Reengineered Processes CHARACTERISTICS OF REENGINEERED PROCESSES

Dr. mer Yaz Department of Business Administration Eastern Mediterranean University

Reengineered processes look very different than traditional processes

Several jobs are combined into one
compression of responsibility concept of case worker -- from beginning to end of process concept of case team -- more than one person involved elimination of handoffs, delays, and errors made possible by case workers and teams decreased overhead and improved control also side benefits

02/03/2005

This slide set is prepared by Dr. mer Yaz for MGMT 585 Business Process Reengineering

Reengineered Processes
workers make decisions
vertical compression - workers now make their own decisions rather than go up the managerial hierarchy for an answer; decision-making becomes part of the work monitor and control by somebody else assumption is no more valid result of vertical compression -- fewer delays, lower OH costs, better and faster customer response, greater empowerment for workers

Reengineered Processes
A de-linearized process

steps in the process performed in natural order

linearity is no more necessary
Task 1 Task 2 Task 3 Task 4 Task 5

a delinearized process has advantages: jobs get done simultaneously shorter time for the process less rework as a result of simultaneous work

Reengineered Processes
processes have multiple versions
this is the end of standardization of the mass production era today, multiple versions of the same process are needed in order to meet the requirements of different markets, customers, or situations IBM Credit example 1. straightforward cases (computer) 2. medium hard cases (deal structurer) 3. difficult cases (deal structurer & specialists) multi-purpose processes are usually very complex must handle a variety of situations multi-version process is much simpler since it is designed to handle only the cases for which it is appropriate
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Reengineered Processes
work is performed where it makes the most sense
in traditional organizations, work is organized around specialists in a reengineered process, work shifts across organizational boundaries purchasing office supplies (example on p. 56) maintenance work lots of money spent with substandard service quality

checks and controls are reduced

these activities do not add value to the product or service the idea in a reengineered process is to use checks and controls only if they make economic sense example: signing of student registration form by the department chairman -- is it really necessary?
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Reengineered Processes
example: auto insurance business (p. 59) claims processing -- for minor accidents, claims adjusters and appraisers are eliminated by some insurance companies

Reengineered Processes
A very interesting illustration
Walmart and Procter & Gambles (PG) inventory management arrangement (p. 60)
an unorthodox but very clever process which benefits both parties

reconciliation is minimized
(reconciliation: uyum) the idea is to minimize the number of external contact points that a process has the result is reduced chance of receiving inconsistent data/information that will require reconciliation Ford Motor example -- Three points of contact: 1. purchasing dept (purchase order) 2. receiving dock (receiving report) 3. accounts payable (invoice)
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Reengineered Processes
A case manager provides single point of contact
acts as a buffer between the customer and the complex process this provides a single point of contact between the customer and the process the case manager provides the customer with all the information needed

hybrid centralized/decentralized operations are common

companies that have reengineered their processes have the ability to combine the advantages of centralization and decentralization in the same process information technology enables organizational units to act as autonomous units while at the same time enjoy the economies of scale brought about by centralization