Process Reengineering
4.6 Systems Integrity
Some organizations are beginning to seriously experiment with the concept of systems integrity, as envisioned by Philip Crosby [21]. Under this approach, all elements of an organization are viewed as components of a system with all parts interrelated and interdependent. Everyone within the organization must have access to a “system map” of their work processes and the interconnections among these processes. These “maps” become more detailed the deeper the analysis proceeds into the organization. This structured approach should lead to increased flexibility, since it is easier to move the component parts around if it is known where to find them in the first place. The increasingly more
rapid changes necessary to respond to customers and the marketplace can be more quickly assessed, coordinated, and more successfully implemented. Every part of the organization impacted by change should be readily identifiable, and planned actions could be initiated to respond more effectively and efficiently.
This systemic approach should minimize the time necessary to respond to needed change. In addition, the potential negative impacts of the change could be minimized or negated. Organizations should learn to design their changes rather than become victims of them.
A system map, however, is only a representation of a dynamic set of interconnecting activities and relationships that occur on a daily basis within an organization. The administration of this system map requires the creation of a new role in the organization to maintain the overall integrity of the system. To ensure systems integrity, someone must be given responsibility for maintaining the broadest view of the workings of the organization to be certain that appropriate stewardship for the total system is exercised. Two common organizational experiences—one an internally imposed force for change and the other an externally imposed change—can serve to illustrate the need for this stewardship role.
Many organizations operate as if a finite “window of opportunity” exists to develop new services or products. This “window” may become the singular focus of management, which proclaims that it must be met or “all is lost.” As a consequence, compromises begin to be made regarding the future integrity of the service or product. Not all the appropriate tests are ordered or completed.
The identification of problems usually leads to finger pointing and the placing of blame for the potential of missing the “window.” When faced with a problem, the sole determining question often becomes: “How can we get past this issue and still meet the launch date?”
Under the concept of systems integrity, the scenario would play out quite differently. All of the work processes affected by the new service or product and their interconnections should be quite apparent in the system map. Therefore, the right people, including customers, can be part of the design team from the start of the project. By fostering this involvement, the plan for the new service or product can be effectively coordinated within the organization. In addition, it should be possible to implement the new service or product without unduly disturbing the smooth flow of current organizational activities.
An added advantage derived from a systems integrity approach is a well- defined and tested development process for the new service or product. This development process can then be incorporated into the organization’s overall strategy and used to determine appropriate timing cycles for the release and subsequent evaluation of the new service or product. Consider a new service or product that has been launched where every affected process within the organization has been evaluated in the design and planning stage. All affected
people should understand what they must do to successfully assist in the introduction of the new service or product.
A second example involves the enactment of a new government regulation that will impact the organization. The due date for compliance is externally imposed. In most cases, management mandates the new changes to the most obviously impacted parts of the organization. Others who might be affected are identified through a “ripple down” process. An inordinate amount of time and money may then be spent in policing actions necessary to ensure compliance.
Unanticipated effects in other parts of the organization are then handled as they erupt.
Under the systems integrity approach, the new regulation would still be mandated and the compliance date set by external forces. However, the “system map” would clearly indicate the impacted portions of the organization’s work processes, the underlying support processes, and all downstream activities. The communication of pertinent information and training of personnel in all affected parts of the organization could be planned and coordinated with a team of process experts—people who work in the areas affected by the new regulations.
Before implementation, all affected processes would be systematically changed to reflect the new regulations. Implementation could occur without unnecessary disruptions, excessive policing, or finger pointing.
5 SUMMARY AND CONCLUSIONS
The National Academy of Public Administration defined process reengineering as, a radical improvement approach that critically examines, rethinks and re- designs mission, product and service processes within a political environ- ment. It achieves dramatic mission performance gains from multiple cus- tomer and stakeholder perspectives. It is a key part of a process management approach for optimal performance that continually evaluates, adjusts, or re- moves processes [22].
Process reengineering includes a fundamental analysis of the overall organi- zation and a redesign of (1) organizational structure, (2) workflows, (c) job definitions, (4) reward structures, and (5) control processes. In some cases, the organizational culture and philosophy must be re-evaluated to ensure the suc- cessful implementation of the proposed change.
Process reengineering involves four basic components that must be main- tained in equilibrium: (1) defining strategic objectives, (2) improving processes, (3) applying technology, and (4) developing human resources. While the pri- mary focus is on the linkages between strategy and process, the existence of an ongoing strategic planning process within the organization can contribute significantly to the overall success of any process reengineering initiative.
Constituent or customer values must be reflected in the strategic objectives of an organization so that processes can be reengineered to focus on providing superior value to the recipients of the organization’s products and services. It may be appropriate to conduct a formal analysis to determine what constitutes quality servicefrom the perspective of the constituent or customer, and how this service perspective can be measured and improved upon.
Strategic objectives must also reflect the core competencies of the organ- ization—what it does best and those areas in which improvements should be initiated. An examination of an organization’s strengths, weaknesses, opportu- nities, and threats (SWOT), can help determine its current competencies which, in turn, will help determine what its mission should be.
Critical success factors should specify how the major activities to be measured should be aligned with customer values and the shared vision of the organization. Key performance indicators—detailed measurements to monitor and evaluate management strategies—should be determined for each critical success factor.
Benchmarking helps to set appropriate targets and metrics for the organi- zation by focusing on (1) using external standards to set targets, and (2) learning from others—learninghow muchand perhaps more important, learninghowand whythey succeed. Learning from others involves identify them, study them, and improving processes based upon what has been learned. Crucial internal pro- cesses need to be identified, and measures must be established. Comparisons in processes and performance must be made internally, as well as externally, and process improvements need to be put in place.
The formulation of an operational vision is designed to translate the more generic aspects of the strategic objectives into specific applications within the organization. An operational vision involves (1) programming approved objectives into specific projects, programs, and activities, (2) identifying and budgeting of necessary resources to implement these programs over some specific time period, and (3) designing and staffing organizational units to carry out approved programs.
Activities and characteristics that define a process can be documented through process mapping. Processes selected for mapping should yield results that can be measured with objective criteria. Each process should be mapped at a level of detail appropriate to identify reengineering opportunities and associated performance measures.
Gap analysis is a principal component of process reengineering. It es- tablishes the framework for the comprehensive analysis of current processes, provides the basis for major program initiatives and the innovative design of new processes, identifies “quick wins,” and assesses barriers to change. And it provides key parameters for the analysis of benefits and costs associated with the implementation of the new processes.
Adapting the organizational structure and human resources system to fit the newly defined processes is a crucial task. Employee empowerment, job rotation, and subunit reorganization often can be achieved without major disruptions.
However, staff reduction, a frequent process reengineering recommendation, can cause major disruptions.
A new role must be created to maintain the overall integrity of the organization as a system. The broad view of the workings of the organization developed through process mapping must be maintained to be certain that appropriate stewardship for the system is exercised.
Reengineering requires that the organization recognizes its problems and seeks to dramatically overhaul the way it does business. According to Hammer, this is not something that can be accomplished in gradual steps (as espoused through the concepts of total quality management). Rather, a “go-for-broke”
approach is required—one that entails setting aside any preconceived notions of how the organization views its structure and ways of doing business. If the leadership is unwilling to make this commitment, an organization is strongly advised against attempting any process reengineering effort.
Organizations must learn to question their beliefs concerning reality (i.e., their paradigms) in order to experiment and innovate. Paradigms can be helpful in ordering our world—in establishing clear boundaries between what is possible and what is not possible in an individual’s universe. However, paradigms also can be hazardous to future success and can cause blindness within an organization.
Innovation and creativity takes place, as a general rule, at the outer boundary of the current paradigm—at the point where the previously unreal becomes real and the unmanifest becomes manifest. Things that happen at the fringes of today’s paradigms may well become mainstream tomorrow. Joel Barker asks the following paradigm-shifting question: “What is impossible to do in your business (field, discipline, department, division, technology, etc.), but if it could be done, would fundamentally change it [23]?”
Efforts to respond more effectively to customer or end-user requirements often result in higher costs to the organization. This cost differential is not always related to “hard” operating dollars, but may also be reflected in softer dollars—those costs associated with employee burn-out, managerial defections, and loss of customers.
Organizations often are confronted by challenging paradoxes. A funda- mental survival strategy—becoming more responsive to the “marketplace”—can only be successfully accomplished by designing more effective work processes that produce a consistent output. Developing such processes, however, seems to go hand in hand with tighter structure and controls. How can an organization be flexible and better controlled at the same time? How can an organization better serve not only its customers or end-users, but also better serve the cadre of people who serve those customers?
ENDNOTES
1. Michael Hammer and James Champy. Reengineering the Corporation. New York:
HarperCollins, 1993.
2. Thomas Davenport. Process Innovation. Boston, Mass.: Harvard Business School Press, 1993, p. 5.
3. S. Guha, W. J. Kettinger, and T. C. Teng. Business process reengineering: building a comprehensive methodology. Information Systems Management. Summer 1993.
4. Arthur A. Thompson, Jr. and A. J. Strickland III. Strategic Management: Concepts
& Cases. Boston, MA: Irwin/McGraw-Hill, 1996, p. 280.
5. H. James Harrington. Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity, and Competitiveness. New York: McGraw Hill, 1991.
6. Thomas Davenport. Process Innovation: Reengineering Work through Information Technology. Cambridge: Harvard Business School Press, 1993.
7. Michael Hammer and James Champy. Reengineering the Corporation. New York:
HarperCollins, 1993.
8. Other publications of note include: R. L. Manganelli and M. M. Klein. The Reengineering Handbook. New York: AMACON, 1994; David K. Carr and Henry J. Johansson. Best Practices in Reengineering. New York: McGraw-Hill, 1995;
Michael Hammer and S. A. Stanton. The Reengineering Revolution: A Handbook.
New York: HarperBusiness, 1995; Office of the Assistant Secretary of Defense for Command, Control, Communications, and Intelligence. A Benchmarking Report on Functional Process Improvement. November 1993.
9. Sharon L. Caudle. Reengineering for Results: Keys to Success from Government Experience. Washington, D.C.: National Academy of Public Administration, 1994.
10. Customer-Focused Process Improvement. Boston, MA: Lockridge & Company, 1995.
11. Arthur A. Thompson, Jr. and A. J. Strickland. Strategic Management: Concepts &
Cases. Boston, MA: Irwin/McGraw-Hill, 1996, p. 94.
12. D. R. Daniel. Management information crisis. Harvard Business Review. September–
October 1961, pp. 111–116.
13. For further discussion of these applications see: John F. Rockart. Chief executives define their own data needs. Harvard Business Review. March–April 1979, pp. 81–
93; John F. Rockart. The changing role of the information systems executive: a critical success factors perspective. Sloan Management Review. Fall 1982, pp. 3–
13; John F. Rockart. Current uses of the critical success factors process. Proceedings of the Fourteenth Annual Conference of the Society for Information Management.
September 1982, pp. 17–21; G. B. Davis. Comments on the critical success factors method for obtaining management information requirements. MIS Quarterly.
September 1979, pp. 57–58; P. V. Jenster. Firm performance and monitoring of critical success factors in different strategic contexts. Journal of Management Information Systems. Winter 1986, pp. 17–33.
14. John F. Rockart. Harvard Business Review. March–April, 1979, p. 82.
15. A. C. Boynton and R. W. Zmud. Sloan Management Review. Vol. 25, No. 4, Summer 1984.
16. Peat Marwick. Creating the “CIOs Dashboard” of Performance Measures. www.
kpmgconsulting.com.
17. Michael G. Dolence. Key performance indicators. Planning for Higher Education.
Vol. 17, Fall, 1989.
18. Philip R. Crosby. Quality Is Free: The Art of Making Quality Certain. New York:
McGraw-Hill, 1979. For a hands-on guide see: V. Daniel Hunt. Process Mapping—
How to Reengineer Your Business Processes. New York: John Wiley & Sons, 1996.
19. H. James Harrington. Business Process Improvement: The Breakthrough Strategy for Total Quality, Productivity, and Competitiveness. New York: McGraw Hill, 1991.
20. Kaoru Ishikawa, one of Japan’s quality control pioneers, developed the cause-and- effect diagram in 1943 and published numerous books on quality control. In addition to his work at Kawasaki, Ishikawa was a long-standing member of the Union of Japanese Scientists and Engineers and a faculty member at the University of Tokyo.
21. Philip R. Crosby. Quality Is Free: The Art of Making Quality Certain. New York:
McGraw-Hill, 1979.
22. Sharon L. Caudle. National Academy of Public Administration Foundation. Reengi- neering for Results. Washington, D.C., 1994.
23. Joel Barker. Future Edge: Discovering the New Paradigms of Success. New York:
William Marrow and Company, 1992.