Introduction to Process Reengineering

By Teresa Chiapputo

Abstract Have you ever heard the expression in your workplace, "We don't need to throw out the baby with the bath water"? I know in my company you'll hear this expression at least once a day. The context of the statement is around redesign of current processes in order to gain productivity, lower costs and to better serve the customer. It appears that most companies are comfortable with incremental change methodology however, in the current business environment, incremental change doesn't seem to be making the grade. It's time to pull out the big guns. Competition and customer demand no longer allows the luxury of moving at a snail's pace. Companies must figure out how to become nimble and efficient to meet and exceed goals and delight their customers. This paper will explore a solution that calls for radical change to dramatically improve a company's performance. It's called Process-Reengineering. There are many different spins on the Process Reengineering definition. Although each definition is slightly different, all have the same overarching theme: the radical redesign of business processes to achieve dramatic improvements in productivity and performance. The two key words are radical and dramatic. Radical redesign means getting rid of existing processes and procedures and inventing new ways. Dramatic improvement means a quantum leap in performance (Hammer, 1993). Both of these ideas are in direct conflict with the old thinking of "constant incremental improvement". The original industrial model, that many companies still use today, rests on the basic principle that workers have fewer, non-complex tasks, which are completed within a large process line. This model allows workers to focus on single tasks that are connected to a more complex process. To reap the benefit from this approach, companies have to accept inconveniences, inefficiencies and higher costs (Hammer, 1993). In reengineering, to meet demands for quality service, flexibility and low cost, processes must be made simple. Figure 1.1 below depicts the themes, which spring from reengineering projects (Hammer, 1996): Figure 1.1. Process Reengineering Themes As illustrated in Figure 1.1, Process Reengineering radically changes the work environment. Individual processes are combined to gain efficiencies and productivity. Workers are allowed to make decisions on the spot to eliminate process roadblocks and increase speed to market. Not only is this beneficial for overall business performance, it can also increase employee satisfaction and loyalty. Employees can expand their skill and knowledge into other areas, and have the ability to make decisions that affect their individual performance. A few words on what Process Reengineering is not. It is not reorganizing, restructuring, downsizing, automation or cost cutting. All of these things may be a result of a well thought out, well planned and well-executed reengineering project. However, the individual goals listed should not be the sole reason for a company to choose to do a process reengineering effort (Carr and Johansson, 1995). It may appear that process reengineering could be the solution to many of the performance issues facing businesses today, however, it's time for a reality check. In the early 90s, more than half of the reengineering projects failed to be completed or did not achieve dramatic improvement results. Benchmark studies with more than 150 companies identified the following success factors illustrated in Figure 1.2 (Prosci's 1998-1999 Reengineering Best Practices Study). Figure1.2. Process Reengineering Success Factors In a recent conversation, a colleague (Lori Fry, personal communication, February 12, 2004), described her top three success factors in a process-reengineering project. First, it's imperative to have executive management support. Second, it important to have willing participation of all associates involved in the redesign. The associates involved in the change must see value in the need for change and buy into the project. Last but not least, is ability of the project team to discern what processes are value-add and customer-focused and which are not. It is easy to get side tracked on processes that do not serve the customer at the end of the day. She also suggested I check out a word she felt is important to any process-reengineering project. That word is Gemba, which means 'actual place' in Japanese. The Gemba is where the value is created. Value is created when people, information, materials, equipment, and processes come together to serve the customer (Gemba Research, 2003). In a process reengineering effort, is important to figure out what processes support the Gemba and what processes do not. The processes that support the Gemba should be at the forefront of any reengineering project. I've skimmed the top of the process-reengineering iceberg in this article. There are many interesting books, websites and periodicals with additional information for those planning to learn more about process reengineering. I am beginning a reengineering process myself in the next few weeks and plan on taking my lessons learned into the real world to support the Gemba in my work environment.

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Author Note

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