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Reengineering:
“ Reengineering is the fundamental rethinking
and radical redesign of business processes to
achieve dramatic improvements in critical,
contemporary measures of performance”
Michael Hammer & James Champy
• The definition contains four key words:
– Fundamental.
– Radical.
– Dramatic &
– Processes.
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Reengineering: Fundamental
Business people must ask the most basic
questions about their companies and how they
operate:
– Why do we do what we do?
– Why do we do it the way we do?
Asking these fundamental questions forces
people to look at the tacit rules and
assumptions that underlie the way they conduct
their business.
Often, these rules turn out to be obsolete,
erroneous, or inappropriate.
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Reengineering: Radical
Reengineering is about business reinvention- not
business improvement, business enhancement,
or business modification.
In reengineering, radical redesign means
disregarding all existing structures and
procedures and inventing completely new ways
of accomplishing work.
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Reengineering: Dramatic.
• Reengineering isn’t about making marginal or
incremental improvements but about
achievement quantum leaps in performance.
• Marginal improvement requires fine-tuning.
• Dramatic improvement demands blowing up the
old and replacing it with something new.
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Reengineering: Business processes.
• We define a business processes as a collection
of activities that takes one or more kinds of
input and creates an output that is of value to
the organizational mission.
• Most businesspeople are not ‘process oriented’;
they are focused on task, on jobs, on peoples,
on structures, but not on processes.
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The enabling role of IT: Shared databases.
• Old rule:
– Information can appear in only one place at one
time.
• Disruptive technology:
– Shared databases.
• New rule:
– Information can appear simultaneously in as many
places as it is needed.
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The enabling role of IT: Expert systems
• Old rule:
– Only experts can perform complex work.
• Disruptive technology:
– Expert systems.
• New rule:
– A generalist can do the work of an expert.
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The enabling role of IT: Telecommunications
• Old rule:
– Business must choose between centralization and
decentralization.
• Disruptive technology:
– Telecommunications networks.
• New rule:
– Businesses can simultaneously reap the benefits of
centralization and decentralization.
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The enabling role of IT: DST
• Old rule:
– Managers make all decisions.
• Disruptive technology:
– Decision support tools.
• New rule:
– Decision-making is part of everyone’s job.
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The enabling role of IT: Mobile technology.
• Old rule:
– Field personnel needs offices
where they can receive, store and
transmit information.
• Disruptive technology:
– Mobile technology and wireless
data communications.
• New rule:
– Field personnel can send and
receive information wherever they
are.
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The enabling role of IT: Technological media.
• Old rule:
– The best contact with a potential buyer is personal
contact.
• Disruptive technology:
– Inter-voice systems, Internet, and specific business
terminal systems.
• New rule:
– The best contact with a customer is the most
effective contact.
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The enabling role of IT: Tracking technology.
• Old rule:
– You have to find out where things are.
• Disruptive technology:
– Automatic identification and tracking technology.
• New rule:
– Things tell you where they are.
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The enabling role of IT: High performance computing
• Old rule:
– Plans and business
performance must be
revised periodically.
• Disruptive technology:
– High performance
computing.
• New rule:
– Plans and business
performance can be
revised instantaneously.
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The enabling role of IT: Virtual Private Networks.
• Old rule:
– Point of Sales need to
operate offline (High cost of
Headquarters
telecommunications).
• Disruptive technology:
INTERNET
– Virtual Private Network /
Internet.
VPN
• New rule:
– Point of Sales can
operate Online.
Point of
Sales.
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Point of
Sales.
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Point of
Sales.
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The enabling role of IT: Information Capture Chips.
• Old rule:
– Many points of check
need to register
special variables on
product or samples.
• Disruptive
technology:
– Information Capture
Chips.
Product
Product
Product
M
M
M
M
M
M
Product
Product
Product
• New rule:
– The information about
of product / sample is
store inside the
product.
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The enabling role of IT: Data Mining
• Old rule:
– The data need to be
studied and
processed to achieve
the information.
INFORMATION
• Disruptive
technology:
DATA MINNING
– Data Mining.
• New rule:
DATA
– The Data can
analyzed dynamically
to achieve the
information.
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DATA
DATA
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DATA
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