Chapter I: Background
1.1 Historical background to the reengineering process
In Christianity there is much talk about the teachings of Jesus Christ, those that he gave more than 2,000 years ago, some attribute that many of those preached by Jesus of Nazareth are applied daily, such is the case mentioned in the Gospel of John, chapter 3 and verse 3 that transcribes what Jesus said "I assure you that he who is not born again, cannot see the kingdom of God" (Biblegateway, 1996) and there is a whole spiritual explanation to this teaching but that can be summarized that a radical change in our attitudes is required to be able to be new creatures blessed by the spirit of God. That is, at that time Jesus Christ was already talking about Reengineering.
Throughout the history of the industrial revolution, companies were the first to apply the foundation of reengineering without it being defined as such, but given the evolution of the company, important changes were taking place that required the attention of new management tools to achieve the desired success.
It was definitely in 1994 with the publication of Hammer and Champy that the story changed for companies that were looking for a tool that allows them to reinvent their action in front of the target market, that is, they ended up evolving with better income, improved service to the customer, they became more efficient and consolidated a greater positioning in the market (market expansion).
At present, companies are in constant change, seeking to develop strategies that allow them to resize their operations, that is, the use of the term managerial as a synonym for company; therefore, to the extent that they believe they can achieve it, they have been doing it and with good results, especially in countries where they have all the conditions to implement reengineering processes. Here is a series of events that started reengineering:
1.1.1 The division of labor Smith (1776).
With his application The Wealth of Nations, he described the Principle of the Division of Labor, that is, he considered that there is a set of tasks that must be carried out and that these make the specialization for the development of the main activity of the company. This principle allows the company to develop the following:
Increased skills in workers according to their knowledge. Reduction of task execution time.
Invention of technology that makes work easier.
1.1.2 Fordism and Taylorism
Henry Ford (1908) explained that the organizational form is given by a sequence of coordinated steps that makes the process in a certain time. On the other hand, Frederick Taylor (1911) explained that the source of wealth is not money but man's work, that is to say that an increase in productivity will directly favor the generation of capital.
1.1.3 The Post-War
Given the end of the Second World War (1945), an expansion model was experienced until the 1960s in which a boom was reached that led the industry to develop production strategies in accordance with the needs of the market through the autocratization of the Taylor, in industries properly managed by ex-millitares.
1.1.4 The Japanese Model
At the end of the 60s in the West, management tools began to be developed in order to segment and analyze the market, emphasizing the quality of production through Research and Development that allowed them to generate the basis of a future market opportunity, considering a vision of quality and productivity.
1.1.5 Opening of markets
Starting in 1973, Japanese companies entered the western market in order to satisfy the same demand under quality conditions and at lower costs, which prevailed over a period of 20 years.
And this is how in the late 70s and early 80s some Western companies began to focus on the processes by adopting paradigms that the Japanese had developed, substantially improving the activities of the value chain. By 1983 the basic principles of the Toyota Production System (JIT) were seriously studied, basic concepts such as waste disposal, synchronized manufacturing, etc., were adopted even by smaller companies. However, Western companies, despite having tools such as JIT, TQM and Strategic Planning, did not develop the integration between the operational and managerial areas of the company.From the year 90 it is when globalization reaches a need for competitiveness and permanent change based on the permanent evolution of its requirements.
1.1.6 Business process reengineering
In 1994 the current conceptualized by Hammer and Champy called reengineering began, which stipulates that it describes that it is a radical change in the activities of a process to achieve a greater benefit, more agile, more productive and without affecting the company's costs, directly involving all its personnel.
1.2 Process management
Process management is directly related to quality management, in which each process to be developed is the central part and must reach a standard required by the client's needs, involving financial and material resources, activity scheduling, supervision and control to meet the goals set. Process management is defined by "the set of interrelated work activities that are characterized by requiring certain inputs (inputs: products or services obtained from other suppliers) and particular tasks that imply added value, with a view to obtaining certain results" (Sescam, 2002, p. 5)
Therefore, business organizations that need to achieve or become a leadership in the local, national or global market must apply tools to their processes that allow them to develop strategies for the generation of competitive advantages, directing and controlling their own expectations, depending on to their own resources or their generation.
1.3 Total Quality vs Reengineering
Total Quality is the fundamental pillar to achieve full customer satisfaction, allowing not only to have served them efficiently in an opportunity but permanently, for them it will be necessary to develop internal policies on continuous improvement to innovate, strengthen internal forces, protect investments and customer loyalty. Being that Total Quality turns out to be "a philosophy in which excellence is sought in the results of organizations" (Improven Consultores, 2001).
1.4 Logical Sequence vs Reengineering
A sequence is a set of operations that are proposed to achieve a goal; Therefore, the logical sequence will be that each of these operations in the sequence cannot be varied in another order because their achievement would not have the same impact. In other words, it implies that this logical sequence is directly related to reengineering since a step sequence would have to be used to carry out the radio change, these steps must be adequately planned as a result of a diagnosis of the main internal and external forces of the company where the reengineering is to be carried out.
Chapter II: Business reengineering case (Peru)
2.1 Reengineering
The following will mention a case of success in the reengineering process in Peru in the telephony sector:
2.1.1 The company
As published by Apoyo & Asociados (2012, p. 2):
The company Telefónica del Perú SAA (TdP) is a telecommunications company that is part of the Telefónica Group (Spain). The Company has several lines of business, which are: local fixed telephony, public and rural telephony, long distance (national and international), Internet, subscription television, data and information technology, among others. Of these, the first three are considered traditional, while the rest make up the Company's new service offer. In addition to the aforementioned services, TdP also offers service packages (Telefónica Duos and Trios), which are made up of: local fixed telephony, Internet and / or subscription television, whose prices are lower than the sum of the individual prices of each one of them. Through TM,The Company provides mobile telephony services, wireless fixed telephony, transmission of text messages and data.
2.1.2 Background
The following chronology of the history of telephony in Peru is presented (OSIPTEL, 2003):
- In 1857 the installation of the first telegraph wiring was carried out. In 1867 the telegraph was administered by private companies, and in 1875 the Peruvian Government again assumed ownership of the service. In 1878 the Telegraph was declared a national service. In 1888 the first telephone communication was made between the chambers of senators and deputies. In 1889 a public tender was called to establish the telephone service in Lima. In 1911 the first radiotelegraph station was installed in Lima. In 1920 the foundation of the Peruvian Telephone Company is carried out. In 1958 the Teleprinting service (Telex) was inaugurated. In December 1968 the Ministry of Transport and Communications was created. On November 7, 1969, Entel-Peru was created. On March 25, 1970,The Revolutionary Government nationalizes the Peruvian Telephone Company. In July 1972, it expropriates the CPT, assuming Entel-Peru its assets and liabilities and the services it provided in the interior of the country. August 1, 1973, the telephone services of the The southern region of the country that was operated by Sociedad Telefónica del Sur SA is integrated into Entel Peru. In 1975, the Government implemented the National Telex Network. Between 1976 and 1988, a series of telephone exchanges were installed within the framework of the Telefónica Expansion Plan. In 1981 ENTEL-PERU was transformed into a state-owned company. In 1994 Entelperú and Cía were privatized.. Peruana de Telefonos and the OSIPTEL regulation is published. In 1996 the caller pays the tariff mechanism approval is given. In 1998 the Opening of the Telecommunications Market in Peru is agreed.Currently, the Telefónica SAA company has integrated its products through a single Movistar brand into three lines: Movistar Fijo, Movistar Móvil and Movistar TV, with the largest share of the national market.
2.1.3 Financial performance
During the July 2011 - June 2012 period, the revenues of TdP and subsidiaries amounted to S /.7,967.3 million, higher than in 2011 (S /.7,778.7 million). However, there is a continuous recomposition by business lines, so that mobile services and non-traditional businesses replace traditional ones. On the other hand, non-traditional businesses also show a growing evolution in their income. However, traditional businesses continue to show a contraction in their sales, mainly due to the fixed-mobile substitution, the reduction in regulated rates and the competition from alternative means for long distance calls. It should be noted that the offer of packaged products allows to mitigate the aforementioned effects,and at the same time increase the penetration of services such as Internet and subscription television, whose revenues partially offset the decline in traditional businesses. The foregoing is reflected in the performance of the income of these businesses: Internet (+ 6.7%) and subscription television (+ 5.0%).
During the first six months of 2012, Telefónica del Peru reduced its liabilities by 4.5%, mainly due to the maturity and amortization of its corporate bonds, its long-term bank debt and the lower balance in trade accounts payable. Thus, the total balance of liabilities as of June 2012 was S /.6,910.0 million.
Chapter III: Conclusions
3.1 Conclusions
Reengineering has had a positive evolution over time, being considered one of the powerful and main management tools that allow companies and / or sectors to develop through an extreme and radical change in conventional operations in order to achieve goals even more ambitions within the scope of the potentials of those who implement it.
It is concluded that if a company does not have an adequate vision to carry out a radical change in its processes, this will be a strong impediment for reengineering to be carried out, that is, it requires planning to where it wants to go, what is the limit that the company intends, with what resources it has to achieve it, what are the main advantages it intends to achieve. If you want to change, you need to know the impact and what it implies.
For the application of reengineering in a company, sector or nation, it is also required the commitment, knowledge, awareness and dedication of the personnel who will be involved in the process, without it it will not be feasible to achieve the benefits of the tool.
References
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