In the time of rapidly changing technology, companies leave the existing process intact and use computer only to speed up the work. Heavy investments in information technology have not delivered impressive results since companies use technology to automate the existing business instead of redesigning new processes.
Reengineering means “completing redesigning business processes using the power of modern information technology to achieve improvements in their performance”. It strives to break away old rules how we organise and conduct business. It involves identifying and eliminating some of old ways and then finding imaginative new ways to accomplish work. It requires looking at fundamental processes of the business from cross-functional perspective. Example: Ford Motor Company reengineered their account payable processes to achieve competitive leadership
At the heart of reengineering is the notion of discontinuous thinking of identifying and breaking away from the outdated rules and fundamental assumptions that underlie operations.
Quality, innovation and service are more important in new decade than cost, growth and control as it was in conventional process structures.
Principles of Reengineering:
* Organize around outcomes, not tasks - Have one person to perform all steps in a process. A person’s job should be designed around an objective instead of a single task.
* Have those who use the output of the process perform the process – Individuals who need the result of a process can do it themselves. Customers can make simple repairs themselves thus there is little need for overhead associated with managing it since people closest to the process perform it.
* Subsume information-processing work into the real work that produces the information – transferring work from one person to another
* Treat geographically dispersed resources as though they were centralized – Companies can use telecommunications networks, databases and standardized...