4.3
BUSINESS PROCESSREENGINEERING
Inspired by Cheryl Currid, Michael Hammer, James Champy, and Steven Stanton.Reengineering advocates have lauded successes including American Express “...reducing its
annual costs by $1 billion ...”; AT&T turning a “...nine-figure loss to a nine-figure profit...”; a
financial firm reducing its new customer processing time from 6 to 14 days, to a few hours;
and a life insurance company reducing the application process from a three-week period to less
than one hour. On the other hand, Michael Hammer concedes that many organizations under-
took reengineering efforts “...only to abandon them with little or no positive results.”
However, like all the leadership tools, reengineering, in the proper circumstances, can achieve
remarkable results; improperly used, it can be a very expensive failure.
Some organizations use phrases like “business process design” or “process redesign” instead
of reengineering. However, the official definition of reengineering, according to Michael
Hammer and James Champy, is “the fundamental rethinking and radical redesignof business
processesto bring about dramaticimprovements in performance.” (Italics are Hammer’s.) The
next section highlights core processes that leaders need to consider if they intend to undertake
business process reengineering.
THE CORE PROCESS OF PROCESS REENGINEERING
Four steps or questions are at the core of the reengineering process.
THE PRINCIPLES OF PROCESS REENGINEERING
The reengineering principles listed here have a profound effect on the leadership culture with-
in an organization. They move it from top-down control to a more involving and democratic
culture. Ironically, although castigated for its antihumane aspects, many reengineering failures
are actually due to leaders being unwilling to give up control (i.e., this work often becomes
bogged down when people in power have strong vested interests in the status quo).
108 SECTION 4 TOOLS FORDESIGNINGPRODUCTIVEPROCESSES ANDORGANIZATIONS
Identify the high-
level purpose and
goals for the process.What is the current
process aimed at
achieving?Develop a clear map
of what we currently
do.How can we make
the changeover to
the new, more
efficient, and
sustainable process?Analyze how the
current process
accomplishes these
purposes and goals.Implement the
changes required for
the improved
business process.Find, or more often invent
with the use of information
technology, more effective
and efficient ways of
accomplishing these goals.➟ ➟ ➟
How could we accomplish
these goals with the least
effort, cost, and time? Where
can we optimize the process?