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EIS Plays Critical Role in Reengineering

By Robert H. Reck

This article was originally published in the Journal of Executive Information Systems, a practitioners newsletter published in England, with worldwide readership. R. Reck was also on the editorial board of this publication.

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Business process reengineering is a concept that is sweeping the world's business communities. I know the concept is a success because the reengineering label is being indiscriminately applied to just about everything that goes on in the business world. Nevertheless, the concept is helping many organizations.

Reengineering is defined as the fundamental redesign of business processes to achieve major gains in cost reduction, service or time. The concept embraces a number of points. "Business process" implies that the concerns of the concept deal with flows of work across the organization, and ultimately to the end customer of the organization. "Fundamental" implies willingness to use a clean sheet of paper in deriving the redesigned process. The ambitious goals, customer focus and process orientation are characteristic of true reengineering efforts.

Reengineering can benefit from use of executive information systems (EIS). This article touches on some of the techniques that can be applied to benefit a reengineering program. Several companies have used one or more the ideas described below.

The label "EIS" has been applied to information systems tools that support desktop efficiency, query, analysis and simulation. These tools usually provide one or two of four primary benefits to the executives and managers that use them:

1. Office productivity (also called office automation);
2. Traditional management information system reports - MIS;
3. Management control information - often used to motivate and inspire others; and
4. Information to enable and to inspire insight and understanding about the business.

Organizations usually launch a reengineering initiative by forming a task force to study the organization, its processes and how significant benefits can be achieved. An EIS should be an integral part of a reengineering effort. There are at least 12 key EIS usage areas of benefit.

1. Analyze fundamental processes - The study team can use an EIS to identify, study and analyze the fundamental processes of the business. Once a process perspective is adopted, the usual metrics of an organization are found to not map into the information needed about process performance.
2. Analyze customer needs - A focused analysis of customer needs and wishes should be undertaken in every reengineering study. Recorded in the EIS, this information can be contrasted with process performance.
3. Inspect competitive or benchmark information - The EIS can help establish the metrics found to be important to customers and important to the organization, and be the bed for their study. Clever techniques are widely available for collecting and analyzing this information.
4. Study best practices - Information on general business best practices in key business processes should also be added to the reengineering EIS. This information looks beyond the business or industry to find and analyze optimum processes that map to the one's under consideration by the team. These optimum examples, however, may come from vastly different lines of business.
5. Perform market analyses - Trends in market and customer behavior, demographics and other factors that may impact the business should also be included in the EIS lest the reengineering team focus on redesigning lines of business about the become "buggy whips."
6. Establish platform for the case for action - Reengineering implies dramatic change. Successful change initiatives require broad organizational buy-in to a clear and compelling need for change. The EIS can be the basis for preparing and presenting the case for action.
7. Provide a novel change management communications platform - reengineering activities require attention to change management and hence a steady and consistent stream of content-rich communications regarding the reengineering initiative. Contents will first deal with the case for action (above), then the vision and model for future operations, and finally the process of getting there. An effective role for an EIS is communication of these elements. Special forums (for instance, in Lotus Notes) can be created to capture and address comments regarding the changes anticipated for the organization, as well as to let the EIS participants modify the design.
8. Enable project management - As the project expands in complexity and in the wider involvement of more and more staff, the EIS plays an important role in project management and reengineering team communications. The deeper into implementation the initiative proceeds the more critical this role.
9. Model key business processes - Process modeling may also be appropriate for inclusion in an EIS. One caution is that analysis of the current process is a time and energy trap. Only a modest level of knowledge about the current process is needed (after all, you're going to change it!). The emphasis should be on modeling the future process to establish feasibility and to determine exactly how it will work in exceptional cases.
10. Motivate managers to change behavior and performance - As the redesign of the business process is implemented, the surrounding management processes (management control systems) will also require change. An EIS can form the basis for analyzing, communicating and implementing these new elements of a reengineered business. In emphasizing and reporting on certain elements of the new business, the EIS can motivate and spark new behaviors.
11. Prototype the new business activity - The EIS can be the platform upon which a prototype or pilot of the new business process is launched. The technology is used as the basis for building and involving the new process owners and players in the design, testing, and redesign of the new process. Some customers may also be involved in this activity.
12. Report on new business activity and results - Finally, the EIS can become the basis for the routine management information system (MIS) that will be needed to run and manage the newly reengineered business processes. As the prototype succeeds and expands, the reengineering EIS can migrate to be the primary process management tool.

In the first five uses of the reengineering EIS, the system serves not only as a repository for collecting and collating the information and findings of the study team, but also provides the tool for analysis and insight building. The goal is to get the managers beyond "gut facts" - beliefs about the business and its performance not based on quantitative information and analysis.

A major chemical company division reached this stage when they studied the two major processes of their business (production and sales) with their new EIS. This business had created a complex, convoluted and multi- segmented sales structure. In analyzing the sales processes, executives realized that they were hopelessly inefficient and ineffective. Requirements from the larger corporation further frustrated the division's ability to improve. As a result the company changed its strategy from improvement to divestiture. They successfully sold-off the sales organization (including a hodge podge of retail outlets) to a downstream competitor. The company continued to produce but now only sells in bulk to this previous competitor - now a customer. They are operating this unit with high profits.

This chemical company benefited from a unique look at their business processes and detailed profitability analysis never undertaken. Further, through analysis of their customers needs and their competition's ability to meet them, the managers saw that only radical surgery could solve their problem. The executives decided that rather than divert their attention to the solution (with possibly marginal results), that they would focus on production where their core competency lay.

The last six benefits (above) from a reengineering program EIS were realized by one insurance company. The company benefited from wide participation on a company network and the recent establishment of Lotus Notes. Various forums on Notes were established. Initially, the reengineering team focused reporting on their findings regarding the need for change. They tested their study and continued to add "ammunition" until the case for action was "bullet proof." Simultaneously, workshop results were posted that reported on the process analysis. Both old and new process models were posted, analyzed, and achieved wide buy-in over two months. Increasingly, the managers were participating in the study. As buy-in built, so did the potential results from the proposed changes.

When the insurance company started to implement the new operating processes in a pilot program, the Notes EIS expanded in several dimensions. The project plan, built earlier by the team was kept in open view so everyone knew what to expect next. An evolving information system to report on business operations was cobbled together and expanded on the EIS as the pilot progressed into full scale operation. New management systems were implemented by senior executives based on key metrics now in the new process pilot. Finally, the executives and the reengineering team used the Notes EIS as one major channel for communications regarding the change activities in the organization. The Notes EIS is credited with a pivotal role in the rapid transformation of a major part of this business.

Reengineering teams should strongly consider establishing an executive information system (EIS) that spans as many of the above benefit areas as possible. Such a system can amplify program benefits, speed buy-in, minimize resistance to change, motivate new behavior, and ease implementation.

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