Six Sigma is itself a management process to improve performance. Like X-engineering and re-engineering, its focus is business processes. Some of the Six Sigma techniques could well be applied in X-engineering. But it is important to remember that the scope of X-engineering extends across an organization's boundaries to the processes of its customers, suppliers, partners and even competitors. Up to now, most Six Sigma work has remained within the walls of a company. So if you want to use Six Sigma techniques for process optimization in X-engineering, be sure that the scope of your investigation is broad enough to include processes outside the walls of your organization. What has been the biggest flaw that you've seen in re-engineering efforts?
The biggest flaw in re-engineering efforts has been the failure for companies to understand the basic concept: Re-engineering is about fundamental work and process change. Many companies applied the term "re-engineering" to almost any change process, including pure downsizing activities. When jobs are eliminated and work processes are not changed, half the people end up doing twice the work. That's when service declines and companies get in more trouble. There must be real process change to make re-engineering -– and X-engineering -– work, and the change must go far enough to deliver real business
There are many tools that have been used in re-engineering –- as well as Six Sigma work –- that could be well applied to X-engineering. But you will have to remember that you will be working in a collaborative, multi-company environment, and the tools will have to be modified for that. There is still the need and opportunity to develop a specific set of tools for X-engineering. I have described some of the techniques in my book. But you may want to consider beginning the X-engineering process by creating a list of the key processes that touch your customers and suppliers. Then ask your customers and suppliers for their key process list. Look for where you share an interest, and then go to work jointly X-engineering those processes to your mutual benefit. Has the CRM world (software AND business implementation of it) kept up with X-Engineering concepts?
The CRM world, up to now, has just affected the processes at the interface of a company and its customers. It really has gone deep enough and far enough into understanding a customer's business processes to do the kind of harmonization that X-engineering calls for. Most of CRM's benefits up to now have been to provide a company with more information about its customers. This is admirable and valuable. But there is much more to be done to make transactions really work well between buyers and sellers. Healthcare needs x-engineering for the inter- and intra-transfer of huge files (e.g., x-rays) for doctors. How can x-engineering be used to lower costs when healthcare standardizations are constantly changing?
Remember that healthcare is still, to a great extent, a regional business. The federal government is busily generating standards for the industry, and these standards will change. But there are lots of processes that go on between providers and payers -- like claims processing -– that can be X-engineered now to great benefit. It just takes two willing partners. When they succeed, others in the healthcare network will join in.
Jim Champy is author of "X-Engineering the Corporation," "Reengineering the Corporation" and "Reengineering Management." He is also chairman of Perot Systems' consulting practice and head of strategy for the company.
Click here for the "Secrets to x-engineering the corporation" webcast.