Information Systems, Incentives and Workflow Logic: Strategic Implications for Reengineering Business Processes

We use a series of case studies to motivate the analysis of the organizational impact and performance associated with information systems and workflow design topologies. Our study places a special emphasis on processes involving information intensive tasks that require information sharing and extended information access. The role of various information technologies is examined in the light of their effects on process workflows, worker incentives and worker performance. Our analytical research framework incorporates the effects of queuing lead times, incentives, data sharing and the consolidation of tasks. We show that the following task attributes — information intensity, skill requirements, specifications variability, and technology returns — have a critical role in the success of process redesign. We prove that technology that streamlines information flows not only improves job control, but can also reduce the cost of incentive compensation. Our results also explain why, under certain circumstances, information technology investments and enhanced worker incentives are substitutable. We conclude with several managerial guidelines for process redesign.