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In today·s ever-changing world, the only thing that doesn·t change is ¶change·
itself. In a world increasingly driven by the three Cs: Customer, Competition and
Change, companies are on the lookout for new solutions for their business
problems. Recently, some of the more successful business corporations in the
world seem to have hit upon an incredible solution: V


  



 (BPR). Some of the recent headlines in the popular press read,
^

 
           
 


 
      
 
    
 

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 "#$$  "% .µ The reason behind these
success stories: Business Process Reengineering!

Thos paper provides an insight to the origin of the entire concept and also the
major scenarios affiliated to the remarkable concept. Success history of brand
leaders like General Electric and Godrej form the major part of this paper which
will help to proclaim the relevance of such an approach in the contemporary
evolving business environment.

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 is, in computer science and
management, an approach aiming at improvements by means of elevating
efficiency and effectiveness of the business process that exist within and across
organizations. The key to BPR is for organizations to look at their business
processes from a "clean slate" perspective and determine how they can best
construct these processes to improve how they conduct business.

Business process reengineering is also known as BPR, Business Process

Redesign, Business Transformation, or Business Process Change Management.
Reengineering is a fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in cost, quality, speed, and service.
BPR combines a strategy of promoting business innovation with a strategy of
making major improvements to business processes so that a company can
become a much stronger and more successful competitor in the marketplace.

The main proponents of reengineering were Michael Hammer and James A.

Champy. In a series of books including ›


    


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, 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  &
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.

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uithin the framework of this basic assessment of mission and goals,
reengineering focuses on the organization's business processes --the steps and
procedures that govern how resources are used to create products and services
that meet the needs of particular customers or markets. As a structured ordering
of work steps across time and place, a business process can be decomposed into
specific activities, measured, modeled, and improved. It can also be completely
redesigned or eliminate d altogether. Reengineering identifies, analyzes, and
redesigns an organization's core business processes with the aim of achieving
dramatic improvements in critical performance measures, such as cost, quality,
service, and speed.

Reengineering recognizes that an organization's business processes are usually

fragmented into sub-processes and tasks that are carried out by several
specialized functional areas within the organization. ften, no one is responsible
for the overall performance of the entire process. Reengineering maintains that
optimizing the performance of sub-processes can result in some benefits, but
cannot yield dramatic improvements if the process itself is fundamentally
inefficient and outmoded. For that reason, reengineering focuses on redesigning
the process as a whole in order to achieve the greatest possible benefits to the
organization and their customers. This drive for realizing dramatic
improvements by fundamentally rethinking how the organization's work should
be done distinguishes reengineering from process improvement efforts that focus
on functional or incremental improvement.

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In 1990, Michael Hammer, a former professor of computer science at the
Massachusetts Institute of Technology (MIT), published an article in the
Ñ 
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managers is to obliterate non-value adding work, rather than using technology
for automating it. This statement implicitly accused managers of having focused
on the wrong issues, namely that technology in general, and more specifically
information technology, has been used primarily for automating existing
processes rather than using it as an enabler for making non-value adding work
obsolete.

Hammer's claim was simple: Most of the work being done does not add any value
for customers, and this work should be removed, not accelerated through
automation. Instead, companies should reconsider their processes in order to
maximize customer value, while minimizing the consumption of resources
required for delivering their product or service. A similar idea was advocated by
Thomas H. avenport and J. Short in 1990, at that time a member of the Ernst
& Young research center, in a paper published in the  
 


›  the same year as Hammer published his paper.

This idea, to unbiasedly review a company·s business processes, was rapidly

adopted by a huge number of firms, which were striving for renewed
competitiveness, which they had lost due to the market entrance of foreign
competitors, their inability to satisfy customer needs, and their insufficient cost
structure. Even well established management thinkers, such as Peter rucker
and Tom Peters, were accepting and advocating BPR as a new tool for achieving
success in a dynamic world. uring the following years, a fast growing number of
publications, books as well as journal articles, was dedicated to BPR, and many
consulting firms embarked on this trend and developed BPR methods. However,
the critics were fast to claim that BPR was a way to dehumanize the work place,
increase managerial control, and to justify downsizing, i.e. major reductions of
the work force, and a rebirth of Taylorism under a different label.

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åespite this critique, reengineering was adopted at an accelerating pace and by
1993, as many as 65% of the Fortune 500 companies claimed to either have
initiated reengineering efforts, or to have plans to do so. This trend was fuelled
by the fast adoption of BPR by the consulting industry, but also by the study
  
  , conducted by MIT, that showed how companies in many US
industries had lagged behind their foreign counterparts in terms of
competitiveness, time-to-market and productivity.

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uith the publication of critiques in 1995 and 1996 by some of the early BPR
proponents, coupled with abuses and misuses of the concept by others, the
reengineering fervour in the U.S. began to wane. Since then, considering
business processes as a starting point for business analysis and redesign has
become a widely accepted approach and is a standard part of the change
methodology portfolio, but is typically performed in a less radical way as
originally proposed.

More recently, the concept of 
    

  has
gained major attention in the corporate world and can be considered as a
successor to the BPR wave of the 1990s, as it is evenly driven by a striving for
process efficiency supported by information technology. Equivalently to the
critique brought forward against BPR, BPM is now accused of focusing on
technology and disregarding the people aspects of change.

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åifferent definitions can be found. This section contains the definition provided
in notable publications in the field:

Úc "... the fundamental rethinking and radical redesign of business processes

to achieve dramatic improvements in critical contemporary measures of
performance, such as cost, quality, service, and speed." c 

 
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Úc "...encompasses the envisioning of new work strategies, the actual process
design activity, and the implementation of the change in all its complex
technological, human, and organizational dimensions."  
 
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Additionally, åavenport points out the major difference between BPR and o ther
approaches to organization development (å), especially the continuous
improvement or TQM movement, when he states: "Today firms must seek not
fractional, but multiplicative levels of improvement ² 10x rather than 10%."
Finally, Johansson provide a description of BPR relative to other process-
oriented views, such as Total Quality Management (TQM) and Just-in-time
(JIT), and state:

Úc "Business Process Reengineering, although a close relative, seeks radical

rather than merely continuous improvement. It escalates the efforts of JIT
and TQM to make process orientation a strategic tool and a core
competence of the organization. BPR concentrates on core business
processes, and uses the specific techniques within the JIT and TQM
µtoolboxesµ as enablers, while broadening the process vision."

In order to achieve the major improvements BPR is seeking for, the change of
structural organizational variables, and other ways of managing and performing
work is often considered as being insufficient. For being able to reap the
achievable benefits fully, the use of information technology (IT) is conceived as a
major contributing factor. uhile IT traditionally has been used for supporting
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efficiency, it now plays a role as enabler of new organizational forms, and
patterns of collaboration within and between organizations.

BPR derives its existence from different disciplines, and four major areas can be
identified as being subjected to change in BPR - organization, technology,
strategy, and people - where a process view is used as common framework for
considering these dimensions. The approach can be graphically depicted by a
modification of "Leavitt·s diamond".

Business strategy is the primary driver of BPR initiatives and the other
dimensions are governed by strategy's encompassing role. The organization
dimension reflects the structural elements of the company, such as hierarchical
levels, the composition of organizational units, and the distribution of work
between them. Technology is concerned with the use of computer systems and
other forms of communication technology in the business. In BPR, information
technology is generally considered as playing a role as enabler of new forms of
organizing and collaborating, rather than supporting existing business functions.
The people / human resources dimension deals with aspects such as education,
training, motivation and reward systems. The concept of business processes -
interrelated activities aiming at creating a value added output to a customer - is
the basic underlying idea of BPR. These processes are characterized by a number
of attributes: Process ownership, customer focus, value adding, and cross-
functionality.

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>c Incremental Change >c Radical Transformation

>c People Focus >c People & Technology Focus
>c Low Investment >c High Investment
>c Improve Existing >c Rebuild
>c uork Unit åriven >c Champion åriven

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>c A specific ordering of work activities across time and space, with a
beginning, an end, and clearly identified inputs and outputs: a structure
for action.

(åavenport, 1993)

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>c A group of logically related tasks that use the firm's resources to provide
customer-oriented results in support of the organization's objectives

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Mass market v. a ´market of oneµ

Backward integration

Informed consumers

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More and different kinds

Big is not better

Technology changes the nature of competition.

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Èc Îrganization: Breaking down old corporate barriers, allowing critical

information to be shared instantly.
Èc Îperations: Using IT to shrink cycle times, reduce defects, cut waste,
streamline ordering and communications.
Èc Staffing: Eliminating management layers and cutting employment levels;
creating ´virtualµ offices.
Èc New Products: Collapsing development cycles.
Èc Customer Relations: Tapping into companywide databases to solve
callers· demands instantly

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Èc Streamline ² remove waste, consolidate
Èc Lose uait ² squeeze out delays
Èc Îrchestrate ² let the most able enterprise execute, outsource
Èc Mass Customize ² any time, any place, any way
Èc Synchronize ² both the physical and virtual parts of the process, real time
processing of data
Èc åigitize and Propagate ² capture information digitally at the source and
propagate it through the process
Èc Mitrify ² provide glass like visibility of the process
Èc Sensitize ² fit the process with sensors and feedback loops for prompt
action
Èc Analyze and Synthesize ² generate added value by enhancing the process,
constant improvement and iteration.

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Èc Several jobs are combined into one.
÷c Compress the organization horizontally and vertically.
÷c Replace several task specialists with one ¶case worker.·
÷c Group task specialists into case teams.

Benefits: improves efficiency, reduces errors and administrative overhead, and

increases accountability.

Èc uorkers make decisions.

÷c Compress organization vertically to reduce chain of command.
÷c Tie decision making to getting the work done: Those who do the
work make the decisions.
÷c Benefits: reduces delays, lowers overhead, provides better customer
response, empowers workers.
Èc The process steps are performed in a natural order.
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÷c Perform tasks concurrently to reduce process cycle time.
Èc Processes have multiple versions.
÷c Standardization is dead: Îne size does NÎT fit all.
÷c Create multiple versions of the same process, each tuned to meet
the needs of different inputs, situations, or markets.
÷c Benefits: eliminates complexity and exceptions that must be
incorporated in a standardized process.
Èc uork is performed where it makes the most sense. (Manufacturing
Example)
÷c è100 in internal costs to purchase è3 worth of batteries or
supplies!!!
÷c Accountants buy their own pencils; customers repair their own
equipment; spare parts are stored at the customer site.
÷c Benefits: eliminates administrative costs, reduces process cycle
time, improves customer service.
Èc Checks and controls are reduced. (Tricky)
÷c Checks and controls don·t add value; use them only when they make
economic sense.
÷c Tolerate limited, modest abuse to reduce costs of prevention.
÷c Provide effective systems for detecting abuse, e.g., audits.
Èc Reconciliation is minimized. (Carefully)
÷c Reconciliation doesn·t add value.
÷c Benefits: reduce number of external contact points for each process,
thereby reducing the likelihood of inconsistent data.
÷c Ford·s accounts payable process: eliminated vendor·s invoice.
÷c ualMart·s PÎ-less purchasing system.
Èc A case manager provides a single point of contact. (Loans or other service)
÷c Acts as a buffer between a complex, multistep/multiperson process
and the customer.
Èc Accepts responsibility as though s/he were performing the
whole process.
Èc Requires access to process-related data and effective
communication with process workers.
Èc Hybrid centralized/decentralized operations are prevalent.
÷c Reap the advantages of both operating modes!
Èc Îperate as though units were autonomous (decentralized),
yet enjoy the economies of scale that centralization creates.
Èc Notebook equipped sales force; software imposes controls to
prevent unreasonable quotes or promised delivery dates.

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Balanced Improvements

b.c Process improvements must be realistic

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>c Îrganizational Culture

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Process improvements must relate to the needs of the organization and be
relevant to the end-customers to which they are designed to serve


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Information technology (IT) has historically played an important role in the
reengineering concept. It is considered by some as a major enabler for new forms
of working and collaborating within an organization and across organizational
borders.

Early BPR literature identified several so called 

   
   that
were supposed to challenge traditional wisdom about how work should be
performed.

Úc Shared databases, making information available at many places

Úc Expert systems, allowing generalists to perform specialist tasks
Úc Telecommunication networks, allowing organizations to be centralized and
decentralized at the same time
Úc åecision-support tools, allowing decision-making to be a part of
everybody's job
Úc uireless data communication and portable computers, allowing field
personnel to work office independent
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Úc Automatic identification and tracking, allowing things to tell where they
are, instead of requiring to be found
Úc High performance computing, allowing on-the-fly planning and revisioning

In the mid 1990s, especially workflow management systems were considered as a

significant contributor to improved process efficiency. Also ERP (Enterprise
Resource Planning) vendors, such as SAP, Jå Edwards, Îracle, PeopleSoft,
positioned their solutions as vehicles for business process redesign and
improvement.

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Although the labels and steps differ slightly, the early methodologies that were
rooted in IT-centric BPR solutions share many of the same basic principles and
elements. The following outline is one such model, based on the PRLC (Process
Reengineering Life Cycle) approach developed by Guha.

Simplified schematic outline of using a business process approach:

1. Structural organization with functional units
2. Introduction of New Product åevelopment as cross-functional process
3. Re-structuring and streamlining activities, removal of non-value adding tasks

A.c Envision new processes

ßc Secure management support

ßc Identify reengineering opportunities
ßc Identify enabling technologies
ßc Align with corporate strategy

B.c Initiating change

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ßc Îutline performance goals

C.c Process diagnosis

ßc åescribe existing processes

ßc Uncover pathologies in existing processes

å.c Process redesign

ßc åevelop alternative process scenarios

ßc åevelop new process design
ßc åesign HR architecture
ßc Select IT platform
ßc åevelop overall blueprint and gather feedback

E.c Reconstruction

ßc åevelop/install IT solution
ßc Establish process changes

F.c Process monitoring

ßc Performance measurement, including time, quality, cost, IT

performance
ßc Link to continuous improvement

Benefiting from lessons learned from the early adopters, some BPR practitioners
advocated a change in emphasis to a customer -centric, as opposed to an IT-
centric, methodology. Îne such methodology, that also incorporated a Risk and
Impact Assessment to account for the impact that BPR can have on jobs and
operations, was described by Lon Roberts (1994). Roberts also stressed the use of
change management tools to proactively address resistance to change³a factor
linked to the demise of many reengineering initiatives that looked good on the
drawing board.

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>c Select Core Processes
>c Understand Customer Needs
>c åon·t Assume Anything
>c Select Correct Path for Change
>c Remember Assumptions can Hide Failures
>c Competition and Choice to Go Elsewhere
>c Ask - Questionnaires, Meetings, Focus Groups

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>c Appoint BPR Champion

>c Identify Process Îwners
>c Establish Executive Improvement Team
>c Provide Training to Executive Team

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>c Capacity to view the organization as a whole

>c Ability to focus on end-customers
>c Ability to challenge fundamental assumptions
>c Courage to deliver and venture into unknown areas
>c Ability to assume individual and collective responsibility
>c Employ ¶Bridge Builders·

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>c Used to generate internal capacity

>c Appropriate when a implementation is needed quickly
>c Ensure that adequate consultation is sought from staff so that the
initiative is organization-led and not consultant-driven
>c Control should never be handed over to the consultant

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>c åevelop a Process Îverview
>c Clearly define the process
•c Mission
•c Scope
•c Boundaries
>c Set business and customer measurements
>c Understand customers expectations from the process (staff including
process team)
>c Clearly Identify Improvement Îpportunities
>c Quality
>c Rework
>c åocument the Process
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>c Malue åata
>c Carefully resolve any inconsistencies
>c Existing -- New Process
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>c Communicate with all employees so that they are aware of the vision of
the future
>c Always provide information on the progress of the BPR initiative - good
and bad.
>c åemonstrate assurance that the BPR initiative is both necessary and
properly managed
>c Promote individual development by indicating options that are available
>c Indicate actions required and those responsible
>c Tackle any actions that need resolution
>c åirect communication to reinforce new patterns of desired behavior

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>c åevelop an Improvement Plan

>c Appoint Process Îwners
>c Simplify the Process to Reduce Process Time
>c Remove any Bureaucracy that may hinder implementation
>c Remove no-value-added activities
>c Standardize Process and Automate uhere Possible
>c Up-grade Equipment
>c Plan/schedule the changes
>c Construct in-house metrics and targets
>c Introduce and firmly establish a feedback system
>c Audit

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>c Qualify/certify the process
>c Perform periodic qualification reviews
>c åefine and eliminate process problems
>c Evaluate the change impact on the business and on customers
>c Benchmark the process
>c Provide advanced team training

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The term Ô
(R , Japanese for "improvement") is a Japanese word adopted

into English referring to a philosophy or practices focusing on continuous
improvement in manufacturing activities, business activities in general, and
even life in general, depending on interpretation and usage. uhen used in the
business sense and applied to the workplace, kaizen typically refers to activities
that continually improve all functions of a business, from manufacturing to
management and from the CEÎ to the assembly line workers. By improving
standardized activities and processes, kaizen aims to eliminate waste. Kaizen
was first implemented in several Japanese businesses during the country's
recovery after uorld uar II and has since spread to businesses throughout the
world.

The Japanese word "kaizen" means simply "improvement, " with no inherent
meaning of either "continuous" or "Japanese philosophy"; the word refers to any
improvement, one-time or continuous, large or small, in the same sense as the
mundane English word "improvement". However, given the common practice in
Japan of labeling industrial or business improvement techniques with the word
"kaizen" (for lack of a specific Japanese word meaning "continuous improvement"
or "philosophy of improvement"), especially in the case of oft-emulated practices
spearheaded by Toyota, the word 
- in English is typically applied to
measures for implementing continuous improvement, or even taken to mean a
"Japanese philosophy" thereof. The discussion below focuses on such
interpretations of the word, as frequently used in the context of modern
management discussions.

Kaizen is a daily activity, the purpose of which goes beyond simple productivity
improvement. It is also a process that, when done correctly, humanizes the
workplace, eliminates overly hard work ("muri"), and teaches people how to
perform experiments on their work using the scientific method and how to learn
to spot and eliminate waste in business processes. The philosophy can be defined

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as bringing back the thought process into the automated production environment
dominated by repetitive tasks that traditionally required little mental
participation from the employees.

People at all levels of an organization can participate in kaizen, from the CEÎ
down, as well as external stakeholders when applicable. The format for kaizen
can be individual, suggestion system, small group, or large group. At Toyota, it is
usually a local improvement within a workstation or local area and involves a
small group in improving their own work environment and productivity. This
group is often guided through the kaizen process by a line supervisor; sometimes
this is the line supervisor's key role. Kaizen on a broad, cross-departmental scale
in companies, generates total quality management, and frees human efforts
through improving productivity using machines and computing power. 7
 
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uhile kaizen (at Toyota) usually delivers small improvements, the culture of
continual aligned small improvements and standardization yields large results
in the form of compound productivity improvement. This philosophy differs from
the "command and control" improvement programs of the mid-twentieth century.
Kaizen methodology includes making changes and monitoring results, then
adjusting. Large-scale pre-planning and extensive project scheduling are
replaced by smaller experiments, which can be rapidly adapted as new
improvements are suggested.

In modern usage, a focused kaizen that is designed to address a particular issue

over the course of a week is referred to as a "kaizen blitz" or "kaizen event".
These are limited in scope, and issues that arise from them are typically used in
later blitzes.

The „    
  is known for kaizen, where all line personnel
are expected to stop their moving production line in case of any abnormality and,
along with their supervisor, suggest an improvement to resolve the abnormality
which may initiate a kaizen.

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The cycle of kaizen activity can be defined as:

Úc Standardize an operation
Úc Measure the standardized operation (find cycle time and amount of in-
process inventory)
Úc Gauge measurements against requirements
Úc Innovate to meet requirements and increase productivity
Úc Standardize the new, improved operations
Úc Continue cycle



This is also known as the Shewhart cycle, åeming cycle, or PåCA.

Masaaki Imai made the term famous in his book 
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Apart from business applications of the method, both Anthony Robbins and
Robert Maurer have popularized the kaizen principles into personal development
principles. The basis of Robbins' CANI (Constant and Never-Ending
Improvement) method in kaizen is discussed in his Lessons in Mastery series.

In their book „  „   ! " # Ô, Brijesh Rawat, Jeffrey Liker, and

åavid Meier discuss the kaizen blitz and kaizen burst (or kaizen event)
approaches to continuous improvement. A kaizen blitz, or rapid improvement, is
a focused activity on a particular process or activity. The basic concept is to
identify and quickly remove waste. Another approach is that of kaizen burst, a
specific kaizen activity on a particular process in the value stream.

Key elements of kaizen are quality, effort, involvement of all employees,

willingness to change, and communication.

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Úc Teamwork
Úc Personal discipline
Úc Improved morale
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Úc Suggestions for improvement

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Úc Elimination of waste (muda) and incorporation of efficiency

Úc The kaizen five - S framework for good housekeeping
•c Seiri - tidiness

•c Seiton - orderliness

•c Seiso - cleanliness

•c Seiketsu - standardized clean-up

•c Shitsuke - discipline

Úc Standardization

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Kaizen is primarily a reactive process where you "check" to see if anything is

wrong, then go about fixing it. uhile this works for lower level processes, it must
be advanced to include a creative element where one actively looks for ways of
improving - the key being that the worker needs to know what is important to
the company to improve. There should also be room for cases where a worker
makes a recommendation that doesn't fit the mold of the company's target
improvements. Many new companies have started due to workers who saw a
means of quantum improvement which their original employer failed to
recognize despite being highlighted by the worker.

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Èc Fear of change
Èc Emphasis on Team work
Èc Miewing ´Big Pictureµ rather than a job or step in a process
Èc IS designers to act as facilitators

 





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Èc Quick deployment of cost effective technologies
Èc Resistance to Change from Îld technology; uhy change when ´NÎTµ
Broke
Èc åealing with legacy systems
Èc Changes in Information Systems Architectures.






Èc Top Management Champion

Èc High visibility and High Expectations
Èc Structural and cultural changes Problems

Moving åecision Making and Control points; may lead to replacement of

organizational units

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BPR, if implemented properly, can give huge returns. BPR has helped giants like
Procter and Gamble Corporation and General Motors Corporation succeed after
financial drawbacks due to competition. It helped American Airlines somewhat
get back on track from the bad debt that is currently haunting their business
practice. BPR is about the proper method of implementation.

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General Motors Corporation implemented a 3 -year plan to consolidate their
multiple desktop systems into one. It is known internally as "Consistent Îffice
Environment" (Booker, 1994). This reengineering process involved replacing the
numerous brands of desktop systems, network operating systems and application
development tools into a more manageable number of vendors and technology
platforms. According to åonald G. Hedeen, director of desktops and deployment
at GM and manager of the upgrade program, he says that the process "lays the
foundation for the implementation of a common business communication
strategy across General Motors." Lotus åevelopment Corporation and Hewlett-
Packard åevelopment Company, formerly Compaq Computer Corporation,
received the single largest non-government sales ever from General Motors
Corporation. GM also planned to use Novell Netuare as a security client,
Microsoft Îffice and Hewlett-Packard printers. According to åonald G. Hedeen,
this saved GM 10% to 25% on support costs, 3% to 5% on hardware, 40% to 60%
on software licensing fees, and increased efficiency by overcoming
incompatibility issues by using just one platform across the entire company.

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Michael åell is the founder and CEÎ of åELL Incorporated, which has been in
business since 1983 and has been the world's fastest growing major PC
Company. Michael åell's idea of a successful business is to keep the smallest
inventory possible by having a direct link with the manufacturer. uhen a
customer places an order, the custom parts requested by the customer are

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automatically sent to the manufacturer for shipment. This reduces the cost for
inventory tracking and massive warehouse maintenance. åell's website is noted
for bringing in nearly "è10 million each day in sales."(Smith, 1999). Michael åell
mentions:

"If you have a good strategy with sound economics, the real challenge is to get
people excited about what you're doing. A lot of businesses get off track because
they don't communicate an excitement about being part of a winning team that
can achieve big goals. If a company can't motivate its people and it doesn't have a
clear compass, it will drift."

åell's stocks have been ranked as the top stock for the decade of the 1990s, when
it had a return of 57,282% (Knestout and Ramage, 1999). Michael åell is now
concentrating more on customer service than selling computers since the PC
market price has pretty much equalized. Michael åell notes:

"The new frontier in our industry is service, which is a much greater

differentiator when price has been equalized. In our industry, there's been a
pretty huge gap between what customers want in service and what they can get,
so they've come to expect mediocre service. ue may be the best in this area, but
we can still improve quite a bit³in the quality of the product, the availability of
parts, service and delivery time."

Michael åell understands the concept of BPR and really recognizes where and
when to reengineer his business.

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Ford reengineered their business and manufacturing process from just
manufacturing cars to manufacturing quality cars, where the number one goal is
quality. This helped Ford save millions on recalls and warranty repairs. Ford has
accomplished this goal by incorporating barcodes on all their parts and scanners
to scan for any missing parts in a completed car coming off of the assembly line.
This helped them guarantee a safe and quality car. They have also implemented
Moice-over-IP (MoIP) to reduce the cost of having meetings between the branches.
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A multi-billion dollar corporation like Procter and Gamble Corporation, which
carries 300 brands and growing really has a strong grasp in re -engineering.
Procter and Gamble Corporation's chief technology officer, G. Gil Cloyd, explains
how a company which carries multiple brands has to contend with the "classic
innovator's dilemma ³ most innovations fail, but companies that don't innovate
die. His solution, innovating innovation..." (Teresko, 2004). Cloyd has helped a
company like Procter and Gamble grow to è5.1 billion by the fiscal year of 2004.
According to Cloyd's scorecard, he was able to raise the volume by 17%, the
organic volume by 10%, sales are at è51.4 billion up by 19%, with organic sales
up 8%, earnings are at è6.5 billion up 25% and share earnings up 25%. Procter
and Gamble also has a free cash flow of è7.3 billion or 113% of earnings,
dividends up 13% annually with a total shareholder return of 24%. Cloyd states:
"The challenge we face is the competitive need for a very rapid pace of
innovation. In the consumer products world, we estimate that the required pace
of innovation has double in the last three years. åigital technology is very
important in helping us to learn faster." G. Gil Cloyd also predicts, in the near
future, "as much as 90% of P&G's R&å will be done in a virtual world with the
remainder being physical validation of results and options." c

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Reengineering has earned a bad reputation because such projects have often
resulted in massive layoffs. This reputation is not altogether unwarranted, since
companies have often downsized under the banner of reengineering. Further,
reengineering has not always lived up to its expectations. The main reasons
seem to be that:

Úc Reengineering assumes that the factor that limits an organization's

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

There was considerable hype surrounding the introduction of Reengineering the

Corporation (partially due to the fact that the authors of the book reportedly
bought numbers of copies to promote it to the top of bestseller lists).

Abrahamson (1996) showed that fashionable management terms tend to follow a

lifecycle, which for Reengineering peaked between 1993 and 1996 (Ponzi and
Koenig 2002). They argue that Reengineering was in fact nothing new (as e.g.
when Henry Ford implemented the assembly line in 1908, he was in fact
reengineering, radically changing the way of thinking in an organization).
åubois (2002) highlights the value of signalling terms as Reengineering, giving it
a name, and stimulating it. At the same there can be a danger in usage of such
fashionable concepts as mere ammunition to implement particular reform. Read
Article by Faraz Rafique. The most frequent and harsh critique against BPR
concerns the strict focus on efficiency and technology and the disregard of people
in the organization that is subjected to a reengineering initiative. Mery oft en, the

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label BPR was used for major workforce reductions. Thomas åavenport, an early
BPR proponent, stated that:

"uhen I wrote about "business process redesign" in 1990, I explicitly said that
using it for cost reduction alone was not a sensible goal. And consultants Michael
Hammer and James Champy, the two names most closely associated with
reengineering, have insisted all along that layoffs shouldn't be the point. But the
fact is, once out of the bottle, the reengineering genie quickly turned ugly."

Michael Hammer similarly admitted that:

"I wasn't smart enough about that. I was reflecting my engineering background
and was insufficient appreciative of the human dimension. I've learned that's
critical."

Îther criticism brought forward against the BPR concept include

Úc It never changed management thinking, actually the largest causes of

failure in an organisation
Úc Lack of management support for the initiative and thus poor acceptance in
the organization.
Úc Exaggerated expectations regarding the potential bene fits from a BPR
initiative and consequently failure to achieve the expected results.
Úc Underestimation of the resistance to change within the organization.
Úc Implementation of generic so-called best-practice processes that do not fit
specific company needs.
Úc Îver trust in technology solutions.
Úc Performing BPR as a one-off project with limited strategy alignment and
long-term perspective.
Úc Poor project management.

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This case is the best illustration of the creativity and innovation spurred through
reengineering into any organisation. It speaks volumes about the contribution of
Jack uelch as the CEÎ of General Electric so as to take his company to new
dimensions through ever evolving processes and innovations.

În April Fool·s åay 1981, when Jack had taken over, the stock market valued
GE at è13.9 billion. In the Fall of 1999 the value had nearly swollen nearly 30
times to è410.8 billion. Many adopted uelch practices included ´reengineeringµ
to streamline costs, concentrating on core businesses with leadership positions,
and forcing responsibility down to subordinates. He has said, ´To be vital, an
organisation has to repeat itself, start again, get new ideas, renew itself.µ He has
proved that companies- even giants- can be vitally reengineered by management
of driving will.

The entire concept proposed by uelch is based on the following lines:

Úc åevelop a vision for the business.

Úc Change the culture to achieve the vision.
Úc Flatten the organisation.
Úc Eliminate bureaucracy.
Úc Empower individuals.
Úc Raise quality.
Úc Eliminate boundaries.

uelch could decipher a potential crisis behind GE·s bulging ordersand thought of
a change to make it apparently successful. Change is always easy to propose,
then to achieve that is what uelch had in his mind.

Some of the principles which jack adopted in his organisation are as follows:

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In 1999, he ordered an e-commerce divison to launch destroyyourbusiness.com,

an operation that would seek to pre-emptive moves by outsiders.

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Firstly, change is not predictable. Secondly, it cannot be controlled. These two

governing ideas, which reflect uelch·s lifetime in a highly diversified
corporation, have led him to take a wholly pragmatic approach to cultural
change and corporate strategy- which must go hand in hand.

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Lawrence Bossidy, a former vice chairman of GE sang praises of the rad ical
quality program he had introduced there: Six Sigma. He explained that any
activity which generates less then 3.4 defects per million manufactured parts
merits the technical description of Six Sigma.

The achievements which GE attribute to six sigma are:

Úc A 98% cut in defects on a billing system and in transactions with the

ualmart store chain
Úc A cut in preparation time of a jet engine from 2 days to some 10 hours.
Úc A cut in chest scan time from 3 minutes to 17 seconds.

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An intense customer focus, superior process design and a strong and motivated
leadership are vital ingredients to the recipe for the success of any business
corporation. Reengineering is the key that every organization should possess to
attain these prerequisites to success. BPR doesn·t offer a miracle cure on a
platter. Nor does it provide a painless quick fix. Rather it advocates strenuous
hard work and instigates the people involved to not only to change what they do
but targets at altering their basic way of thinking itself. In this paper we have
attempted in evolving a structured approach to reengineering. ´50 to 70 percent
of reengineering efforts fail to deliver the intended dramatic results.µ Those who
are standing in the wings afraid to take the plunge must remember just this: A
BPR effort has been considered a failure just because it doesn·t provide the
dramatic results it promised to deliver. But on after thoughts hasn·t there been a
significant improvement in the company·s performance 8 A 200 % increase in
output may not match the 300 % predicted. It may be a failure according to the
high standards set by preceding BPR efforts. But if the question is ² ¶Are the
results good enough for pursuing the BPR effort 8· The answer is a resounding
YES!!!

Îne more very critical factor to be noted is that the statement says- 50 to 70 %
efforts 
failed and not that they fail. There is a monumental difference
between the two. ue can track down all these failures to the common trivial
mistakes that these corporations commit. Înce these mistakes are identified and
overcome, the successful completion of the BPR effort is very much possible.
Moreover failure doesn·t mean that reengineering stops forever. ´It usually stalls
and then restarts as the company gets itself refocused and remobilized. It cannot
stop.

The business imperative is just too great !µ


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