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Books Video icon An illustration of two cells of a film strip. Video Audio icon An illustration of an audio speaker. Audio Software icon An illustration of a 3. Software Images icon An illustration of two photographs. Reengineering is never focused on fixing old processes. That will deliver marginal improvements at best. Instead, reengineering is focused on breakthroughs -- quantum leaps forward. Reengineering The Corporation - Page 6 Section 3 Reengineering Case Studies Main Idea Successful reengineering programs undertaken by large and small corporations in the past have these common themes: 1.
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.
For the new century it is being applied to the front office and the revenue producing side of the business. Yet aside from earning them improvements in their business performance, the shift into more-process-centered organizations is causing fundamental changes in the corporate world, changes that business leaders are only now beginning to understand.
What will the revolutions final legacy be? Beyond Reengineering addresses this question, exploring reengineering's effects on such areas as: Jobs: What does process-centering do to the nature of jobs?
What does a process-centered workplace feel like? Managers: What is the new role of the manager in a process-centered company? Education: What skills are vital in the process-centered working world, and how can young or inexperienced workers prepare? Society: What are the implications of process-centering for employment and the economy as a whole?
Investment: What are the characteristics of a successful 21st-century corporation? An informed look at one of the most profound changes to ever sweep the corporate world, Beyond Reengineering is the business manual for the 21st century.
Reengineering—changing the traditional and outdated organization, processes and culture of a company—is corporate America's greatest challenge today. In Reengineering Management, Champy examines the far-reaching changes managers must make for themselves and their companies to succeed in an era of unprecedented competition. Through his extensive consulting and research work, he shows how reengineering succeeds only when managers reinvent their own jobs and managerial styles. Otherwise, the ultra-efficient and effective reengineered processes for acquiring and serving customers, filling orders, bringing new concepts to market and other key business activities eventually fall apart.
Champy shows how they are mastering the managerial challenges of reengineering, and as a result are making their organizations exciting and competitive. As more and more organizations reengineer, the experiences of these managers will become an insiders' guide to managerial life in the company of the future.
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