2.1 Reengineering, Restructuring and Crisis
Hammer and Champy initiated Business Process Reengineering (BPR) trend in 1993 with their book “Reengineering the Corporation”. The objective of this practice is to attain increased customer satisfaction and organizational performance of revolutionary magnitude – “we are talking quantum leaps”. The business model needs to be fundamentally redesigned in order to prepare the organization for new market demands. To lower costs and increase service quality, a radical redesign and reorganization of an enterprise is necessary. The concept is fundamentally top-down oriented and is especially successful when a high pressure situation, or crisis, dictates perception.
The principles are:
- Alignment of core business processes
- Focus of critical business processes on the customer
- Emphasis on core competencies
- Use of modern information technologies
Reengineering concepts are rather mechanical in their approach, while people play a minor role. Focus is on a strategic remodeling and restructuring of the organization. The change manager follows these four steps: positioning, process description, process design and controlling.
2.1.1 Positioning
Positioning is the base for a successful initiation and fulfillment of the BPR process. The change manager must:
- Analyze the performance of existing processes
- Redesign operational and strategic goals of the organization
- Outline organizational infrastructure
- Describe existing corporate culture
The change manager can use the following Business Reengineering tools:
- Benchmarking
- Monetary models
- Value chain (according to Porter)
- IT tools
- Process cost mapping
- Change Management
- Controlling
2.1.2 Process description
Process analysis and description are very important in this concept and are conducted using the following steps:
Process modeling | Illustration of business processes in an organization Illustration of process related functions (tasks, responsibilities) within the content and time related dependencies with the use of link operators (and, or, exclusively) due to high complexity performed with computer support |
Process simulation | Time simulation (for separate tasks) Simulation of probability distributions Horizontal positioning of vertical operational practices in relation to operational processes |
2.1.3 Process redesign
In process redesign, operational practices are aligned with strategic challenges pursuing the following targets:
- Decisions and responsibilities are transferred to the process teams
- Consolidation of positions, minimizing of interfaces
- Performance of tasks by optimal location (principle of origination)
- Parallelization of process steps
- Combination of centralized and decentralized tasks
2.1.4 Controlling
Applied measures and reorganizations need to be monitored. If necessary, processes will be continuously improved.
2.1.5 Conclusion
Hammer and Champy themselves admitted that reorganizations fail approximately nine times out of ten. The presumption is that revolutionizing organizations is not a model for success from a mechanical point of view. It is difficult to illustrate the complexity of reality in a purely mechanical way. Excluding employees in the process generates a resistance that works against an otherwise reasonable concept.
2.2 Strategic r