Reengineering work: don’t automate, obliterate

1. Reengineering work: don’t automate, obliterate SepehrKeyvan-ShokouhiSerimaNazarianKourosh Yazdani R

2. Outline • Introduction • Some legends; Ford and MBL • The navigate of reengineering • 7 disciplines of reengineering • Leadership with real vision

3. Introduction | this era • Time of rapidly changing technology • Age of the customer • Usual methods have not yielded dramatic improvements • IT vs. disappointing results • ‘reengineer’ the business; use IT to rapidly redesign business processes • Find imaginative new ways to accomplish work • Not meticulous planning – no small and cautious steps • All-or-nothing proposition with an uncertain result

4. Tale of Ford’s reengineering • ‘re-eng’ in accounts payable processes • Plan: rationalizing processes and installing new computer systems • Goal: reduce the head-count by 20% • Old procedure and situation; huge and disappointing • Changes; • Invoice-less processing • IT helps by using database • 14 data items to only 3 items • All matchings are done automatically • Results; 75% reduction in head-count and no mismatches and more accurate financial info

5. Case of Mutual Benefit Life • ‘re-eng’ in insurance applications • Old way; 30-steps rigid sequential process involving 5 depts. and 19 people process an applicant in 24 hours • Goal: 60% improvement in productivity • Changes; • Shared databases and powerful PC-based networks and workstations • Expert systems • New position of ‘case manager’ instead of many job definitions • No more handoffs of files, no more shuffling of inquiries • Results: application completion in only 4 hours and elimination of 100 vain positions

6. The navigate of ‘re-eng’ • Don’t cut fat processes and don’t automate them • Challenge old underperforming assumptions and rules • Quality, innovation and service are now more important than cost, growth and control • Industrial Revolution and postwar period: specialization of labor! But delays, errors, bureaucracy and costs are occurred • Look at essential processes from a cross-functional view: What the process is really trying to do? • The ‘re-eng’ team must keep asking Why? and What if?

7. 7 Disciplines of reengineering

8. Outcome-based organizing • Sometimes one person can perform all the steps in a process • Design a job around an objective instead of a single task • The most refined example: MBL • Another example: an electronics company • Eliminate the assembly-line approach; compress responsibility for the various steps

9. Autonomous units • Depts., units, and individuals who need the result of a process can do it themselves • Using expert systems and databases, depts. can make their own purchases without any purchasers • Some examples • Interfaces and liaisons can be eliminated • The problem of capacity planning for process performers is greatly reduced

10. Work and produce Info simultaneously • Why doesn’t an organization that produce information also process it? • Data is created in a dept and it will be collected and processed in other dept! • Remember the Ford’s case

11. Dispersed but centralized • Conflict between centralization and decentralization • Companies no longer have to make such trade-offs • They can use ‘re-eng’ by IT and standardized processing systems to get advantages of both of them • hp case: each of the more than 50 units had its own purchasing dept and a coordination unit getting harmony to them by using a shared database • 150% improvement in on-time delivery; 50% reduction in lead times and 75% reduction in failure rates

12. Link parallel activities • Sometimes separate units perform the same function or different activities that must eventually come together • Some examples: case of developing a photocopier • Forge links between parallel functions and coordinate them while their activities are in process rather than after they are completed • IT can brings the independent groups together

13. Decision making by doers • A tacit assumption: the doers have neither the time nor the willingness for controlling and have no knowledge for making decisions • But built-in controls and self decision makings are needed • Pyramidal layers compress and hierarchy disappears • MBL does it vertically (compress linear sequence) and horizontally (eliminate layers of managers). • Convert the controller to supporter

14. Get Info firstly and once • Each depts. Or units has its own required information and forms but • Collect a piece of info once and store by IT • Sample case: insurance company

15. Think big

16. Leadership with real vision • ‘re-eng’ is a tremendous effort that mandates change in many areas • Real vision is needed • Top managers must back the effort and then staff will take ‘re-eng’ seriously • Considering the inertia of old ways, implementing the ‘re-eng’ plan is hard • We have the tools to do what we need to do • If managers have the vision, ‘re-eng’ will provide a way

17. Thank you.