11.

Reengineering
• Reengineering
• Business process reengineering
• TQM and Reengineering

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 11. Reengineering
Reengineering
• Customer satisfaction has increasingly become main
principal in managing successful business.
• Despite emphasis on customer satisfaction by companies,
there has been high incidence of complaints, anger, rage,
and acute disappointment over products.
• In many cases incremental improvements is not sufficient.
• What is needed is re-engineering of entire process.

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 11. Reengineering
Re-engineering
• Re-engineering may be defined as “fundamental
rethinking and radical redesign process to achieve
dramatic improvements in critical contemporary measure
of performance, such as cost, quality, service and, speed”
(Hammar).
• Re-engineering does not make great effort to improve
existing process.
• It seeks to enhance speed of delivery of product without
compromising its quality by improving utilization of
resources such as materials, labor, and equipment.
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 11. Reengineering
Re-engineering
• Re-engineering helps companies to achieve
higher levels of customer satisfaction by focusing
on making improvements in all dimensions like
human resources, work process, and technology.
• Re-engineering involves redesigning business
processes to take advantage of computer and
information technology.

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 11. Reengineering
Re-engineering
• Re-engineering requires thorough evaluation of current use
of advanced technologies, to identify opportunities for
change that can improve quality of service and customer
satisfaction.
• Hammer states that re-engineering strives to break away
from old rules about how we organize and conduct business.
• It involves recognizing and rejecting some of them and
finding new ways to accomplish work.

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 11. Reengineering
Fundamental rethinking
• What do we do what we do?
• Why do we do it the way we do?
• Understand rules and assumptions that activate
business and see whether these rules are
obsolete, erroneous, or inappropriate.
• Re-engineering ignores what is and
concentrates on what should be.
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 11. Reengineering
Radical redesign?
• Getting to root of things, not to superficial
changes.
• Re-engineering is about business reinvention
- not business improvement, business
enhancement, or business modification.

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 11. Reengineering
Dramatic improvement?
• Re-engineering is not making
marginal/incremental improvement.
• For 10% boosting re-engineering is not
required.
• It is about blowing up old, and replacing it
with something new.
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 11. Reengineering
What re-engineering is not?
• Restructuring or downsizing: Doing less with less.
• Automation: Simply provides more efficient ways of
doing wrong kinds of things.
• Software re-engineering: Rebuilding obsolete
information systems with more modern technology.
• TQM & quality management: Both re-engineering and
TQM are process based but they are not same in
many dimensions.
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 11. Reengineering
What re-engineering is not?
• Re-engineering is search for new models of
organizing work.
• It is about to begin again with clean sheet of paper.
• It is about rejecting conventional wisdom and
assumptions of past.
• Tradition counts for nothing.
• Re-engineering is new beginning.
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 11. Reengineering
Quality and Reengineering
• Tools of quality always come in handy when laying out
procedures for re-engineering (Spadaford).
• Standards and goals should be established for series of internal
measures of process outcomes that are important to customers.
• Weekly informal group meetings along with monthly meeting
could be ideal tool to review measures for quality compliance.
• Re-engineering as a tool shifts its focus from leadership model of
command and control to one of commitment and trust.

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 11. Reengineering
Quality and Reengineering
For continuous success of newly developed organization, managers
must establish followings:
1. Set clear strategic direction and demonstrate commitment to it.
2. Openly communicate with staff, especially when dealing with bad
news or problems.
3. Encourage staff involvement whenever possible, so that managers
have say in how their jobs are affected by any changes.
4. Experiment with new ideas and concepts, and reward not only results,
but also efforts to bring about positive change.
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 11. Reengineering
Quality and Reengineering
[Link] risks of change against expected returns.
[Link] expectation of quick realization of benefits, as
many changes will take years to truly blossom.
[Link] more on outcomes and less on activities, this will
create mindset for adding value and reducing marginally
useful activities.
[Link] on creating appropriate climate for people to
attain excellent performance and personal growth.
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 11. Reengineering
Benefits of Reengineering
Some important benefits of re-engineering are:
1. Revolutionary thinking: Reengineering encourages organizations to
abandon conventional approaches to problem solving and to “think
big”.
2. Breakthrough improvement: Reengineering helps organizations make
noticeable changes in pace and quality of their response to customers’
needs.
3. Organizational structure: Primary objective of organization is to identify
real customer needs, rather than create products that ignore needs
and wants of customer.
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 11. Reengineering
Benefits of Reengineering
Some important benefits of re-engineering are:
4. Organizational renewal: Re-engineering often results in radical
organizational designs that can better compete in quality,
increase market share, and profitability.
5. Corporate culture: Workers at all levels is encouraged to make
suggestions for improvement and to believe that management
will listen to what they have to say.
6. Job redesign: Reengineering helps to create more challenging
and more rewarding jobs with broader responsibilities to
employees.
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 11. Reengineering
Business Process Reengineering
• Business process is collection of activities that takes one or more
kinds of input and creates output that is of value to customer.
• Most business people are not process oriented; they are focused
on tasks, on jobs, on people, on structures but not on process.
Examples:
• IBM credit corporation - credit insurance process
• Ford Motor - procurement process
• Kodak - product development

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 11. Reengineering
Business Process Reengineering
Reengineering themes in these examples were:
• Process orientation.
• Ambition.
• Rule-breaking.
• Creative use of IT.

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 11. Reengineering
Essence of Re-engineering in Business Process
• Business process may be defined as a set of logically related
tasks performed to achieve defined business outcome.
• When business process and structures are outdated and
obsolete, its processes are ineffective and inefficient,
business company should decide to embark (begin a new
course of action) on to redesign its process.
• Unless existing processes are changed, breakthroughs in
performance are extremely difficult.

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 11. Reengineering
Essence of Re-engineering in Business Process
• Quality and customer service are increasingly
becoming the primary focus of any company.
• Rather than looking for opportunities to improve current
process, company should determine which of its
processes really add value and search for new ways to
achieve new results.
• Reengineering efforts strive for dramatic levels of
improvements.
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 11. Reengineering
Essence of Re-engineering in Business Process
• Reengineering break away from conventional
wisdom and constraints of organizational
boundaries, and are broad and require looking at
fundamental processes of business from a cross-
functional perspective.
• Reengineering use information technology not to
automate existing process but to create new one.

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 11. Reengineering
Essence of Re-engineering in Business Process
Steps of re-engineering in business process are:
1. Develop business vision and process objectives:
involve prioritizing objectives and setting targets for
future.
2. Identify processes to be redesigned: involve
identifying critical or bottleneck processes and
envisioning steps to avert (prevent unpleasant event)
shortcomings on them.
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 11. Reengineering
Essence of Re-engineering in Business Process
Steps of re-engineering in business process are:
3. Understand and measure existing processes: involves
identifying current problems and setting baseline.
4. Identify information technology levels: involves bringing
those involved in process in brainstorming session to
identify new approaches.
5. Design and build prototype of process: includes
implementing organizational and technical aspects.

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 11. Reengineering
Who needs Business Process Re-engineering (BPR)
• Those companies that find themselves in trouble in this
competitive market and with no choice, i.e. companies
that have hit wall and are lying injured on ground.
• Those companies that are not yet in trouble, but whose
management has foresight to see trouble coming - new
competitors, changing customer requirements, altered
economic environment, etc., i.e. companies travelling
along at high speed, but sees something rushing towards
them, could it be wall?
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 11. Reengineering
Who needs Business Process Re-engineering
• Those companies who are in peak, but their
management is aggressive and ambitious.
• By enhancing their performance they seek to raise
competitive bar even higher and make life even tougher
for other competitors.
• They are companies that are out for drive on clear
afternoon with no obstacles in sight; what a splendid
time, they decide, to stop and build wall for other guys.
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 11. Reengineering
TQM and Reengineering
Comparison of TQM and BPR
Similarities:
• Customer focus.
• Process oriented.
• Commitment to improved performance.

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 11. Reengineering

TQM and Reengineering

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 11. Reengineering
TQM and Reengineering
Comparison of TQM and BPR
Differences: Control measurement and improvement:
• TQM - cost of quality and concerned with continuous
improvement.
• BPR - cost of process and concerned with dramatic
improvement.
Differences: Type of change and nature of implementation:
• TQM - evolutionary and bottom up.
• BPR - revolutionary and top-down.
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11. Reengineering

End of Chapter 11

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