Reengineering is the opportunity to develop the rules by which business in the future will be conducted rather than being forced to operate by the rules imposed by someone else.
As such, reengineering underpins every attempt to seize and maintain a true competitive advantage. Section 1 -- The Reengineering Concept.
Page 2 Reengineering is defined as the fundamental rethink and radical redesign of business processes to generate dramatic improvements in critical performance measures -- such as cost, quality, service and speed. Section 2 -- The Characteristics of a Reengineered Corporation. Page 4 Reengineering initiatives typically lead to a business organization with these characteristics: 1. Business processes are simplified rather than being made more complex.
Job descriptions expand and become multi-dimensional -- people perform a broader range of tasks. People within the organization become empowered as opposed to being controlled. The organizational structure is transformed from a hierarchy to a flatter arrangement.
Professionals become the key focus points for the organization, not the managers. The organization becomes aligned with the end-to-end process rather than departments. The basis for measurement of performance moves away from activity towards results. The role and purpose of the manager changes from supervisor to coach. People no longer worry about pleasing the boss -- they focus instead on pleasing the customer.
Reengineering is not solely about creating new business processes -- it focuses on creating a new company. Section 3 -- Reengineering Case Studies. Page 6 Successful reengineering programs undertaken by large and small corporations in the past have these common themes: 1. A focus on processes rather than organizational boundaries. The ambition to create breakthrough performance gains. A willingness to break with old traditions and rules. The creative use of new information technology.
There are no guaranteed-to-work or step-by-step prescriptions that can be followed in reengineering. Page 8 To succeed at reengineering, follow these guidelines: 1. Always start with the customer and work backwards. Move fast. Tolerate risk. Accept imperfections along the way.
In short, reengineering is the opposite of business as usual. Reengineering The Corporation - Page 2 Section 1 The reality is corporations cannot move into the new competitive The Reengineering Concept environment by adapting the old management methods -- a complete and sweeping redesign is called for.
Reengineering Main Idea delivers those changes. Inevitably, the answer to that question will have four key elements: Reengineering 1. A focus on fundamentals. Fundamental rethink of Radical redesign of Addressing the issue of precisely what it is the corporation business processes business processes does, why is it done the present way and what are the tacit rules and assumptions embedded in present practices.
A radical redesign element. Reengineering is about reinventing the business -- not In practice, reengineering means to start over with a clean sheet making superficial changes or marginal enhancements to the of paper and rebuild the business better. Supporting Ideas 3. The potential for dramatic results. Are fast 4. A business process orientation. Deliver high quality consistently. Reengineering evolves around business processes -- not 3.
Are flexible. A business 4. Are low cost. A business process only requirements because of the way business management has works if it generates added value, not internal activity. The four key stages in the evolution of business Generally speaking, three types of companies undertake management have been: intensive reengineering programs: Stage 1 -- Companies that find themselves in deep competitive trouble Adam Smith published The Wealth of Nations. In this, he -- and who often require an order of magnitude improvement suggested the specialization of labor as a way for workers to somewhere in their operations to be able to compete with achieve greater productivity.
Companies with managers who can see problems arising a little further down the road they are traveling on -- and who Stage 2 -- s want to begin reengineering before all competitive The railroad companies introduced bureaucracies to avoid advantages they possess evaporate.
Companies with managers who are ambitious and aggressive This was the forerunner of the command-and-control system -- who see reengineering as a way to position the company still in use today -- where there are workers and supervisors to extend their lead over their competitors. The reengineering concept: Stage 3 -- Early s Should not be confused with automation -- since doing the Henry Ford introduced the assembly line -- workers wrong things more efficiently will make few, if any, performed one tiny step in a complex process where the work improvements to a business.
Functional Allows fragmented processes to be brought together -- middle managers were added to provide control and thereby eliminating the need for a business bureaucracy. Delay and errors. High overhead costs. Most reengineered business process will look like -- simply because each will be processes end up reducing dramatically the number of points individual and process-specific.
There are, in practice, some of contact between the company and its customers -- recurring general themes most reengineered processes tend to eliminating the need for hand-offs from one department to align with: another and reducing the possibility of irregularities arising for Several jobs are combined into one.
Reengineering tends to reverse the assembly line approach. Single points of contact -- case managers -- assume Instead of having many people involved, none of whom can responsibility for the results.
That eliminates the errors, That caused confusion and frustration -- simply because delays and inefficiencies of hand-offs. Most When a business process is reengineered, the responsibility reengineering programs eliminate that problem altogether by for making decisions often becomes an integral part of the creating a one person contact point -- frequently designated process itself rather than being separated.
The advantages as the case manager -- to act on behalf of the customer and of this are: follow the entire transaction from start to finish. Process steps are performed logically and naturally. Many companies that have reengineered their processes end In many older industrial-age business processes, an artificial up combining the benefits of both decentralization and amount of linearity was introduced as part of the control centralization.
In other words, business units tend to operate function. Inevitably, arranging tasks that way slows work as if autonomous giving them greater flexibility and market down and creates a drag on efficiency. Most reengineered responsiveness while at the same time enjoying the processes allow multiple jobs to be completed economies of scale purchasing power and pooling of key simultaneously, and for the sequence of activities to be information centralization delivers.
Key Thoughts The paradigm of the industrial age was to achieve economies of scale through mass production. Most current business operations.
The benefits: repair their own equipment". These rules are based on assumptions about technology, people and organizational goals that no longer hold. The work is performed where it makes most sense. Unless companies change these rules, any superficial In industrial-age organizations, the work usually had to reorganizations they perform will be no more effective than physically travel to where each specialist was located -- dusting the furniture in Pompeii.
We need something entirely reduces drag on the company. In fact, the revolution. Processing a finance application used to take between six days and two weeks as the application wound its way from the credit department to the pricing department to an administrator who wrote out a formal quote letter.
For unusual cases, the deal structurer can still call on the specialists to provide additional expertise. The specialist and the deal structurer then team up to develop a customized package as required.
This happens only rarely, however. The results of the reengineering program were: Turnaround time was reduced from a typical 7-days to 4-hours. Without any increase in staff numbers, IBM Credit has been able to achieve a hundred fold improvement in productivity -it can now handle times the number of credit applications handles before reengineering was undertaken. IBM Credit did not ask, "How do we improve the calculation of a financing quote?
The only absolutely essential element in every reengineering project is that it be directed at a process rather than a function. Practically everything else in reengineering comes down to technique -- which is to say that it is right if it works for you and wrong if it does not.
Ford decided to reengineer the entire parts procurement process. Therefore, the steps Ford took were: An online database was created of purchase orders. Whenever a buyer issued a purchase order, it was entered into the database. As goods are received at the receiving dock, someone checks the database.
If the shipment matches a purchase order, it is received. If the shipment does not, it is not accepted. Therefore, there are no possible discrepancies between what was ordered and what was physically received. As soon as the shipment is received, the database is updated and a check is automatically generated and issued to the vendor at the appropriate time.
The new processes at both companies are not just the old programs with new wrinkles. We say that in reengineering, information technology acts as an essential enabler. Without information technology, the process cannot be reengineered. Every change you design is a living rough draft, not a perfected process. Reengineering is an iterative process. The first team we called the core team. As soon as we had a process design, we put the second team, which we called the lab team, to work.
They would try the new process, change it however they liked and then feed their results back to the core team. Thus, our reengineering program was iterative. The lab team became, in effect, a prototype for the case team concept that our core team developed. At that time, it took 2 -- 3 years to get a new line of greeting cards from concept to market.
The company was making about 50, revisions to designs each year, and Hallmark had no accurate way of finding out what was selling well and what was not. The company had stalled, with little or no growth over the previous five years. In essence, Hallmark looked to reengineering as a pre-emptive competitive strike rather than as a response to a bad situation. A decision was made to reduce the costs of everything about the business except the cost of the food and its packaging.
To reengineer, Hallmark took these steps: A vision of the company as a leader in the restaurant business and not just the Mexican food business was articulated. To reengineer, Taco Bell did these things: The customers were asked what they wanted. The company assumed they wanted bigger and better restaurants. Every job in the system was redefined. These teams came up with recommendations, 12 of which were chosen for a pilot project. Taco Bell reengineered the way its buildings were designed.
Before , the typical Taco Bell was percent kitchen and percent customer area. Since , that ratio has reversed -- new Taco Bells are percent kitchen and percent customer area. Taco Bell reengineered its marketing to become value-driven. Once it became clear the pilot program was generating impressive results, the reengineering initiatives were put into action company wide. The continual refinements -- tweaking each and every departmental task -- would no longer be enough. Only a radical change in the way we did business would address our issues.
Stark, president, Hallmark Cards, Inc. Continuous improvement can do that -- bubble up from a unit and reach critical mass on its own volition. We knew that because of the cross-divisional and cross-functional nature of this effort, it had to be driven from the top-down. It is a never ending journey, because the world keeps changing.
Processes that have been reengineered once will someday have to be reengineered all over again. Reengineering is not a project; it must be a way of life. Taco Bell introduced new management information systems using the latest technology to keep track of sales minute-by-minute. Instead of measuring success as market share of the fast-food market, Taco Bell looks at its goal to become the value leader for all foods for all meal occasions.
That creates a broader vision and stimulates the development of new innovations. As a result of these reengineering programs: Taco Bell has grown from 1, restaurants in to 3, in Profit has grown at a rate of percent per year over the same period. This perspective stands in sharp contrast to that of the traditional manager who put fryer maintenance skills at the top of the list.
Supporting Ideas Taking each of the guidelines in turn: 1. Business processes exist solely for the purpose of creating a satisfied customer -- they have no other valid reason to exist.
From an internal perspective, the best way to generate enthusiasm for a reengineering program is to set ambitious goals that stretch and challenge the organization. Provide that spark of motivation. Reengineering is a dramatic, radical process. It simply cannot be undertaken slowly or deliberately.
Reengineering must be achieved quickly and decisively -- otherwise the forces of internal resistance for the way things have historically been done within the company will overwhelm and impede the process. Reengineering must be done at speed -- the faster the better.
Experience has shown there is generally a month window of opportunity for a successful reengineering initiative.
Change -- and therefore progress -- always involves risk. Therefore, in undertaking reengineering, the people who are by nature risk-averse will feel disoriented and disfranchised. Experience has shown probably the only way to offset the fear of change within an organization is to demonstrate dramatically the greatest risk of all comes from sticking with the status quo. No reengineering program ever emerges full-blown right out of the box.
That means there will be partial failures along the way as a normal, expected part of the process. Many organizations suspend reengineering when they see the first sign of success. Others stop at the first hint of a problem. Both actions are equally damaging to the long-term success of the organization. The true breakthroughs always require perseverance and patience. The payoffs of successful reengineering are spectacular -- for the individual company, for its managers and its employees, and for the American economy as a whole.
The time for hesitation is gone; the time for action is now. Most of them have passed through the patients without discernible effect. Reengineering, in contrast, promises no miracle cure. It offers no simple, quick and painless fix. On the contrary, it entails difficult, strenuous work. It requires that people running companies and working in them change how they think as well as what they do. It requires that companies replace their old practices with entirely new ones. It cannot be accomplished with motivational lectures and catchy wall posters.
As more companies bring their core processes up to higher levels of performance, the reengineering option becomes a competitive necessity for others in the same industry.
Reengineering by even one key participant in a market creates a new benchmark level that all competitors must meet. The world of the industrial revolution is giving way to an era of a global economy, powerful information technologies and relentless change. The curtain is rising on the Age of Reengineering.
Those who respond to its challenges will write the new rules of American business. All that is needed is the will to succeed and the courage to begin.
But change is its motivator, and change has its enemies. Business reengineering means starting all over, starting from scratch. Home Reengineering The Corporation. However, it must be the leaders the own the transformation.
I'll be honest with you. It took me a month to power through this book, and I only did so after my boss made me. I always retain book facts well but with this book I remembered just enough to pass off my knowledge in it but a year later I don't remember anything and that says something.
Maybe with a better mindset going in i might have liked it more, but probably not lol. The first half of the book is a good and insightful read into how to make radical changes. But after some point it becomes a bit redundant. Overall a good read for those looking to bring about changes in existing companies and their systems and procedures.
Short, sweet, and to the point. Has some good ideas, less specialization and more efficiency. Business is all about taking the right risk for profits.
Business is run by people and needs processes and guidliness for controls. Business processes needs reengineering based on the organisations vision and appitite. The reengineering the corporation provides key insights on how to redevelop or redesign the business process so that the purpose and value is achieved based on the customer needs. I found the following as the key from the book. Chapter — 1: The reengineering Concept - Reengineering The authors assert that the current circumstances of business in America are not due to factors currently blamed foreign competition, federal government, etc.
The solution is not in automation, management-by-whatever concepts e. TQM , but in totally rethinking a business in terms of whole processes. Reengineering is: 'If I were re-creating this company today, given what I know and given current technology, what would it look like? I especially enjoyed reading Chapter 3 where the authors what a reengineered process looks like. This book inspires me to become a change agent, but I have to wonder how successful reengineering In , when this book was published for the first time, most organizations in America had became inefficient and mammoth proportions monsters, spending ridiculous ammounts of money with useless systems, hardware, offices and any sort of pointless extravagances.
The original idea was an easy concept, but the implications specially in a giant organization were huge: it was about time to re-think the whole company, and decide what could and should be cut.
Unfortunatelly, some ideas were misun This is a good book for someone in a management, director or VP position that is either looking to improve intra-office dynamics or is in a traditional company that is in need of keeping up with the times.
It is a more holistic view of running a company. Includes the ideas of: combing several jobs into one, allowing workers to make decisions, performing the steps of a process in a natural order, and recognizing that processes have multiple versions and designing processes to take account of diff
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