Michael Hammer and James Champy wrote the influential book "Reengineering the Corporation" which brought attention to the concept of business process reengineering (BPR). The book sold over 2.5 million copies and remained on the New York Times bestseller list for over a year. BPR is defined as the radical redesign of core business processes to achieve significant improvements in critical performance measures like cost, quality, and speed. Hammer proposed looking at processes holistically rather than as separate elements and using technology to redesign processes rather than just automate existing ones. He gave the example of Ford redesigning its accounts payable process from paper-based to electronic to dramatically reduce costs and processing time.

1. Surbhi Jindal
PGDM1-1416
Michael Hammer and James Champy
On Business process reengineering (BPR)
Video Analysis
Re-engineering the corporation: A manifesto for business revolution, the book written by
Michael Hammer and James A. Champy was instrumental in capturing the focus of business
community towards BPR. A massive 2.5 million copies of the book were sold and the book
remained on the "New York Times Best Seller list" for more than a year.
Michael Hammer
Dr. Hammer is the author of four books, including the international best-seller "Reengineering
the Corporation", the most important business book of the 1990s. His latest book is "The
Agenda: What Every Business Must Do to Dominate the Decade". His articles have appeared in
periodicals from Harvard Business Review to The Economist, and his work has been featured in
every major business publication.
An engineer by training, Dr. Hammer focuses on the operational nuts and bolts of business; his
work is relentlessly pragmatic and immediately relevant. Dr. Hammer was formerly a professor
of computer science at the Massachusetts Institute of Technology, and he is a founder and
director of several high technology companies. He was named by Time Magazine to its first list
of America's twenty-five most influential individuals.
James Champy
James Champy is chairman of Perot Systems Corporation’s consulting practice and also head of
strategy for the company. He is responsible for providing direction and guidance to the
company’s team of business and management consultants.
Prior to joining Perot Systems, Mr. Champy was chairman and chief executive officer of CSC
Index, the management consulting arm of Computer Sciences Corporation. He was one of the
original founders of Index, a $200 million consulting practice that was acquired by CSC in 1988.
Reengineering
Reengineering is defined as the fundamental rethink and radical redesign of business processes
to generate dramatic improvements in critical performance measures -- such as cost, quality,

2. service and speed. In practice, reengineering means to start over with a clean sheet of paper and
rebuild the business better.
The organization’s value system transforms from being protective to being productive. In a
protective organization, every manager wars with every other manager over issues like blame for
problems, jurisdiction, fault and allocation of resources. In a productive, reengineered company,
everything in the value system is centered on the creation of customer value.
Everything is aligned with and judged by those criteria alone: the way
people are paid. The way performance is evaluated. The way promotions are made. The way
people actually spend their time. Changing corporate value systems is always going to be a big
part of any reengineering program.
Process consists of many elements starting from input to the output where the raw materials are
converted to finished goods. In that process there would many intermediary elements involved
which help in the conversion process. Taylor specified to catch hold of each element as a single

3. and separate entity and develop a different science for each element, so that the entire process
has an effect and it gets changed.
But Hammer is not like Taylor, he gives a complete new definition on how
to look at that process. He proposed some rules on how to change the normal scenario which
everyone uses and came up with some rules to be followed:
Rule1
“Look at the process as a whole.”
The entire process should be looked as a single process, not as parts of an element. In this
manner one can know how the whole process is going on and can re-design the complete process
efficiently, which can be called as re-engineering of business.
This process can be backed up with Information Technology, which is increasing its reach day
by day and extending its arms all over the world. The IT can be used to support the re-designing
process to be fully efficient.
Rule 2
“Don’t automate, OBLITERATE’’
Don’t just use IT as a simple tool that makes the existing process faster. Use it in completely re-
designing the process. It’s never written anywhere that the old process needs to be followed. It is
fine to break away from the good old rules and make way for the new thoughts of simplification.

4. Then also many people will have a big doubt, if this will work or not?
This surely works and it has been very well explained by Hammer with a good example of
FORD.
1. It’s about the Accounts Payable Department of Ford, the scenario which happened when
Ford has given an order.
2. The purchasing team writes a purchase order and sends a copy to ACCOUNTS
PAYABLES.
3. When the goods arrive the receiving team sends a copy of the attached receiving
document to Accounts Payables.
4. Then the vendor sends an invoice to Account Payables.
5. Accounts Payable then have to make up all the documents and then pay to the vendor.
This shows that there is a lot of work for the Accounts Payables team to be done which takes a
long time and complete efforts of them. And some other problems are like:
6. Payments could not be send until all documents were matched.
7. Because of many workers involved in the process there are always high chances of
mismatches to be occurred and delay of payment.

5. So what FORD could have done to minimise this effect?
This has been explained in the terms of both Taylor and Hammer:
Taylor: Help the Accounts Payable clerk to investigate the mismatches regularly.
This is the process of breaking down the complete process into separate elements.
Hammer: Prevent these mismatches to be happened in the first place.
This thought from Hammer gave rise to a completely new process called “INVOICELESS
PROCESSING”.
8. Purchasing team enters the purchase information into an online database.
9. When the goods arrive, the Receiving team checks the database to see if the order
corresponds to an outstanding purchase order.
10. If the order corresponds, receiving team enters the transaction into the Online Database.
11. The database prepares the cheque which the Accounts Payable team sends to the vendor.
This Re-designed process had a great outcome like:
12. Automatic matching of Purchase order and Receipt record have to be matched.

6. 13. No discrepancies between Financial and Physical records, which makes the financial
information more accurate.
14. FORD achieved a 75% reduction in Accounts Payables workers, where in which it
expected only a decrease of 25% of the workers.
15. “We pay when we receive the invoice” became, “We pay when we receive the GOODS”.
In which way a Business Process can be Re-engineered?
16. Assemble a re-engineering team, representing each unit in the process and those that
depend on it.
17. Make sure that they analyse and scrutinise the process until they understand what it is
trying to accomplish.
18. Determine which of the steps do not add value to the process and think of new ways to
achieve the results.
19. Question everything, even if it is considered conventional.
This small video gives a complete explanation of Business Process
Re-engineering with a classic example of FORD. Business Process Reengineering involves the
radical redesign of core business processes to achieve dramatic improvements in productivity,
cycle times and quality. In Business Process Reengineering, companies start with a blank sheet
of paper and rethink existing processes to deliver more value to the customer. They typically
adopt a new value system that places increased emphasis on customer needs. Companies reduce
organizational layers and eliminate unproductive activities in two key areas. First, they redesign
functional organizations into cross-functional teams. Second, they use technology to improve
data dissemination and decision making.
Customers now have choice, and they expect products to be customized to their unique needs.
Competition, no longer decided by "best price" alone, is driven by other factors such as quality,
selection, service, and responsiveness.
In addition, rapid change has diminished product and service life cycles, making the need for
inventiveness and adaptability even greater.
This mercurial business environment requires a switch from a task orientation to a process
orientation, and it requires re-inventing how work is to be accomplished. As such, reengineering
focuses on fundamental business processes as opposed to departments or organizational units.
"Reengineering is the fundamental rethinking and radical redesign of business processes to
achieve dramatic improvements in critical, contemporary measures of performance, such as cost,
quality, service, and speed."—Hammer and Champy, 199