Business Process Reengineering: Principles and Implementation

What Is Business Reengineering?

Reengineering represents a fresh start; it is an all-or-nothing change that reorganizes a company around its processes. It requires that fundamental business processes be observed from a cross-functional perspective, centered on customer satisfaction.

Key Concepts of Reengineering

• Radical Design: Changes must be fundamental, not superficial.
• Fundamental Inquiry: Reengineering asks why a process is performed in a specific way.
• Process Focus: Changes must focus exclusively on business processes.
• Dramatic Improvements: Expected results should be significant, not merely incremental.

Key Figures in Reengineering

Michael Hammer

Processes have been largely ignored, as managers have historically focused too closely on functional milestones.

James Champy

Reengineering has only just begun. Many companies, such as Dell, Cisco, and Intel, have fundamentally changed how they conduct business, all enabled by Internet technology. While manual or telephone-based transactions cost tens of dollars, online processing costs only pennies. The cost-benefit of this change is irresistible; the technology is here, and companies must adapt.

How to Implement Reengineering

A company must follow these five general steps to redesign its operational processes:

1. Develop Vision and Objectives: Set clear priorities and goals.
2. Identify Processes: Determine which processes require redesign, focusing on critical bottlenecks.
3. Understand and Measure: Analyze existing processes thoroughly.
4. Collaborate: Gather the people involved and conduct workshops.
5. Prototype and Develop: Design a process prototype and proceed with technical implementation.

Rapid Methodology for Reengineering

• Vision: Defining the future state.
• Solution: Developing the new process model.
• Transformation: Executing the change.

Features of Reengineered Processes

• Different jobs are combined into one.
• Workers are empowered to make decisions.
• Processes may have multiple versions to suit different needs.

Benefits of Reengineering

• Encourages big-picture thinking within the organization.
• Delivers decisive performance improvements.
• Optimizes organizational structure.
• Facilitates corporate renovation.
• Refines corporate culture.
• Enables the redesign of job roles.

When Is Reengineering Necessary?

Reengineering is required in a company when:

• Market conditions or technologies shift.
• The organization faces a crisis, such as a drop in market share.
• The company must respond to aggressive competition.
• The leader recognizes the need for continuous improvement to maintain market dominance.
• The organization aims to achieve a market-leading position.