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Reengineering

From Academic Kids

Reengineering (or re-engineering)is the radical redesign of an organization's processes, especially its business processes. Rather than organizing a firm into functional specialties (like production, accounting, marketing, etc.) and looking at the tasks that each function performs, we should be looking at complete processes from materials acquisition, to production, to marketing and distribution. The firm should be re-engineered into a series of processes.

The main proponents of re-engineering were Michael Hammer and James Champy. In a series of books including Reengineering the Corporation, Reengineering Management, and The Agenda, they argue that far too much time is wasted passing-on tasks from one department to another. They claim that it is far more efficient to appoint a team who are responsible for all the tasks in the process. In The Agenda they extend the argument to include suppliers, distributors, and other business partners.

Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management systems all owe a debt to re-engineering theory.

Criticisms of re-engineering

Reengineering has earned bad reputation because such projects have often resulted in massive layoffs. In spite of the hype surrounding its introduction (partially due to the fact that the authors of Reengineering the Corporation reportedly bought huge numbers of copies to promote it to the top of bestseller lists), reengineering has not lived up to its expectations.

The main reasons seem to be that:

  • reengineering assumes that the factor that limits organization's performance is the ineffectiveness of its processes (which may or may not be true) and offers no means of validating that assumption
  • reengineering assumes the need to start the process of performance improvement with a "clean slate", i.e. totally disregard the status quo
  • reengineering does not provide an effective way to focus improvement efforts on the organization's constraint (as defined by Eliyahu M. Goldratt in his theory of constraints).

See also


References

  • Champy, J. (1995) Reengineering Management, Harper Business Books, New York, 1995.
  • Hammer, M. (1990)"Reengineering Work: Don't Automate, Obliterate", Harvard Business Review, July/Aug 1990, pp. 104-112.
  • Hammer, M. and Stanton, S. (1995) "The Reengineering Revolution", Harper Collins, London, 1995.
  • "Reengineering Reviewed", (1994) The Economist, 2 July 1994, pp 66.
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