FORMAL DEFINITION OF REENGINEERING
We are entering the new century, with companies that operated in the 20th with 19th century administrative designs. We need something entirely different.
Faced with a new context, new management modalities arise, among them is reengineering, based on the premise that it is not the products, but the processes that create them, that lead companies to success in the long run. Good products do not make winners; winners make good products. What companies have to do is organize around the process.
Fragmented operations located in specialized departments mean that no one is in a position to notice a significant change, or if they do, they cannot do anything about it, because it goes beyond their radius of action, their jurisdiction or their responsibility. This is the consequence of a wrong concept of organizational management.
A business process is a set of activities that receive one or more inputs to create a product of value for the customer.
Reengineering means starting over by starting over; Reengineering is not doing more with less, it is giving less to the customer. The goal is to do what we are already doing, but to do it better, to work smarter.
It is redesigning the processes so that they are not fragmented. Then the company can get by without bureaucracies and inefficiencies.
Properly speaking: "reengineering is the fundamental revision and radical redesign of processes to achieve spectacular improvements in critical and current performance measures, such as costs, quality, service and speed".
TOWARDS REENGINEERING
Behind the word reengineering is a new business model and a corresponding set of techniques that executives and managers will have to employ to reinvent their companies.
Under traditional management thinking, many of the tasks employees performed had nothing to do with meeting customer needs. Many of these tasks were carried out to satisfy internal demands of the company's own organization.
In today's environment nothing is constant or predictable, no market growth, no customer demand, no product life cycle.
Three forces, separately and in combination, are driving companies to penetrate deeper and deeper into territory that is unknown to most executives and managers. These forces are: customers, competition and change.
customers
Customers take over, the concept of the customer is no longer valid, now it is this customer, because the mass market today is divided into segments, some as small as a single customer. Customers are no longer satisfied with what they find, as they currently have multiple options to meet their needs.
This is equally applicable in the customer-supplier relationship between the companies themselves, and complaints are often expressed in: "Either you do it as I want or I do it myself."
Clients have placed themselves in an advantageous position, in part because of access to more information.
For companies that grew up with the mass market mentality, the reality is harder to accept about customers, in that each one counts. If a customer is lost today, no other shows up to replace them.
Competition
Before it was simple: the company that managed to go to the market with an acceptable product or service and at the best price made a sale. Now there is much more competition and of very different classes.
Globalization brings down trade barriers and no company has its territory protected from foreign competition. American, Japanese, European companies have experience in strongly competitive markets and are very eager to win a share of our market. Being great is no longer invulnerable, and all existing companies have to have the acumen to discover new companies on the market.
New companies don't follow known rules and make new rules to run their business.
The change
Change becomes a constant, the nature of change is also different. The rapidity of technological change also promotes innovation. Product life cycles have passed from years to months. The time available to develop new products and introduce them has decreased. Today companies have to move faster, or they will soon be completely paralyzed.
Executives believe that their companies are equipped with efficient radars to detect change, but most of them are not, what they detect is the change that they themselves expect. The changes that can make a company fail are what happens outside of its expectations.
WHAT WILL BE REDESIGNED?
Let us remember that it is the processes and not the organizations that are subject to reengineering.
It is a difficult part since normally we can identify all the elements within an organization but not the processes, we can talk about the purchasing department and its procedures, but we rarely talk about a purchasing process that involves several departments and that by definition it should have only one manager.
To better identify and understand the processes, they can be given names that indicate their initial and final state:
- Manufacturing: process from supply to dispatch. Product development: from concept to prototype. Sales: from potential buyer to request. Dispatch of orders: from order to payment. Service: from inquiry to resolution.
To select a process to redesign we can consider the following aspects:
Broken processes
They have difficulty having a final product. Ways to identify them are:
- Extensive information exchange, data redundancy, repeat click. It is caused by the arbitrary fragmentation of a natural process. The flow of information should be reduced to finished products, and the information in each unit should not be reprocessed from the information received. Inventories, reserves and other assets. They exist due to uncertainties in internal and external processes. These reserves are not only usually materials, they are also personnel or financial resources. It is necessary to plan together with suppliers and clients the needs so as not to have idle resources. High relation of verification and control with added value. Fragmentation. There are internal processes that do not add value to the product but do affect its cost and final quality. Repetition of work. Inadequate feedback throughout the chains.Often the problem is corrected at the end of the process by returning the product to the beginning without even indicating what the problem was found and when it was detected. Complexity, exceptions and special cases. Accumulation to a simple basis. We create exceptions and special cases to a simple initial process as other problems arise, in reengineering it is necessary to rescue the initial process and create another process for each special case that arises.in reengineering it is necessary to rescue the initial process and create another process for each special case that arises.in reengineering it is necessary to rescue the initial process and create another process for each special case that arises.
Important processes.
They are the ones that have a direct impact on customers, and are second in importance when selecting reengineering processes. In this case, it is necessary to be in contact with the clients of each process to identify their needs, although they do not know the process if they attach importance to some characteristics resulting from it, such as price, timely deliveries, product characteristics, etc. Same that can give us an idea of which part of the process is being talked about.
Feasible processes.
Another concept is that of feasibility and it is based on the radius of influence in terms of the number of organizational units that intervene in it, the more they are, the greater the radius of influence.
Before proceeding with reengineering, it is necessary to understand the process and not go into the details, by understanding the process it is possible to create new details.
Traditional analysis takes the inputs and outputs of a process as assumptions and looks inside the process to measure and examine what happens. On the other hand, understanding the process does not take anything for granted, when understanding a process the product is not accepted as an assumption, but in part if it is to understand what the client does with that product.
This implies understanding the customer better than he does.
RECONSTRUCTION OF PROCESSES
Here are some common characteristics of reengineered processes.
Several trades are combined into one
The most common and basic characteristic of redesigned processes is that serial work disappears. That is, many trades or tasks that were different before are integrated and compressed into one. However, it is not always possible to compress all the steps of a process into a single job performed by a single person. In other cases, it may not be practical to teach one person all the skills they would need to run the entire process.
The benefits of integrated processes eliminate side passes, which means eliminating errors, delays and repetitions. They also reduce indirect administration costs as process employees take responsibility for seeing that customer requirements are met on time and without defects. Additionally, the company encourages these employees to find innovative and creative ways to continually reduce cycle time and costs, while simultaneously producing a defect-free product or service. Another benefit is better control, as integrated processes require fewer people, it makes it easier to assign responsibility and monitor performance.
Workers make decisions
Instead of separating decision making from actual work, decision making becomes part of the job. This implies vertically compressing the organization, so that workers no longer have to go to the higher hierarchical level and make their own decisions.
Benefits of compressing work both vertically and horizontally include: Fewer delays, lower overhead costs, better customer feedback, and more empowerment for workers.
The steps of the process are executed in natural order
The redesigned processes are free from the tyranny of rectilinear sequences: the simultaneous execution of tasks can be exploited by over artificial sequences imposed by the linearity in the processes. In redesigned processes, work is sequenced based on what really needs to be done sooner or later.
The "delinearization" of processes accelerates them in two ways: First: Many tasks are done simultaneously. Second: By reducing the time that elapses between the first steps and the last steps of a process, the scheme of major changes that could make the previous work obsolete or make the subsequent work incompatible with the previous one. Organizations thereby achieve less repetition of work, which is another source of delay.
Jobs have multiple versions
This is known as the end of standardization. It means ending the traditional single processes for all situations, which are generally very complex, since they have to incorporate special procedures and exceptions to take into account a wide variety of situations. In contrast, a multi-version process is clear and straightforward because each version only needs to be applied to the cases for which it is appropriate. There are no special cases or exceptions.
Work is done at reasonable site
Much of the work that is done in companies consists of integrating interrelated parts of the work performed by independent units. The customer of a process can run part of the process or the whole process, in order to eliminate side passes and indirect costs.
After reengineering, the correspondence between processes and organizations can seem very different from what it was before, as work is relocated in organizational units, to improve the overall performance of the process.
Checks and controls are reduced
The redesigned processes make use of controls only to the extent they are economically justified. Traditional processes are full of verification and control steps that do not add value, but are included to ensure that no one abuses the process.
Redesigned processes show a more balanced approach. Instead of strictly checking work as it is done, you have global or deferred controls. These systems are designed to tolerate moderate or limited abuse, delaying the point at which abuse is detected or examining collective patterns rather than individual cases. However, redesigned control systems more than offset any potential increase in abuse by dramatically decreasing costs and other constraints related to control itself.
Reconciliation is minimized
The external contact points that a process has are reduced, and thus the possibilities of receiving incompatible information that requires reconciliation are reduced.
A case manager offers a single point of contact
This character appears frequently in redesigned processes, when the steps of the process are so complex or so dispersed that it is impossible to integrate them in a single person or even in a small group. The case manager acts as a "public defender" for the client, responding to the client's questions and concerns, and resolving their problems. Therefore, the case manager has access to all the information systems used by the people doing the work and has the ability to contact them, ask questions, and request assistance when necessary.
Centralized-decentralized hybrid operations prevail
Companies that have redesigned their processes have the ability to combine the advantages of centralization with those of decentralization in the same process. Supported by information technology, these companies can function as if the various units were completely autonomous, and at the same time, the organization enjoys the economies of scale that centralization creates.
TYPES OF CHANGES THAT OCCUR WHEN REDESIGNING PROCESSES
Work units change: from functional departments to process teams
In a way what is done is to reunite a group of workers who had been artificially separated by the organization. When they are put back together they are called process teams. In short, a process team is a unit that comes together naturally to complete an entire job - a process.
Trades change: from simple tasks to multidimensional work
Workers on process teams who are collectively responsible for the results of the process, rather than individually responsible for a task, have a different job. They share joint responsibility with their teammates for the performance of the total process, not just a small part of it.
Although not all team members do exactly the same job, the dividing line between them is blurred. All team members have at least some basic knowledge of all the steps in the process, and probably perform several of them. Furthermore, everything that the individual does bears the stamp of an appreciation of the process in a global way.
When work becomes multidimensional, it also becomes more substantive. Reengineering not only eliminates waste but also work that does not add value. Most of the verification, waiting, reconciliation, control and follow-up - unproductive work that exists because of the borders that exist in a company and to compensate for the fragmentation of a process - are eliminated with reengineering, which it means that people will spend more time doing their actual work.
After reengineering, there is no "mastering a trade" thing; the trade grows as the skill and experience of the worker grow.
The role of the worker changes: from controlled to empowered
When management entrusts the teams with the responsibility of completing a total process, it necessarily has to give them the authority to take the necessary action as well. Single and multi-person teams doing process-oriented work have to manage themselves. Within the limits of their obligations - agreed deadlines, productivity goals, quality standards, etc. - they decide how and when the work is to be done. If they have to wait for the direction of a supervisor for their tasks, then they are not process teams.
Reengineering and the consequent authority impact the kinds of people companies must hire.
Trade Preparation Changes: From Training to Education
In an environment of change and flexibility, it is clearly impossible to hire people who already know absolutely everything you will need to know, so that continuing education throughout the life of the trade becomes the norm of a redesigned company.
The focus on performance averages and compensation shifts: from activity to results
Workers' compensation in traditional companies is relatively straightforward: people are paid for their time. In a traditional operation - be it an assembly line with manufacturing machines or an office where paper is processed - the work of an individual employee has no measurable value. What is, for example, the monetary value of a weld? Or from verified employment data on an insurance application? None of these have value on their own. Only the finished car or the insurance policy issued is of value to the company.
When work is broken down into simple tasks, companies have no choice but to measure workers by how efficiently they perform narrowly defined work. The downside is that increased efficiency of narrowly defined tasks doesn't necessarily translate into better process performance.
When employees do process work, companies can measure their performance and pay them based on the value they create. In companies that have been redesigned, contribution and performance are the main bases of compensation.
Promotion criteria change: from performance to skill
A bonus is the appropriate reward for a job well done. Promotion to a new job is not. When redesigning, the distinction between promotion and performance is firmly drawn. Promotion to a new position within a company is a function of skill, not performance. It is a change, not a reward.
Values change: from protectionist to productive
Reengineering involves an important change in the culture of the organization, it requires that employees make the commitment to work for their clients, not for their bosses. Changing values is as important a part of reengineering as changing processes.
Managers change: from supervisors to coaches
When a company redesigns itself, processes that were complex become simple, but jobs that were simple become complex. By transforming processes, reengineering frees up managers' time to help employees perform more valuable and demanding work.
Managers in a redesigned company need strong interpersonal skills and they have to take pride in the accomplishments of others. Such a manager is an advisor who is where he is to provide resources, answer questions, and see to the long-term professional development of the individual. This is a different role from what most managers have traditionally played.
Organizational structures change: from hierarchy to flat
When an entire process becomes the work of a team, managing the process becomes part of the team's craft. Cross-departmental decisions and issues that previously required managers 'and managers' meetings are now made and resolved by teams in the course of their normal work. Companies no longer need as much managerial "glue" as they once did to hold work together.
After reengineering, you don't need as many people to put fragmented processes back together. With fewer managers there are fewer administrative levels and consequently, flat structures predominate.
Executives change: from highscore scorer to leaders
Flatter organizations bring executives closer to customers and the people who do the value-adding work. In a redesigned environment, successful job performance depends far more on the attitudes and efforts of empowered workers than on the actions of task-oriented functional managers. Therefore, executives have to be leaders who can influence and reinforce the values and beliefs of employees with their words and actions.
ROLES OF REENGINEERING
To carry out process reengineering, the following roles have been identified:
- Leader. Owner or person in charge of the process. Reengineering team. Steering committee. Reengineering "Zar".
Leader
He is a senior executive who supports, authorizes, and motivates the total reengineering effort. It must have sufficient authority to persuade people to accept the radical changes that reengineering implies. Without this leader, the reengineering process remains in good standing without being completed as expected.
You must maintain the final objective of the process, you need the vision to reinvent the company under new competitive schemes, keep employees and managers informed of the purposes to be achieved, as well as the progress achieved.
Designate who will own the processes and assign responsibility for performance progress.
Process owner
Area manager responsible for a specific process and the corresponding engineering effort.
Traditional companies do not think in terms of processes, functions are departmentalized, thereby putting organizational boundaries to processes.
The processes should be identified as soon as possible, assign a leader and this to the owners of the processes.
It is important that the process owners have acceptance from the colleagues with whom they are going to work, accept the change processes that reengineering brings, and their main function is to monitor and motivate the reengineering.
The office of the owners does not end when the reengineering project is completed, when the commitment is made to be process-oriented, each process continues to occupy an owner who is responsible for its execution.
Reengineering team
Formed by a group of individuals dedicated to redesigning a specific process, with the ability to diagnose the current process, supervise its reengineering and its execution.
He is in charge of doing the heavy lifting of producing ideas, plans and turning them into reality.
It should be mentioned that a team can only work with one process at a time, in such a way that a team must be formed for each process that is being worked on.
The team must have between 5 and 10 members, maximum, of which one part must know the process thoroughly, but for a short time so that they do not accept it as something normal, and another part must be formed with personnel outside the process, being able to be people from outside the company, who can question it and propose alternatives.
Directive Commitee
Policy-making body, composed of senior managers who develop the organization's overall strategy and monitor its progress, usually including process owners.
They may or may not be present in the process, give order of priority, comment on issues that go beyond processes and projects in particular.
"Tsar" of reengineering
He is responsible for developing reengineering techniques and instruments and for achieving synergy between the different projects in the company.
He is in charge of direct administration, coordinating all reengineering activities that are underway; supports and trains process owners and reengineering teams.
SUCCESS IN REENGINEERING
Unfortunately, despite the many success stories presented, many companies that start reengineering achieve nothing. They end their efforts precisely where they began, without having made any significant changes, without having achieved any major performance improvement, and rather encouraging employee skepticism with another ineffective business improvement program.
Here are most of the common mistakes that lead companies to fail at reengineering:
Try to fix a process instead of changing it
Although existing processes are the cause of a company's problems, they are familiar; the organization is comfortable with them. The infrastructure on which they are based is already installed. It seems much easier and more sensible to try to improve them than to discard them altogether and start over. Incremental improvement is the path of least resistance in most organizations. It is also the surest way to fail to reengineer companies.
Not concentrating on processes
Innovation is also the result of well-designed processes, not a thing in itself.
The fault lies in not adopting a process-oriented perspective on the business.
Do not forget about everything that is not process engineering
A reengineering effort generates change of many kinds. We must redesign the definitions of trades, organizational structures, administrative systems, that is, everything that is related to processes.
Even managers who yearn for radical process reengineering freak out at the magnitude of the changes that are required. Precisely what redesign means is to remake the company.
Ignoring the values and beliefs of employees
People need some reason to perform well within the redesigned processes. Management has to motivate employees to rise to the occasion by supporting the new values and beliefs required by the processes.
You have to pay attention to what is happening in the minds of the staff as well as what is happening at their desks. Changes that require modifications of attitudes are not easily accepted, the required values have to be cultivated by rewarding the behavior that demonstrates them. Senior managers have to give talks about these new values while demonstrating their dedication to them through their personal behavior.
Settle for little results
Achieving great results requires great aspirations. There is a great temptation to follow the easier path and be content with marginal improvement, this in the long run is rather a detriment. The most damaging thing is that the marginal measures reinforce a culture of incrementalism and make the company an unworthy entity.
Give up the effort early
It may come as no surprise that some companies abandon reengineering or reduce their original goals at the first sign of trouble. But there are also companies that suspend their reengineering effort at the first sign of success. The initial success becomes an excuse to return to the easy life of the usual business. In both cases the lack of perseverance deprives the company of the great benefits that it could reap later.
Limit the definition of the problem and the scope of the reengineering effort in advance
A reengineering effort is doomed in advance to failure when management narrowly defines the problem to be solved before it begins or limits its scope. Defining the problem and fixing its scope are steps in the reengineering effort itself. This begins with the statement of the objectives to be pursued, not with the way in which these objectives are to be achieved.
Reengineering has to break boundaries, not reinforce them.
It has to feel destructive not comfortable.
To insist that reengineering is easy is to insist that it is not engineering.
Letting existing corporate cultures and attitudes prevent reengineering from beginning
Dominant cultural characteristics in a company can inhibit or frustrate an engineering effort before it begins. Companies whose short-term orientation keeps them focused exclusively on quarterly results will find it difficult to extend their vision to the broader horizons of reengineering. Executives have an obligation to overcome those barriers.
Try to reengineer from the bottom up
There are two reasons why front-line employees and middle managers are unable to initiate and execute a successful reengineering effort.
The first is that those near the front lines lack the broad perspective that reengineering demands. The second reason is that every business process necessarily crosses organizational boundaries.
If radical change emerges from below, you may be resisted and stifled. Only vigorous leadership from above will induce acceptance of the transformations that reengineering produces.
Entrusting leadership to a person who does not understand reengineering
Top management leadership is an indispensable prerequisite for success, but not just any top manager will do. The leader has to be someone who understands reengineering and is fully committed to it, and must also be operations oriented and appreciate the relationship between operational performance and final results. Seniority and authority are not enough; Equally critical are understanding and a proper mental attitude.
Scrimping on resources for reengineering
A company cannot achieve the enormous performance benefits that reengineering promises without investing in its program, and the most important components are the time and attention of the best in the company. Reengineering cannot be entrusted to the semi-competent.
Allocating insufficient resources also signals to employees that management does not attach much importance to the reengineering effort, prompting them to ignore it or resist it, hoping that it won't be long before it loses momentum and disappears.
Burying reengineering in the middle of the corporate agenda
If companies do not put reengineering at the top of their agenda, it is preferable that they dispense with it altogether. Lacking the constant interest of the administration, resistance and inertia will cause the project to stop. Staff only come to terms with the inevitability of reengineering when they recognize that management is fully engaged, focused on it, and paying regular and constant attention to it.
Dissipate energy in a large number of project
Reengineering requires a precise approach and enormous discipline, which is to say that companies have to focus their efforts on a small number of processes at a time. Many processes - customer service, R&D, and sales - may require radical reengineering, but not all will need to be addressed simultaneously to be successful. Management's time and attention are limited, and reengineering will not get the support it needs if managers are thinking about one thing or another.
Trying to redesign when the CEO is just a few years away from retirement
Making radical changes in a company's processes will inevitably have serious consequences for the structure of the company and its administrative systems, and a person who is about to retire will simply not want to intervene in such complex issues or make commitments that limit freedom of action. of his successor.
In hierarchical organizations, especially, aspiring vacancies for senior positions may feel watched and judged, in which case they will be more interested in individual performance than in being part of a large collective reengineering effort.
Not distinguishing reengineering from other improvement programs
One danger of reengineering is that employees see it as just another show of the month. This danger will certainly become a reality if reengineering is entrusted to a powerless group. To avoid that possibility, management has to entrust reengineering to line managers, not to specialists from the executive staff. Also if another improvement program has been undertaken, then one must be very careful otherwise there will be confusion, and enormous energy will be wasted to see which one is superior.
Focus exclusively on design
Reengineering is not just redesign. You also have to make new designs a reality. The difference between winners and losers is usually not in the quality of their respective ideas but in what they do with them. For the losers, reengineering never goes from ideological to execution.
Trying to reengineer without making someone miserable
You can't make an omelette without breaking the eggs. It would be nice to say that reengineering is a win-win program, but it would be a lie. Reengineering does not give everyone an advantage. Some employees will lose their jobs and others will not be happy with their new jobs. Trying to please everyone is an impossible undertaking, one that will only postpone reengineering execution for the future.
Backing up when resistance is encountered
Employees will always resist, it is an inevitable reaction when you undertake a major change. The first step to facing it and waiting for it and not letting it get in the way.
The real reason reengineering is unsuccessful is management's lack of foresight that does not plan ahead to deal with the inevitable resistance reengineering will encounter.
Prolonging the effort too much
Reengineering creates tensions throughout the company and prolonging it for a long time increases the discomfort for everyone. Just 12 months should be enough to go from proaction to delivery of a redesigned process. If it takes longer, people become impatient, confused, and distracted. You will conclude that it is another rogue program and the effort will fail.
For all the above there are more reasons for failure because people have a great ability to find new ways to abandon a project, but in all the reasons seen, we have found a common factor and that is the role played by senior management. If reengineering fails whatever the immediate cause, senior managers either misunderstand reengineering or suffer from a lack of leadership.
ADDITIONAL CONSIDERATIONS
Which area of the company is attacked first when reengineering is undertaken?
There are two important areas: one is related to customers, especially in the way of filling orders in the customer service sector, and the other is to attack the area that is performing the worst, which is sometimes financial and sometimes it is manufacturing. Still, more than half of organizations start with customer service.
Can reengineering be applied more than once?
Of course. There is a whole new generation of reengineering that is starting now. Even companies that went through the process in the last five or ten years are starting over. And the force behind this generation is the Internet. Because although they work very well, companies are not ready for customers to access them over the Internet. Companies are not yet in a position to provide prices, availability and the possibility of ordering online. Everything that has been done so far is not enough and you have to start over.
How does technology translate to reengineering?
A company that cannot change its model of thinking about computing and other technologies cannot be redesigned. The fundamental mistake that many companies make when thinking about technology is to see it through the lens of their existing processes. They wonder: How can we use these new technological capabilities to enhance or energize or improve what we are already doing? Rather, they should ask themselves: How can we harness technology to do things that we are not doing? Reengineering, unlike automation, is innovation. It is to explore the newest capabilities of technology to achieve entirely new goals. One of the most difficult aspects of reengineering is recognizing the new unfamiliar capabilities of technology rather than the familiar ones.
Does reengineering have to do with downsizing?
People get these two things confused, mostly because most cutbacks don't work, let people go and then take more.
Reengineering does not imply, nor does it foresee reduction of personnel, it was not stated with that objective, unfortunately human resources are the easiest variable to reduce and the most notorious when rebuilding and redesigning processes.
Bibliography
- Llanova Galvan, Melchor. Because reengineering efforts often fail. V Seminar on computer trends in the public sector. INAP. 1995.Nieto Irigoyen, Ricardo. Process reengineering with a focus on benchmarking. V Seminar on computer trends in the public sector. INAP. 1995 Hammer, Michael and James Champy. Reengineering. Editorial Norma. 1994 La Nación newspaper 2/5/99 Mercado Magazine 6/96
