Business reengineering is a model for the organization of companies and means turning away from organizations that are based on the division of labor and functional. Michael Hammer and James Champy (2003) define reengineering as the fundamental rethinking and radical redesign of business processes in order to achieve drastic improvements or quantum leaps in terms of costs, quality, service and speed. This change process is based on four central elements:
Fundamental: Reengineering begins with fundamental questions about the company and its work processes: Why do we do what we do? And why do we do it the way we do it? This approach does not focus on what is, but on what should be.
Radical: Radical means ignoring the existing structures and processes and finding completely new ways to achieve the defined goal. In this sense, reengineering is business reinvention, not improvement.
Dramatic: The aim is to achieve quantum leaps and not just marginal growth. That implies a need for total change.
Process-oriented: Instead of breaking down the tasks in the company as usual and transferring them to experts, reengineering includes orientation towards processes. Hammer and Champy define the business process as a collection of activities that require one or more types of inputs and produce an output that is relevant to the customer. The delivery of the ordered goods to the customer is the value that the process creates.
This puts the customer at the center of the company. The forces emanating from the marketing approach are strengthened. Ineffective marketing departments and functions are disappearing. Marketing is assigned to modern business processes.
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