Reengineering is the process of redesigning the processes (especially business processes) of an organisation in order to cut costs, improve performance, quality and service. It emphasises on the need to organise a company into processes rather than functions. Michael Hammer and James. A.
Champy proposed the theory in the early 1993. The process caught on in the early 1990’s and several newer management information systems like ERP, HRM and CRM.Reengineering applications (case-studies): Reengineering offers lasting solutions with huge returns to companies, which seek to provide varied solutions. Companies like Proctor and Gamble, General Motors and American Airlines have recovered from potential financial debacles to go onto beat their competition. P&G, which boasts of close to 300 brands, has to constantly innovate and reengineering helped them combine their manufacturing and production processes.
General Motors has applied reengineering to its software platforms and has been able to drastically cut costs and improve quality.Criticisms of reengineering: Reengineering has unfortunately become an excuse to downsize the workforce. Many a company today is using the process to cut costs by laying-off a large number of employees. The management of several companies is also reluctant to employ reengineering, as it requires the company to restart the operations and does not work within the existing status quo. The process also sometimes is used as a one-time solution thus negating its potential long-term benefits.
Many managers are of the opinion that the process itself is just a redefinition of scientific management and does not provide extra dimension to the business process. Conclusion: Reengineering when used in conjunction with other existing functions to form cross-functional applications can be used on a wide range of management information systems and is very profitable to the company. Thus reengineering despite its downside as a layoff scheme it is a viable long-term alternative for companies looking to cut costs and improve quality and service.
