By Ready, Kathryn J.
Industrial Management , Vol. 37, No. 6
As the marketplace becomes increasingly global, companies seek new ways to improve their competitive advantage. While streamlining, rightsizing, and TQM have developed as methods to evaluate existing structures and processes, these approaches have not redefined the way work is actually performed. Reengineering, on the other hand, does redefine the way companies use technology and personnel by focusing on business processes. Successful reengineering results in improved speed, innovation, service, and quality. As business processes change, so do the accompanying roles and responsibilities of employees, performance measurements and incentives, shared values and skills, the organizational structure, and the application of information technology.
Despite gains realized through reengineering efforts, over half the organizations that have attempted reengineering have failed. Because much of the focus of reengineering is on technology and its benefits, the people-related changes are often given minimal consideration with little, if any, assistance from the human resource department. Human resource (HR) expertise can aid the reengineering process by preparing people-both individuals and teams-and developing policies that are consistent with the objectives set forth in the reengineered organization.
The mechanics of business process redesign
Reengineering is defined as the fundamental rethinking and redesign of work and critical business processes to achieve radical improvement in business performance, such as cost, quality, service, and speed. It involves breaking away from the formal or implied underlying rules and assumptions within the organization, and reinventing the business. Many times the existing methods have been developed piecemeal and lack consistency. Dramatic efforts are needed to eliminate barriers (e.g., capital, political, technological) and to create a vision that supports the competitive organizational goals of innovation, speed, service, and quality.
Top management begins the reengineering process by appointing a steering committee consisting of senior managers to operate as a policy-making body for developing the organization's overall reengineering strategy, and monitoring its progress. Top-level management also selects a leader or "reengineering czar" from the senior executive ranks. This person authorizes and motivates the overall reengineering effort. The leader is usually an individual who possesses the vision and motivation to successfully carry out a reengineering effort.
Once management has communicated the new vision to employees, they begin selecting and prioritizing the processes that may be redesigned. The reengineering leader identifies an owner, or "champion for the cause," to represent each of the departments affected by the change. These people will oversee the change process and should, therefore, be able to think outside the paradigm of organizational past practices. These process owners then select a reengineering team made up of a group of individuals dedicated to the reengineering of a particular process. The team is responsible for analyzing the existing process and overseeing its redesign and implementation.
Management's vision guides the development of process objectives such as cost reduction, time reduction, output quality, and quality of worklife. Michael Hammer, one of the originators of reengineering, advocates beginning the reengineering process with a clean slate, ignoring past business approaches and working toward a complete redesign of the entire organization. While this is the ideal approach, Hammer concludes that this may not be feasible in some organizations where limited resources demand that reengineering proceed one division at a time, beginning with the area of the organization that is most amenable to change.
Before beginning any redesign efforts, existing processes must be understood and measured, thereby setting a baseline for improvement. …