This phase consists of the following activities:
. Identify the core/high level processes
. Recognize potential change-enablers
. Gather performance metrics within the industry . Gather performance metrics outside the industry . Select processes that should be reengineered . Prioritize selected processes
. Evaluate pre-existing business strategies
. Consult with customers to know their desires
. Determine customer's actual needs
. Formulate new process performance objectives . Establish key process characteristics
. Identify potential barriers to implementation
In this phase, we begin to break away from normal patterns of identifying business opportunities. We start by dividing the entire organization into high-level process rather than the usual vertical business' areas such as marketing, production, finance, etc. these processes, usually less than a dozen, are the major or core processes of the organization. This activity is not a time consuming
task, but it is difficult because it requires a good knowledge of how the company thinks about itself. One goal here is to identify the process boundaries (where the process begins and where it ends), which will help set the project scope for those processes that are to be reengineered.
In many cases, seeing the company from the customer:~s point of view can help
identify what these high level processes might be. Fdr example, when Texas
.1Instruments outlined their major processes for their semiconductor business, they came up with only six processes as follows: Strategy Development, Product Development, Customer Design and Support, Order Fulfillment, Manufacturing Capability Development, and Customer Communications. Each of these processes converts inputs into outputs.
At this point, it is helpful to begin thinking about potential change levers that may lead to dramatic changes in the organization's processes. Change levers will usually fall under one of these categories: the use of information, the use of information technology and human factors. Try answering the following questions:
. What new information is available and easily accessible to the organization? . What new technologies have recently been introduced or are on the horizon, that can change how businesses and customers interact?
What new ways of strructuring cross-functional work teams, compensation systems and incentiv~ methods have proven to be effective in improving operations within other organizations?
In many instances, a modification in one of these areas - information, IT and people - requires changes in the other two areas as well to be most effecUve. Once the major processes need to be reengineered. The most objective and accurate way is to compare the performance of the high level processes, identified earlier, with i :the performance of the competitors as well as organizations in other in1:tustrial segments. Even if the direct competition is outperformed, there mayi'be companies in other industries that may be more effective in performing a similar task - such as order fulfillment or product development.
If company fulfills orders in six months, while a competitors fulfills orders in two weeks, then this process can definitely be considered as a candidate for reengineering. What ones'should look for are overall, bottom line performance metrics for the high level processes that will help in selecting the processes that must be reengineered. Typically, organizations use the following three criteria: a) Dysfunction (which processes are the most ineffective)
b) Importance (which processes have the greatest impact on our customers)
c) Feasibility (which processes are at the moment most susceptible to
accomplish a successful redesign
Picking a process which has high success potential and which can show success fast is very important to build the necessary momentum and enthusiasm at all levels of the organization. Prioritizing the processes that have been chosen for reengineering, results in a schedule --' the order in which the processes will be reengineered.
The first step is an assessment of the existing business'strategy. Most likely, this existing business strategy is not focused on driving a process; therefore, a new process strategy has to be defined. This new process strategy should reflect the new strategic goals for the process. Customers arE!, ,an important source of information to set the new direction. Hence, they shou!~ be consulted not only to discover their desires, but also to find out what they aqt4ally need. Process goals and objectives can be determined by combining custoljTler needs with competitor strategies and best practices of the business. In additiQn ~o goals and objectives, the conception of the new process needs to be cOll1pleted by identifying key performance measures, key process characteristics, critical success factors, and potential barriers to implementation.
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