MIT Sloan Management Review

Management of Technology and Innovation

Successful Reengineering Demands IS/Business Partnerships

By Erwin V. Martinez

July 15, 1995

BUSINESS REENGINEERING HOLDS GREAT PROMISE FOR COMPANIES BY CHANGING THE WAY THEY DO BUSINESS AND BREAKING DOWN OUTDATED ASSUMPTIONS AND rules. But unless management gives information systems a prominent role in the reengineering project, the effort will be doomed to failure. The author traces a reengineering effort at Breezy Services Company, showing where management went wrong in ignoring IS’s vital participation. He presents five steps toward better reengineering by assigning IS the tasks of project management and technical vision and leadership. Only by working together can business and IS managers ensure a successful reorganization of their company.

Breezy Services Company, a medium-sized service provider, was in trouble.1 New entrants threatened its domination of particular market segments, and competitors attacked its customer base. Its business practices and information systems infrastructure were decades old, and there was little hope of enhancing the company’s existing (or legacy) systems to support innovative products or services. And, although the company was still viable, its profit margins were shrinking.

Breezy’s top management decided to undertake a massive three-year business reengineering effort that would involve all business functions and include an extensive information systems (IS) project to technologically enable radical business change. Breezy executives expected the project to achieve orders-of-magnitude improvement in both operations and customer service. After initial analysis, selected business managers organized into teams structured around a newly defined reengineered business model.

IS also mobilized to support the business reengineering effort. After Breezy hired a new CIO from an external pool of candidates (and removed the incumbent CIO from the IS operations), the IS staff thoroughly assessed the company’s existing systems and IS employees’ skills and reorganized to focus on new technologies and operate parallel to the business reengineering teams. The department also introduced a new system development methodology and developed prototype systems to support business reengineering efforts using client/server technologies. Finally, the IS staff began to develop a comprehensive, long-term IT strategy designed to... To read the complete article, login or sign-up using the form below.

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