Reengineering

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Reengineering Principles

The standard Reengineering principles are as follows -

1. Organize work around its end results, not tasks

According to this principle, it is optimal to determine the work’s end result rather than dividing the work into small tasks & units. We try to rearrange the work process so that a single person can perform all the steps involved. This eliminates wastage of time due to trailing of work processes through many hands and also puts workers in control of processes. Organizing work around end results reduces the number of intermediate levels of approvals and assign a single concerned personnel to perform all the tasks.

2. Capture data only once when it is first created

According to this principle, the company shall capture & store data only one time when it is first created. In other words, the should avoid redundant data. The company should avoid accepting the same data via input forms that has already being entered in the enterprise database. The use of IT enabled systems such the EDI systems, OLT systems DSS, data warehousing systems EIS etc will help to setup the appropriate information management system for the enterprise that deals with data consistency, integrity, correctness and avoiding data redundancy.

3. Allow decision points where work is performed

In usual work setups, the processes are completely controlled by the managers and supervisors. This often fasten hierarchical management structures. The actual doers are assumed to lack the knowledge or responsibility o take a process to completion. The reengineered process argues that the people who actually do the work should be the ones to make many of the decisions about it, and that the controls over the decisions should be built into the systems that workers use.

Such an approach to work will reduce layers of organizational bureaucracy and changes the roles of workers and supervisors. It empowers the doers to better control their own work environment.

4. Incorporate controls into information processing

While reengineering a business process, we allow the people who collect the information to process the information too. Such controls are incorporated to the information processing system in such a way that usually a single computer could process and store all the related information of a process. The single computer shall process all the data in seconds and at a single location, thus avoiding the process to stretch along the various functions. Now, the person handling the computer system is responsible for the whole process and usually this change in responsibility is a boon to efficiency. Instead of allowing a discrepancy to pass through to several people within an organization, it can be stopped at the source.

5. Make people who use a process do the work

Over specialized and complex processes brings in bureaucracies and will cause people to spend undue time and energy following company policies and strict functional approaches rather than common sense. Make people who use a process do the work means that the reengineered process lets users get their own supplies and information by building controls into the system. If, for eg:, the accounting department requires some stationary items, it should not have to go to another department to administer the process. Instead, the purchasing group shall setup master accounts in a computer system to deal with any sort of purchasing in any other departments indirectly via distributed computer applications and this allow the accounts department to buy the stationary by itself and get the necessary data updated in the purchasing department’s master account.

6. Work in parallel instead of sequentially and later integrate the results

Reengineered business setup enables multiple work projects to be handled in parallel so that the individual projects are linked & coordinated in such a way that the end product development is accelerated without any breakup in between. Reengineering enabled by IT solutions such as the enterprise wide intranets, CAD/CAM systems, manufacturing automation systems, ERP systems, EDI systems, work group internet works etc, supports this work in parallel and integrate results methodology.

7. Treat geographically dispersed resources as one

According to this reengineering principle, the reengineered system will enable the enterprise to integrate the geographically separated resources (man, machine, money, information) and provide a centralized control over these resources. Consider the case of enterprise’s information management setup in the reengineered system. The enterprise wide intranet integrates the distributed data sources and data stores by allowing data sharing, peer-to-peer communication between data applications and a centralized control over the intranet by the IT department. When we take the case of the workforce, we may integrate the workforce of the enterprise towards the common goal of the enterprise by enabling the workers to interact with each other and with the related process via the intranet.

Shared databases, telecommunication networks and standardized processing systems now make it possible to gain the benefits of scale and centralization while maintaining the advantages of the flexibility and service that come from being dispersed and close to the customer.

Be the first to comment - What do you think? Posted by admin - November 25, 2011 at 4:12 pm

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Why Companies Do Reengineering?

Companies are doing reengineering since they want to remain stable in the dynamic business environment while facing changing strategies, financial crisis due to weak / poor / outdated business processes, technological changes, change in customer demands & business competition. Everyone is going for reengineering since it usually provides a quick fix for the present problem by a suitable business transformation. Everyone has great aspirations while reengineering one’s business, since reengineering surely brings out various potential benefits that usually breakeven the costs of reengineering. The following are the potential benefits brought about by reengineering that inspires every business enterprise to go for it.

Benefit level 1: Provides a quick fix for the present problem

Benefit level 2: Business processes are refined according to the improved strategies

Benefit level 3: Refined business processes creates high quality products & services, reduced paperwork, reduced manual labor and reduced process cycle times.

Benefit level 4: The above benefit creates high quality and value added products and services shipped to the customers in time. This improves customer satisfaction and customer support. The company now tends to care more for its customers.

Benefit level 5: Cash flow is improved which leads to easy realization of ROI and business profits and gains.

Benefit level 6: This leads to business prosperity and stability.

Article Copyright – Deepesh Joseph (2010)

Be the first to comment - What do you think? Posted by admin - November 15, 2011 at 9:12 pm

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Reengineering an accounts payable function

Consider the case of approving a loan application. In the manual process, it takes 6 persons and considerable amount of time to accept the details, calculating risks and repayment capabilities and letting the application trail through hands of various functional levels. But, when we reengineer the above process, the whole process may be converted to a PC based applications handled by a single person who performs the formal dealings with the customer & inputs the details on the computer generated form. All further, calculations and checking & further approval of the loan is made by the computer by checking various records of the customer. Here, the reengineered business system is process based since all the trailing levels are capsulated into a single person to perform the process. The benefits of reengineered process lies in the customer satisfaction, reduced business process cycle time, reduced manual labor, reduced paper work and reduced number of persons to perform / complete the process.

Thus, BPR has various potential benefits that leads to long term business stability and process refinements. This prompts every business enterprise to go for BPR when it requires to change its business strategies due to changing customer demands, financial crisis, technological changes and business competition.

Be the first to comment - What do you think? Posted by admin - October 30, 2011 at 10:13 pm

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Creating Process based Organizations via Reegineering

While reengineering a business enterprise, we create a process based organization structure for the enterprise to avoid the inefficiencies and time wasting business process cycles as in a functions based organization. ie – the business process information systems and the enterprise wide information infrastructure are integrated in such a way that the people of various functions or departments could easily form teams for related activities and project works. Such a process based system enables faster business process cycles, workflows and data flows that creates a total quality business setup. The business enterprise is now able to produce its products and services faster and with added value to satisfy its customers.

Often, when we reengineer a business enterprise, a process that took 3 days and 6 persons to get completed, will require say only a single person and a PC and say only 2 hrs to finish the process with all formalities satisfying the business rules.

Be the first to comment - What do you think? Posted by admin - at 10:03 pm

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Basic approaches to Reengineering

The three basic approaches to reengineering are as follows -

1. STREAMLIING

2. INTEGRATING

3. TRANSFORMING

1. Streamlining – Streamlining approach to reengineering the business offers a basic, segmented, quick-fix methodology for reengineering. It cleans up and treats symptoms but doesn’t necessarily transform a process nor find a cure for a bad process. It doesn’t change the way a company conducts its core business nor does it impose whether certain processes should exist at all. For eg: while reengineering an accounts payable process, we may reduce the staffs from the existing number to 7. If we follow a thorough transformation approach, this would require total number of 17 sign offs. The streamlining approach of reengineering the accounts payable process may also increase the level of spending authorization for managers. Another approach would be to translate the current workflow and dataflow via electronic means such as EDI. In essence, the streamlining approach to reengineering is simple, functional and makes operations go faster or better.

2. Integrating – The integrating approach to reengineering integrates discrete business processes, replacing them with a unified process that frequently cut across functions and department responsibilities i.e, it creates a process based organization of workflows within the reengineered process. For eg:, when we reengineer a sample business process that formerly required the functional trailing of workflows among various departments such as accounting, purchasing and warehousing, we re-order the workflows so that the individual functions are closely related by reducing redundancies, cycle-times and unnecessary retention of separate receiving logs and lists of prices. Now, the reengineered process will cut across all the functions and will now require only lesser number of persons and manual labor and lesser process cycle times to perform the tasks. But when we consider the business as a whole, the reengineering by integrating has only changed the accounts payable process, but it doesn’t change the way the enterprise produced / manufactured products nor does it directly affect other major functions of the enterprise, but it has a profound influence on the jobs of the people performing the accounts payable process.

3. Transforming - Transforming approach to reengineering transforms the company as a whole. When such an organizational transformation is carried out, the projects should get complete commitment and sponsorship from the top management and support from the working staff. New strategies, policies, objectives and plans will have to be devised to effect the complete transformation. The enterprise shall search for the appropriate technology and workflows to setup the transformed system. The company shall benchmark its existing system with that of another similar company which has already applied reengineering in its system. The company shall seek help from IT consultants to bring in the right infrastructure and IT solutions.

Be the first to comment - What do you think? Posted by admin - at 9:53 pm

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Basic steps in Business Process Reengineering

We can generalize Business Process Reengineering (BPR) efforts as an eight step process as follow -

Step 1: Formulate / Modify business visions, policies, objectives

Step 2: Formulate / Modify business strategies according to changing customer requirements, technology changes and competition

Step 3: Analyze the existing business process cycles & workflows and determine how they may be modified or refined

Step 4: Apply IT to setup an optimal Business Information Management Architecture (BIMA) to support the reengineered business process

Step 5: Modify or redesign the existing processes according to the reengineering strategies and develop refined Business Process Automation Systems (BPAS)

Step 6: Apply IT strategies to map BIMA onto an Enterprise Information Management System (EIMS) that is integrated across the enterprise and that fits into and supports the reengineered Business process cycles and workflows.

Step 7: Integrate the EIMS with the BPAS to build up the completed reengineered business system

Step 8: Repeat steps 1-7 for continuous BPR due to changing customer demands, technology changes and business strategies, which leads to business stability

Since information management is a key factor in BPR, the BPR efforts are enabled & supported by a variety of IT solutions.

Be the first to comment - What do you think? Posted by admin - October 28, 2011 at 8:53 pm

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What is Re-engineering? Why companies are doing re-engineering?

Re-engineering or Business Process Re-engineering (BPR) is way of rethinking or redesigning the existing business systems both in technical and behavioral terms. The ultimate goal of BPR is to continuously improve the business process cycles so that a total quality is built to the business system, its processes & workflows that reflects as high quality products & services produced by the enterprise. As quality products and services are provided by the enterprise for its customers, customers are able to gain value for the products and services that they buy. This improves customer satisfaction and customer orders. This further improves cash flows and easy realization of business profits and gains.

Now, since BPR leads to continuous business process improvements, the business process cycles and workflows are continuously refined according to changing strategies, technologies and customer demands. This ultimately leads to business stability in the competitive industry / business environment. Since every enterprise is striving for business stability, everyone is going for BPR.

BPR involves considering everything from business strategies to processes to organization structures to management systems (people, machine, money, information) to values & beliefs of the enterprise that undergoes BPR.

Be the first to comment - What do you think? Posted by admin - at 8:16 pm

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Mind Mapping technique to prepare WBS

I would prefer the mind mapping technique to arrive at WBS (work break down structure), due to my liking for problem solving by visualization and modeling techniques. Another reason to like that technique is that it is very much similar to various modeling tools that we use during the System Analysis phase of product development and I have been closely working in this area. I would compare mind mapping method of creating WBS to preparing a context diagram. Just like a context diagram forms the basis for the high level and detail level data flows, a mind map forms the basis for high level and detailed level tasks. One great advantage of mind mapping model is that they account for easy translation to structure and plan since they work similar to translating our thoughts into sensible actions.

I haven’t personally used mind mapping since I haven’t prepared an official WBS on any project. However I sometimes use mind mapping technique for my own scheduling.

Be the first to comment - What do you think? Posted by admin - October 15, 2011 at 9:58 pm

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Strategic alignment of IT resources – A case study in Grocery industry (Part 2)

	Japan	UK	Spain	US
Effect of economic situation	The effect of recession has prompted Japanese to be more cautious while selecting grocery stores to shop. This situation is breeding ground for underdeveloped private label market in Japan to capitalize on price (32).	Consumers have scaled back spending and repaid debt amid signs of slow recovery. In Q4 of 2009, the UK economy experienced the first economic expansion in six quarters. Low consumer confidence, high personal and government debt, and high taxes will slow recovery (48).	Recession has its impacts on buying habits on Spanish people too. While looking out for cheaper private labels, they also have increased quality sense (60).	Currently, there is high trends that shows shift from eating out to going back to grocery stores and save money (usage coupons etc). There exists high food prices, down economy, low consumer confidence and notion of ‘healthy eating which is required and costly (4).
Technology & Infrastructure Issues	Concerns that old style of doing business is not viable any more. Trying to improve innovation systems (33).	Robust private markets for technology and services. Strong government support for capturing value in public sector (49).	Innovation system highly dependent on foreign technology. Deficit appears to be structural (61).	Major technology thrust pushes industry to take drastic steps towards customer satisfaction and innovation (5).
Integration Issues	System integration issues due to heavy mergers between companies and due to suppliers’ legacy systems.	Applications developers must understand retailers’ business and integrate with its existing systems as part of its value proposition.	Severe integration issues in supply chain.	Major challenge is integration issues while targeting global sourcing and thus being exposed to wider pool of suppliers, providing multi-channel integration for customers and integration with legacy systems.

	Japan	UK	Spain	US
Political Structure	A parliamentary government with a constitutional monarchy. Legal system is modeled after European civil law systems with English-American influence; judicial review of legislative acts in the Supreme Court. Supreme Court (chief justice is appointed by the monarch after designation by the cabinet; all other justices are appointed by the cabinet) (34).	Constitutional monarchy and Commonwealth realm (50).	Basque Nationalist Party , Canarian Convergence and Union Coalition, Democratic Union of Catalonia (63).	Even though current US political setup and administration is convinced that supporting innovation and entrepreneurship is necessary for improving the economic conjuncture, the existing economic recession cause consumer product manufacturers to reconsider their plans to launch new products for Grocery industry (6,7).
Legislation	In 2006, the Internet providers attempted to disconnect users anytime they detected P2P or any other file-sharing software. The Japanese Ministry attempted to block P2P but stopped because of concerns of privacy issues (35).	Growing dominance of large grocery chains prompted Office of Fair Trading to review competitive practices of largest retailers (62). Fear that smaller suppliers and sole proprietorships will be pushed out of markets has prompted lawmakers to consider limiting labor and operational tactics used by large grocers.	Education expenditures amount to 4.2% of the population, which compares to 97th in the world. By law, every public school in the country is required to teach Roman Catholicism. But new legislation has been enacted which has made religious classes optional (64).	Current US administration has put forth various legislative measures to support product innovation and growth of grocery industry, especially when Grocery Manufacturers association is influencing US Senate to modernize U.S. Chemical Safety Laws (8).
Trade Policy	Japan’s weighted average tariff rate was 1.3 percent in 2008. Import and export bans and restrictions, import quotas and licensing, services market access barriers, non-transparent and burdensome regulations and standards, restrictive sanitary and phytosanitary rules, restrictions in government procurement, state trade in some goods, subsidies, and inefficient customs administration add to the cost of trade (36).	The Bank of England periodically coordinates interest rate moves with the European Central Bank, but Britain remains outside the European Economic and Monetary Union (50).	Spain’s trade policy is the same as that of other members of the European Union. The common EU weighted average tariff rate was 1.3 percent in 2008. However, the EU has high or escalating tariffs for agricultural and manufacturing products, and its MFN tariff code is complex.	US trade policies are designed to support grocery industry expansion in developing areas and to reduce overhead for Grocery stores and put in more money for product innovation (4).

Porter’s Competitive Forces Model

Porter's Competitive Model

Dominant Blueprints & Strategic Focus

Blueprint (Drivers & Constraints)

Blueprint	Force	Japan	UK	Spain	US
Multi-Channel Easy To Do Business With	Driver	Acquisition of small wholesalers, mergers and cooperative agreements are in response to need for greater efficiency (39).	Growing interest in shopping online makes retailers pursue web strategies that compliment brick & mortar experience(47).	Efficiency of marketing to consumers who often make decision to buy at point-of-sale(65).	Technology/Innovation infusion in the form of Web 2.0 and mobile technology offers wide options for channel integration and is leading blueprint’s development and alignment of IT (20).
Multi-Channel Easy To Do Business With	Constraint	Shortage of technical capability, attitudinal problems preventing wholesalers, retailers, and manufacturers from working together. Poor penetration of technology in traditional-bound portions of value chain (39).	Ordering more efficient with RFID(51). Loyalty programs track individual consumers‘ and tailor promotions (52).	Today, more grocers are collecting customer-specific data. Large retailers using RFID to deliver targeted promotions (66).	Convincing customers to thinking “My Store” rather than “The store“. Greater reliance on integration for increased sales, customer retention and profitability (16,17,18,19).
Spend Management Low Cost	Driver	The market has shifted its focus to support more discount store models in order to provide lower prices to customer (38).	Spend management encourages higher quality and greater choice (Profit through partnership, 1994), faster replenishment.	Spend management software has been delivered to the enterprise however, Europe was a unique case because of the large number of languages owed to its significant presence in both Western and Eastern Europe (67).	Economic recession compels companies to cut costs on direct and indirect goods/services and they resort to spend management solutions to gain visibility into the area of procurement and analysis(US21).
Spend Management Low Cost	Constraint	Recession is having a major negative impact on consumer confidence, as they look for ways to cut back on daily expenditure and retailers have to drastically rethink their operating strategies in an effort to retain even moderate growth levels (38).	Cash purchases without loyalty card provide no customer data to improve decisions.	Mega-Hubs were launched with promise to provide interoperability between trading exchanges, however companies were not ready to invest into the process because it was a separate entity (67).	Walmart’s efforts to align IT to current spend management blueprint is partly hindered by cultural/language barriers while on its journey to global sourcing (23).
Employee Productivity Multiplier	Driver	A decade of declining economic growth aligned with contextual factors, such as an ageing workforce, has caused Japanese firms to introduce changes to their HRM strategies (40).	Respecting employee rights to privacy and confidentiality requires controls that limit data exchange between applications and by information consumer.	Integrating and automating HR processes and multiple country systems is demanding for service providers (68).	Increased need to reduce the total cost of employee communication per year , improve corporate hiring process and increased productivity improvement ,all influence usage of employee centric blueprint (24).
Employee Productivity Multiplier	Constraint	Regulations, compliance and ethical enforcement activities in many organizations have been confined to a few specific operating silos such as HR, corporate security, and legal, and have been conducted either on paper or on spreadsheets, making the procedures difficult to share across the organization (41).	Data Protection Act, Chartered Institute of Personnel Development, and Information Commissioner’s Office provide extensive guidance on responsibilities and obligations of employers (53).	For many multinationals the cost of administering a pan-European HR & Payroll policy, with all the complexities of EU and country reporting regulations and compensation and benefits variations, has made the HR & payroll outsourcing message a compelling one (68).	Severe integration issues exist when grocers try to implement fined tuned HCM systems to support the blueprint as in the case of Brookshire Grocery store (25)

Blueprint	Force	Japan	UK	Spain	US
Supply Management Fast & Responsive Service	Driver	The smaller supermarket chains around the country are slowly being acquired. Larger retailers are consolidating and expanding their territories. Retailers have too much inventories on hand and they need to cut their cost structure, both in terms of labor costs and store operations, and reducing inventories (42).	Tesco uses RFID tags on milk and DVDs to track product from production facilities to shelf. Supplies can be replenished faster and DVD stocks better organized on shelf (54).	Grocery retailers such as Asda and Tesco have been marked to increase their product ranges, however European companies are still refining the use (CPFER, 3PL, 4PL) infrastructure to stave off the competitive pressures of expansion (69).	Early adoption of EDI as common standardized means of integrated SCM systems communication has smoothened the efforts of SCM integrations between grocery stores and suppliers (26).
Supply Management Fast & Responsive Service	Constraint	focused (42).	Shorter order times, faster payment, interaction by tech, finance and stock management personnel (55).	ERP does not as of yet have a dominant industry association such as Manufacturing Execution Systems Association (MESA) governing its development (70).	The main driver that contributes to alignment of IT towards SCM blueprint is the strive towards service differentiation and the need to remain competitive by being innovative in the SCM arena (27).
Product Innovation Product Innovation	Driver	Health is a key factor in determining customers’ food choices. It is recognized that the consumption of certain foods can promote improved health and well-being and the prevention or minimization of disease. The addition of functional ingredients enables a product to be distanced from other products within the same category, increasing the profit margins and reducing the impact of price wars with competing commodity products (43).	Introducing private label goods as a way to provide low-cost alternative produces conflict with preferred suppliers (56).	CAD application resulted in an explosion of digital data. Because those design applications created many digital files, it became increasingly difficult to effectively capture, manage, and control the output of those systems (71).	One of the major drivers that support product innovation blueprint usage in US grocery industry is the strive for brand focus, which is implicitly offered by the underlying PLM solution (28).
Product Innovation Product Innovation	Constraint	According to GNX’s VP of Product Development, the typical retailer private brand program comprising several thousand products (SKUs) that are constantly changing, and data maintenance can be a significant challenge. Failure to effectively manage this data can negatively impact consumer confidence and market competitiveness (44).	Grocery stores can provide aggregated customer data to reveal preferences, but manufacturers must make independent decision to change how they produce their goods.	By the 1990’s, industry demanded more sophisticated applications to address issues such as product structure, change control, configuration management, and others (71).	Full collaboration with suppliers has been one of the major issues in ensuring complete strategic alignment with the blueprint (28).

Countries Position in Blueprint Evolution

Countries' position in Blueprint

Summaries, Interpretations, and Lessons Learned

•Customer’s are time-consciousness and demand power to establish preferences and satisfaction level has an ever increasing influence on the development and acceptance of multi-channel blueprints.

•Spend management is an essential dimension in business intelligence solutions, enabling better visibility into factors influencing strategic decisions.

•Leading grocery companies have invested enormous time and capital into aligning IT and business processes by standardizing applications.

•Retailers in the grocery industry search for innovative and efficient ways to integrate and standardize supply chain management by leveraging available IT resources to reinforce their business processes.

Conclusion

•Technology and innovation infusion has a positive impact on companies to quickly devise methods to establish effective means to perform sales promotions, improve customer service, provide easier and efficient tracking of products and supply chain management, and cut across multiple channels.

•Leading grocery retailers are distinguished by their significant attention to—and investment in—aligning people, processes and technology.

•To gain competitive advantage, retailers, manufacturers and wholesalers look for ways to reduce costs and improve response time by improving and standardizing their business processes.

•The major influences in the usage of product innovation blueprint are brand focus & subsequent differentiation and the strive towards effective means of product life cycle visualizations and subsequent IT alignment in satisfying a powerful customer.

References

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