9.3 Re-engineering and business process re-engineering

Detail

Companies often divide business processes into individual tasks and assign them to different people. The documents used in the business process often wait for hours or days at each desktop as they are passed between the people involved in the process. Delphi Consulting Group estimates that up to 90 percent of the time needed to complete typical office tasks is a result of gathering and transferring paper documents.

Some companies centralize operations to achieve economies of scale. Others decentralize operations to be more responsive to their customers and to provide better service. With current technology, companies can have the advantages of both approaches: corporate-wide data bases centralize data, and telecommunications technology disburses it.

Many organizations have a number of separate information systems, such as an accounting system, a management information system, a marketing system, a production system, and so on. Each of these systems collects, enters, and processes some of the same information. Not only is this inefficient and expensive, but redundant data exists that all too often contains discrepancies. These problems can be solved by capturing data once, at its source, storing it in data bases, and making the data accessible to all authorized users.

Most organizations process their acquisition/payment information like Ford Motor used to do. Ford prepared multicopy purchase orders and receiving reports. Fourteen different data items on these two documents had to be matched to a vendor's invoice before a payment could be made. Accounts payable had more than 500 people who spent most of their time trying to reconcile all the mismatches. The process was time consuming and frustrating, and vendors were unhappy because payments were delayed.

Most organizations are split into separate departments and each specializes in a specific task. Each department completes its particular task and passes its "product" off to another department. This principle states that the people who use information from the system should be those who perform the process that produces that information.

Most organizations have a hierarchical structure with one or more levels of management to supervise, direct, and control those below them. Many organizations have found that empowering workers with decision-making responsibilities leads to a higher quality product and service, faster responses to problems, and fewer levels of management. Expert systems and other newly developed information technology helps workers make correct decisions and avoid mistakes.

Many business processes are so complex that they are divided up and assigned to independent teams. These teams work in parallel with each other and then integrate their tasks when they are done. For example, when Chrysler designed a new car, they had different teams designing the body, the interior, the engine, the transmission. and other elements. When they began assembling the cars, they often found that the components did not fit together properly and had to be redesigned.