1. Introduction
By nature, man seeks answers to the different questions that he encounters as he develops his knowledge, and once he gets these answers, he asks new questions, questions these answers.
We would dare to say that the reengineering process is an answer to a question ("are we doing things well or could we do them better?") That arose after having obtained an answer (the process or activity itself) to a question that was originally raised (How to do things).
The objective of this work is to take a journey through the theory of reengineering and how this can be an effective tool in the development of our businesses, in the development of our administrative career and the marketing branch.
2. Analysis
What does "Reengineering" mean? Let's start by defining it from a simple point of view. Engineering is «The application of scientific knowledge to the invention, improvement and use of industrial technique… The coherent role that a group of experts contributes to the creative process of a technical realization ”. In short, it is the way in which man develops techniques to carry out things more easily, so that anyone can, following the same procedures, repeat said action with the same results. Reengineering, then, is the review of those processes, in order to make them much more effective.
Reengineering is a new approach that analyzes and modifies the basic work processes in the business. In reality, the prospects of reengineering can be very attractive for business people, as it will allow them to fully apply all their knowledge in their companies, with the purpose (as we said before) to make them more effective: faster, more, higher quality, lower costs, higher profits.
Like any new activity, it has received a variety of names, including modernization, transformation and restructuring. However, regardless of the name, the goal is to increase the ability to compete in the market by reducing costs. This objective is constant and applies equally to the production of goods or the provision of services.
The recent emergence of reengineering efforts is not based on the invention of new management techniques. For decades, industrial engineering, time and motion studies, managerial economics, operations research, and systems analysis have been related to business processes.
Some progressive companies have seen that their response to the challenge of competition must go beyond reducing budgets: They have understood that changes must be efficient and that they must not only lower costs, but also improve quality. The term reengineering is derived from the practice of developing information systems, so that the company can get feedback from what is happening in the market, in the minds of its consumers and even within the company itself. It is from here that it follows that the best way to use computers is to use them to facilitate new and better business processes, the faster and more fluid handling of information, rather than using them to automate old processes. To do reengineering, you need to start from scratch.Do not try to rearrange the old way of doing things, but start from scratch by learning from that old way of doing things.
In its current development, reengineering, to be effective, implies a wide scope and its implementation requires a lot of skill. Business processes cross organizational lines and changing one process can affect others. Reengineering requires experts in personnel work, engineering, economics, in marketing, technologies of different kinds and indeed in the specific work to be developed.
3. Positioning and reengineering
Positioning is a set of activities that provides the input and strategic planning framework for reengineering and through which methods are implemented to support rapid and effective change. The first element of positioning is the collection of data about the company or institution; you compare where you are today and where you want to be.
The second most important element is the collection of information about the way the business is run. This information provides a framework for change; it defines the relationships between the company's business units and their respective processes, provides a basic guide against which future change can be measured, and supports analysis of cost and effectiveness improvements.
The third part of positioning is creating an environment where change can be implemented quickly, effectively and without affecting the organization. Positioning and reengineering are two fairly flexible concepts to be used throughout a company or part of it.
Taking into account that both divide the business into manageable parts, there is no limitation on the size of the companies in which they can be applied.
Positioning is a kind of reengineering of the brand, the product or the company itself. Where I am right now, and where I want to go, or where I would like to be. I must restructure my brand, or my product or even my company, to be more effective and this means repositioning it. Review the processes that I have been using so far, and see the most appropriate way to correct them so that they allow me to reach that new goal that I have set.
4. The basis of success in reengineering
There are seven conditions that must be part of the reengineering process for it to be successful:
1. Ability to guide the reengineering process according to a systematic and comprehensive methodology. This methodology should always begin with drawing detailed diagrams of the current business process. One of the sectors where the Reengineering concept has been most widely received has been in the automotive industry. Most assembly plants have looked for ways to make their work more effective in order to improve the quality of the final product while being able to assemble vehicles faster and in greater quantity.
For example, we have the specific case of Toyota. Workers on the assembly line must make a series of movements to look for the different pieces that they will have to place. The scheme of these sequential movements is called "spaghetti." The engineers in charge of applying reengineering processes on the assembly line must outline these movements and analyze them, together with the workers themselves, in order to find a way to reduce steps, avoid fatigue and improve the process. The worker must learn the new work system adapted to this new "spaghetti" that will allow him to be more efficient. The Japanese found that they could in some processes reduce more than 20 steps at a single point of assembly.
2. Coordinated change management for all business functions that are affected. Business operations must respond to changes initiated by four forces: competition, regulation, technology, and internal improvements. For the best reaction to change, an operation must be flexible and designed for modifications on the fly. As we saw in the previous example, the personnel directly involved are an active part of the reengineering process. In addition, this process is applied to all areas of the institution and changes are monitored as they are made, before being implemented on a large scale.
Reengineering represents a systematic response to change and if applied appropriately, it becomes a methodology for change, to modify operations. As such it will include many business components such as marketing, planning, quality initiatives, human resources, finance, accounting, information technology. A reengineering project that ignores these areas is likely to fail during the implementation stage, due to the high degree of interdependence between these activities.
3. Ability to evaluate, plan and implement change on an ongoing basis. The reengineering of business processes is almost always with two very difficult problems. The first results from the size of the projects themselves: they tend to be very large. Management is justifiably intimidated by reengineering projects that appear to jeopardize the fate of the company. And the second difficulty that seems inherent in reengineering is related to the short time during which the improvements will provide a competitive advantage.
For both problems there is a solution, reengineering can be developed on a continuous basis. Instead of trying to implement a large project that restructures the entire corporation, a series of smaller projects can be initiated that gradually disrupt the company. This approach not only reduces the risk and delay in perceiving the profits but also allows the company to keep evolving continuously and simultaneously with its competition.
4. Ability to analyze the full impact of proposed changes. A reengineering approach should provide the ability to analyze the impact that changes to any process will have on all organizational units. In addition, it is essential to have the ability to foresee the impact of any change on all associated processes of the company considered as a whole, since normally the processes interact with each other.
5. Ability to visualize and simulate proposed changes. For the reengineering effort, the ability to simulate the proposed changes is essential, since this resource allows the testing and comparison of any number of alternative designs. Although it seems risky to implement process reengineering without trying to simulate the results, it has already been tried. In these cases, the business itself becomes the test bed for the new process, with only the opportunity to rectify some part of the design that was not found satisfactory. As we mentioned in the case of Toyota, the processes are previously tested and monitored by representatives of each department involved in the process,in order for them to help with their ideas and daily knowledge of the process and as the main affected (benefited) by the changes.
6. Ability to use these models on an ongoing basis. Reengineering designs and models are obviously used to support future efforts in this field. If a total quality initiative is implemented, the company will need to change its processes on a common basis when the improvements are implemented. And a second and less obvious application of the designs is to support daily business operations, since they contain information that can be useful in making operational decisions, in training, and in controlling job performance.
7. Ability to associate all the administrative parameters of the company with each other. To begin the reengineering process, quick access to all the information related to the processes to be worked on, to the company's plans, the information systems used (which allows feedback to the process with vital information, in order to monitor its effectiveness), technology, organizational charts, company mission statement and job description, as well as many other details of company management and work organization. As important as the data for new projects, is the relationship between these aspects. It is important to see each department as an integral part of the process and the company and not as an independent entity.
Some progressive companies have found that their response to the challenge of competition must go beyond cutting budgets. They have understood that changes must be efficient and that they must not only lower costs, but must also improve quality. By selecting specific products or services, they have reviewed their business processes in different directions to improve their competitive positions.
For example, when Chrysler decided to build its experimental Viper car as a car on its production line, it gave a new look to its product development cycle. He wanted to apply the reengineering process so that less time and expense were needed to bring a new vehicle to market.The success of the Viper project, from a business point of view, was much more important from the point of view of the reengineering process. than from a new product point of view. Chrysler proved that it could integrate each of its departments and work as one, restructuring its processes, in order to put a new vehicle on the market, with the highest standards of quality, innovation and engineering, and in less time. Obviously this project was not motivated by technology.The truth is that technology was used to support the process, but the redesign of the process began first and technological considerations came later. Since then, Chrysler has applied these strategies to the production of each new vehicle, which is why it is one of the companies with the largest number of products and the most innovative designs.
5. Reengineering movement towards a new paradigm
Reengineering applied to business processes is not in itself a paradigm. She, however, requires a new paradigm to be effective: the desire to continually question everything. Although reengineering is fairly recent, in general, attempts to streamline business operations and improve their efficiency has been common for a long time. For example, efficiency experts who did time and motion studies during the first half of the 20th century were sometimes mocked, this did not prevent them from frequently producing effective results, and their work leading to the study and formal practice of industrial engineering. The movement to support the computer in the 1960s also sought to improve productivity and efficiency.Both were believed to reduce costs and lead to improved customer service. A common view of the paradigm shift is that business paradigms have shifted due to the recent popularity of total quality management.
The basic assumptions of the businesses do not change due to the introduction of total quality management, although they are usually strengthened. This quality method is new and highly effective, however, it is intended for performance scaling rather than careful review of basic assumptions and processes. While reengineering and total quality management are on the right track, they still have a long way to go.
The sweeping changes that have occurred over the past 15 years have taken the business world by surprise. It has always been difficult to distinguish between a new long-term trend and short-term cycles. For example, the lack of true growth in established companies was not seen as a real trend until very recently and therefore these businesses are not sure about the extent of the global changes that are taking place.
It is clear that many companies do not know how to react to global competition. The opportunity and the challenge, even when recognized, do not produce an immediate reaction in most companies. Few have made moves to take advantage of the situation and have made efforts to expand their markets. Cooperation is desirable, but it will take longer than allowed by the new business climate. To a large extent the effort of the business executive, in reaction against the immediate symptoms of the times, has been directed toward short-term maneuvers, usually financial. Companies seem to be waiting for indefinite external events or perhaps it just takes time to adjust attitudes.
At present, however, although the will to change exists, the methodology required to do so is not well known. Companies must learn to change themselves in a more effective way than in the past, it is the only factor that seems obvious in the future.
One of the most important aspects in the current position of business is the lack of information on which the change is decided. The information needed in change projects is oriented towards how the company actually works and what the market will be in the future. Internal information appears to be the most difficult to obtain. For example when examining the options for a given product, or for the company itself, it is often found that the costs are not as well allocated as had been assumed and that the true costs of production cannot be easily defined at the level detailed. Without good information and figures related to the current operations of the company, it is impossible to predict the impact of change projects.The data sources for the decision of the change project are not well developed in most of the companies, even few have defined their work processes. Accounting and production data provide different views of the company, and it would be helpful for companies to begin gathering process data as a routine activity.
6. Expectations of reengineering
Successful reengineering occurs progressively over time. Each progressive development requires supporting information, which must be gathered separately when there is no basic positioning guide. Promoting reengineering and controlling expectations are similar activities to marketing a new product. Change teams must understand the basic expectations of the potential client, then create acceptable strategies and subsequently sell the result, this is not a one-time sale, everything must be sold on a continuity basis because given the magnitude of the reengineering efforts, people easily lose sight of objectives.
Some benefits of reengineering will be tangible, others will not. Reducing the amount of movements that a worker makes in the Toyota line of work cannot be taken only as how much money he can save, but in the comfort with which the worker will carry out his work, and the consequence that he will get less sick or can working for more years, but this is not entirely tangible for managers.
As in cost benefit comparisons, benefits can be divided into two categories: those that can be quantified (such as reduced waste or time) and those that cannot. However, intangible benefits can have the greatest long-term impact. For example, improving customer support will have tangible parts and intangible parts, similarly improve product reliability, and further increase company good name and customer loyalty.
7. Reengineering applied to human resources
The human factor cannot be secondary to any other factor in a company. The success of a company will depend on the performance of its workers, no matter the size of that workforce. Reengineering must go live if the business is based on the level of performance. The reengineering process can even be more dependent on individual performance if it is designed to achieve a more efficient process.
A wide spectrum of personnel issues can arise from the reengineering project: the need to recruit personnel, train them, relocate them to work, transfer them, restructure parts of the organization, retire them or advise them. The importance of human resources for the success of the reengineering project means that this area should receive attention from the very beginning of any project. The participation of the personnel department can help to identify problems while having the time to solve them, in addition, it provides information related to the personnel plant, obviously it is highly desirable that the new processes are compatible with the corporate personnel policies.
Reengineering is a good opportunity to try team organization. Their techniques do not require that the teams carry out the work processes proposed under this methodology, although the change projects will be carried out by them. The team organization will have several possible alternatives when the reengineering project enters its implementation phase. The first will use the change team as a seedbed and direct employees to that team for the process of implementation and then institution of a traditional hierarchical structure. The second alternative will use the implementation team as a working team, maintaining its organization and appointing a permanent director. The members will act as a team, but the director will assign the work,you will stay motivated and make decisions.
In terms of reengineering, team approaches will need the same process design work, however, high-performing teams will require slightly less individual work definition.
8. Conclusion
Reengineering is the fundamental and last tool of change. She directs the business process of an organization. In its current state, it helps to adjust business from old paradigms to a new one of service and information. In the future it will continue to move the business.
Reengineering uses continuous change to achieve competitive advantage. The opportunities of organizations will continue to grow if one takes into account that one way or another, most of the profit of these organizations will come to business without much effort. However, the businesses that will win the most will be those that can assimilate the latest technology and take advantage of the opportunities, thus preparing themselves to change.
9. Bibliography
- COOK, Victor. "Readings in Marketing Strategy". 2nd edition. The Scientific Press LEVITT, Theodore. "Creative Marketing". Continental Publishing Company. Mexico. 1986. 191 pp. LEVITT, Theodore. "Innovation in Marketing". McGraw Hill. 203 p. MORRIS, Daniel. "Reengineering: How to apply it successfully in business". Mc Graw Hill, 1994, 282 pages PRIDE, William. "Marketing: Concept and strategies". 9th edition. McGraw Hill. 1997. 877 pp. TROUT, Jack. "Positioning". Mc Graw Hill, 1986. 263 pages.WILSON, Bud. Planning and Commercial Product Development ». Herrero Hermanos, Mexico. 217 p.
