Week 8 - Redesigned Process 

Reference:

1. Caron, J.R., Jarvenpa, S.L. and Stoddard, D.B. (1994), “Business Reengineering at CIGNA   
    Corporation: Experiences and Lessons Lerned From the First Five Years”, Management
    Information System Quarterly, 18(3), http://www.misq.org/archivist/vol/no18/issue3/sim94/sim94.html.

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Seven Reengineering Principles

There are several reengineering principles of restructuring and configuring and changing information flows around processes to us. I am going to give a brief summary of those principles and lastly I would use a real case study to apply those principles.

There are three types of redesign principles and tactics, they are “restructuring and configuring around processes”, “changing information around processes” and “changing knowledge management around processes” respectively. The lecture today only talked about the principles of the first two types.

0. Streamline the process

- Minimize waste

- Eliminate worthless complexities

- Obliterate unnecessary and outdated activities

- Combine similar activities

1. Lose wait

- 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.

Common Tactics:

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

2. Orchestrate

- Different parts of the processes are accomplished by different parties who are good at it

Common Tactics:

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

3. Mass-customize

- Flex the process wherever, whatever, whenever it is appropriate

Common Tactics:

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

4.  Synchronize

- Synchronize the physical & logical parts of the process

Common Tactics:

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

5. Digitize and propagate

- Capture information digitally at the source & propagate it

Common Tactics:

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

6.  Vitrify

- Provide visible information about the process status

Common Tactics:

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

7. Sensitize

- Fit the process with sensor and feedback loops to prompt action

Common Tactics:

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 on CIGNA

I would like to apply all principles learnt in lecture on CIGNA case study. 

Brief Introduction

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	Explanation	Applied?
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.	Yes
Principle #1 - Lose wait	CIGNA has changed to team-based management, each team serve different districts in US and every team member can manage several cases concurrently.	Yes
Principle #2 - Orchestrate	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.	Yes
Principle # 3 - Mass-customize	CIGNA has utilized a national database to share the data and information; therefore, staff can have flexible time to access the information.	Yes
Principle # 4 – Synchronize	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.	Yes
Principle # 5 - Digitize and propagate	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.	Yes
Principle # 6 – Vitrify	The authorized staffs can track the information by accessing the database.	Yes
Principle # 7 – Sensitize	The article I read 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.	Not sure