Reengineering is a strategic organizational and administrative restructuring system, with the objective of reformulating the activities of a certain company so that it can become more competitive in the market.
The central idea of reengineering is the “reinvention” of the organization, eliminating practices and customs that have become obsolete and, based on studies and plans, adapting to new production mechanisms, new activities, processes and even new products.
This strategy was developed by the Americans Michael Hammer and James Champy, both from the Massachusetts Institute of Technology (MIT), in the mid-1990s.
Reengineering is usually applied in three different scenarios: when the organization is facing moments of crisis; when you are not in crisis but want to avoid potential problems in the future; or when you want to enhance your performance, without the need to predict future crises.
No matter the situation, the first step in reengineering is the study and analysis of all the information regarding the organization, process or function that you want to improve.
Reengineering can be focused both on the organizational context, that is, on all aspects of the organization, as well as aimed at restructuring a specific process, position or function.
Reengineering and Downsizing
Some critics link reengineering to the downsizing, due to the fact that this too involve cutting the workforce of employees as an alternative to avoid costs.
Usually, the downsizing it is applied as an organizational restructuring strategy in times of crisis, focusing on emergency cost elimination.
See also: the meaning of Downsizingit's from rightsizing.
