Academic journal article Management International Review

From Business Reengineering to Management Reengineering - a European Study

Academic journal article Management International Review

From Business Reengineering to Management Reengineering - a European Study

Article excerpt

The Concept of Business Reengineering

The main focal point of business reengineering is process orientation. The company is seen through a "process lense". This implies a horizontal perspective of the firm which transcends traditional organizational barriers.

The restructuring of core processes(2) aims to achieve sustainable competitive advantages by innovative improvements in four areas: customer satisfaction, costs, quality, and time. A "fundamental rethinking of how a company does business"(3) is necessary to achieve this goal.

A process-oriented perspective of the firm leads to a radical change of its business activities as well as its strategy, structure, culture, and systems.

The European Study

For the purpose of clarifying the understanding of business reengineering in practice and the strategic meaning of business reengineering in the view of the top-management, 1-2 hour interviews were conducted with top managers (CEO's and chairmen of the board) of some of the most important Swiss and German companies in the chemical, automobile, manufacturing- and engineering industries.

Top management(4) interviewed in this study views reengineering in two different ways. One group says that business reengineering presents solely "old wine in new tubes". Under this viewpoint, business reengineering is not seen as a "revolutionary new management concept" but rather an expansion of existing management tools.

The other group identifies more closely with the views expressed in business reengineering-literature: "Business reengineering is a fundamental consideration of business processes with regard to product, customer and market and a radical rethinking of how customer service is provided with a goal of a drastic improvement of customer satisfaction, quality, time and costs." (C/A:1)

The goals of process redesign are defined along three crucial success factors: costs, time and quality. In following this, firms sometimes have different priorities. The interviewed experts agree that a focus on customer satisfaction in process redesign must be in the foreground of all business reengineering projects. "A fundamental perspective of the whole value chain must be guaranteed. In doing so customers are seen like "intermediary customers" and not like "final customers". (H:1)

It is interesting that all interviewed managers have mentioned customer relations with regard to the meaning of business reengineering. One manager also mentioned the importance of the company's relationship with other stakeholders especially shareholders.

The Role of Top-Management

The interviewed experts agree that changes in the company must be initiated by top-management. The role of the board members is to act as change agents and role-models.

The executive board prescribes the corporate vision, the processes to be changed, and the goals to be achieved by the process redesign. Business reengineering in this sense must be tied to the corporate strategy, i.e. business reengineering-projects must be defined with regard to the long term product-market-strategy. "If you don't put business reengineering in forefront of a long term strategy, you really shouldn't start with business reengineering at all. It is wrong to redesign processes among certain products, if you already know that you will only manufacture components of them in the next 3-5 years. The process redesign has to be future-oriented." (C:2)

No Isolated Perspective

The interviewees agreed that customers, processes and core competences must not to be viewed separately, but must be considered in an integrated way. This can be explained by the following three points:

1) Products have to be considered in the redesign of processes: "Trying to solve the problem of competitiveness and cost positions with a process approach is fascinating . . . The acceleration of processes is not useful, if you are incorrecently positioned with your products. …

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