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International Journal of Project Management 22 (2004) 213–223

www.elsevier.com/locate/ijproman

Managing a public sector project: the case of the


Italian Treasury Ministry
Michela Arnaboldi*, Giovanni Azzone, Alberto Savoldelli
Dipartimento di Ingegneria Gestionale, Politecnico di Milano, Piazza Leonardo Da Vinci, 32, 20133 Milan, Italy

Received 15 November 2002; received in revised form 24 January 2003; accepted 5 June 2003

Abstract
Project management strategy in the public sector has attracted the interest of many scholars since the late 1980s, following the
growing pressure on governments to abandon bureaucratic organisations in favour of leaner structures. Though Italy is considered
a late developer in this movement, its scope, speed and consistency of reforms is considered remarkable [OECD, (2001), Reviews of
Regulatory Reform in Italy]. Within this context many projects have been undertaken trying to implement the ideas of New Public
Management (NPM) [Public Administration (1991) 69:3; Accounting, Organizations and Society (1995) 20:93]. This paper reports
on a reengineering project carried out at the Italian Ministry of Treasury which tested a methodology drawn from the literature of
process engineering. Multiple dimensions and actions proved to be crucial in managing the project: the paper discusses them and
their relative importance over the life of the reengineering project.
# 2003 Elsevier Ltd and IPMA. All rights reserved.
Keywords: Reengineering; Project management; New Public Management; Public sector

1. Introduction general concern has been shown for the difficulties of


managing a project in the public sector: are business
Since the beginning of the 1980s many countries have methodologies appropriate to these organisations?
been trying to change public organisations, responding Which are the critical success factors? Second, a recent
to the mounting pressure to reduce budgets and increase trend in public sector research has focused the attention
the quality of services provided. This widespread move- on the ‘‘reality’’ of this change; some authors [7,8] sug-
ment is often labelled as new public management gest that projects and more generally the use of business
(NPM) [2,3] and many scholars (see for example [4–6]) techniques is a way for adapting to the external envir-
attribute its origin to the British initiatives of Thatcher’s onment in an isomorphic way [9]. This means that
reforming conservative government in the UK from organisations use projects as a façade for legitimation
1979 on. The movement has been a driving force for and for picturing themselves as modern to the external
governments for downsizing and elimination of waste, environment. According to this perspective after the
and it has led many public organisations to revise their completion of the project, public entities continue to use
procedures and structures for complying with the prin- old practices and present the new one in the façade
ciples of economy, efficiency and effectiveness. The emerging, which is their formal structure. Third, after 2
application of business techniques is one of the more decades since the first attempts, an emergent field of
significant elements which has led many public institu- research poses the question whether the rise of different
tions to undertake major, modernising projects. projects, at different levels, at different times is an
This trend has attracted the attention of many scho- answer to the reforms or are they elements of a
lars who are interested in different issues. First of all, a failure to achieve the comprehensive change claimed by
governments.
* Corresponding author. Tel.: +39-02-23992796; fax +39-02-
The present paper addresses the overall problem of
23992720. implementing a project within the public sector, pre-
E-mail address: michela.arnaboldi@polimi.it (M. Arnaboldi). senting the analysis of a reengineering carried out in the
0263-7863/$30.00 # 2003 Elsevier Ltd and IPMA. All rights reserved.
doi:10.1016/S0263-7863(03)00067-X
214 M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223

Italian state administration as an action research inter- adopting mechanisms which reduced the administra-
vention. tion’s capacity to delay and stop action. A second step
The idea of the research is to first draw on the existing was made in 1993 (Law 537/93), where attention was
literature to identify the main issues of managing a directed to reducing the duplication of functions among
project, and in particular a reengineering intervention, ministries and governmental bodies and improving
in the public sector. The theoretical framework used customer relationships.
refers to three streams of research: (1) NPM, business In 1997, the government launched a third phase under
process reengineering (BPR) and project management. the so-called ‘Bassanini laws’, which are considered a
The NPM literature helped in pointing out and analys- real breakthrough within Italian management reform
ing the most relevant issues implied in the change of [1,10,11]. These laws aim at re-balancing powers
public sector institutions; (2) business process reengi- between the centre and subnational governments, and
neering offers both theoretical and empirical studies, re-launching the administrative simplification policy
which have been the basis for developing a methodology based on processes of continuing accountability and an
suitable for state administrations; and finally (3) the project aggressive reorganisation of government to improve
management literature which integrated the definition coherency and efficiency. Decentralisation accelerated,
of the ‘‘action’’ approach. the legal system was reorganised, and horizontal central
The combined approach to the analysis highlighted units were created to promote and monitor reform.
the major problems and the main instruments in under- This context has been a fertile field for the implemen-
taking such a project. This led to the definition of the tation of NPM techniques; particular attention has been
methodology which was subsequently applied in a pub- paid by government to business process reengineering
lic organisation, the Ministry of Treasury. This organi- (BPR), as a change technology. An example of this,
sation represents the ideal field for such an application. which stems from technology, comes from the Author-
Its critical role as a change agent, the dynamic legisl- ity for the Informatization in the Italian Public
ative context in which it is embedded, and the increasing Administration (AIPA):
pressures from different stakeholders, reflect the typical
situations discussed by NPM researchers which all make The AIPA interest in process reengineering issues
the Ministry of Treasury a relevant example for testing rises from the observation of the widespread diffi-
the methodology. Furthermore, the intervention culty within the public administration in defining,
addressed a process, the management of European starting and realizing information technology pro-
Structural Funds, which is under scrutiny itself and jects able to obtain evident and tangible results in
contributes to the creation of the complex situation in terms of improvements in the services offered to
which many public institutions operates. citizens and in expensiveness in the operations [12].
The paper starts with an introduction to the Italian
situation to provide an understanding of the context in This indirect pressure and the promotion of ‘Rein-
which the research was conducted. The second part is venting Government’ experiences [13] have driven insti-
an outline of business process reengineering that has tutions to make several attempts to revise the processes.
served as a background in the definition of the method- The next paragraph gives an overview of BPR and its
ology and for preparing the empirical application. The evolution, which is the basis for the empirical applica-
central part of the article is devoted to the findings. tion at the Ministry of Treasury.
Finally the last section sets out the conclusions of this
study. 2.1. Business process reengineering

The original idea of BPR came from Hammer [14],


2. The Italian context who defined reengineering as the ‘radical redesign of
business process to achieve dramatic improvements in
Italian central government started its reforming pro- critical contemporary measures of performance perfor-
cess at the beginning of the 90s, following the example mances’. Since this first concept BPR has evolved and a
of many OECD countries. Though Italy is considered a number of approaches have been developed during the
follower of the ‘higher reformers’, such as the UK, New years. Though it is not possible to identify a completely
Zealand and US [4], its actions are remarkable both for uniform methodology, reengineering can be divided into
its speed and its scope. The initial struggles of central six phases, which contain the essential elements for defini-
government were directed towards state- citizen rela- tion, design, implementation and consolidation. The pha-
tionships. Following the NPM principles and policies of ses are: (1) the reengineering strategic definition, (2) the ‘‘as
other countries, an administrative procedure law of is’’ process analysis, (3) the ‘‘to be’’ process definition, (4)
1990 (Law 241/90) was approved for simplifying proce- improvement interventions design, (5) implementation,
dures. It focussed on improving procedures, and and (6) monitoring and continuous improvement.
M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223 215

The goal of BPR is redesigning cross-functional pro- cohesion. Resources are targeted at actions which help
cesses that determine the competitive success of an bridge the gaps between the more and the less developed
organisation. It appears evident that the first step is regions and which promote equal employment oppor-
necessarily the definition of the intervention at a strate- tunities between different social groups, according to
gic level through the following steps: strategic objectives certain priority objectives.
identification, strategic context definition, top-down The economic and social importance of the ESF has
mapping of organisational processes, and definition of attracted the attention of many scholars, who have
reengineering breadth. addressed both general problems and country specific
Once the process to be revised has been defined, the issues. McAleavey and Mitchell [15] describe the ESF as
objective of the second phase is the representation of a ‘‘blunt policy instrument’’ and analyse the problems
the process workflow. The third phase, the ‘‘to be’’ process related to programming and implementation, in which
definition, is theoretically examined separately from the better-organised and advantaged groups within regions
‘‘as is’’ process analysis. However, in the practical seem to be favoured. The critical nature of this issue
development of the interventions, these two phases and in particular of the programming capability is
become inseparable: often ideas and hints for the rede- reaffirmed by a number of studies in different settings
sign emerge when the project team makes its survey of [16–19] including different countries, that might be
the existing process. The last step of this phase is the classified as early adopters or late adopters of NPM
choice of which alternative to implement. Contrary to [1,3].
the other steps of this phase, the alternative choice is not This growing attention is explained by the increasing
a task performed by the project team: the final decision financial importance of ESF. The ESF are now the sec-
needs significant project commitment from the ond largest item of expenditure in the EU’s budget. The
organisation itself. major impetus for this change goes back to 1988, when
Once the project team has identified an alternative five regulations introduced a new framework through
process to implement, the succeeding steps are set in which the structural funds delivered financial aid aimed
motion to specify the interventions necessary to make at reducing economic disparities among the Union’s
the new reengineered process operational. According to regions [20–22]. After that two major reforms followed
this approach the implementation means carrying out in 1993 and 1999 [23]. They resulted in the entry of six
the plans previously specified. The last phase, monitor- new states and more rigid management and monitoring
ing and continuous improvement, has proved to be a procedures.
fundamental prerequisite for controlling and improving The definition of stricter management rules, the
final performances in the future: it facilitates the antici- reduction of the total availability (from the proposed
pation of possible difficulties of the organisation in 218.4 billion Euros of 1998 to 195 billion Euros) and the
adapting to the new ‘‘to be’’ process, and to tailor the introduction of newer, less wealthy countries into con-
new process to subsequent strategic and context changes. tention for ESF funds emphasised the need to use
resources better than before. This change put an addi-
tional pressure on the member states which are, more
3. Results than before, competing for the remaining resources.
This situation created a new regime of constraints in
The conceptualisation of the reengineering project at which the proposal to revise the ESF management pro-
the Ministry of Treasury began in 1997, when the cess appeared as an important opportunity for Italian
enthusiasm for this technique was high. A negotiation Ministry managers, which is the Italian core organiza-
process was carried out before starting the project to tion within the ESF management process. The Italian
achieve the necessary commitment among managers Ministry of Treasury (MoT) is a political body, which
and elected members. The particular process addressed determines financial and economic guidelines and pro-
was the European Structural Funds (ESF). This is grams. It is structured in several staff offices and four
under scrutiny itself from the European Commission. operative departments: Treasury Department, General
The next section provides an analysis of ESF, its recent Accounts Department, Development Policies Depart-
changes and it describes the role of the Ministry of ment, General Administration, Personnel and Periphery
Treasury within this process. Services Department. Each Department has more
Directorates (or Inspectorates or Services), within these
3.1. European structural funds and the ministry of treasury Offices.
The main competencies attributed to Treasury
The European Structural Funds (ESF) are the main Departments are: supporting economic and financial
mechanism for the provision of regional aid to the decisions of the Government, managing public debt and
member states of the European Union: they work sharing public resources, dealing with international
towards the goal of achieving economic and social economic, financial affairs and currency affairs and
216 M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223

supervising the banking system and financial markets The need to select the proper process to review, the
(together with Italian Central Bank). difficulties of gaining and guaranteeing leadership on
Concerning the ESF the MoT has the responsibility the project, and the necessity of securing and focusing
for budgeting and controlling European balances, human resource efforts required a high commitment
including the execution of payments, the monitoring of from the organisation. This factor is recognised as cru-
financial flows and the execution of EC controls. The cial in the project management literature [27,28] and
role of MoT is therefore crucial in the overall process of more specifically amongst reengineering supporters
managing ESF both in funds planning and in grants and detractors [30,31]. Top management commitment
payment. Often the bureaucracy of its activities has helps anticipating problems in driving the project to its
caused delays in action, preventing the possibility of completion. The definition of a steering committee was
obtaining funds and reimbursement. considered an appropriate instrument for directing
The financial importance of ESF, the clear urgency to internal attention to the project and formalising nego-
improve the efficiency of the whole process and the tiation and interactions among involved parties.
legitimation of these needs in the major principles of However, in public sector institutions, top manage-
Italian reforms accelerated the negotiation process ment support is not enough. Politicians have an influ-
which ended in 1998 with the official start-up of the ence on organisational life and their exclusion has often
project. driven the project to failure [17]. The consequent action
is defining a steering committee composed by three
3.2. Dimensions and actions spheres: public managers, politicians and project team
leaders (A1). The appropriate definition of the steering
The project was carried out over a three year period in committee and its involvement in the project has an
close collaboration with the Ministry staff. Three levels influence on all the phases: the active participation of
of groups, lead by the project manager, supported the the steering committee put pressure on the human
reengineering: the steering committee, the project team resources involved, helping to achieve the completion of
and the project groups. The first was devoted to defining the project and the incorporation of new routines.
the strategic purpose of the intervention and maintain- It is also important to carefully evaluate the coherence
ing the commitment on the project and was devised by between the influence of the steering committee and the
the project manager and the director of all the Ministry scope of the project: the wider the scope of reengineer-
divisions involved. The project team consisted of aca- ing, the higher the commitment needed. At the MoT the
demic researchers. steering committee was defined from the beginning, but
The implementation followed the six phases described before starting the implementation some actors, not
in the BPR section: the strategic definition, which led to previously involved, interfered with the project imple-
the selecting process to be revised, the ESF payment mentation: the project manager needed almost three
process mapping, the definition of the ‘‘to be’’ process months to involve them and restart the implementation.
and the detailed interventions and finally the setting of a The creation of such a steering committee should not
monitoring and control system. Fig. 1 shows the phases be seen essentially as an additional problem but also as
of the project, people directly involved. an opportunity. The involvement of political parties
This empirical application at the Ministry of Treasury guarantees the possibility of promoting and starting a
(MoT) offers the possibility of identifying the variables policy change, which could not be achieved without
and the factors which affect project and project man- political support. Obviously one consequence is the time
agement success in public institutions. spent on reaching decisions is longer, especially because
The empirical study at the MoT stressed in particular the actors involved often have contrasting interests.
the importance of seven dimensions (D) of the public Another important dimension of the public sector is
sector, that can be faced with seven actions (A). Table 1 that objectives are not linked with profit (D2). It is evi-
reports a summary of these characteristics and actions. dent that this factor influences reengineering from the
This paragraph discusses these dimensions following the strategic definition at the outset. Also private organis-
sequence of reengineering phases. However as sug- ations pursue different objectives, nevertheless they are
gested, where characteristics and actions related to a shaped by the final goal of creating economic value:
particular phase can influence all the following ones. instead in public institutions it is often difficult to find a
The reengineering process has been depicted in a unitary vision. The lack of convergence on explicit,
number of discrete stages. The first is the strategic measurable goals allows different interpretations and
definition in which the project team identifies the pro- creates problems in negotiating with contrasting actors.
cesses to be revised. Since the beginning it was clear This is further complicated by the difficulties in marking out
that the political nature of commitment (D1), as the process users (D3). Who are the users of a public insti-
reported also by many authors [24–26], is a first tution’s process? As Thompson and Jones [32] suggest a
important difference. user in the public sector is someone who immediately
M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223 217

Fig. 1. Project phases.

presents themselves for the service, those who may be client satisfaction played a fundamental role in all the
waiting for the service, those who may need the service following phases, and the formalisation of procedure
even though they are not actively seeking it, future gen- can be seen as an insurance against future opposition.
erations of service recipients, relatives and friends of the The definition of the map was particularly useful in
immediate recipients, state and local governments or defining the scope of the project at MoT. The analysis
entities that assist in service provision, legislators, citi- of ESF management highlighted two critical processes:
zens who oversee the agency’s performance, and citizen programming and payment. The discussions with the
as taxpayers. steering committee and the definition of the goal/user
These two characteristics were matched during the map stressed the difficulties in revising the first one. The
strategic definition at the MoT generating a possible negotiation drove the team to narrow the scope of the
solution. Each steering committee member was asked to project and focus the reengineering on the payment
make goals clear and link them to possible advantages process.
for different users, defining a formal relation between This situation mirrors, partially, the complexity that
them. This user/goal map (A2) was then discussed in characterises public institutions. They are not the result
several meetings and finally the agreement on the scope of rational planning, they usually emerge from a weak
of the reengineering was achieved. balance of political relations where any change in one
The formal instrument enhanced and accelerated the part of the organisation is likely to have an effect on the
negotiation process, but also allowed a narrowing other [25].
the breadth of reengineering project, which is a prerequisite The political origin of public organisations is further
for project success [33]. Realistic and definite goals, and reflected in their usually decoupled structure (D4); this
218
Table 1
Dimensions and actions

Dimension Action Implications on reengineering phases

M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223


Strategic Definition ‘As Is’ process analysis ‘To Be’ process definition Intervention Design Implementation Monitoring

D1 Political Commitment A1 Steering Committee Involvement of political Major helpfulness of Negotiation on new Motivation Motivation Motivation
Enlargement actors; Goal negotiation internal staff process possibility and supervision and and
supervision supervision
D2 Not profit objectives A2 Definition of a Map Formalising negotiation Facilitating in defining Possibility to control Facilitating in
of goals and users on goals process performance alignment between defining control
indicators strategic goals and system
‘To be’ process
performances
D3 Multiple and Formalising user Possibility to verify
various users requirements user satisfaction
D4 Decoupled structure A3 Definition of Formal Involvement of all Identification of
and Informal structure stakeholders informal practices
D5 Legislative A4 Identification of Analysis of macro Analysis of
constraints legislative constraints legislative procedural laws
constraints
A5 Legislative plan Possible Project revision Definition of timescale
D6 Lack of expertise A6 Training Training on Negotiation Training on techniques Training on new process Training on
tool and use of results (here BPR) tools and functioning MCSs
(e.g.: IT)
D7 Scarce management A7 Parallel design of Definition of goals and Definition of
control systems MCSs architecture performance indicators/
responsibility
M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223 219

means that institutions have a formal structure that the organisations of meeting and the circulation of
satisfies the external environment and a different inter- information. This also activated a process of informal
nal routine that constitutes the real management prac- conversation on the project issues which was particularly
tice. This characteristic has a strong influence on useful for the project team in capturing problems and
reengineering. Decoupled organisations generally act opportunities without the barrier of formal interviews.
differently from what formal tasks suggest; this high- A further struggle was made in this phase in high-
lights the need for reengineering teams to analyse a dual lighting the overlapping of formal and informal rela-
structure identifying the real and the formal routine (A3). tions and routines. This is a peculiarity of public
At the MoT this action was first performed during the organisations that needed a careful approach from the
strategic definition. With the help of internal members teams; this increased the time for carrying out the ‘‘as
the project team drew the map of formal and informal is’’ process analysis.
actors related to ESF payment process. Gathering this A further important difference of projects carried out
information facilitated the recognition of possible in public sector is the presence of legislative constraints
‘organisational’ constraints and enabled tailoring a (D5). Laws and procedures are central elements of pub-
strategy for involving these ‘hidden’ stakeholders. lic organisations, which regulate routines and changes,
The double analysis of the decoupled process was and consequently affect reengineering interventions.
essential also during the ‘as is’ process analysis. Origin- During the intervention at the MoT the project team
ally this second phase was proposed as marginal in the decided to tackle this problem formally, making a par-
reengineering process [34]. The essence of reengineering allel analysis of legislative issues (A4). Firstly the prob-
was a problem solving, creative and iterative process, lem was addressed during the reengineering strategic
starting from a so-called ‘‘blank sheet of paper’’. To definition. Some interventions for example were exclu-
identify the explicit and the hidden needs of customers, ded because they implied a significant change in legisl-
and define organisational potentialities, reengineering ation: this was considered by the steering committee to
(according to this radical approach) had to start from be outside of the project. Then the legislative analysis
an empty field. In such interventions the detailed analy- proceeded during the ‘as is’ process mapping where the
sis of the existing process becomes superfluous, nothing project team identified necessary changes in regulation.
of what the ‘‘as is’’ process included is assumed as con- The third phase carried out at the MoT is the defini-
straints for the redesign. For earlier BPR proponents tion of the ‘‘to be’’ process design. As suggested pre-
bottom-up analysis was conversely seen as counter- viously this phase was almost concurrent with the
productive, because it could determine a conservative process mapping and performed by the project team.
influence on the creative process, bringing little differ- The interaction with the internal structure and specifi-
ence to the initial situation. Analysing the literature cally the involvement of the steering committee was
(regarding both the most recent methodology and essential in choosing the alternative to implement. The
implementation cases) a mitigation of this radical complex environment of a public organisation required
approach emerges, together with a greater attention to a long negotiation to convince people of the appro-
mapping existing processes [12,30,31,35–42]. priateness of the suggested interventions and the use of
The project at the MoT followed this recent simulation software was particularly helpful because it
approach, identifying a detailed map of the activities, showed cost and time savings. The need to support
responsibilities, and information technology. alternatives with software simulation required the
The use of project management instruments was par- detailed definition of each intervention, which implied a
ticularly useful. Two different teams were established to longer time for this phase but increased the desire to
carry out this task. The first group (composed of three proceed with the project.
members) was devolved to mapping the management It is finally important to say that the alternatives
issues and the second group (composed of two IT engi- involved some procedural and legislative changes. This
neers) was devoted to investigating information and led to the definition of a legislative implementation plan
communication. The initial stage of the mapping (A5) with a timetable agreed by the steering committee.
required the involvement of both teams in every inter- This step is a peculiarity of public sector organisations
view; then the two teams focused on different group of and it can be critical for the success of the project. The
actor. duration for implementing legislative change is not
Another important element of project management always foreseeable and this could delay the implemen-
was the definition of frequent and regular meetings for tation of new procedures.
continuously revising the map of the process. In this Before starting the implementation the project man-
way the coherence between the teams was guaranteed, agers in accordance with the steering committee defined
and at the same time a triangulation of data was four work groups within the MoT, supported by four
achieved. The geographical concentration of all the external team leaders. Each group was devoted to fol-
internal people involved in one building facilitated low a specific intervention and report the results on a
220 M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223

regular basis. The project management was supported at the Ministry of Treasury, the use of simulation
defining a precise path with a number of milestones and software was revealed to be an important instrument
frequent reviews in order to support the both the exter- for convincing people. As stated above, the leap from
nal and internal implementers. the design phase to the implementation was critical:
The creation of these mixed groups was particularly the missing engagement of some process stakeholders
helpful in facing another public sector issue that is the created some difficulties and arose oppositions for
general lack of expertise (D6). This is particularly true in proceeding the project. Presenting simulation results,
Italy where managers traditionally have a legal rather and showing costs and time savings were fundamental
than management background. Training (A6) is sug- for getting stakeholders support and taking the project
gested as an appropriate tool to address this issue in the forward.
project management literature [43]. The experience at
the MoT suggests that training should be provided on:
(1) the background of techniques and tools used during 4. Conclusions
the project, (2) the use of information systems (if
defined), (3) the operationalisation of the new process. Implementing a project in public organisations has
In the last phase of the project—monitoring and con- become an important issue in recent years. This interest
tinuous improvement—another difference highlighted is in this context too, has been stimulated by the reform-
the general absence or scarcity of management control ing movement that has spread across all the OECD
systems (D7). Nevertheless the consolidation of the countries in the last two decades. Though governments
process and its improvement needs a system which is have started to change at a different pace, the principles
able to report on performances. This implies often of the reforms are similar and they are commonly
designing a control system ‘ex novo’’ (A7) together with addressed with the label of New Public Management
the redefinition of the process and the identification of a [2,3]. Italy is considered a late adopter of this move-
responsible for managing and reporting its results. This ment, starting the legislative change only at the begin-
is the case of the MoT, where the payment process has ning of the 1990s. Nevertheless the breadth of policy
never been evaluated through specific indicators. An changes is remarkable and it makes the Italian context
incremental approach was followed, designing an initial an ideal field for researchers. The increased importance
control system with simple indicators (time and costs) of Italy is proved by the attention recently given by
and reports. international researchers [44–48].
Finally it is important to highlight two elements, One of the implications of the NPM movement is the
which are not considered peculiar to public institutions proliferation of business techniques applications by
but which were crucial in carrying out the project suc- undertaking a project. In such a context this paper has
cessfully: leadership and software support. Leadership analysed the problems of managing a reengineering
has been a fundamental element during all the phases of project in public sector organisations.
the reengineering. Indeed this element is not new for The findings of this paper are based on data from an
private organisations; authors agree that leadership action research approach carried out in a 3-year period
strengths and enthusiasm will provide an example and at the Italian Ministry of Treasury. In this paper we
will aid the project success. In public organisations, have drawn on NPM, reengineering and project man-
especially in recent years, maintaining a sharp focus is agement literature. NPM has informed the investigation
sometimes very difficult. Human resources struggle of the major issues involved in public institutions chan-
everyday with new tasks, initiatives and new services to ges, informing the definition of a tailored approach to
deliver: this could give a project affecting management reengineering in such organisations. The available lit-
practice a lower priority. The solution suggested for erature on BPR was essential in defining the methodol-
private organisations fit: that is the presence of a con- ogy. However project management contributions to the
tinuous open and frank communication. literature completed the framework, adding cross-fertil-
Finally it is important to say that the use of software isation of elements which were fundamental in the
was useful, in particular during the process mapping empirical phase.
and the definition of the ‘new’ reengineered process. The specific interest in Structural Funds was raised by
Many authors agree that the use of design and simu- the recent changes in their legislation: (1) the increased
lation software has become an essential tool for the number of eligible countries, (2) the definition of stricter
modern reengineering approach. First these instruments monitoring procedures, (3) the reduced overall budget.
allow the identification of all the possible pitfalls of the These changes stressed the need of achieving a more
existing process, highlighting organisational, human efficient process management. The complexity of the
and technological constraints. Second simulation tools process and the huge number of stakeholders involved
offer the possibility of testing different solutions and have allowed an investigation of a complete range of
measuring process performances more easily. Further, critical dimensions and identifying possible actions for
M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223 221

facing these situations. The results presented in the lities or additional struggles for achieving the project
paper are not generalisable to all public organisations completion.
elsewhere. However the process of change studied may The last two actions introduce the third major find-
have a wider interest for other public sector organisa- ings of this paper: the importance of project manage-
tions. ment issues. The first element is training; human
The major theoretical findings of the paper cover resources in public administration, but particularly in
three dimensions; first insights from, and the limitation Italian institutions, did not have a management back-
of BPR available methodologies in approaching a pub- ground. The introduction of business techniques causes
lic sector redesign; second, strictly related to the first, defensive resistance and negative behaviour which could
the identification of possible actions on the implemen- prevent the success of the project. Though the involve-
tation of reengineering in government settings; third the ment of internal staff is important, providing the proper
importance of project management issues throughout training is essential from the initial phases of the pro-
the project. Further the action research rationale has ject, because it allows a full immersion of people in the
given empirical evidence of the real applicability of the project proceedings.
above approach. A second important element is the control of the
A major finding of this study relates to the insights project and results. Defining achievable milestone and
gained from and the limitations of business reengineer- emphasising the need to maintain a timescale helped to
ing methodology. Though some authors suggested that address behavioural struggles in the reengineering,
public sector projects can be managed following busi- minimising the risk of people being diverted and trap-
ness approaches, literature and the experience at the ped by their routine activities.
Ministry of Treasury proved that a tailoring is needed. Two further instruments helped in avoiding project
The adaptation of the methodology has been discussed failure: continuous communication and the definition of
using seven dimensions (D) and seven actions (A) which a management control system. Both formal and infor-
are considered to be relevant. As shown in Table 1 a mal communications, such as official reports and fre-
single action can influence many phases of a reengin- quent meetings, allowed the circulation of information
eering project. at all levels, informing constantly on the results of the
The first issue is the enlargement of the social system project. The defined measurable indicators was funda-
governing the project. The political nature of public mental: particularly for convincing the steering com-
institutions generates the necessity to involve on one mittee and maintaining the needed commitment [28].
hand elected members and on the other hand stake- It is important to highlight that all these instruments
holders that apparently are not related to the process were more effective because they were supported by the
under revision. The structure of these institutions is the use of formal structured groups: the steering committee,
result of subtle negotiations, which can disappear in the project team, the work groups. This approach helped
the formal facade though remaining at the core of the in rationalising the change process: first the groups
organisation. Revising a process in public sector means represented a reference and discussion point for internal
revisiting this network of relations, creating possible staff, all along the project duration; second their presence
tensions; for this reason the involvement of all stake- enhanced the process of legitimation within the organi-
holders is essential. sation diminishing the potential for conflicts.
Involving all the actors is necessary but it is not The approach was successfully applied at the Ministry
enough: when actors with different interests are involved of Treasury and the ESF payment process revisited. The
the negotiation on goals can become never-ending. The new procedures have been tested for a 3 month period
empirical experience at the MoT suggested that the use and different benefits have been so far shown both by
of a formal instrument enhanced this process. The par- final user and internal staff.
ticular instrument adopted here is a map of goals and First the new process and the rationalisation of activ-
users, which was defined by each member of the steering ities prevent the duplication of documentation and
committee and subsequently agreed with them. reducing the need of documentation cross-checking,
Another important element for avoiding problems which had caused considerable delays in the past in the
during the reengineering project was the definition of payment process. Second the reduction of payment time
constraints. Recent approaches to BPR have stressed allowed more rapid reimbursements for the Italian
the importance of anticipating problems from the regions, which began to reduce their financial exposure.
beginning, abandoning the radical Hammer and Cham- The management control system implemented allowed a
py’s approach [34] which advocated forgetting all con- reduction in cost around 35%, on average, and in time
straints and starting from a blank sheet. Our approach of 48%. At present the full implementation of the pro-
is more relevant in public institutions where constraints cedure on a routine basis needs the final approval of an
are more difficult to remove. In particular the analysis already proposed law which is under discussion at the
should tackle the legislative sphere, underlining possibi- Parliament.
222 M. Arnaboldi et al. / International Journal of Project Management 22 (2004) 213–223

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