment. Importantly, as an enabler, IT provides an organization with an up to date knowledge necessary for the establishment of a strategic vision before the redesigning phase of BPR takes place (Schniederjans and Kim 421).
The role of IT as an enabler in BPR systems is denoted by the extent to which it overcomes geographical barriers to enhance communication. In this case, the IT systems ensure that managers acquire relevant information regarding the proper redesigning approaches for the organization (Rinaldi et al. 430). Thus, IT enhances the communication element of redesigning the organizational structures and processes. As a result, it allows an organization to identify the various approaches for managing BPR facilitation and implementation.
A study by Serban shows how information systems incorporated in business process reengineering enhance the facilitation phase of designing the new structures and processes in an organization (84). As noted, IT applies different project management tools and techniques to support reengineering design. Further, Rinaldi et al. identified IT as a factor that encourages improvement in business processes by streamlining the continuous communication between the facilitators and users (431).
Additionally, advancements in computer technology have altered the approval of a process-oriented strategy in the development of BPR systems through the sharing of a shared database. The shared database influences the functionality of the different units that perform the same task in an organization. The telecommunication technologies including groupware and local area networks (LANs) contribute significantly to the harmonization of employees who partake in roles that complete a standard business process. Further, BPR systems supported by IT have the ability to reduce the workforce of an enterprise by up to 75% (Rinaldi et al. 431). Therefore, besides streamlining processes focused on the realization of organizational goals and objectives after the creation of a new vision aided by IT-based BPR systems, organizations cut their labor costs.
Information systems facilitate the improvement of management efficiency by spearheading the implementation process towards the shared vision after the completion of the reengineering process. The application role that information technology plays in BPR projects ensures that the workers direct their efforts towards the envisioned goals and objectives. The “digital feedback loop” that the IT systems provide helps managers to infuse the meaning of organizational success. Therefore, employees engage in processes that improve their work as well as approach tasks differently to avoid monotony.
Research demonstrates that many organizations today have realized prominent IT integration making BPR an important feature of management. As a result, managers view BPR as an addition to the value of processes as well as improvement to the functionality of various procedures. In this regard, an inquiry by Lacity and Willcocks sought to investigate the degree to which IT has enhanced the storage of information relevant to an organization (70). The research identified the database concept as a significant reengineering development in the organizational world. The databases facilitate the organization and storage of information in an enterprise. Thus, capturing the information regarding the employees, financial reporting, and the workforce before storing it for future reference signifies the degree to which information technology enhances business decisions.
In business process reengineering, information systems affect data mining activities substantially. A study that examines data mining approaches adopted by companies in different industries identifies information technology as the primary enabler and implementer of BPR projects in enterprises that consider the essence of customer satisfaction in retail, financial, communication, and marketing firms (Camisón and Villar-López 2894). Therefore, BPR systems assist management to assess the internal relationships influenced by factors such as employee skills, product positioning, and pricing besides the external associations affected by demographics, competition, and economic development.
Further, in data mining processes, information technology enhances the effectiveness of radical changes introduced through BPR projects. The automated data mining processes ensure that the management “drills down” to acquire relevant information regarding procedures that influence issues such as sales, customer fulfillment, and the generation of corporate profits. The study indicates that currently, retailers use IT-enabled systems to offer promotions to individual customers by accessing their purchase records. Similarly, retailers consider the mining of demographic data as key in expediting product development and promotions to satisfy different market segments.
Furthermore, the concept of data warehousing has gained much recognition in the corporate world thanks to BPR initiatives undertaken by various players. Currently, organizations use data warehouses to preserve copies of transaction data used for analysis or creation of reports. Thus, IT streamlines the handling of information generated by multiple processes within an organization. The ability of the data warehouse to store useful information safely for several years helps the management to reengineer the processes of the organization by considering historical trends. Oesterle argues that the report created out of the data stored in the warehouse supports quick decision-making processes for reengineering initiatives (81).
Moreover, Rosemann and Vom Brocke identify data stores as significant in helping large corporations to solve their complex issues (107). As such, the integrated information systems help managers to redesign business processes thoroughly. They avail crucial information from different sources in the organization, thus helping the leadership to identify the most suitable solutions. However, the study failed to consider the tediousness and inefficiency of continually conducting queries before creating reports that influence the development and implementation of the BPR initiative.
Business Process Innovation (BPI)
Innovation entails the introduction of new ideas, objects, or practices for use by individuals or other adoption units. In the business setting, change involves new approaches to managing processes, new products not familiar with clients, new sources of supplies, new markets that were previously unknown by the organization, and new competitive features in the business organization. The new environments characterized by increased awareness, globalization, and technology influence organizations to adopt innovation as a key element of boosting competitiveness. Organizations seek to adopt business process innovation (BPI) to acclimatize to the unpredictable, dynamic, and complex nature of the contemporary business environment.
Business process innovation entails the integration of advanced technology or new methods of performing different functions in an organization to enhance its competitive edge as well as meet the demands of customers. Additionally, BPI entails the execution of work processes in entirely new approaches to realize visible and remarkable outcomes that secure predetermined business objectives. Therefore, BPI is likened to the integration of entirely new sets of features for the improvement of performance. As such, through BPI, organizations embrace information systems that add remarkable values to the business.
Business process reengineering influences BPI since the latter prompts the automation of processes in an organization to boost the effectiveness of the different activities that employees undertake to deliver goods and services to customers (Boons and Lüdeke-Freund 10). Thus, the nexus between reengineering and innovation influences the performance of an organization considerably owing to the improved functionality steered by new approaches. Importantly, innovation forms the essential element of a business novelty since it helps the management to assess the importance of IT in business processes.
Hashim delved into research to explore the influence of BPI on the competitive edge of an organization (58). Hashim pinpoints innovation as a core source of competitive advantage in various organizations (59). According to Hashim, innovation encourages differentiation, boosts productivity, and facilitates efficiency (60). Therefore, in BPI, technology is a core driving force to organizational efficiency alongside entrepreneurship. Technology makes it possible for companies to restructure their processes in ways that cultivate growth.
Trkman claims that there exists a substantial connection between technology, innovation, and business growth (127). Besides, there exists a positive correlation between BPI and the financial performance of an organization (Trkman 127). Between 1980 and 2005, China and India established national innovation systems that promoted research and development (R&D) in high-technology exports, especially on patents. Within the period, both China and India realized significant growth in Gross Domestic Product (GDP) by introducing technology to business sectors. Notably, both states showed interest in the creation of innovation incentives and the importation of technologies (Onetti et al. 338).
A study by Löfsten indicates that organizations need to intensify their efforts towards the development and integration of innovations in their operations for the sake of enhancing the realization of desirable outcomes (248). Boons et al. insist that organizations have incorporated technology into their systems (7). Nevertheless, they have not exerted enough effort to come up with new ways of doing things (Boons et al. 7). Hence, for businesses to perform their activities smartly, they need to continually evaluate their application of the information systems so as to identify the gaps that require satisfying through BPI.
Through BPI, traditional enterprises could realize great improvements. An inquiry to investigate the role of technology as an enabler of BPR identified IT as a driver of innovation in the traditional industries. Importantly, the changing needs of customers call for the integration of business process innovation to facilitate the execution of organizational strategies (Lacity and Willcocks 68). The need for customer satisfaction calls for organizations to consider innovations in the form of information systems to improve the functionality of process strategies. In this case, the implementation of technology results in the realization of innovation in an organization (Romero and Martínez-Román 178).
Furthermore, Tang et al. highlight that organizations have demonstrated significant changes through the development of mobile applications that seek to enhance the delivery of goods and services (654). The increasing demand for mobile BPI has seen organizations influence their clients, employees, and partners to adopt mobile technology innovations on a large scale (Camisón and Villar-López 2892). The mobile innovations that organizations use today enable users to access new work items through online platforms before viewing and acting on them offline. Similarly, customers prefer to access the information about the products and services offered by a company on their mobile devices before making decisions to purchase the items or services (Camisón and Villar-López 2893). Business process innovation enhances the experiences of the different stakeholders in an organization (González-Benito et al. 647).
Technological innovations also account for the creation of tailor-made products and services by businesses. In a cross-sectional examination, Chen and Tsou identified business process innovation as the key driver for the development of customized goods and services (75). In this regard, organizations enhance their capability of meeting the unique needs of customers through various online platforms. The retailers use the information available via different online platforms to meet the needs of clients (Lacity and Willcocks 67).
Furthermore, innovations driven by technology foster the sustainability of business corporations. For instance, social media and web analytics software used by organizations to analyze the market conditions play a core role in ensuring the development of sustainable business decisions (Schneider and Spieth 130). Therefore, understanding the new market trends by assessing the data mined through different analytic tools contributes significantly to improving the survival of the business.
Business process innovation helps to streamline supply chains. The supply chain management departments in contemporary organizations rely considerably on information systems to realize efficiencies in the movement of goods from the producers to the consumers. Bucherer and Gassmann argue that through business process innovation, organizations, especially those in the service industry can use handheld tracking systems to improve the surveillance of supply chain processes (187). According to Hausman and Johnston, the new practices in supply chain management, which are supported by information systems account for the efficient production and delivery processes encountered by organizations in the modern world (2723).
The popularity of business process innovation is crucial in fostering the efficiency of businesses in different ways. Ngo and O’Cass (1137) argue that BPI results in increased profitability, reduced operations costs, improved effectiveness, increased productivity, and augmented employee satisfaction. Today, most enterprises consider innovation as an essential driver of value-addition. It helps to enhance the quality of goods and services delivered to customers. Furthermore, Boons and Lüdeke-Freund insist that the value addition that comes as a result of the adoption of information systems contributes to the success of a business, thus fostering the competitiveness of an organization (15).
Additionally, business process innovation influences the adaptive approaches of enterprises in the ever-changing corporate world (Hausman and Johnston 2728). In the manufacturing sector, entrepreneurs regard business process innovation as critical to integrating advanced production methods that could result in desirable efficiency, enhanced quality, and reduced time-to-market aspect of conducting business (West and Bogers 819). The effectiveness of production processes increases the productivity of a manufacturing organization since it boosts the quality of products offered to customers. Furthermore, BPI technologies reduce the time between the production and delivery of goods to customers. Therefore, besides bolstering the efficiency of processes, BPI facilitates the timely delivery of goods and services to fulfill the unique needs of customers (Drucker 88).
Information systems improve the efficiency of business management strategies considerably. As noted, BPI, BPR, and BPM systems adopt technology as the enabler, facilitator, and implementer of improvement initiatives within an organization. The literature review shows that information systems bolster efficiency regarding cutting production costs, coordinating activities, improving job satisfaction, enhancing customer experiences, heightening productivity, and promoting the profitability of an organization. Notably, the literature review identifies information systems as an essential aspect of business process innovation, business process reengineering, and business process management. Therefore, organizations need to view information systems, not as automation projects but initiatives geared toward the improvement of the organization’s management approaches.
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