AN EMPIRICAL STUDY OF THE CRITICAL SUCCESS FACTORS FOR BUSINESS PROCESS RE-ENGINEERING (BPR) IN THE EMPLOYEES’ PROVIDENT FUND MASTER OF BUSINESS ADMINSTRATION IN E-GOVERNANCE N. A. Athukorala Department of Computer Science & Engineering University of Moratuwa December, 2009 AN EMPIRICAL STUDY OF THE CRITICAL SUCCESS FACTORS FOR BUSINESS PROCESS RE-ENGINEERING (BPR) IN THE EMPLOYEES’ PROVIDENT FUND By N.A. Athukorala MASTER OF BUSINESS ADMINSTRATION Department of Computer Science & Engineering University of Moratuwa December, 2009 The dissertation was submitted to the Department of Computer Science & Engineering of the University of Moratuwa in partial fulfillment of the requirement, for the Degree of Master of Business Administration. i DECLARATION “I certify that this thesis does not incorporate without acknowledgement any material previously submitted for a degree or diploma in any university. To the best of my knowledge and belief it does not contain any material previously published, written or orally communicated by another person or myself except where due reference is made in the text. I also hereby give consent for my dissertation, if accepted, to be made available for photocopying and for interlibrary loans, and for the title and summary to be made available to outside organizations” …………………………… ……………………… Signature of the Candidate Date To the best of my knowledge, the above particulars are correct. ……………………………. Supervisor (Dr. Shahani Markus Weerawarana) ii ABSTRACT The Employees’ Provident Fund (EPF) is an organization to which Sri Lankan private sector and semi-government employees contribute a percentage of their monthly income and the employer contributes a percentage of employees’ monthly income throughout the employees working career. The administrative aspect of the fund is handled by the Department of Labour, whilst the management of the fund is handled by the EPF department of the Central Bank. The total amount contributed with the accrued interest is reimbursed, to EPF member qualified to claim as per the section 23 of the EPF Act. Statistics of the EPF revealed that there are 7000 – 8000 applications received per month by the Labour Department from the members, for EPF withdrawals. The EPF IT enabling project was launched, covering the EPF refund section in 1998 in order to improve staff productivity and provide a more effective service to its principal clients, the employees who call over at the head office of the department or its sub offices island wide. Until the year 1998, all EPF claims were handled by the Management Assistants, manually. Now all existing member records are computerized and all manual procedures of record retrieval are supposedly abandoned. The Management Assistants and Staff Officers have been provided personal computers with on-line data retrieval facilities from the central employees’ master database, as well as the Central Bank member accounts’ database, in a networked environment. However, the trade unionists and members still complain about the delay of their EPF claims. There are complaints about mal-practices in various claim units in district offices. Although claim files are handled by the computer system and a large amount of records are retrieved electronically, the record keeping staff still retrieves member records manually, leading to corruption in the system. This research study is focused on identifying the problems of existing IT enabling systems of the EPF with the intention of making suggestions for a member centric solution for the EPF refund system. iii AKNOWLEDGEMENTS My sincere thanks should go to my research supervisor, Dr. Shahani Weerawarana for her disciplined guidance and provision of a long term vision to the study. I would also like to thank the Head of the Department of Computer Science and Engineering Mrs. Vishaka Nanayakkara and all the staff members and batch mates of the MBA E-Governance 2008/2009 batch. I would like to extend my thanks to the Commissioner General of Labour, Commissioner of Labour (EPF) and the Assistant Commissioners of Labour and their Management Assistants in the EPF Head office at Narahenpita, Colombo 05. In addition to that my thanks should go to the Assistant Commissioners of Labour in-charge of Anuradhapura, Hatton, Kurunegala, Galle district offices and the Management Assistants in those district labour offices, who contributed to my research by providing me, with their valuable time amongst busy work schedules, without which my objectives would not have been fulfilled. I cannot forget to thank the Librarian of the department of labour and her staff, who helped me a lot to fulfill my tasks. Finally I wish to thank my wife Supulsara for her understanding and patience throughout this research. Athukorala, N.A. MBA E-Governance 2008/2009 08/10/200 iv TABLE OF CONTENTS DECLARATION………………………………………………………………….. i ABSTRACT……………………………………………………………………….. ii ACKNOWLEDGEMENT…………………………………………………………. iii TABLE OF CONTENTS………………………………………………………….. iv LIST OF FIGURES & GRAPHS………………………………………………….. v LIST OF TABLES………………………………………………………………… vi ABBREVIATIONS …………………………………………….…………………. vii 1. Introduction 1 1.1 Background………………………………………………….. 1 1.2 Purpose of the Research……………………………………… 6 1.3 Research Objectives………………………………………… 11 1.4 Impact & Benefit of the Research………………………… … 12 1.5 Limitations and Scope of the work…………………………… 13 2. Literature Review 15 2.1 Common Problems of EPF Systems ……..………………….. 15 2.2 Global Practices on Introducing IT as a Solution...................... 18 2.3 Challenges when Introducing IT to the Public Sector.............. 21 2.4 Lessons Learned and Experiences gained in BPR Approaches. 22 2.5 Re-Engineering of EPF Systems in Regional Countries………28 3. Research Methodology & Design 36 3.1 Research Design........................................................................ 36 3.2 Research Methodology.............................................................. 37 3.3 The Conceptual Framework...................................................... 39 v 4. Data Collection 46 4.1 Data Collection Methods.......................................................... 46 4.2 Sample Selection...................................................................... 51 4.3 Questionnaire Design Methodology......................................... 54 4.5 The Data Collection Methodology........................................... 57 5. Data Analysis 59 5.1 Responses to the Questionnaire……………………………… 59 5.2 Analysis of Sample Data of QSet1…………………………… 60 5.3 Analysis of Sample Data of QSet2…………………………… 69 5.4 Interview with Deputy Commissioners………………………. 78 5.5 Interview with the Members of the Fund…………………….. 82 6. Recommendation and Conclusion 88 6.1 Recommendations for Technology Factors................................ 89 6.2 Recommendations for Process Factors..................................... 91 6.3 Recommendations for Political Factors..................................... 92 6.4 Recommendations for Organizational Factors........................... 93 6.5 Recommendations for Member Factors..................................... 95 6.6 Recommendations for Stake Holders Factors............................ 96 6.7 Recommendations for Resource Factors................................... 96 6.8 Recommendations of Values to Members................................. 97 6.9 Future Research………………………………………………. 98 6.10 Conclusion................................................................................. 99 7. References 101 vi 8. Appendices 105 Appendix A: Questionnaire for Management Assistants............... 106 Appendix B: Questionnaire for Assistant Commissioners............. 109 Appendix C: Interview Template for Deputy Commissioners....... 112 Appendix D: Interview Template for Members......................... 113 vii LIST OF FIGURES & GRAPHS Figure 1.1 Organizational Charts – EPF Head Office...................................... 05 Figure 1.2 Organizational Charts – Zonal Setup.............................................. 06 Figure 2.1 Operate of EPF Kiosk in Singapore.................................................... 31 Figure 2.2 EPF Call Center in Singapore… ………………................. ………….32 Figure 3.1 Research Methodology........................................................................ 36 Figure 3.2 Conceptualization Methodology ........................................................38 Figure 3.3 Conceptual Models.................................................................................41 Figure 4.1 Stakeholder Category wise Analysis.................................................... 52 Figure 4.2 Data Collection Methodology.............................................................. 58 Graph 5.1 Service Period Group Distributions (MA)............................................ 60 Graph 5.2 Age Group Distributions (MA)............................................................. 62 Graph 5.3 IT Literacy Level Distribution (MA).................................................... 63 Graph 5.4 Adequacy of the IT Training Given (MA).......................................... 64 Graph 5.5 Service Period Group Distributions (AC)............................................. 70 Graph 5.6 Age Groups Distribution (AC).............................................................. 71 Graph 5.7 IT Literacy Level Distribution (AC) ................................................... 72 Graph 5.8 Adequacy of IT Training Given. (AC)................................................. 73 Graph 5.9 Application Processing Speed.............................................................. 82 Graph 5.10 Public Relations in EPF Refund Unit.................................................. 80 Graph 5.11 Public Awareness of EPF IT Enabling System ................................. 84 Graph 5.12 Capability of IT Enabling System ………………............................ 85 Graph 5.13 Quality of Service…………………………….................................. 86 Graph 5.14 Provision of Information ………………………….......................... 87 Figure 6.1 Complete Research Methodologies..................................................... 88 viii LIST OF TABLES Table 4.1 Stakeholders sampling............................................................. 52 Table 4.2 Units Selection for the Research............................................... 54 Table 4.3 Questionnaire mapping with the conceptual factors.................. 56 Table 4.4 Questions mapping with factors of Q Set1............................... 56 Table 4.5 Questions mapping with factors of Q Set2............................... 57 Table 5.1 - Q Set1 - Responses for Question No 02............................... 60 Table 5.2 - Q Set1 - Responses for Question No 03............................... 61 Table 5.3 - Q Set1 - Responses for Question No 04............................... 63 Table 5.4 - Q Set1 - Responses for Question No 06............................... 64 Table 5.5 - Q Set1 - Responses for Question No 07................................. 65 Table 5.6 - Q Set1 - Responses for Question No 08................................. 65 Table 5.7 - Q Set1 - Responses for Question No 09................................ 66 Table 5.8 - Q Set1 - Responses for Question No 10.................................. 67 Table 5.9 - Q Set1 - Responses for Question No 11.................................. 68 Table 5.10 - Q Set1 - Responses for Question No 12.................................. 68 Table 5.11 - Q Set1 - Responses for Question No 13.................................. 69 Table 5.12 - Q Set2 - Responses for Question No 02.................................. 70 Table 5.13 - Q Set2 - Responses for Question No 03.................................. 71 Table 5.14 - Q Set2 - Responses for Question No 04................................... 72 Table 5.15 - Q Set2 - Responses for Question No 06................................... 73 Table 5.16 - Q Set2 - Responses for Question No 07................................... 74 Table 5.17 - Q Set2 - Responses for Question No 08.................................. 74 Table 5.18 - Q Set2 - Responses for Question No 10.................................. 75 Table 5.19 - Q Set2 - Responses for Question No 12.................................... 76 Table 5.20 - Q Set2 - Responses for Question No 13................................... 76 Table 5.21 - Q Set2 - Responses for Question No 14.................................... 77 Table 5.22 - Q Set2 - Responses for Question No 15.................................... 78 ix ABBREVIATIONS AC Assistant Commissioner ACL Assistant Commissioner of Labour BPR Business Process Re-engineering CMC Call Management Center CPF Central Provident Fund DC Deputy Commissioner DCL Deputy Commissioner of Labour DOL Department of Labour DL Determination Letter EPF Employees’ Provident Fund HTML Hyper Text Marker Language ICT Information & Communication Technology ISSA International Social Security Association IS Information System IT Information Technology LAN Local Area Network LIS Land Information System MA Management Assistant MEB Member of the Fund MOL Ministry of Labour PF Provident Fund SLIP Sri Lanka Inter Bank Payment System