Reengineering: some basic
concepts
Assoc. Prof. Dr. Jegak Uli
TheOfficial
Official Definition
The
Definition
Unlike continuous improvement or
benchmarking, reengineering is intended to
totally change the process.
The fundamental rethinking and radical
redesign of business processes to bring
about dramatic improvements in critical,
contemporary measures of performance,
such as cost, quality, service and speed.
TheKey
Key Words
The
Words
dramatic -- improvements not
marginal/incremental, not 5 or 10 % but quantum
leaps
radical -- going to the roots of things. Starting
over, reinventing
process -- a group of related tasks that together
create value for customers e.g.. order fulfillment
redesign -- the design of processes, how work is
done
It is used to capture a steep change in speed,
efficiency, or quality
However, changes of this magnitude are not
easily obtained
Embarking on reengineering requires both
justification and determination
Common themes found among organizations that
have successfully engaged in reengineering are
process orientation, ambition, rule breaking, and
creative use of information technology.
What Reengineering is Not
it is not downsizing
it is not restructuring
it is not a fad -- it works, brings about huge
improvements
it is not more of the same -- it is
revolutionary. Focus on end to end
processes and not specialization of labor
The
The Three
Three CsCs
CUSTOMERS -- more sophisticated,
demanding, more alternatives, more
knowledgeable
COMPETITION -- no longer local and gentle,
but more global and cutthroat
CHANGE -- change from traditional focus on
planning, control, and managed growth to
emphasis on speed, innovation, flexibility,
quality, service, and cost
Top Ten Ways to Fail
1) Giving only lip service to reengineer
2) Don’t focus on processes
3) Spend a lot of time analyzing the current situation
4) Proceed without strong executive leadership
5) Be timid in redesign
6) Go directly from conceptual design to
implementation
7) Reengineer slowly
8) Place some aspects of the business off-
limits
9) Adopt a conventional implementation style
10) Ignore concerns of your people
The Primary Ingredients
Leadership
The Reengineering Team
The Tools of Reengineering
Leadership
SIGNALS -- Explicit Communications
SYMBOLS -- Personal Behavior
SYSTEMS -- Measurements and Rewards
The Profile of a Reengineer
Process oriented
Holistic perspective
Creativity
Restlessness
Enthusiasm
Optimism
Persistence
Tact
Team player
Communication skills
The Content of Reengineering Work
Understanding the old processes and
customer requirements
Inventing a new process design that
shatters old assumptions
Constructing the new process-- details of
operations, taking care of implications,
training
Selling the new way
The Context of Re-e Efforts
Uncertainty -- uncertainty eliminated
gradually
Experimentation -- iterative. Designing on
paper must be followed by trying in reality
Pressure -- must proceed at fast pace.
Always operate under conditions of great
urgency and intensity
Focus of Team Members
Must share dedication to three things:
i.
ii.
iii.
The process being reengineered
The needs of the customer of that process
The team itself
Example of team characteristics
CARING
DARING
SHARING
Problem, Rule, and Assumption
PROBLEM -- a specific performance
shortcoming of the process e.g.. slow cycle time
RULE -- a specific aspect of the process design
that causes the problem e.g.. must have
specialist for each task
ASSUMPTION -- a belief that gives rise to the
rule e.g.. the work is complex
Principles for Overcoming Resistance to
Principles for Overcoming Resistance to Change
Change
Resistance is natural and inevitable --Expect it
Resistance is not always apparent -- Find it
Resistance has many motivations -Understand it
Deal with people’s concerns not their arguments
-- Confront it
There’s no one way to deal with resistance -Manage it
The Key Mechanisms for Overcoming Resistance
INCENTIVES -- positive and negative
INFORMATION -- dispel uncertainty and fear
INTERVENTION -- one-on-one connection
INDOCTRINATION -- make change seem
inevitable
INVOLVEMENT -- make people part of the effort
Selling the Change
Impediments to communications
Ten Principles of Reengineering
communications
Impediments
Impediments to
to Communications
Communications
Disbelief
False familiarity
Fear of layoffs
The rumor mill
Sloppy execution -- incomprehensibility,
abstractions, complexity, and clichés
TenTen
Principles
ofRe-eng
Re-eng
Principles of
Communications
Communications
1) Segment the audience
2) Use multiple channels
3) Use multiple sources
4) Be clear
5) Communicate, communicate,
communicate
6) Honesty is the only policy
7) Use emotions, not just logic
8) Heal, console, encourage
9) Make the message tangible
10) Listen, listen, listen
Major components of the rapid re-e
methodology
Preparation: How do we do the project?
Identification: Where do we focus our attention?
Vision: What result do we want to produce?
Solution: How do we produce those results?
Transformation: How do we implement the
solution?
STAGESOF
OF REENGINEERING
REENGINEERING
STAGES
STAGE 1 – PREPARATION
The purpose of this stage is to mobilize, organized,
and energized the people who will perform the
reengineering
1.
2.
3.
Goal seeking – goals and objectives must be aligned
with the various business processes
Facilitation – is use continuously during the life time
reengineering project
Team building – Organizing the members of
reengineering team into a working group and training
them the methodology
4.
Motivation – to develop interest and enthusiasm so the
team members will be encouraged to seek and
understand the opportunity for breakthrough changes
5.
Change management – the change plan will evolve in
substance in detail as the project progresses
6.
Self-assessment – analyzes the organization strength
and weaknesses, ie. Org life cycle, org structure, task,
culture, people
7.
Environmental assessment – identifying the external
forces which may offer threats or opportunities to the
business
8.
Project mgmt – requiring project leadership, planning,
reporting, team guidance and issue resolution
Example of re-e team
SPONSOR
CEO
TEAM LEADER
MANAGER
INDUSTRIAL
ENGINEERING
FACILITATOR
REENGINEERING
EXPERT
SUPERVISOR
PRODUCTION
PLANNING
MATERIALS
MGMT
DIRECTOR
SALES
MANAGER
INDUSTRIAL
RELATIONS
SPECIALIST
COST
ACCOUNTANT
INFORMATION
SERVICES
EXPERT
STAGES OF REENGINEERING
1.
2.
3.
Stage 2 – IDENTIFICATION
Produces definition of customers, processes, and
performance measures and identifies value adding
processes
Customer modeling – to gain a complete
understanding of the customer
Performance measurement and cycle time analysis –
to define the customers performance expectation and
to quantify the measures of how work is being perform
Process modeling – rapid representation of individual
processes and sub processes showing the sequence
of activities
4.
Supplier integration and partnership program
5.
Workflow analysis – to identify critical analysis necessary
to make the process work and those which add value
6.
Organizational mapping – take the specific task and
activities associated with the processes and document
the action taken
7.
Activity based cost analysis – quantifies the label cost
associated with specific process task, based on current
work value and staffing
8.
Process value analysis – prioritize the processes
based on the assumed potential of the process to meet
the goals and objectives
9.
Change mgmt, project mgmt and facilitation are
continued in this stage
STAGES OF REENGINEERING
STAGE 3 – VISION
To develop a process vision capable of achieving
breakthrough performance for the processes selected
to be reengineered
1.
Workflow analysis – to further analyze the process in
terms of the individuals performing descript tasks and
the technology being used
2.
Process value analysis – inspect the activities of each
process to determine which have an impact on the
value added worth of the process itself
3.
Benchmarking – to quantify existing performance
factors and compared them against competitors,
practices
4.
Visioning - the ideal process that put result if all
performance measures were optimize
5.
Change mgmt, project mgmt, facilitation are continued
STAGES OF REENGINEERING
STAGE 4 (a) – SOLUTION : TECHNICAL DESIGN
To specifies the technical dimension of the new process
1.
Work flow analysis – analyzes the linkages among
processes to identify opportunities for movement of
steps, responsibilities, etc
2.
Information engineering – to define the technical
solution where and how to apply technology to
implement the activities and steps of the reengineer
process
3.
Performance measurement – helps identify appropriate
places for process controls and performance data
capture
4.
Strategic automation – addressing technology
deployment and implementation options (use or adapt
existing systems, replacements, outsourcing)
5.
Change mgmt, project mgmt, facilitation are continued
STAGES OF REENGINEERING
STAGE 4 (b) – SOLUTION : SOCIAL DESIGN
To specify the social dimensions of the new processes
1.
Employee empowerment – to define the responsibility,
decision making that can be deployed to the level of the
employee
2.
Skill matrices – to make required skill for each new
position and define the job characteristic
3.
Team building – structures the needed process teams
4.
Self managed work team – determine the way in which
each process team will manage the work produced by
the team and the working of the team itself
5.
Organizational restructuring and organizational
mapping – to “redraw” the org that is appropriate to the
mgmt and operation of the new process
6.
Job production – to determine the skill and knowledge
needed of each of the newly define position
7.
Broad banding – to designed compensation system
8.
Change mgmt, project mgmt and facilitation are
continued
9.
Employee reward and incentive – to break down some
barriers to change and retain certain current
cooperating operative during the transformation stage
STAGES OF REENGINEERING
STAGE 5 – TRANSFORMATION
Produces pilot and full production versions of
reengineered process and continual change mechanism
1.
Process modeling – to complete the design of the
business system
2.
Information engineering – implement the technical
design from stage 4(a)
3.
Skill matrices – address specific personnel and the
strategies necessary to train or retrain them
4.
Team building – use to organize and train the new
process team
5.
Continues improvement – is initiated as a program to
identifies and capitalizes on opportunities for
incremental improvement
6.
Performance measurement – is done on and on going
basis, since some key benefits will depend on the
customer reaction to the changes made
7.
Change mgmt, project mgmt, facilitation are continued
The differences between proc reengineering, redesign,
and benchmarking (Harington, 1998)
BPR
- Use when cost and cycle time need to be reduced
between 60-90%
Proc redesign
Use when cost and cycle time need to be reduced
between 30-60% with 100% improvement in quality
Proc benchmarking
Use when cost and cycle time need to be reduced
between 30-60% with 80% improvement in quality
Example of BPR in Malaysia
Banks and finance companies
Before: Malaysia has 67 banking inst.
Now: 10 anchor banks;
1. Arab Malaysian Bank
2. Bumiputra Commerce Bank
3. EON Bank
4. Hong Leong Bank
5. Maybank
6. Multi-purpose Bank
7. Perwira Bank
8. Public Bank
9. RHB Bank
10. Southern Bank
References
Hammer, M. and Champy, J.
Reengineering the Corporation: A
Manifesto for Business
Revloution.HarperCollins, New York, 1993
Hammer, M. and Stanton, S.A. The
Reengineering Revolution: A
Handbook. HarperCollins, New York,
1995.