Process Reengineering

What is Process Reengineering?

Process reengineering is a fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed. Coined by Michael Hammer and James Champy in their 1993 book, it emphasizes starting from scratch, questioning all existing assumptions about how work is done. The goal is to achieve breakthroughs in efficiency and effectiveness rather than incremental improvements.

Unlike continuous improvement methodologies like Six Sigma or Lean, which focus on refining existing processes, process reengineering aims to dismantle and rebuild them entirely. This approach often involves leveraging information technology as an enabler for new ways of working. It requires a top-down commitment and a willingness to challenge established norms and organizational structures.

The success of process reengineering hinges on identifying core business processes and redesigning them to be customer-centric and efficient. It typically involves cross-functional teams and a focus on outcomes rather than tasks. The potential benefits are significant, including reduced costs, improved customer satisfaction, and increased competitiveness.

Key Takeaways

• Process reengineering involves a radical redesign of existing business processes.
• It focuses on achieving dramatic improvements rather than incremental changes.
• Information technology is often a key enabler for reengineered processes.
• The approach requires a fundamental shift in how an organization operates and thinks about its work.
• Customer satisfaction, cost reduction, and speed are common goals.

Understanding Process Reengineering

Process reengineering fundamentally challenges the status quo. It asks