Reengineering

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This article is about reengineering business processes. For software reengineering, see Reengineering (software).

Reengineering (or re-engineering) is the radical redesign of an organization's processes, especially its business processes. Rather than organizing a firm into functional specialties (like production, accounting, marketing, etc.) and looking at the tasks that each function performs, we should, according to the reengineering theory, be looking at complete processes from materials acquisition, to production, to marketing and distribution. The firm should be re-engineered into a series of processes.

The main proponents of re-engineering were Michael Hammer and James A. Champy. In a series of books including Reengineering the Corporation, Reengineering Management, and The Agenda, they argue that far too much time is wasted passing-on tasks from one department to another. They claim that it is far more efficient to appoint a team who are responsible for all the tasks in the process. In The Agenda they extend the argument to include suppliers, distributors, and other business partners.

Re-engineering is the basis for many recent developments in management. The cross-functional team, for example, has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, knowledge management systems, groupware and collaborative systems, Human Resource Management Systems and customer relationship management systems all owe a debt to re-engineering theory.

Criticisms of re-engineering

Reengineering has earned a bad reputation because such projects have often resulted in massive layoffs. This reputation is not altogether unwarranted, since companies have often downsized under the banner of reengineering. Further, reengineering has not always lived up to its expectations. The main reasons seem to be that:

Reengineering assumes that the factor that limits an organization's performance is the ineffectiveness of its processes (which may or may not be true) and offers no means of validating that assumption.
Reengineering assumes the need to start the process of performance improvement with a "clean slate," i.e. totally disregard the status quo.
According to Eliyahu M. Goldratt (and his Theory of Constraints) reengineering does not provide an effective way to focus improvement efforts on the organization's constraint.

There was considerable hype surrounding the introduction of Reengineering the Corporation (partially due to the fact that the authors of the book reportedly^{[citation needed]} bought numbers of copies to promote it to the top of bestseller lists).

Abrahamson (1996) showed that fashionable management terms tend to follow a lifecycle, which for Reengineering peaked between 1993 and 1996 (Ponzi and Koenig 2002). They argue that Reengineering was in fact nothing new (as e.g. when Henry Ford implemented the assembly line in 1908, he was in fact reengineering, radically changing the way of thinking in an organization). Dubois (2002) highlights the value of signaling terms as Reengineering, giving it a name, and stimulating it. At the same there can be a danger in usage of such fashionable concepts as mere ammunition to implement particular reforms.

References

Business Process Redesign: An Overview , IEEE Engineering Management Review.
Abrahamson, E. (1996). Management fashion, Academy of Management Review, 21, 254-285.
Champy, J. (1995). Reengineering Management, Harper Business Books, New York.
Dubois, H. F. W. (2002). Harmonization of the European vaccination policy and the role TQM and reengineering could play, Quality Management in Health Care, 10(2): pp. 47-57. "PDF"
Hammer, M., (1990). "Reengineering Work: Don't Automate, Obliterate", Harvard Business Review, July/August, pp. 104-112.
Hammer, M. and Champy, J. A.: (1993) Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business Books, New York, 1993. ISBN 0-06-662112-7.
Hammer, M. and Stanton, S. (1995). "The Reengineering Revolution", Harper Collins, London, 1995.
Hansen, Gregory (1993) "Automating Business Process Reengineering", Prentice Hall.
Ponzi, L. and Koenig, M. (2002). "Knowledge management: another management fad?", Information Research, 8(1).
"Reengineering Reviewed", (1994). The Economist, 2 July 1994, pp 66.
Rummler, Geary A. and Brache, Alan P. Improving Performance: How to Manage the White Space in the Organization Chart, ISBN 0-7879-0090-7.ar:هندرة