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Topic 2 - Reengineering - The Path To Change II

This document discusses the concept of reengineering and provides examples. Reengineering means fundamentally rethinking and radically redesigning business processes to achieve dramatic improvements in performance. It involves tossing aside old systems and reinventing work from scratch. Successful reengineering programs focus on processes rather than organizational boundaries, aim for breakthrough gains, break old traditions and rules, and leverage new information technology creatively. Case studies of IBM Credit, Ford Motor Company, Hallmark and Taco Bell illustrate these themes.

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Simon Ruoro
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85 views14 pages

Topic 2 - Reengineering - The Path To Change II

This document discusses the concept of reengineering and provides examples. Reengineering means fundamentally rethinking and radically redesigning business processes to achieve dramatic improvements in performance. It involves tossing aside old systems and reinventing work from scratch. Successful reengineering programs focus on processes rather than organizational boundaries, aim for breakthrough gains, break old traditions and rules, and leverage new information technology creatively. Case studies of IBM Credit, Ford Motor Company, Hallmark and Taco Bell illustrate these themes.

Uploaded by

Simon Ruoro
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Reengineering - The

Path to Change
Intro

 An informal definition of reengineering … means


asking the question: "If I were re-creating this
company today, given what I know and given
current technology, what would it look like?"
 Reengineering a company means tossing aside
old systems and starting over. It involves going
back to the beginning and inventing a better way
of doing work.

2
Intro

 Definition…

 Reengineering is “the fundamental rethinking and


radical redesign of business processes to achieve
dramatic improvements in critical, contemporary
measures of performance, such as cost, quality,
service, and speed”

3
Intro
 Four key words

 KEY WORD: FUNDAMENTAL


 In doing reengineering, businesspeople must ask the
most basic questions about their companies and how
they operate: Why do we do what we do? And why do
we do it the way we do? Asking these fundamental
questions forces people to look at the tacit rules and
assumptions that underlie the way they conduct their
businesses. Often, these rules turn out to be obsolete,
erroneous, or inappropriate.

4
Intro
 KEY WORD: RADICAL
 The second key word in our definition is radical,
which is derived from the Latin word "radix,"
meaning root. Radical redesign means getting to
the root of things: not making superficial changes or
fiddling with what is already in place, but throwing
away the old. In reengineering, radical redesign
means disregarding all existing structures and
procedures and inventing completely new ways of
accomplishing work. Reengineering is about
business reinvention—not business improvement,
business enhancement,or business modification.

5
Intro

 KEY WORD: DRAMATIC


 The third key word is dramatic. Reengineering isn't
about making marginal or incremental
improvements but about achieving quantum leaps
in performance. Reengineering should be brought
in only when a need exists for heavy blasting.
Marginal improvement requires fine-tuning;
dramatic improvement demands blowing up the old
and replacing it with something new.

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Intro
 KEY WORD: PROCESSES
 The fourth key word in our definition is processes.
Although this word is the most important in the
definition, it is also the one that gives most corporate
managers the greatest difficulty. Most businesspeople
are not "process-oriented"; they are focused on tasks,
on jobs, on people, on structures, but not on
processes.
 We define a business process as a collection of
activities that takes one or more kinds of input and
creates an output that is of value to the customer.
7
 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.
2. The ambition to create breakthrough performance gains.
3. A willingness to break with old traditions and rules.
4. The creative use of new information technology.
 Every company’s reengineering program must be
unique if it is to achieve anything substantial. There
are no guaranteed-to-work or step-by-step
prescriptions that can be followed in reengineering.

8
Some Cases

 Here are four examples of reengineering to


illustrate how it works and what it can accomplish
for companies. In reading these examples, it is
helpful to keep in mind the four key words that
characterize reengineering—fundamental, radical,
dramatic, and process—but especially process.

9
Cases - Summaries

 Case - IBM Credit.doc


 Case – Ford Motor Company
 Case – Hallmark
 Case - Taco Bell

10
Themes in the Cases
Several themes emerge in these three cases:-

 Process orientation

 The improvements that IBM Credit, Ford Motor Company,


Hallmark and Taco Bell effected/ did not come about by
attending to narrowly defined tasks and working within
predefined organizational boundaries. Each was achieved
by looking at an entire process—credit issuance,
procurement, and product development—that cut across
organizational boundaries.
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Themes in the Cases

 Ambition

 Minor improvements would not have been


sufficient in any of these situations. All three
companies aimed for breakthroughs. In
reengineering its accounts payable process. Ford,
for example, skipped the 20 percent fix and went
for the 80 percent solution.

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Themes in the Cases

 Rule-breaking

 Each of these companies broke with old traditions


as they reengineered their processes.
Assumptions of specialization, sequentiality, and
timing were deliberately abandoned.

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Themes in the Cases

 Creative use of information technology

 The agent that enabled these companies to break


their old rules and create new process models
was modern information technology. Information
technology acts as an enabler that allows
organizations to do work in radically different
ways.

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