September 4, 1998 Intranets rescue reengineering By Geoffrey James Business Process Reengineering. A term to strike dread into the hearts of middle managers and line employees alike. Once touted as a corporate panacea, BPR has been losing its luster of late. In some companies, reengineering is seen as just another management fad, destined to follow TQM, self-managed teams, and matrix management into the scrap heap of ideas that seemed to make sense but never quite panned out. In other companies, the term has become nothing more than a euphemism for layoffs. A backlash is even developing against reengineering consultants. For example, a recent IBM advertisement pooh-poohs the high-priced, MBA-armed, reengineering consultants who descend upon a company, create mountains of reports, and then leave with their pockets lined. The bad publicity, however, merely reflects the sad truth that real reengineering -- the kind that truly changes business processes -- is frighteningly rare. How rare? A recent study showed that two-thirds of all reengineering efforts fail, primarily due to problems with the computer systems used to implement the new processes. Even Michael Hammer and James Champy, who coined the term in their classic book, Reengineering the Corporation, estimate in it that "as many as 50% to 70% of the organizations that undertake a reengineering effort do not achieve the dramatic results they intended." In the real world, the typical reengineering effort enters the game with three strikes against it: 1. Reengineering is usually driven from the top down. Although that might seem to be an advantage, it's often a recipe for passive resistance, especially when employees suspect that pink slips will result if the reengineering is successful. 2. A reengineering project often makes extraordinary demands upon employees to learn new processes. This can require massive personnel retraining, which can cost millions of dollars and take many man-months of precious time. 3. Most important, reengineering fails because it requires the participation of multiple departments, many of which are likely to have made wildly different computer purchasing decisions. In such cases, supporting a corporatewide reengineering project may mean welding Macintoshes, Wintel PCs, UNIX workstations, and dumb terminals -- not to mention a hodge-podge of networking schemes and incompatible server architectures into a single coherent infrastructure. Sounds pretty hopeless, doesn't it? But that was before intranets. A recent poll of 400 Fortune 1,000 buyers, evaluators, and users of intranet products conducted by Boston-based Delphi Consulting Group reveals that fully 90% of respondents indicate they are using or are actively evaluating an intranet. "That's an astounding shift over just the last six months, and many of these systems are being used for reengineering," asserts Delphi CEO Tom Koulopoulos. Indeed, intranets are excellent vehicles for reengineering because they overcome the problems that have plagued so many reengineering attempts: 1. Intranets tend to sprout from grass-roots movements, rather than being forced down employees' throats by top management. "Intranets are being driven by the users -- it's like the PC revolution of the 1980s," according to Koulopoulos. 2. By encouraging the spread of information and making it easy to share best practice techniques, intranets provide an excellent vehicle for educating employees on new processes and procedures. 3. Because Web browsers and servers run on many different platforms, they can transcend the stovepipes caused by incompatible legacy systems and applications. As a result of these factors, intranets are transforming reengineering from a maligned buzzword into a practical and positive reality. At many large Fortune 500 companies, intranets have by and large single-handedly rescued reengineering projects, and the resulting effects have been profound, with far-reaching consequences across corporate America. Bottom-up reengineering In hindsight, it should come as no surprise that many top-down reengineering projects have failed. During such efforts, employees and middle managers alike, fearing the loss of jobs and power, have typically blocked change at every turn. That, however, wasn't what happened at Johnson Controls. To be honest, Johnson Controls isn't exactly a name that immediately pops to mind when people think of a large corporation. But Johnson Controls manufactures over $9 billion worth of automotive parts, plastics, and control systems. The core of the company is its $3 billion Controls Group. Founded all the way back in 1885, the group was responsible for the first electronic thermostat. The environmental controls business has come a long way since then. Today's units are highly sophisticated devices that often include integrated microprocessors capable of analyzing and controlling hundreds of factors. The increasing complexity of environment controls creates major challenges for sales and support personnel. It's virtually impossible for any single salesperson or technician to understand the ins and outs of every product. Add this to the fact that every customer's system is completely customized and you have your basic sales-training nightmare. Intranets reengineer reengineering Why reengineering has failed: 1. Top-down efforts garner no support from employees and middle managers, who tend to equate reengineering with layoffs. 2. Massive personnel retraining is usually necessary. 3. Projects typically require the participation of multiple departments, many of which have diverse and incompatible computer systems. Why intranets will bring it back: 1. Intranets have typically been implemented as a result of grass-roots, bottom-up efforts. 2. Deploying easy-to-use browser technology, intranets are an excellent vehicle for employees to use to share information on new processes and procedures. 3. The beauty of Web technology is that it supports many different and diverse platforms. It wasn't that the company didn't have in-house expertise. In fact, one of Johnson Control's greatest assets was its intellectual capital -- the result of years of experience building and installing systems around the world. The problem was making use of that intellectual capital in a meaningful way. The company produced product manuals, of course, but the entire collection was so bulky that the complete set could only be stored at central locations. And there was also no vehicle for salespeople to share either their experience or their sales tools, such as their presentations and proposals. Johnson Controls did have a centralized sales and marketing group, but the group was often too remote from the field to be able to provide useful advice. To make matters worse, corporate headquarters had become complex and political, as many different organizations positioned for funding and turf. Specifically, Johnson Controls was filled with organizational newsletters about the services and functions provided by the different groups, but there was no efficient way to get that information to the appropriate people. Clearly, if field people were to receive timely information, the change was going to have to come from the bottom up. It was the engineering services group that stepped up to the task by hiring Compuware, a Farmington Hills, Mich.-based IT and consulting firm, to construct an intranet to provide field personnel with answers to frequently asked questions. The fact that the engineering services group brought up the system, rather than the central bureaucracy, ruffled some feathers. But the system came up so fast that it became a fait accompli, thereby preempting a possibly lengthy and complicated turf battle. AT A GLANCE: Johnson Controls The company: A $9 billion manufacturer of automotive parts, plastics, and control systems based in Plymouth, Mich. The problem: How to keep salespeople and technicians up to date on the company's increasingly sophisticated environmental control devices. The solution: Deploy an intranet to provide personnel with quick answers to frequently asked questions. The IT infrastructure: Windows 3.1 clients running Netscape Navigator to access HP-UX and Windows NT servers using HTTP. Good thing, too, because within a few months, the system was being deployed by 5,000 people using the Netscape Navigator browser on PC clients, 90% of which were running Windows 3.1. "We went with Netscape because it's easy to use and it supports file uploads with HTTP," says Jim Smith, principal Web developer for Johnson Controls. The company decided against using Internet Explorer because, according to Smith, the Microsoft browser only supported FTP uploads, which were just too complicated for users. The Johnson Controls intranet is also the main repository for official training documents. More than 200,000 documents were available earlier this fall, constituting some 3GB of text hosted on a combination of HP-UX and Windows NT servers. And the repository is growing at a breakneck pace. Smith expects it to contain up to 500,000 documents by the end of this year. The intranet is also being used to distribute internal newsletters, which are now formatted as Web pages rather than as hard-copy documents, thus saving tens of thousands of dollars in printing and distribution costs. But the real power of Johnson Controls' intranet is the way the system is creating a marketplace of ideas inside the corporation. "We've set up our intranet like a shopping mall," says Smith. "The contents of the pages are owned and managed by the people who own and create the information." On Johnson Controls' intranet, each internal department has its own "store," or home page. And that page typically consists of "What's new" information, a library, a "Letters" area for correspondences, an area for useful applications and spreadsheets, and something very special, a "Team page." "We've set up our intranet like a shopping mall," says Jim Smith, Johnson Controls. Team pages consist of the pictures and biographies of individuals who work with a particular department or sales office, regardless of whether or not the individuals are actually part of that department. A team page provides a way to break organizational boundaries and draw upon the expertise that's scattered around the corporation. For example, a person can use the Verity search engine to locate employees who have particular skill sets or who have worked on similar projects. A major reason that the team page concept works is that all of the departments' collections of Web pages are structured identically. The search engine knows that the team pages will be in the Web page named "Organization" for each department. This greatly reduces the time it takes to search the team pages for the entire company. Johnson Controls has created a corporate Cyberspace that supports cooperation and teamwork -- two top goals of nearly every reengineering effort. The key to accomplishing this was letting the reengineering rise from the bottom ranks, rather than shoving it down employees' throats. Not surprisingly, Smith says, "People really love the new system. It's truly changing the way that we communicate."