W10 - Redesign Principles and Tactics (1)

Response:


In this lecture, I have learnt several reengineering principles of Restructuring which is restructuring and reconfiguring the process and Informating which is changing the information flows around the process. I am going to analyze these principles and give a case study which had applied these principles.


There are three types of redesign principles and tactics, they are “restructuring and reconfiguring the process”, “changing the information flows around the process” and “changing knowledge management around the process” respectively. In this week, I have learnt the principles from the first two types.

Principle #0 - Streamline the process


It is the common sense principle which including
- Minimize waste
- Eliminate worthless complexities
- Obliterate unnecessary and outdated activities
- Combine similar activities


Restructuring - Restructuring and reconfiguring the process


Principle #1 - Lose wait


It is to reduce waiting time in process links to create value including
- Reduce the time within which no actual work is done but waiting
- Waiting time reduction helps reducing costs. The larger portion of waiting in the whole-process time, the more is the money spent for the production.


The common tactics of this principle are
1) Concurrent Process – use parallel process to decrease the communication cost and the cost of sharing data
2) Closed-Loop Teams – create closed-loop teams for quicker flexible interaction to save the time of coordination among the participants
3) Not Gating Main Process – do not allow a support activity or management activity to delay a core value adding process
4) Continuous Flow – design for real-time processing
5) Upstream Relives Downstream – modify some practices of upstream to benefit the downstream




Principle #2 - Orchestrate


It is to let the swiftest and most able enterprise 
execute including
- Different parts of the processes are accomplished by different parties who are good at it


The common tactics of this principle are 
1) Partnering
2) Outsourcing
3) Insourcing – insource a process back into the enterprise to have a better control
4) Routing through an Intermediary – route the process through an intermediary, like online middlemen




Principle # 3 - Mass-customize


It is to flex the process wherever, whatever, whenever it is appropriate.


The common tactics of this principle are 
1) Flexing Time – expand the time window for the process
2) Flexing Space – create more options for the physical spaces in which the process is executed
3) Modularity – create modular process platforms which can be resequenced easily
4) Dynamic Customization – enable dynamic customization
5) Modularity & Dynamic Customization – allow different process outcomes to be generated




Principle # 4 – Synchronize


It is to synchronize the physical & virtual parts of the 
process.


The common tactics of this principle are 
1) Match Offerings – match the offerings
2) Common Process Platforms – create common process platforms for physical and electronic processes
3) Track Movement – track the movement of physical products electronically




Informating - Changing the information flows around the process


Principle # 5 - Digitize and propagate


It is to capture information digitally at the source & 
propagate it throughout the process.


The common tactics of this principle are 
1) Digitize at Source – shift the data entry to customers and digitize it
2) Make the Process Paperless – make the process paperless
3) Make Information Accessible Upstream and Downstream
4) Shrink the Distance between the Information and the Decision




Principle # 6 – Vitrify


It is to provide glass-like visibility through fresher and richer 
information about process status including
- Provide visible information about the process status


The common tactics of this principle are 
1) On-demand Information Tracking – provide on-demand tracking information for customers of the process
2) On-the-fly Reporting and Analysis – provide reporting facilities for on-the-fly analysis
3) Standard Partner Interface – design standard partner interface processes for seamless exchange of information




Principle # 7 – Sensitize


It is to fit the process with sensor and feedback loops to prompt action.


The common tactics of this principle are 
1) Process Dysfunction – build in customer feedback loops to detect process dysfunctions
2) Monitor Environmental Change – enable software smarts to trigger quick business reflexes, or attach environmental probes to the process to monitor change






Case Study

CIGNA

About CIGNA:


CIGNA is a leading provider of insurance and related financial services throughout the United States and the world. Between 1989 and 1993, CIGNA introduced business reengineering into its organization and saved more than $100 million.


Analysis:


Principle #0 - Streamline the process


CIGNA has applied this principle.
In the case, it reduced 14 hand-offs to zero. It is because the content of hand-offs can be placed on the network. The staff with authorized rights can see the notices. Also, both the cycle time and the working hours were reduced because the employees can share information together on the network. Therefore, they can save the time of searching information. BPR made the business process and the information systems to be consolidating.




Principle #1 - Lose wait


CIGNA has applied this principle. 
CIGNA has changed to team-based management, each team serve different districts in US and every team member can manage several cases concurrently.




Principle #2 - Orchestrate


CIGNA has applied this principle.
The CIO and his management team brought in a new CIGNA Reengineering director from an outside consultancy that focused on dramatic operational improvement, bringing the organization’s cost structures in line with changed market conditions. In this case, it used “Outsourcing” tactic.




Principle # 3 - Mass-customize


CIGNA has applied this principle.
CIGNA has utilized a national database to share the data and information; therefore, staff can have flexible time to access the information.




Principle # 4 – Synchronize


CIGNA has applied this principle.
CIGNA has provided a common process platform as it applied Local Area Network (LAN) that linked up 1000-person unit of the company where they can work together.




Principle # 5 - Digitize and propagate


CIGNA has applied this principle.
CIGNA obviously satisfies this principle because there are totally 3 hours for a Corporate Medical Presale Process instead of 6 hours because of the digitization of process and paperless information.




Principle # 6 – Vitrify


CIGNA has applied this principle. 
The authorized staffs can track the information by accessing the database.




Principle # 7 – Sensitize


Not sure if CIGNA has applied or not since the article doesn't mention anything about how to collect customer feedbacks. Instead, it has mentioned customer service process in CIGNA International that delivered a 50% improvement in customer satisfaction. Therefore, I think it has applied.




Reference:
1)“Business Reengineering at CIGNA Corporation: Experiences and Lessons Lerned From the First Five Years”, Management Information System Quarterly, 18(3) by Caron, J.R., Jarvenpa, S.L. and Stoddard, D.B. 1994