Reengineering

JULY-AUGUST I990

Reengineering Work: Don't Automote, Obliterote

Michael Hammer

,,,i downsizittg, many U.S. companies are still ,,,ii,**,,,i: ' unprepared to operate in the 1990s. In a tirne of rapidly sfuanging technologies and ever-shorter product life cycles, product development often pro' ceeds at a glacial pace. Irr an age of the customer, order fullillment has high error rates and customer inquir' ies go unanswered for weeks. In a period when asset stili-31iea is critical, inventory levels exceed many months of demand. The usud methods for boosting performanceprocess rationdization and automation-haven't yielded the dramatic improvements companies need. In particular, heavy investments in information tech' nology have delivered disappointing results-Iargely because companigs tend to use technolory to mechanios .16 ways of doing business. They leave the existing processes intact and use comPuters simply to speed them up. But speerting up those processes cannot address their fundamentd performance deficiencies. Many of our iob designs, work flows, control mechanisms, and organizational.structures came of age in a different competitive enviroument and before the advent of the computer. They are geared toward efficiency and control. Yet the watchwords of the new decade are innovation and speed, service and qudity. It is time to stop paving the cow paths. Instead of embedding outdated processes in silicon and soft,,,:

=ii'*"l," espite a decade or more of restructuring and

warg we should obliterate ttrem and start over. We

should "reengineer" our businesses: use the power of modem information technolory to radicdly redesit[ our business processes in order to achieve dramatic improvements in their perforrnance. Every company operates xsg6lding to a great many unarticulated ruIes. "Credit decisions are made by the credit department." "Local inventory is needed for good customer serrrice." "Forms must be filled in completely and in order." Reengineering...