REENGINEERING

DEFINITION:

It is a systematic approach to radically improve the core processes of a business and the
key support processes.

Seek for organizations to achieve a radical change in performance in: costs cycle times.
of production, service, and quality through the application of tools and techniques focused on
Business; it is a philosophy of improvement.

ORIGIN:
Reengineering in business processes arises as a result of an increasingly pressurized environment.
intensa competencia, de recesión económica a nivel mundial y de búsqueda de formas de
take advantage of the benefits of information techniques after the depressions of the 1970s
80s and 80s.

REENGINEERING CONCEPTS

There are several definitions that have been given to the word reengineering. Some can be cited.
how:

It can be stated that the:

Reengineering is the current concept given to the drastic changes that an organization undergoes.
when their processes are restructured. The foundation of reengineering is customer service; it describes a
business model, a corresponding set of techniques that executives and managers
they will have to employ to reinvent their companies in order to compete in a new world
(Hammer, 1994).

Reengineering arises in the business world, defining it as:

Reengineering is the fundamental review and radical redesign of processes to achieve improvements.
spectacular in critical and contemporary performance measures, such as cost, quality,
services and speed."(Hammer, 1994).
Mauricio Lefcovich, however, explains that:

It constitutes a recreation and reconfiguration of the company's activities and processes, which
it involves radically recreating and configuring the company’s system or systems for the purposes
to achieve significant increases, in a short period of time, in terms of profitability,
productivity, response time, and quality, which implies obtaining advantages
compettvas”.(Lefcovich, 2004).

All of this that is enclosed within what Lefcovich calls:

Reengineering cannot be separated from the beliefs, values, culture, and habits of the workers.
A good start in favor of achieving positive changes in the organization has to do with
the environment in which the worker is immersed; and knowing how to deal with the personnel of a
organization in this sense is more valid than diving into structural plans with new
proposals" (Lefcovich, 2004).

In general terms, Reengineering is an appropriate methodology for reviewing and redesigning.

processes, as well as to implement them. Focusing on adding value to each of the steps of
a process and eliminate those that do not provide or cannot provide any added value, being very
suitable for generating horizontal organizations and process-based organizations, as well as for
reducir costos,tempos de procesos, mejorar el servicio y los productos, así como para mejorar la
motivation and staff participation.

What is a process?
A process is a series of linked activities that is dedicated to needs and
market expectations (strategic processes). Processes are the foundation on which the
organizations generate wealth.

PROCESS REENGINEERING

HISTORY

The concept of reengineering has its origins in the principles of management, in the
early years of the 19th century. The purpose of reengineering is to make "all our processes
the best in their class.
Frederick Taylor suggested, in 1880, that managers use reengineering methods.
processes to optimize productivity, takes the classical belief that there is a better way to
doing things. In Taylor's time, technology did not allow large companies
design their processes in a functional or departmental way.

It was specialization that allowed for increased efficiency. Early in the '90s it was Henri Fayol.
who originated the concept of reengineering. He drove the start of his objectives in the
making use of all possible resource sources. Although the technological resources of
our era has changed, the concept still remains.

At the same time, a business engineer named Lindall Urwick said, 'it is not enough
Maintaining the necessary staff for certain activities is also essential to leave them the
necessary authority to take responsibilities". This leads to the idea that the worker must
having the necessary power to decide, which is central to the reengineering process.

Process reengineering was presented to the academic world by Hammer and Champy in the year
1993. Both authors present their accumulated experience mainly during the decade of
the 80s. From them, a real global frenzy is unleashed in the business world for the
application of these concepts.

OBJECTIVES OF PROCESS REENGINEERING

The general objectives pursued by a process reengineering are:

Greater economic benefits due to both the reduction of associated costs

process like the increase in performance of processes.

Greater customer satisfaction due to reduced service time and improvement

the quality of the product/service.

Greater satisfaction of the staff due to a better definition of processes and tasks.

Greater knowledge and control of processes

Achieve a better flow of information and materials

Reduction of product or service process times.

Greater flexibility in relation to customer needs

CHARACTERISTICS OF REENGINEERING (RADICAL CHANGES)

By redesigning the company based on processes, radical changes are made within it.
structure, roles, responsibilities, values, internal relationships and way of exercising leadership.
Among the most significant changes, we can mention:

Several trades are combined into one: tasks are integrated and compressed, horizontally and
vertically, causing a reduction in cycle time, decrease in errors
and costs.

The organizational structure is modified: functional departments are changed.

by process teams.

It shifts from a hierarchical system to a flatter organization: responsibilities are transferred

decisions related to work to the same people who do the work.

Leaders must bring together the people who do the work, they must be able to
influence and reinforce the values and beliefs of the employees with their words and their
facts. From supervisor managers to facilitator managers, trainers and
skill developers.

The steps of the process are carried out in a natural order: a sequence is established.
trabajos en función de lo que es necesario hacerse antes y después – cuando el
the process is designed without a linear sequence, many tasks can be performed simultaneously
simultaneous, reducing times and avoiding the need to harmonize different steps
of the process that must not be compatible or sequential with the previous one.

There is only one person responsible for the entire process: responsibility is consolidated.
different steps of the process in a single person, thus eliminating a large part of the
bureaucracy and administrative processes and as a logical consequence, it increases the
flexibility, the process time is reduced and control is improved.

When the process is carried out by several people, each worker is responsible for everything.
the process, even if I only work on some part of it.

Processes have multiple versions, each one tuned to the requirements of

different markets, situations or inputs: this implies assuming that there will be no
standardized or traditional process for all situations. Serial work,
repetitive and fragmented disappears.
 Multidimensional jobs and workers with various are being developed.
skills. Most of the steps in a process, with efficient support systems,
it can be developed by a single person. When it is not possible to structure the processes
In this way, several people carry out the different stages of the process, but they do not
they isolate in individual tasks. On the other hand, workers are removed
"pieces" and integral workers are developed who are capable of performing various tasks.
and inclusively exchange positions with the same skill. (For this, it is required
training and coaching

A global vision and teamwork are encouraged: each worker is associated with a
The integrated process is aware that its work is not measured by its effort.
individual, but by the results of all the people who work in it.

The approach to performance measurement is modified from activities to results: the

contributions and performance are the main bases of remuneration; the
remunerations are not established based on the person's position in the
organization, but for the value created. The criterion for promotions is not the
seniority, the hours spent in the office, but the ability, skills
developed and results-oriented.

Information technology is an essential tool, as it allows for redesign.

the processes. The power of technology lies in that it allows breaking rules and creating
new ways of working.

Combining centralization and decentralization: The units act as if they were

autonomous, but at the same time, technology and networks have the capacity to
centralize the information and, in many cases, also take advantage of economies of
scale.

HOW TO START PROCESS REENGINEERING

UNDERSTANDING THE NEEDS OF THE EXTERNAL CUSTOMER

Many times, customer needs seem obvious, but in most cases they are not.
are fully understood. For example, most banking institutions study from
What way to reduce waiting time in lines. Programs are then introduced that reward
the attention speed and/or televisions are installed to apparently reduce the time of
soda. A deeper analysis of the issue may reveal, for example, that the majority of the
the most important clients for a bank do not go to the branch, but send an employee.
manager or messenger, so the waiting time in line is important, but not
determinant. On the other hand, almost 80% of the people who go to the bank branch make payments
minors, such as taxes or municipal services. These operations are the least profitable
for the bank. These clients, in the long run, drive away customers - the bank's objective... The question
what is formulated to improve the care process should not be how can we reduce the
Customer's duration of stay at the bank? If not: why does the client have to go to the bank?...

DETERMINE THE NEW ROLE OF THE BUSINESS IN THE MARKET

The dynamics of the markets impose greater demands for adaptation and flexible responses. The
business must be redesigned in such a way as to obtain robust processes with greater
probability of success. If the business is poorly focused, all the actions taken will be
By definition, wrong... Will our business have chances to compete in the future?
What could the company do to change the rules of the game, even if it were very difficult?

COMMITTING TO THE REQUIRED CHANGE

The Administration must be truly committed to the required change; otherwise, it

It will go straight to failure, whether reengineering is applied or any other tool.

REDESIGN THE KEY PROCESSES, NOT THE SUBPROCESSES

A key process or main process is a set of activities that flow throughout the
organization that unites several divisions, departments, or functions in support of the macro process
business. These key processes are a vital part of the business strategy and generate the
ability to provide products or services to external customers and, therefore, impact
directly in the business results. In contrast, the subprocesses or support processes are
subordinate to a key process, which flows through client-supplier chains. These
subprocesses are not strategic and can occur within a business unit, department
and, in some cases, end up crossing the functional boundaries of a given area. For
In general, these businesses do not transcend the market. If the reengineering project is located in a
key process, all areas of the company are affected and participate in the redesign. This
directly impacts the results for the external customer. When only a redesign of one
subprocess, the result can have neutral or negative effects on a key process or on others
subprocesses and having no impact on the final client or having undesirable results
for the same.

BENEFITS OF REENGINEERING

Simple processes that are easy to manage and control

Lower costs due to the reduction or elimination of duplication of functions, jobs that
they do not add value, rework and errors, reduction of process cycles

Greater customer satisfaction, as a result of better performance in the

critical and strategic areas of the business

Better image of the company in the market

Opportunities to increase sales

Better organizational climate, as a result of increased responsibility and authority

of the employees, of the development of their potential and skills, and of the greater
involvement between management and the workforce

HOW TO DO PROCESS REENGINEERING IN A

ORGANIZATION

To be able to reinvent companies, managers need to dismantle the old concepts that
they know how to organize and manage businesses: they must abandon the principles and
organizational and operational procedures that they currently use and create others
completely new. This will cause new organizations not to resemble the current ones.

Companies must take these 5 general steps to give a new design to their processes.
operation:

1. Develop the vision and objectives of the company's processes. Establish priorities and
goals.

2. Identify the processes that need to be redesigned. Identification of the processes

bottlenecks, etc.

3. Understand and measure the current processes

4. Bring together the people involved and hold work sessions.

 5. Design and develop a prototype of the process. Technical implementation.

In addition to these general steps, companies must follow the following principles to make
a reengineering

1. Organize around results and not tasks. One person carries out all the
steps of a process, this design must be made to achieve an objective or result and not
a task.

2. That the process is designed by those who will use the product of it.

Technology leads to automating processes and eliminating interfaces and links.

4. Include the work of processing information in the real work that produces it.
Transfer the information and the tasks.

5. Consider geographically dispersed resources as if they were centralized.

6. Efficiency and innovation in communications.

7. Link the parallel activities instead of integrating their results. Forge links between
functions and coordinate while the activities are being carried out.

8. Place the decision site where the work is done and incorporate control.
to that process. Those who do the work must make the decisions. Compress the
flat pyramid organization.

The role of management when initiating a reengineering is fundamental. To carry out the reengineering, management
should

1. Persuadir al personal para aceptar el cambio

2. Educate from the beginning of the process

3. Give clear messages

4. Clarify where the company is located and why it needs to change.

The vital and crucial aspect of reengineering that must necessarily occur at the beginning is persuasion.
the people within the company to accept or at least acknowledge the effort for it to succeed
to give oneself, is to not reject the possibility of a great change within the company.

WHO SHOULD CARRY OUT PROCESS REENGINEERING

To carry out the process reengineering, the following roles have been identified:
 Leader.

Owner or responsible for the process.

Reengineering team.

Executive Committee.

Reengineering zar.

THE LEADER

He is a high executive who supports, authorizes, and motivates the total effort of reengineering. He must have the
sufficient authority to persuade people to accept the radical changes that it entails
reengineering. Without this leader, the reengineering process remains good intentions without reaching
to culminate as expected.

It must maintain the final objective of the process, it needs the vision to reinvent the company under
new competitive schemes, keep employees and directors informed of the purposes
to achieve, as well as the progress made.

Design who will be the owners of the processes and assign responsibility for progress in
the performance.

OWNER OF THE PROCESS

Gerente de área responsable de un proceso específico y del esfuerzo de ingeniería

corresponding.

It is important for process owners to have acceptance from the colleagues they are going to work with.
to work, to accept the processes of change brought by reengineering, and its main function is to oversee and
obstacle to the realization of reengineering.

The work of the owners does not end when the reengineering project is completed, when it
He is committed to being process-oriented, each process still needs an owner.
that is responsible for its execution.

REENGINEERING TEAM
Formed by a group of individuals dedicated to redesigning a specific process, capable
to diagnose the current process, supervise its reengineering and execution. He is responsible for
carry out the heavy work of generating ideas, plans, and turning them into realities. It is worth mentioning
that a team can only work with one process at a time, in such a way that a must be formed
team for each process that is being worked on.

The team must have between 5 and 10 members at most, of which some must know the
in-depth process, but for a short time so that they do not accept it as something normal, and another part
it must be formed with personnel outside the process, which can be people from outside the company, who
I can question it and propose alternatives.

STEERING COMMITTEE

Policy-making body, composed of senior administrators who develop the strategy

They oversee the organization's global process and monitor its progress, usually including process owners.

He/She may or may not be present in the process, gives a priority order, and expresses opinions on issues that arise.
beyond the specific processes and projects.

FROM REENGINEERING

He is responsible for developing reengineering techniques and tools and achieving synergy between
the different projects in the company. He is in charge of direct management coordinating all
the reengineering activities that are underway; supports and trains the owners of
process and reengineering equipment.

STAGES OF PROCESS REENGINEERING

The stages through which the reengineering methodology evolves are broken down following a
progressive circuit, as shown in the figure, by means of which the organization advances to
complete a set of good practices regarding mentalization and organization
business-oriented, prepared to evolve with the changes it itself promotes in a
programmer.
START OF THE IMPLANTATION

Only from conviction, exhaustive knowledge, and acceptance of the implications that
has for the organization, the implementation plans that entail can begin
fundamental redesign of processes susceptible to being changed.. It is often advisable to analyze the
impact of the change, and how it is prepared, or the need to prepare the organization for
that the staff feels comfortable in the new functions assigned to them by the reengineering. To achieve this,
Conversations should be initiated, the state of the organization should be studied, and a plan should be proposed.
performance calendar.

HUMAN FACTOR OF CHANGE

The preparation of the staff to face challenges optimistically is crucial for making progress in the
methodology, during this stage the most determining and driving risks of success or failure fall.
failure of any reengineering project and much more of its methodology. Within this
At this stage, the work team must be formalized, communicated, and involved with the entire organization.
train the staff in the tasks of reengineering and prepare the employees for the new structure
that the changes will produce.

ANALYSIS OF PROCESSES

In this phase, the beginning is made and the preparations are initiated that allow for contemplating the state of the
processes. To this end, the action plans regarding the quantitative analyses are described
qualitative aspects of the current state, its evolution, and its relevance in the organization. It is also developed
the methodology where the guidelines for evaluation and supervision of the processes are described
when its replacement is necessary. Includes techniques, tools, and resources, establishes the
incorporation of these into the applied reengineering.
IMPLEMENTATION OF CHANGE / INNOVATION

In this phase, we fully engage in the most operational part of the change, evaluating the processes of the
organization and the necessary preparations are made to implement the change. The implementation
The change is made as follows: Innovate and inquire about technological advancements.
they can contribute to the radical review. Design an implementation plan and incorporate methods and
appropriate tools for supporting the implementation.

SUPERVISION AND EVALUATION.

It is structured to establish evaluation and monitoring systems, being aware that change
It is dynamic to comment and convey the achievements reached and the need to continue.

SUPPORT TECHNIQUES FOR PROCESS REENGINEERING

Benchmarking. (Current processes compared to similar processes from another organization)

Total Quality (Continuous Improvement)

SIGMA (Management technique that increases profits)

CRM (Succeeding by prioritizing customers)

Balanced scorecard (Continuous evaluation of objectives)

Intelligent Businesses (Taking historical information from the organization to generate

useful knowledge.
ACTIVITY FRAMEWORK - TECHNIQUES - TOOLS FOR ASSESSING THE STAGES
FROM REENGINEERING
APPROACHES TO REENGINEERING IN BUSINESS PROCESSES

SYSTEMATIC REDESIGN:

To apply this approach, we must identify and understand the existing processes and review them in
systematic way to change what is not working within the current processes
from the company; thus achieving the desired results.

BLANK SHEET METHOD:

This approach consists of rethinking or reinventing the way a product is produced or a service is provided.
a service designing new processes from scratch.

CLASSES OF REENGINEERING IN BUSINESS PROCESSES

The reengineering classes in the business processes that a company can undertake,
It depends on the objective you want to achieve.

IMPROVING COSTS: The improvement of a process that can lead to incredible

reductions in the costs of non-essential processes.
ACHIEVING PARITY OR BEING THE BEST IN YOUR CLASS: Companies seek through the
reengineering in business processes to reach the best positioned company in the
market or even be the best company in the sector.
IDENTIFY RADICAL INNOVATION POINTS: A point of innovation is the achievement of
excellence in one or more measures of value, where the market clearly recognizes the
advantage and where the result is a disproportionate and sustained increase in the
market share.

Five areas are identified where a point of radical innovation can occur:
Market, design, product support (after-sales services), value chain, and finance.
Through reengineering in business processes, we can try to find points of
radical innovation that can lead us to a tremendous success for the company.

THE BLACK HOLE OF INFORMATION TECHNOLOGY

Although technology has always been and will be a great ally of reengineering systems in the
business processes, many companies have spent millions of dollars on technology
information without obtaining the sought benefits.

One of the many reasons why information technologies have failed in their
potential, is that many times it is implemented in processes that are too obsolete. Because instead
to focus attention first on improving processes and then adapting technology; what
We automate existing tasks to achieve efficiency.

It is surprising to find that in the processes of companies where there is interaction with customers,
Many times, information technologies, instead of facilitating processes, become
an obstacle to providing better service.

Dynamic elements of Reengineering:

Change of work units: From functional departments to process teams.
Change at work: From simple tasks to multifunctional.
Changes in worker roles: From controlled to thinkers and decision-makers.
Changes in training: From trained to educated.
Changes in performance evaluation: From compensation for activities to
compensation for achievements.
Changes in Professional Development: From performance to capacity development.
Changes in value: From 'the boss pays' to 'the customer is the one who pays'.
Changes in the role of the administrator: From supervisor to coach.
Changes in the organizational structure: From hierarchical to flat.
Changes in Management Roles: From Boss to Leader.

7 steps for process improvement:

Define the limits of the process.
Observar los pasos del proceso.
Collect the data related to the process.
Analyze the collected data.
Identify areas for improvement.
Develop improvements.
Implement and monitor the improvements.

Participants in the Reengineering:

Leader.
Direct Committee.
Multidisciplinary Reengineering Team.
Change Management Team.
 Owner of the process.
Process Improvement Team.
The People.

Some common errors in Reengineering processes:

Think about applying reengineering to the company and not to its processes.
Settling for sub-optimal results.
Abandon the reengineering effort.
Limit in advance the definition of the problem and its scope.
Let oneself be carried away by existing cultural practices.
Implement reengineering from the bottom up.
Do not distinguish Reengineering from other improvement programs.