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'Reengineering' is central to forthcoming changes

MIT is about to embark on a "reengineering" effort that will initially design and implement significant changes in key administrative operations.

The undertaking is a major component of the Institute's evolving plan to prepare the university for the future and to eliminate by the end of Fiscal Year 1997 the growing gap between income and expenses.

Senior Vice President William R. Dickson is leading the effort.

Mr. Dickson said that Dr. Michael M. Hammer, coauthor of the book Reengineering the Corporation: A Manifesto for Business Revolution, will conduct a day-long workshop on November 23 for members of the Academic and Administrative Councils "to help us better understand how we begin the process."

Dr. Hammer is the originator and leading exponent of the concept of reengineering and the founder of the reengineering movement. The movement and his subsequent book grew out of a July-August 1990 Harvard Business Review article.

In that article, Dr. Hammer summed up the essence of reengineering (often referred to as BPR for business process reengineering) this way:

"At the heart of reengineering is the notion of discontinuous thinking-of recognizing and breaking away from the outdated rules and fundamental assumptions that underlie operations. Unless we change these rules, we are merely rearranging the deck chairs on the Titanic. We cannot achieve breakthroughs in performance by cutting fat or automating existing processes. Rather, we must challenge old assumptions and shed the old rules."

Dr. Hammer has first-hand knowledge of "the rules" at MIT. He is a former faculty member (1973-86) in the Department of Electrical Engineering and Computer Science and holds three degrees from MIT, the SB (1968) in mathematics and the SM (1970) and the PhD (1973), both from EECS.

His co-author, James A. Champy, chairman of CSC Index, Inc., the management consulting firm that pioneered the development and practice of reengineering, also is no stranger to MIT. He is a member of the Class of 1963 and holds the SB and SM in civil engineering. From 1975 to 1978 he was executive vice president of the MIT Alumni/Alumnae Association and also a lecturer in the Department of Architecture.

The Hammer-Champy book defines reengineering in two words: Starting over.

It is, the authors say, "about beginning again with a clean sheet of paper. It is about rejecting the conventional wisdom and received assumptions of the past. Reengineering is about inventing new approaches to process structure that bear little or no resemblance to those previous eras.

"Fundamentally, reengineering is about reversing the industrial revolution. Reengineering rejects the assumptions inherent in Adam Smith's industrial paradigm-the division of labor, economies of scale, hierarchical control, and all the other appurtenances of an early-stage developing economy. Reengineering is the search for new models of organizing work. Tradition counts for nothing. Reengineering is a new beginning."

It is that complete "out-with-the-old" focus that differentiates reengineering from Total Quality Management (TQM), which is already being applied extensively at the Institute. TQM is used within the framework of existing processes and seeks steady incremental enhancements. Hammer and Champy describe TQM's aim as "to do what we already do, only to do it better."

Yet, TQM and reengineering share common themes. Both recognize the importance of processes and both start with the needs of the process "customer" and work backward from there.

"TQM and BPR really go together," Mr. Dickson said. "Both focus on customers and processes-a collection of business activities (tasks) that create value for a customer. In our case, the customers of our business processes are our students, faculty and staff. TQM is very useful for improving a process that is already well structured and customer focused. BPR, on the other hand, examines those processes that are overly complex and lack customer focus."

The "reengineering timetable" outlined by Vice President Dickson calls for:

  • The workshop to be led by Dr. Hammer on November 23.
  • The selection, by December 31, of an outside consultant to work with MIT.
  • The appointment, also by year-end, of a "governance group" of senior members of the MIT community to guide the reengineering effort. The governance group will work with the consultant and others from the Institute to clarify the business case for reengineering, create a process map for MIT, formulate the reengineering strategy, recommend processes for reengineering and nominate members of cross-functional teams to reengineer a small number of business processes. These tasks should be completed in the spring of 1994.

The cross-functional teams will begin work on the selected processes in late spring. Based upon reengineering work at other organizations, each team will take about six months to reengineer its assigned process and to do an initial prototype of the new process. The members of the cross-functional teams will be drawn from across the Institute, not just from the process being redesigned, Mr. Dickson stressed. He also noted that the teams will be engaged in the reengineering project for as much as 80 percent of the their work time. "Their primary assignments will be the reengineering project."

Once the prototype of a reengineering process is successfully in place, the process will be implemented Institute-wide. Thus, the Institute will begin to see changes in the way business is done early in calendar 1995.

This timetable outlines the work on the first set of processes that will be reengineered. It can be expected that work will be required on additional processes and that additional teams will begin work later in calendar 1994.

A version of this article appeared in MIT Tech Talk on November 22, 1993.

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