Information Systems Management

ISSN: 1058-0530 (Print) 1934-8703 (Online) Journal homepage: https://www.tandfonline.com/loi/uism20

BUSINESS PROCESS REENGINEERING

Building a Comprehensive Methodology

Subashish Guha , William J. Kettinger & James T.C. Teng

To cite this article: Subashish Guha , William J. Kettinger & James T.C. Teng (1993)
BUSINESS PROCESS REENGINEERING, Information Systems Management, 10:3, 13-22, DOI:
10.1080/10580539308906939

To link to this article: https://doi.org/10.1080/10580539308906939

Published online: 06 Feb 2007.

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CI-IANGE MANAGEMENT

BUSINESS
PROCESS
REENGINEERING
Building a Comprehensive
Methodology

Subashish Guha, William J. Kettinger, and James T.C. Teng

The new paradigm of business process reengineering seeks to achieve
dramatic performance improvement by radically redesigning the
organization; it replaces information systems development that has
focused largely on automating and supporting existing organizational
procedures. The Process Reengineering Life Cycle (PRLC) proposed in
this article is a comprehensive, six-stage methodology with guidelines
for envisioning a reengineering project, getting started, diagnosing
process pathologies, and redesigning, reorganizing, and measuring the
newly configured process.

ARDLY A DAY PASSES \VITIHOUT tions and to orchestrate extreme gains by slash-
some new event that challenges existing ing costs and achieving manifold improvements
paradigm. Changes are occurring on the in productivity and quality.
SUBt\SIIISI I GUI-IA political, social, and econoniic fronts as T h e results of reengineering efforts have
is o corzsulting anoiyst well as in science and technology. Megatrends surfaced among numerous organizations, in-
with N C R Corp k Co- are no longer forthcoining-they are sweeping cluding Ford Motor Co., Eastinan Kodak Co.,
upcrat~rsComputing
Systcms Ilieision and awa!, entirc institutions. Modest improvements AT&T, and Digital Equipment Corp.. wl~ich
o PhII condidute in IS arc n o longer acceptable. Astounding break- have embarked 011 campaigns to rework how
ol llw University of throughs have alrcady been accomplished ill ge- they conduct business. These companies report
South Carolina, nctic engineering. If we can geneticall) rcengi- increases in and decreases in staff
Columbia. neer biological systems, why can't we also after business reengineering. Digital Equipment
\\'I l.,lJ~\MJ. K I T - reenginccr human organizations? has successfully consolidated 5 5 accounting
'I'INGER is dirrctor.
Ilivision of Informu-
Organizational diseases such as foot drag- groups into five, eliminating 450 jobs. ClCNA
tion and T'echr~ulogy ging, buck passing, empire building, and quick RE Corp. saves $1.5 million each year in opera-
Resources, ond ossis- fixing have been with us for millennia. ,Most tions costs and has improved access to data with
font deor~.College o f people have accepted these aspects of organiza- its $3.2-million reengineering effort.
Rusirms Administro- tional bureaucratic life as ncccssary evils How- Increasingly, IS departments are being asked
lion. U~~ircrsity of
S m t h Corolinu.
ever, organizational change is taking place in the either to facilitate or to lead the organization's
form of corporate restructurings, downsizings, reengineering efforts. The use of a methodology
JAMES T . C . T E N C
is ossociotc profcsstr and process reengineering. Information technol- can better enable an organization to capitalize
o f IS o f the Uniwrsity ogy-induced reenginrering is being offered as a on reengineering. This article introduces a com-
ofSouth Carolinu. new paradigm to radically redesign organiza- prchcnske framework to help IS managers and
INFOFIMATION SYSTEMS MANAOEMENT
S U M M E R 1983
13
 CHANGE MANAGEMENT
their departments accomplish significant i n -
p r o \ w ~ e n t sin busincss proccsscs.
THE AGE OF REENGINEERING
I3usincss rccngincering seeks to redesign work
processes to enhance productivity and competi-
tivcncss. T h e d e m a ~ i dfor reengineering has
hec~ifucled h! tlic fact that much of the busi-
~icss-processlogic currently in use is 40 or more
years old. l'hcsc proccsscs wcre first dcsigncd as
scqucntial manual proccdurcs and stemmed
from a strong efficiency orientation that pushed
for optimal proccdurcs and maximum control
withiin d e p r t m e n t s or functions, with littlc at-
tcntion paid to organization\r,ide orcustomeref-
fccts. As organizations grew, and more people
were added and proccdurcs modificd to meet
immediate needs, the basic process usually con-
tinued to follow the original logic.
As aging manual proccsscs wcrc automated,
thcrc nV:lsan impressio~ithat some degree of
imprt~vcmcntoccurred as well. In reality, these
information systems wcrc oftcn dcsigncd to sup-
Ix~rt;~lrcadyfragmented processes, and automa-
tinn only maskcd the problem by increasing
processing spccd. This localized, incremental
approach has created extremely complex pro-
ccsscs that contribute little to the overall effec-
tive~icssof organizations operating in today's
busi~icssenvironment.
Cross-Functional Model
Incrcasingly, successful organizations are e n v -
sioncd t o he networked across functions and
dcsigned around business processcs rather
than functional 11icr;irchies. Achieving this dy-
namic structure takes morc than thc latcst tech-
nology :~ppliedto the existing procedures; most
comp:i~~ies realize it rcquircs a rethinking of
busincss fundamentals. T h e solution lies in
effectively redesigning processes by renioving
unneccssary activities and replacing archaic pro-
cesses with cross-functional activities that sup-
port pardlcl processing, speed, ser\,ice. quality,
and innovation. These richer proccsses must be
supported by enterprisewide information access
and communication.
Business reenginccring usually involves a fun-
damental analysis of thc organization and a re-
design of organizational structure, job dcfini-
tions, rcward structures, business work f l o u ~ ,
control prnccsses, and in some cases, a reevalua-
tion of the organizational culture and philoso-
phy. Miin!. corporations are completing such
INFORMATION SYSTEMS M A N A G E M E N T
SUMMER 1993
processes has been suggested as a new paradigm
of organizational change necessary in maintain-
ing flexibility and competitiveness.
In the age of reengineering, professionals i n
thc IS field are faced with developing new design
techniques to address the changing role of IS.
Because reengineering projects are usually de-
signed around business processcs that transcend
functional units, there is a need for greater lat-
eral systems planning and interaction between
IS designers and users than IS has been accus-
tomed toin the past. Rather than functioningas
the sole de\*elopers, IS professionals may be
asked to act as coordinators or colleagues on a
multifunctional tcam made upof operating staff
from many functional departments. In this sce-
nario, the operating staff provides direction as to
what needs to be recngineered and IS staff mem-
bers are asked t o provide direction on how to
conduct the reengineering. In other words, d o
we h a w the tools to handle the job!
THE PROCESS REENGINEERING LIFE
CYCLE
Although tlierc is no standard methodological
approacll that ensures success in reengineering
cfforts. commonalities among approaches are
present. This article proposes a more complete
rccngineering approach, referred to as the Pro-
cess Reengineering Life Cycle (PRLC). This ap-
proach, shown in Exhibit 1, offers a detailed ex-
a m i n a t i o n of t h e six m a j o r s t a g e s i n a
reengineering project. T h e activities within each
stage are discussed throughout the remainder of
this article.
ENVISIONING NEW PROCESSES
Reengineering is so re\,olutionary in nature that
nothing short of championship from the top can
activate such a venture.The organization's lead-
ers start by examining how thcy would run their
company if they had no constraints. This re-
quires a creative reexamination of how work is
done and how it could be done. This initial
PRLC stage involws the crucial component of
aligning corporate goals and strategies with the
reengineering effort. It is within this stage that
management commitment is secured, vital busi-
ness proccsses are identified, and ITenablers are
examined.
Securing Commitment from Senior
Management
T h e CEO, president, and leaders of all the ma-
jor functional departments must rcalize that
their efforts are required in guiding the direction
 CHANGE MANAGEMENT

EXHIBIT 1 Six-Stage Process Reengineering Life Cycle

Initiate
Diagnose
Envision

Feedback

----------------------------------- --- _/

"
I
,
I
Monitor
-, Reconstruct

of the new processes and in selling the project to
employees. The proponents of a redesign project
face a formidable task, however, because those
in control of a business most likely have spent
largc parts of their lives working with thc current
methods; it may be extremely difficult to con-
vince them that any rethinking of internal pro-
cesses is needed. The major task, then, is to pre-
sent the potential benefits and costs to senior
management in a \vay that management will be
receptive and committed to the success of the
project.
Forexample, improvingcycle time may be an
important objective of the rcengineering proj-
ect. The faster information, decisions, and ma-
terials can flow through a company, the faster it
can fill orders and adjust to ch'mging consumer
tastes and competitive conditions. Implications
of decreased cycle time are that:
Q Costs are gencrally reduced as time is pared
from processes.
Q Cash is generated because Icss capital is ticd
up in work-in-progress inventory.
o Customer service improves as a result of im-
proved lead times.
INFORMATION SYSTEMS MANAGEMENT
SUMMER
Q Qualitv is higher because a process is not al-
lowed to be accelerated until it produces first-
rate products.
o Organizational learning is enhanced because
rapid nell' product development cycles keep
the company in close touch with customers
and their changing needs.
Q If productivity is defined as output per time
unit, then it also inextricably relates to cycle
time.
Identifying Reengineering
Opportunities
When confronted with the large numbcr of pro-
cesses in a typical business. the problem be-
comes deciding which ones should be investi-
gated for redesign. A useful definition of process
may help in this matter.
A process is a set of activities or logically re-
lated tasks that must be performed to accom-
plish a business objective. Processes to be reengi-
nee red should have high potential impact on thc
business. Usually, these processes have an iden-
tifiable owner and customers and may span mul-
tiple internal and intcrorganizational bound-
1993
15
 CHANGE MANAGEMENT

:~rics.Known dcfccts in a suspect process should tecllnologies are accelerating the pace of change
be identified and anticipated performance-iln- at corporations by establishing new organiza-
provc~nc~tt bcncltlnarks should be isolated. tional forms and performance standards. T h e
Thinking in tcrms of proccss types is helpful rccnglnccring project must identify enabling ill-
in g:~initlga 1xo;idcr understanding of what the formation technologies that provide the oppor-
giwn \ d u e chain means to the company. Spe- tunity to improve internal efficiency, satis@cus-
cific dimensions of a proccss can he categorized tomers, a n d allow organizations t o ignore
as cntitics, objects, and activities. \Vithin this geography. Technologies such as local area
scheme there arc tlirce lcvcls of proccss entities: networks (I.ANs), client-server architecturc,
I) 1r1lerorguni:oliotlol processes. T h e means by electronic data interchange (EDI), and execu-
\vItich cornpanics a l m g the same value chain tive information systems (131Ss) are allowing or-
interact. ganizations to achievc lxrformance gains.
I) l~~lerfuncfiortal processes. Those that cross
functional l~oundarieswithin one organiza- Aligning with Corporate Strategy
tion. After proccss reenginccring opportunities have
II in/erpersor~ulprocesses. 'l'liosc that occur bc- been discovered and I Tenablers identified, the
twccn pcoplc \vithin one functional group. next step is tocompare them with strategicgoals
T h e objects wit11 \r41iclt a business process to ensure that both external (eg., market) and
clc:~lsmay hc cither pltysic:ll or i~lforrnatio~~al, or intcrnal (i.c., efficiency) strategic arrangements
they may contain eleme~ttsof both, Activities in- arc in sync with the present or potential IT com-
\ , o l \ ~ din a proccss can hc classified as opera- pctencies and the infrastructure of the organiza-
tir~n:dor managerial, and such demarcation can tion. Strategic vision to leverage structural dif-
simplify t l ~ credirection of rcsponsibility and ac- fcrcnccs or distinctive competcncics of a n
count:~l)ilityacross the entire process. Hy defin- organization with IT, relative to industn com-
ing an organization's proccsscs, the rccngineer- petitors, may be the hasis for changing an orga-
ing projcct c a t identify problems and begin to nization's competitive position. Reengineering
d c \ ~ l an hascline
~~ against which new processes efforts may differ greatly dependillg on varying
c m he co~nparccl. strategic directions-for example, low-cost
Ccrtai~lplanning tools, such as value chain competition. entry into new markets, seamless
analysis, business systcms pl:~nning,and critical buyer and scller relationships, and high-quality
production. /\ review of strategic alignment
succcss factors, maybe used in the identificntio~~
of business proccsscs. Eitltcr a comprcl~ensi\~e should idcntify needlcss reengineering efforts
or a t:~rgetctl metllod can be used t o define that either d o not have strategic significance or
proccsscs. for \vhicIt an IT base does not or cannot exist.
..
I hc c o m p r c l t c n s i \ ~approach attcmpts t o
idcntify all the processes withi11an organization INITIATING CHANGE
/'rO"".S.S
and tltcn rank t l ~ c m C . l ~ a r l c sSchwal) Corp. T h e initiation stage ensures that careful prepa-
[).P".Y is adopted this :lpproaclt a ~ l didentified 24 busi- ration is conducted in anticipation of organiza-
11c!lpJi11 irr ness proccsscs tll:~twould strcamline operations tionwide radical change. Keengincering projects
\eitlt the intcnt of a 10% annual revenue growth must be staffed by thc right team members to
~tn(ler-
i l l a 10-ycar period. /\ltl~ougllthe comprehensive sustain the effort. The project should have defi-
slrr~rdi~rg aplxoxli can provide an unparalleled opportu- nite perfortnancegoals that can later provide the
l l ~ l l ~Ill(!
rl nity to considcr thc organization as a wltole, col- mctric for judging success, a n d these goals
lccting thedata can be timc-consumingand may sltould be justified against anticipated costs. An
gilN!tl I)(/Ill(!
divcrt the team's attention from the truc goal of in-house public relations campaign can be orga-
c l r ~ill
l 111~!~lIl.~
recnginccring. T h e targeted approach defines nized to inform employees of the redesign proj-
lo //re tllusc processes known to bc most vitd to the or- cct. A mcssage from the C E O or president ad-
ganization, as determined by reengineering dressing tlic need, scope, commitment, and
colll/'fl" v:
team discussions, managerial a~orksltops,or leadership of the project should be communi-
m;tn:~gcrialintcrvicws. catcd to the employees.

Identifying Enabling Technologies Organizing the Reengineering Team

New technical cq~abilitiesof data and commu- 13ecause the process of reengmccring involves or-
nic:~tioi~stccl~nolugiesarc moving IT to the fore- ganizational design around proccsscs rather
front i n its potc~ltialto induce business recon- t h ; ~ nfunctional Itierarchics. ~ n u l t ~ f u n c t i o n a l
figur:~tion.Morc than just a tool, these new t a ~ m with
s members from various parts of the
INFORMATION SYSTEMS MAN/\OEMENT
SUMMER ,983
 CHANGE MANAGEMEN1
company are the most likely agents of change.
~he;killsof team members &oild be broad and
should traverse functional units.
Management should first appoint a director
of the reengineering project who is responsible
for the project's conduct and accountable for its
results. One of the first tasks this person must
perform is to assemble and assign sevcral task
groups. One method of assembling a team is to
follow the announcement of the reengineering
project with a memo to managers at all levels,
further describing the redesign project and the
need for team volunteers. Candidates include
those who are knowledgeable in functional areas
and can dedicate significant amounts of their
time. At least one me~nbermust be knowledge-
able about the current state of IT, especially
communications networks and data bases.
Some companies use multiple tcanls of vary-
ing composition and specialization for different
stages of reengincering; in general, howcver,
members usually include executives from the IS
department and other major departments (e.g..
finance. ~narketing,and manufacturing) as well
as kcy staff and linc managers from the areas un-
der study. An alternative approach is to assign a
team to study one process from its starting ac-
tivity to its end activities, which may in all pos-
sibility cxtcnd beyond the organization's exter-
nal boundaries.
Rec:~uscreengincering is new and unknown
to many companies, companies often enlist the
help of consultants. Hiring those who have
helped other companies adds valuable expcri-
ence to the team and brings in an outsider's
viewpoint and creativity.
Setting Perfonnance Goals
T o clctermine tlic lcvel of succcss of the reengi-
neering project, the perforrn:~nccof thc new pro-
cess must be measured and compared to that of
the processes replaced. C S C Index, Inc., a man-
agcmcnt consultancy, identifies tlirec rnc;lsures
of reengineering benefits:
I) Time.
0 Cost.
I) Number of defects
A study of 15 of its clients produced an average
reduction of 48% in cost, 60% in defects, and
80% in time. Nolan, Norton & Co., another ma-
jor rccngineering consulting firm, recommends
the use of a balanced scorecard that mcasures
four dirncnsions of performance. Thcsc mca-
surcs reflect the structural assumptions of orga-
nizations of the future and scek to create share-
INFORMATION SIS'
SUMME
holder value.The four dimensions are:
I) Financial success.
I) Customer satisfaction.
I) Internal processes.
I) Organizational learning.
Goals must be ambitious, radical, and highly
optimistic in nature. It is not unrealistic to sct
performance goals of 50% to 60% in~provemcnt
in cost and productivity or reductions in staffing
hy one-half. Many reengineering consultants
suggest that lofty goals must be t l ~ ctarget of
recngineering efforts to create the organization-
al momentum necessary t o depart from the
status quo.
DIAGNOSING THE PROCESSES TO BE
REENGINEERED
\Vitli the staffing issues :~ndperformance goals
determined, the ~nultifunctionalteam begins an
in-depth investigation of the business process
selected for rccngineering. T h e diagnose stage is
critical bccnuse ~t clarifies the existing proccss
and uncowrs hidden patl~ologies.
Documenting the Existing Process
T o redesign a business process, the organizatiou
must elearl? understand ho\v the existing pro-
cess works. In documenting an existing proccss,
the following criteria must be met:
I) Depict tlic process from start to finish. which
may cover several functions, departments,
users, and external linkages.
II Identify components of t h e process (c.g.,
IS, h u m a n , physical. a n d o t h e r process
rcsources).
Q Document the performance of the existing
process in tcrms of customer satisfaction, in-
ventory turnover, cyclc time, waiting queues,
defect ratcs, activity times, transfer rates, pri-
ority rules. and other relevant nleasures.
0 Decompose ;I largc process into a set of
subprocesses and a s s i g ~team
~ members, ae-
cording to their expertise, to the appropriate
subprocesses.
T h e participants in a process should be intcr-
viewed to reveal the flow of information and
linkages. The value added may be determined by
the nature of the information bcing processed.
how it is processed, and the resourccs used dur-
ing processing. T h e time required for informn-
tion processing, moving, and waiting should be
rccorded to indicate costs and to act as a bench-
m:~rk against which improvcd processes can bc
measured. T h e performance measures of the ex-
 CHANGE MANAGEMENT
isting process should reflect the organization's
goals : ~ n dmissions. For example, a lcading
a u t o ~ ~ w t i vscrvicc
c chain uscd revenuc quotas
as its pcrform:~nccmeasure; as a result, it alien-
atcd customers with needless repairs and, ulti-
~iiately,decrcascd customer satisfaction and re-
turn hu3iness. A sound choice of a performance
rncaburc based on reengineering principles
would 11:ave been service quality as evaluated by
its custo~iiers.
Uncovering Pathologies
I'rocess pathologies ma!. Ix dcfined as work-flow
activitics. busincss policies, bureaucracies, and
non-due-addctl rolcs that hinder and fragment
the overall effectiveness of a busincss process.
..
1 o uncover such pathologies, a critique of the
misting value and non-\due-added work-flow
activitics should 11c conductcd. For IS person-
nel. this action iwolves:
O Identifying undesirable sequential activities
and unnecessary bureaucmtic steps.
I) Idcntifying functional information systems
t l ~ ; can
~ t be integratcd into a single process-
widc system.
I) Questioning the need for various forms, ap-
prwals, and reports and identifying :dl papcr
float and redundancies.
O Identifying dysfunctional policies and rulcs,
formal as well as informal.
Onc way of uncovering such pathologies is to
graph the performance variables set in the initi-
ate stage for each activity in the current process.
For cs:~mple,if the goal is to reduce timc and
cost, it is bcncficial t o draw the incremental
rtrrr 11iliotr.s costs, elapsed time_ hottlencck delays, labor re-
quircmcnts. and other qualitative measures
(rtrrl r r t d i c d ;
along each activity of the process. Such perfor-
ilk rrol manec-measurc charts may l)e used for compar-
rrrrrertli.slic ison with the redesigned process in the next
stagc, that of monitoring the project, to allow
lo s e t
r c c n g i ~ ~ e c r itcams
~ ~ g to sclcct the optimal pro-
ccss configuratio~i.
Many organizations use process design tools
that generate PERT charts or process-activity
network diagrams. Such techniques, which have
been in use in manufacturing process design,
may be applicd in analyzing business processes
and their input uscd to develop simulation mod-
els of the proccss. Numcrous products arc : n d -
ablc that allow the developmcnt of unified data.
process, and logic models. Keenginecring teams
can then use these models to create business so-
lutions and specifications for the design and im-
plcmentation of information syste~iisduring thc
rcdesign and reconstruct stages.
THE REDESIGN STAGE
A business process can be redesigned to achieve
performance improvements in the areas of time,
cost. producti\.ity, quality, and the amount of
committed capital. I n pursuing sue11 improve-
ments. the reengineering team should not be
I~oundby existing c o ~ ~ c e pof
t s organization or
proccss designs. Brainstorming is oftcn promot-
cd to uncover sometimes wildly different proce-
durcs that employ I T in ways that increase effi-
ciency and effectiveness. A systematic approach
that uses the input from the diagnose stage to
eliminate pathologies and that redesigns effee-
tive process configurations is described next.
Exploring Alternative Designs
IZxploring process design alternatives involves
creativity and a radical approach that questions
cvery procedure and principle that currently
governs task activities, approvals, and work flow.
T h e reengincering team should develop and in-
vestigate alternative process redesign solutions
and consider IT applications that may support
each alternative. For example, an imaging sys-
tem for credit transactions and authorizations
using expert systems and work-flow automation
may provide one means for handling forms pro-
cessing, routing, distribution, a ~ i dapproval. An
alternative is t o consider a wide area network
(\\'AN) application tied into the corporate SQL
sewer toallow immediateapprovals online by re-
mote sales lpersonnel.
Each of tl~esesolutio~isentailsdifferent work-
flow activity, staffing, and cross-functional s u p
p o r t 7 ' 1 1 ~IS reengincering t e a m members
should be continually educating fellow team
members about the opportunities that IT may
provide for alternative designs. T h e best process
dcsign can then be considered before the final
selection of a supporting technology. \\'itliout
this step, the result could be force-fitting new
technologies to existing procedures.
Designing New Processes
T h e key to successful rcdesign is to constantly
question why a certain task is done, what are bet-
ter ways of doing it, who should hc responsible,
and which information technology best supports
the redesigned process. Most of these questions
are answered during the course of uncovering
pathologics in the diagnose stage. IFundarnental
c l e ~ i ~ e nthat
t s must h c considered in selecting
the redesigned process include:
I) Pattern breaking. Breaking age-old principles
and rulcs (e.g., in this company, travel request
111ustbe approved at the unit, departmental,
and divisional levels).
 CHANGE MANAGEMEN1
O Aligning with performance goals. Ensuring as much as possible. Reorganizing subunits to
that the performance goals set earlier are tru-
ly aligned with process outcomes.
O lob assignment. Designing a person's job
around the goals and objectives of the pro-
cess, not a single task.
O Elimination ofhierurchies. Replacing bureau-
cratic hierarchies with self-organized teams
working in parallel.
0 Elimination of identified puthologies. Ques-
tioning the activities and roles used siniply to
relay information if these communications
can be handled with information technology.
C) Improving productivity. Moving focus from
work fragmentation and task specialization
toward task compression and integration.
O Appruisirtg information technology. Consider-
ing thc appropriate IT configuration that can
support and enable the redesigned process.
Redesign focuses on leveraging time. Pro-
cessing, transporting, and waiting time may all
be improved with a redesigned process and the
application of IT. Vast amounts of time can be
savcd by eliminating multiple approval lcvcls
and noncritical control checks. by integrating
data processing into the work that produces the
information, and by eliminating wait buffers and
mtegrating multiple tasks.
An important redesign possibility involves
the substitution of sequential activities for si-
multaneous oncs. This reduces the waiting time
involved in processes and can be achieved by ap-
plying online data bases and information net-
works across the process so that concurrent in-
formation access occurs at every node.
Separate tasks within processes should be in-
tegrated as much as possible into one job de-
scription to keep important information from
being lost as responsibility transfers across in-
terorganizational boundaries. In redesign, ap-
propriatc information, including immediate
fecdback on performance, should be provided to
line workers directly so that problems can be re-
solved immediately Through use of I T plat-
forms that support cnterprisewise information
access, individual jobs can be designed to con-
duct parallel tasks and to allow workers to make
morc informed decisions.
Designing the Human Resources
Architecture
Reengineering a company is not limited to just
its processes; the organizational structure of a
business should be considered fair game during
reengineering. Indeed, the subunit divisions of
an organizatio~ishould support the processes
INFORMATION SYSTEMS MANAGEMENT
SUMMER
minimize unit interdependencies holds poten-
tial for reducing costs and improving productiv-
ity. Confrontations that consume t i m e a n d
money can be bypassed. Minimizing interde-
pendencies between subunits can be accom-
plished by improving the alignment of objec-
tives, tasks, and people within a single subunit.
Where possible, a designed human resources ar-
chitecture should support a free exchange of in-
formation and a refocusing of decision making
and actions at the individual and work-group
levels.
Inevitably, recngineering may cause signifi-
cant change in the organizational structure and
human resources architecture. T h e redesign
stage should include a human resources compo-
nent that incorporates the following:
C) Redefinition of job titles and positions affect-
ed by changes in cross-functional processes.
O Team-based management techniques, such as
the establishment of self-motivated teams as-
signed to specific business processes on the
basis of unique skills individuals possess.
O Continual organizational learning through
on-the-job training with emphasis on quality.
time, and output.
0 Performance evaluation based on team pro-
ductivity and measured by group effectivencss.
0 l n c e n t i \ ~ sand reward structures based on
group performance and an individual's con-
tribution to the team.
C) Modification of management structures that
require managers t o he leaders as well as
equals to team members.
0 Continuous reengineering project con~muni-
cation to all employees who provide feedback
on progress.
Prototyping
Prototyping has been widely used in traditional
systems development because it creates rapid
feedback that helps determine systems require-
ments. Prototyping techniques are extremely
useful for reengineering projects because they
can be used to demonstrate proposed redesigns
that would otherwise be difficult for people to
comprehend. CASE tools have the capability to
develop rapid prototypes.
Prototypes should be reviewed and evaluated
by the reengineering team; they provide man-
agement with a vehicle to make judgments to-
ward a final process design choice. The US De-
fense Department adopted a comprehensive
business process reengineering plan that made
extensive use of rapid prototyping. T h e result: a
1993
 C H A N G E MANAGEMENT

reconfiguratio~~
of cxisting methods and a re- Installing IT
duction of commandwide systems from 80 A major effort that is undertaken in the recon-
to 43. struct stagc is the deployment of new systems to
support new processes. In the extreme case, the
Selecting an IT Platform existing systems and technology are replaced en-
111tegratio11,cooperation, ease of migration, tirely with new hardware platforms and appliea-
adaptability t o new technologies, and enter- tion programs. For example, several companies
prisewide information access and sharing are have downsized their mainframe-based infor-
among the factors that influence the selection of mation systems with more flexible and eost-
an IT platform to support the redesigned pro- cffective LANs and client-server architectures.
cess. T h e I Tbase must be able to support com- T h c second option is software reengineering,
munication between corporatc systems and de- which is the process of redesigning and reusing
centr;~lizeddivisional systems, as well as tie cxisting system code for migration to more ef-
suppliers, vendors, and customers using \VANS. fective I~ardwareand software platforms. A ma-
,.
I he need for coopcration may result in down- jor direction in systems development is the re-
sizing im~inframe-basedsystems to LAN-based verse reengineering of object code to produce
opc11 systc~nsusing objcct-oriented technology. recyclable source code. This source code may
Some reengineering consultants believe that thcn be used in forward-engineering techniques
only an ohjcct-oricntcd infrastructure will allow using CASE tools for added capability and re-
developers to integrate and implement systems structuring of current systems. Software reengi-
fast enough to mect the reengincuing timc neering can help to improve the reuse, redesign,
frame. analysis, and performance of software systems.
.
~
I hc critical nccd for information sharing and Amoco Corp. credits software reengineering in
access determines the corporatc data base dc- helping wit11 software maintenancc, analyzing
sign requirements. This may lead to the decision source code, and providing syste~usstructure
to dcvclop an cnterprisewide information archi- charts and complexity rcports with software
tecture or distributed data bases. T h e IT plat- mctrics. Charles B a c h m a ~ ,founder and chair-
for111 selected must outline hardware decisions man of Bachman Information Systems, lnc.,
(e.g., mainframe, minicomputer. or nvrksta- describes a six-step software reengineering
tion-based configurations), softwarc decisions cycle: capture, reverse engincering, enhance-
(c.g., operating systems), and a data architecture ment. forward engineering, optimization, and
at all levels of systems implcmcntation. It must generation.
also detail the appropriate software systems to Several companics have chosen to radically
be implcmcntcd at every level-for example, de- ovcrhaul current systems with new technologies
\dolmient of a dccision support systcm at the that provide improved connectivity and cost/
executive level and several integrated work- pcrformance ratios. Migration t o LAN-based
group applications for transaction processit~,o. platforms and groupware applications based on
Ilccisions must hc nmdc regarding IT deploy- ohjcct-oriented design has shown success, and
mcnt of third-party softwarc, in-house software several vendors ha& dcwloped groupware prod-
development kits to support applications dcvel- ucts based on open systems to allow organiza-
o p n ~ c n t ,software rccnginccring plans, docu- tions to dcvelop easily integrated applications.
mentation, and training plans. Thc sclcction of
an IT platform for a prticular process can bc rc-
Reorganization Activities
latecl to the enterprisewide IT architccturc.
A crucial clement for reengineering success is
the design of a new organizational structure con-
RECONSTRUCTION sistent wit11 the newly defined process. T h e hu-
This next stage is the actual implementation of man resources architecture outlined in the re-
t11c change. As with any major organizational design stage must be thoughtfully executed to
change, a mcthodical process should be adopted minimize any disruption to employee morale.
that takes advantage of small-scale pilot proj- This stage focuses on a smooth transition to a
ccts, user training, and extensive user feedback. new organization design that incorporates such
LVhcn problems arise in this stage of reengi- improvements as subunit reorganization, job
wcring, thosc involved must retain their com- rotation and staff reduction, the empowerment
~ n i t m e n t o the main ideas generated during of remaining employees through training and
process redesign yet m u s t be amenable t o educational programs, and in general, improving
changes rcquircd to facilitate the installation. thequality of work life.
INFORMATION SYSTEMS MANAOEMENI
SUMMER 1 8 8 3
 CHANGE M A N A G E M E N T
Empowering workers means placing decision
points where work is pcrformcd-in essence, al-
lowing individual workers to control the proccss.
This basic assumption contradicts traditional
bureaucratic theory that states that people do-
ing the work have ncithcr the time nor the incli-
nation to monitor and control their own work
performance. Building control and accountabil-
ity into the work process is accomplished by
making thosc responsible for producing infor-
mati011also accountable for its processing. Prop-
erly reorganizing the process and related organi-
zational structure should allow empowered
employees to use discretion in iudgrnent and sig-
nificantly increasc the possibility that their work
call he a rewarding experience.
Training of personnel inn newly installed pro-
cess-based environment is critical. Because the
major doctrine of business rccngineering in-
volvcs the climination of functional hierarchies
and thc development of organizational struc-
tures based on processes, team-based manage-
ment techniques are at a premium.
I'erformnncc evaluation takes a new twist as
team performance rather than individual perfor-
mancc becomes the primary rnctric of success.
l ~ ~ c c n t i v eand
s reward structures must be re-
designed according to group performance. Indi-
vidual rcward structures need to he redefined ac-
cording to the individual's contribution to the
tcam. The changes brought on by reorganization
may cause rcsent~mentthat must bc addressed
by continual c o n ~ ~ n t ~ n i c a t ibetween
on the
reengineering tcam and employees. In the long
term, however, the combincd people and pro-
cess changes should producc an organization
better able to change and learn.
MONITORING THE NEWLY
CONSTRUCTEDPROCESSES
This stage has two distinct components that fo-
cus on performance measurement of the process
and quality improvement.
Performance Measurement
T o determine the level of success with thc
rccngineering project, new processes must be
measured for time, costs, productivity, quality,
and capital, then compared to the processes they
replaced. T o cnsure the fulfillment of perfor-
mancc improvements, a wide spectrum of mon-
itoring must be attempted. Several aspects of the
organization must be continually assessed and
controlled. Examples of hard measures include:
I) Process performance. Cycle time, customer
scrvice, and qualit!
INFORM&IION SYSTCMS MANAGEMENT
SUMMER
O IT performunce. Software complexity, infor-
mati011 rates, downtime, system use, and
paper reduction (e.g., through E-mail or an
EIS).
O Productivity indices. For t h e performance
of employees and production and service
operations.
Monitoring should be based not only on such
hard measures but also on soft measures, such as
morale and customer good will. This multidi-
the changes caused by the radkally reenginccrcd
business process.
This all-encompassing scope of perfonnancc
monitoring rcquircs the attention and active en-
dorsement of senior managenlent and marks a
major departure from the technicalities of EDP
auditing. The new measure for process outcome
is directly tied to overall corporatc performance.
I f tl~oughtfullyandthoroughly carriedout, these
monitoring and integration efforts lay the foun-
dation for the continuing success of the rc-
designed process and the further diffusion of
the reengineering approach to other areas of
business.
Links to Quality Improvement
For reengineering to succeed. it must be linked
with corporatc quality programs. I-lowever,
rccngineering goals differ radically from such
quality programs as total quality management
(TQM) that aim at incremental gains. T h e fun-
damental difference between quality programs
and reengineering is the focus on continuous
improvement as opposed to goals that are preset
before the reengineering projcct has begun. T h e
monitoring stage provides a fundamental link
between the radical focus of reenginccring and
the continuous incremental improvements of
TQM.
Continual monitoring of the rcdcsigned pro-
cesses is essential, especially in the early stagcs
of deployment. An efficient feedback loop must
exist between the monitoring stage and the di-
agnose stage (see Exhibit I). Such a loop pro-
vides an audit of thc performance of the re-
designed processes and identifies processes that
arc candidates for further redesign to adapt to
change. It may be necessary to fme-tune certain
aspects of the new process and associated IT
until acceptable performance gains have been
achieved. If the first reenginccring projcct is a
success, senior management may direct t h e
reengineering team to focus on another process
for redesign.
1893
 CHANGE MANAGEMEN1

CONCLUSION systems professionals with a detailed framework

Corporate management is looking for ways to
exploit organizational competencies, to regain
competitiveness, and to achieve long-term sus-
t;linal~ility.Iteengineering has captured t h e
imagin:ltion of these corporate Icaders. IS pro-
fessionals are being called upon to take part
in thc c1i:lllcnging assignment of achicving ma-
jor performance gains:Their participation in
recngineering is vital.
Although the need for change is universally
recognized, there has been no widely accepted
csccution plan or methodology available to sup-
port SLICII change. T h e Process Reengineering
Life Cycle presented in this articlc may fill this
void. This plan provides the new generation of
indicating t h e stages, roles, a n d e x e c u t i o n
guidelines for achieving large-scale organiza-
tional change. I
Recommended Reading
Davenport, 'l'.ll., and Short. 1.1:. "The New
Industrial lingineering: Information Technology
and Business Process Rcdcsign." Sioan
~\lanagemcnfReview (Summer IWO)
Scnn, ].A. "Reshaping Rusiacss Processes Through
Re~n~ineering." S l M h'efwork (hlarch/April
1991).
Stewart ,'l'.A. "'lhe Search tor the Organization of
Tomorruw." 1:urlune (hlay 18. 1992).

INFORMATION SYSTEMS MI\NAGEMENT

SUMMER 1993