Corporate Reengineering

 

Corporate Reengineering refers to a modern business concept that involves the analysis and creation of new or radically modified workflows and processes to achieve breakthrough results in the organization's performance. It consists of identifying key processes within an organization and making them as lean and efficient as possible.  This organizational streamlining may mean a complete overhaul of existing systems to eliminate peripheral processes, and produce drastic improvements in the corporate metrics.  

                              

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Corporate reengineering was conceptualized by James Champy and Michael Hammer, with the latter proclaiming, "don't automate; obliterate."   Champy and Hammer defines 're-engineering' as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service, and speed." 

   

Corporate reengineering has become more popularly known as 'Business Process Reengineering', or BPR, but Champy and Hammer considered this phrase to be too limiting. To them, true reengineering of a corporation  encompasses not only the alteration or refinement of its individual business processes, but revolutionizes it in its entirety as well.  Nonetheless, reengineering and BPR will be used interchangeably in this article.

   

Reengineering integrated a handful of modern business concepts (such as TQM, JIT, CRM, and lean manufacturing) into a tidy business philosophy for reinventing a company by making it 'lean and mean'.  Many companies found this new concept appealing, and so paid large consultancy bills to get it institutionalized internally.

   

A business process is a set of activities that convert a set of inputs into a set of outputs (products or services). Large corporations recognize the need for continuous improvements in its internal processes to keep one step ahead of the competition. Many business concepts involve incremental but continuous improvements on existing processes to improve company performance.  In contrast, reengineering promotes drastic redesign of processes to achieve a step-function improvement in results.  It even promotes the abolition of processes that don't work so that new and more effective ones can be created to replace them.  In fact, many reengineering experts recommend that the revolution of change be started on a blank piece of paper.

    

Different experts have different opinions on how to put BPR into practice.  An example of a BPR process may consist of the following steps: 1) develop the business vision and the business' specific objectives; 2) identify the processes that need to be redesigned based on this vision; 3) understand the current processes as baseline for future comparison and/or others' processes as reference; 4) design and build the new processes; 5) transition from the old to the newly-created processes.

    

Unfortunately, BPR has become synonymous with 'downsizing.'  This can not be blamed on the proponents of the concept, but on companies that abused the term 'reengineering.'  These companies implemented indiscriminate cost-cutting under the guise of BPR, using the theory as a convenient and more palatable excuse for the sole purpose of cutting down on manpower. To many critics, reengineering's greatest weakness is its lack of a human side, or its depersonalization.

                            

Primary Reference: Des Dearlove, "Ultimate Book of Business Thinking", Capstone Publishing

                   

See Also:   Knowledge Management Learning Organization

 

      

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