Opinions of UniForum Members
Reengineering: Who Really Benefits?
Recently we asked our readers whose organizations have been reengineered
why it was done and what effects it has had on organizational structure,
productivity and morale. Here's what they told us:
We did it to reduce costs. At my radio stations, the announcers have been
essentially replaced by multimedia client/server setups. Music is stored
in RAID arrays, and the DJs stay ahead of the system by cutting voice tracks
rather than "doing a show" as such. The companies have saved lots
of money on labor costs, and the morale of remaining staff is good. As a
broadcast engineer, it's been great making the shift from screwdrivers and
voltmeters to RAID, NetBEUI and inittab.
San Jose, CA
My company just hired a reengineering team, and my department was chosen
as the pilot. I see many potential benefits to having an impartial third
party review your processes, but it remains to be seen whether all the proposed
changes are actually put in place and improve the bottom line. With participation
from the entire company, there is the potential for wide acceptance of the
"plan," and with mass acceptance, success is probable. For some
departments, reengineering can improve a tarnished image. Input must come
from the ground up before the best changes can come from the top down.
Joe De Angelo
One of my major customers has been reengineering its processes for several
years now. The changes have been drastic: moving from paper input and output
to online at the users' networked PCs. It has happened one application (functional
area) at a time. Morale has been mixed--during some application migrations
there has been general concern for the users and their needs and reactions.
At other times it has been a we/they adversarial situation. Overall, these
"reengineerings" have resulted in great gains in productivity
and, after some pain, great satisfaction from the user community.
St. Louis, MO
It's hard to tell why it was done; there is so much vindictive talk going
on that even the rumors are worthless. Of course, there should have been
better communication from the top--we did get some company-wide e-mails,
but these used lots of industry buzzwords and let us all imagine the worst.
As best I can tell, the why of it was cost-cutting (reducing payroll) and
refocusing on somewhat different markets (this is where upper management
Product marketing has been moved out to the field offices. There have been
no significant IS changes at my site. As for the results, the marketing
change hasn't been felt yet, but I'm not too happy about it. I'm in engineering,
and we were getting too little input from marketing already. Now it will
be next to impossible. The bigger changes (the ones I can't talk about)
have everybody more scared than I have ever seen. We just got a new CEO
and this "first step" isn't giving me much confidence in his respect
In our case, reengineering was done because our customers were extremely
unhappy. The customer focus was always missing from our IS efforts in the
past. Matrix management organization was implemented. We added program managers
who are responsible to the customer for performance, budget and schedule,
and made the section managers (to whom the people report) responsible for
people, process and technology. Initial confusion has resulted in some morale
problems, but customers are happy to have a focal point for their frustrations.
We were reengineered about two or three years ago, and I found it a trying
experience but absolutely necessary for our company. It gave us the chance
to refocus and retool (bad names for downsizing) our personnel and come
back stronger than ever. Companies, cultures and businesses change, and
employees have to change also.
We reengineered because people in various units--MIS most conspicuously--had
little or no understanding of how what they did had anything to do with
the company and its goals. The MIS department was essentially laid off in
its entirety, the applications they supported were replaced and an entirely
new platform and application was brought in to replace them. Certain people
in specific technical positions who reported through MIS were redeployed
to the formerly client organizations; however, these individuals had long
been outside the mainstream of MIS. The company went from one commercial
mainframe and four scientific platforms to one AS/400 and about 150 personal
computers for commercial use and 45 scientific workstations.
Our company went through a reengineering effort last year. It did not deliver
on its promise. However, it was an important experience, and the IT organization
played a critical part. If the reengineering team is put together with some
of the best people in your organization, you will have a wonderful opportunity
to learn more about the business and the roles of other departments and
to interject IT into your company's business processes.
Our charter was to reengineer the order fulfillment process in the company.
The team recognized that we needed to reengineer the sales forecasting process
before even considering replacing the existing forecasting software system.
A well-understood process is a prerequisite to determining the requirements
for a new system. Occasionally, the team would start to head prematurely
to identifying the features and functions of a new forecasting system before
getting the reengineering process down. It is important that the IT person
pull the team back to its main focus.
The final lesson was the role of executive support. In this context, it
means being actively involved in the oversight of the reengineering team.
It is also important that the executive staff empower the team and follow
through on their recommendations whenever possible.
My department did a BPR this year; in fact, we're still doing it. The reason
is that we are expecting a tenfold increase in work without any additional
manpower. We took some time to reevaluate what we did and how we did it
in order to delete the 90 percent of unnecessary effort. We have defined
the fundamental reasons for the existence of the department and are now
refusing to work on anything that is outside of its primary mission. There
are some unhappy people, but the department and our customers are happy.
Santa Clara, CA
The reengineering was done presumably to lower costs while improving internal
customer service, but no precise statement of an organization-wide goal
has ever emerged. Not all changes have been determined yet (this is only
the second year of implementation), but those that have include the combination
of departments, the outsourcing of previously internal functions and the
fragmentation of departments previously combined. The latter has been the
most visible change within the IT function--plus the appearance of extra
millions of budgetary dollars which were unavailable before. The new money
has facilitated the purchase of a lot of new equipment, which has done much
to move us closer to the state of the art in networking and IT.
Morale--especially in the IT area--is lower than I would have believed possible.
This is due to the personality of the person hired as associate VP of IT
to honcho our part of the change. [The VP] acts as a deterrent to many of
the ideas normally embraced with reengineering efforts, such as teamwork
and organizational flattening.
In summary, I see no actual benefit from the reengineering effort. All the
benefits visible so far are a direct result of increased spending in one
area and are, if anything, smaller than might have been seen from the same
increase in spending under the previous organization.
R. Bruce Meikle
The University of Wyoming underwent limited reengineering in the last year,
because budget shortfalls required cuts in programs and services. In the
process, salary grades and ranges were lowered; no salary cuts were implemented,
but future income growth was narrowed and positions were terminated. Continuing
shortfalls are impacting the critically deferred maintenance of the university's
infrastructure. As might be expected, morale is low, and the administration's
(and state's) budgetary abilities are held in low esteem.
It was done to improve processes that would result in cycle time reduction
and cost reduction. We starting moving IS into the business units 20 years
ago. The main change was not organizational, but in attitudes--everyone
was empowered to change their own processes. One major success was that
our product cycle to get a new drug application submitted to the FDA was
reduced from 48 to 22 months. The process has actually affected morale and
productivity favorably, because it has put the individual in a position
where he or she can effect change, rather than wait for someone else to
do it for them.
Thomas Wayne Alles
Abbott Park, IL
With the changing face of government funding of basic science research organizations,
we found that reengineering was vital for us to remain competitive (and
afloat) in the field of ocean science research. Severe changes have been
made, including elimination of most centralized computer services and merging
of financially oriented IS departments with technology oriented departments,
which gave individual departments more direct control over their own IS
Morale is at an all-time low. The restructuring and decentralizing of information
services have been massively divisive and have caused petty political battles
over information territory. Most fear that the worst is yet to come, and
when people are in constant fear of losing their jobs, they can't be productive,
efficient or even friendly members of a technological team.