Reengineering Organizations: Results of a GAO Symposium (Letter Report,
12/13/94, GAO/NSIAD-95-34).

In light of the Pentagon's efforts to streamline its business practices,
GAO conducted a symposium in June 1994 on private sector best practices
in reengineering.  Five principles for effective reengineering emerged
from the symposium.  The principles reflect the panelists' views, which
are not necessarily those of GAO.  First, top management must be
supportive of and engaged in reengineering efforts to remove barriers
and drive success.  Second, an organization's culture must be receptive
to reengineering goals and principles.  Third, major improvements and
savings are realized by focusing on the business from a process rather
than a functional perspective. Fourth, reengineering processes should be
chosen on the basis of a clear notion of customer needs, anticipated
benefits, and potential for success.  Fifth, process owners should
manage reengineering projects with teams that are cross-functional,
maintain a proper scope, focus on customer metrics, and enforce
implementation timeliness.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-95-34
     TITLE:  Reengineering Organizations: Results of a GAO Symposium
      DATE:  12/13/94
   SUBJECT:  Defense cost control
             Reductions in force
             Federal agency reorganization
             Interagency relations
             Defense economic analysis
             Systems evaluation
             Strategic planning
             Total quality management
             Information resources management
             Agency missions
IDENTIFIER:  TQM
             
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Cover
================================================================ COVER


Report to Congressional Requesters

December 1994

REENGINEERING ORGANIZATIONS -
RESULTS OF A GAO SYMPOSIUM

GAO/NSIAD-95-34

Reengineering Organizations


Abbreviations
=============================================================== ABBREV

  DOD - Department of Defense
  x - x

Letter
=============================================================== LETTER


B-258900

December 13, 1994

The Honorable Earl Hutto
Chairman, Subcommittee on Readiness
Committee on Armed Services
House of Representatives

The Honorable John R.  Kasich
Ranking Minority Member, Subcommittee on Readiness
Committee on Armed Services
House of Representatives

As part of your request to review the philosophy and organization of
the Department of Defense's (DOD) efforts to streamline its business
practices, we conducted a symposium in June 1994 to address private
sector best practices in reengineering.  We briefed your staff on
reengineering best practices, and as a result, you asked us to
provide this report, which summarizes the key points made during the
symposium.  We will continue to obtain information on successful
reengineering efforts in the private and public sectors and discuss
our observations with consultants and academics who have studied
reengineering concepts and practices. 


   BACKGROUND
------------------------------------------------------------ Letter :1

Although substantially reduced from Cold War levels, DOD remains the
largest U.S.  government entity.  DOD employs about 3.5 million
personnel with annual budgets ranging from $240 billion and $250
billion.  Approximately $88 billion is spent on business activities
to operate and maintain the defense infrastructure, including command
and control, finance, material management, and human resources. 
Maintaining a strong national defense is dependent upon many factors. 
One of those is having a set of business operations that efficiently
and effectively support the fighting forces.  Today, there is great
concern that efficiency and effectiveness improvements within the
defense infrastructure are not keeping pace with those within the
force structure.  Furthermore, the National Performance Review is
spurring DOD and other federal agencies to better serve its
customers, empower its employees, and foster a more productive
government.  Reengineering represents one of many ways that allow DOD
the opportunity to reduce cost and improve business processes, while
providing effective support to the fighting forces.  We describe
business process reengineering in more detail in appendix IV. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :2

Five principles for effective reengineering emerged from the GAO-
sponsored symposium.  While these principles are not intended to be
an all-inclusive list on how to effectively implement reengineering,
they form the basis of a framework for bringing about the radical
change required to reengineer business processes in a large
organization.  The principles reflect the panel members' views, which
are not necessarily those of GAO. 

Top management must be supportive of and engaged in reengineering
efforts to remove barriers and drive success. 

An organization's culture must be receptive to reengineering goals
and principles. 

Major improvements and savings are realized by focusing on the
business from a process rather than a functional perspective. 

Processes should be selected for reengineering based on a clear
notion of customer needs, anticipated benefits, and potential for
success. 

Process owners should manage reengineering projects with teams that
are cross-functional, maintain a proper scope, focus on customer
metrics, and enforce implementation timelines. 

We provide more information on each of the principles in appendix I. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

We sponsored this symposium to obtain information on factors that
lead to successful reengineering.  We invited executives from five
companies.  The companies selected were cited in the literature or by
experts as having successful reengineering activities.  However, they
do not represent a scientific sample of all companies that have
succeeded in reengineering.  We discussed the material presented by
the panelists and its applicability to DOD with military consultants
knowledgeable of DOD operations.  (See app.  III.) We also selected a
moderator who had knowledge of the subject matter but no vested
interest with the represented companies or DOD.  A list of panel
members is in appendix II. 


---------------------------------------------------------- Letter :3.1

We are sending copies of this report to the Chairmen, House and
Senate Committees on Armed Services; other appropriate Members of
Congress; and the symposium panelists and military consultants. 
Copies will also be made available to other interested parties on

This report was prepared under the direction of Donna M.  Heivilin,
Director, Defense Management and NASA Issues, who may be reached at
(202) 512-8412 if you or your staff have any questions concerning
this report.  Other major contributors to this report are listed in
appendix V. 

Henry L.  Hinton, Jr.
Assistant Comptroller General
National Security and International
 Affairs Division


REENGINEERING ORGANIZATIONS
=========================================================== Appendix I

Many private sector organizations have adopted reengineering
principles to increase customer satisfaction and decrease operating
costs by eliminating nonvalue-added activities.  To do so, many
companies have radically changed their ways of doing business.  A
detailed description of reengineering is in appendix IV. 


   THE GAO SYMPOSIUM: 
   REENGINEERING ORGANIZATIONS
--------------------------------------------------------- Appendix I:1

In June 1994, we convened a symposium on reengineering.  We brought
together executives from five Fortune 500 companies to get their
input on the critical elements needed to achieve success through
reengineering.  The organizations selected were cited in the
literature or by experts as having successful reengineering
activities and do not represent a scientific sample of all
organizations that have succeeded in reengineering. 

The panelists and the organizations they represented were James D. 
Fischer, Corporate Headquarters Program Manager, Process Management,
IBM Corporation; Joseph W.  Joseph, Manager, General Motors Knowledge
Center, General Motors Corporation; Joseph M.  Matejek, Vice
President of Reengineering, Aetna Life and Casualty Company; James D. 
Schoonover, Director of Integrated Operations and Vice Chairman of
the Corporate Operations Network, E.I.  duPont de Nemours and
Company; and Gaye M.  Williams, Senior Member, Technical Staff,
Business Process Engineering, Bell Atlantic Corporation.  Appendix II
contains additional information on these panelists and their
reengineering efforts.  Dr.  Astrid E.  Merget, the Bantle Chair of
Business and Government Relations at the Maxwell School of
Citizenship and Public Affairs at Syracuse University, moderated the
symposium. 

Several military consultants present at the symposium expressed their
opinions on reengineering within the Department of Defense (DOD). 
This report, however, focuses on private sector trends in
reengineering. 


   SYMPOSIUM RESULTS: 
   REENGINEERING PRINCIPLES
--------------------------------------------------------- Appendix I:2

Five principles for effective reengineering emerged from the
symposium.  While these principles are not intended to be an
all-inclusive list on how to effectively implement reengineering,
they form the basis of a framework for bringing about the radical
change required to reengineer business processes in a large
organization.  The principles reflect the panel members' views, which
are not necessarily ours. 

Five Principles for Effective Reengineering: 

Principle 1:  Top Management Must Be Supportive

Committed and engaged top managers must support and lead
reengineering efforts to ensure success.  This is because top
management has the authority to encourage employees to accept
reengineered roles.  Also, top management has the responsibility to
set the corporate agenda and define the organization's culture and
the ability to remove barriers that block changes to the
organization's corporate mindset.  The panelists agreed that a lack
of top management commitment and engagement is the cause of most
reengineering failures. 

Top management engagement does not mean that the chief executive
officer has to lead reengineering or that senior executives should
manage all aspects of the reengineering effort.  As Gaye Williams
pointed out with a quote from futurist Joel Barker, "You lead between
paradigms, and manage within paradigms." Senior executives play a
leadership role in the process management paradigm by effecting
cultural change and removing barriers, while the process owners (line
management) are responsible for managing or actually redesigning the
work processes. 

The distinction between leadership and management is demonstrated by
the experience at Bell Atlantic.  Top management was fully engaged in
the efforts and regularly met with reengineering teams.  However,
rather than being involved in the minutiae of redesigning the
processes, top management used its power to remove the barriers
confronting the functional managers who were trying to redesign along
process lines.  Responsibility for redesigning the processes was left
to teams that understood the core processes. 

Principle 2:  Culture Must Be Receptive to
Reengineering

Symposium panelists said that one of the most important aspects of
successful reengineering is having a corporate culture consistent
with reengineering principles.  The panelists stated that a culture
receptive to reengineering accepts the premise that corporate success
in a globally competitive environment requires that companies
understand and respond to the needs of their customers.  Joe Matejek
summed up this idea by saying that their customers are "putting [our
organization's] feet to the fire," expecting "the same or better
service as in the past" for less cost.  Failure to do this will
ultimately result in loss of business.  The panelists also added that
a culture receptive to reengineering requires that business move
beyond models of functional work organization to those of a process
orientation.  Without a compelling and well-communicated vision of
where reengineering will take the organization, suspicion and
mistrust can prevail.  In this type of environment, reengineering
should not be undertaken. 

One cultural belief that fosters reengineering is that marketplace
success is based on the ability to respond to customer needs.  Our
panelists stated that this is best accomplished by defining the
organization's customers, determining their needs, and being equipped
to fulfill these needs.  Defining the customer is not easy, but it is
a necessary first step.  Once the customer is defined, several
techniques are useful in determining customer needs.  These include
customer surveys, focus groups, and market trend analyses. 
Fulfilling needs requires communication throughout the organization
and an environment that promotes and reinforces an orientation toward
customers. 

Another cultural belief that fosters reengineering involves moving
from functional to process management.  According to Jim Schoonover,
success in process management requires a "holistic" view of the
business.  This requires viewing the business across functional lines
and focusing on customer needs.  This is a complete redefinition of
the way organizations traditionally perform work. 

Our panelists emphasized the importance of communication in focusing
the culture on reengineering.  Reengineering goals should be
communicated and explained consistently at all levels in the
organization.  This kind of communication is especially important in
reducing employee skepticism and when corporate downsizing is forcing
organizations to modify their covenants with their employees. 

IBM's experiences provide valuable examples of communication in the
process of framing the organization's vision and adapting the
culture.  IBM had to reengineer in response to a major financial
crisis.  The crisis affected IBM's ability to maintain its full
employment policy.  However, in its employee communications, IBM did
not allow reengineering to become a euphemism for layoffs.  IBM
stated that reengineering was necessary in order to remain productive
with fewer people and to meet employee and customer needs.  IBM's Jim
Fischer said that management's honesty on these issues helped gain
employee commitment to the new environment.  According to Jim
Fischer, when employees knew how they fit in the new organization,
they were more likely to help in implementing change.  Jim Fischer
also stated that employees came forward to help because they saw
reengineering as an opportunity to survive and grow with the
business. 

Our panelists also emphasized training as an important tool in
focusing the culture on reengineering.  Training in skills such as
negotiation and conflict resolution is required to get employees to
work across functions.  As reengineering proceeds, training should be
modified as necessary to best support the process and should be
provided on a "just-in-time" basis so employees can understand and
apply what they learn. 

At General Motors, groups are encouraged to bring actual product or
manufacturing redesign problems to reengineering workshops.  While
promoting learning through application, General Motors wants to
ensure that employees apply what they have learned and will continue
the reengineering process through implementation. 

While communication and training are vital to the success of
reengineering, they alone will not be enough.  To ensure that changes
are internalized, the new assumptions stressing coordinated and
cooperative efforts must become part of the corporate culture and
system of norms.  Doing this may require that incentives and rewards
be tailored to encourage and reinforce desired behaviors. 

Principle 3:  Savings Are Derived by Focusing on
Processes Rather Than Functions

The panelists agreed that major improvements and savings in
reengineering efforts would come from focusing on processes that span
across functions rather than within functions.  DuPont's Jim
Schoonover pointed out that reengineering that focuses on redesigning
processes yields benefits 10 times as large as attempts to improve
the operations within a functional area. 

In their affirmation of the importance of process over function, the
panelists commented on the role of information technology in
reengineering.  Panelists agreed that reengineering cannot be based
on information technology.  Aetna disregarded information technology
in redesigning processes.  According to Joe Matejek, requirements
were determined and processes were designed first, and then systems
people were tasked with developing systems to support the new
processes. 

Panelists also agreed that reengineering should not be framed by the
capabilities of existing computer systems.  Gaye Williams mentioned
one organization that, despite substantial investments in information
technology, was forced to abandon a portion of its information
systems because it was no longer adequate for the needs of its
redesigned processes. 

As it is important to tailor information management around redesigned
processes, it is also necessary to understand processes in relation
to one another.  Since processes are interrelated, it is important
that a redesign approach ensure that the effects and linkages to
other processes are fully understood. 

Coordination should take place not only when reengineering the
activities within a process, but also when designing measurements. 
Such coordination will help assure that the activities and
measurements are complementary.  Bell Atlantic's Gaye Williams gave
an example of how conflicting functional measures could drain the
overall organization.  She described a company where the sales
department was assessed on how many orders it generated, while the
manufacturing department was evaluated based on conformity to
production projections.  Although sales had generated more than
enough orders to keep manufacturing busy all month, the manufacturing
division shut down halfway through the month because, according to
flawed projections, the company had already met its quota.  The
overall organization suffered because the metrics used to evaluate
functional performance were not aligned with overall process or
customer-related goals. 

Success in reengineering requires fostering a sense of process
orientation and a willingness and ability to view reengineering
outside of functional "stovepipes." This process orientation can be
fostered without regard to the organizational structure.  However,
reengineering efforts may result in improvements in organizational
structure. 

Principle 4:  Processes Should Be Selected Based
on Customer Needs

Successful reengineering requires answering several basic questions. 
Why should the organization reengineer?  What process or processes
should be reengineered?  How long should reengineering take?  With
regard to how long reengineering should take, Gaye Williams said,
"How long you have is how long it should take.  If you have an
immediate, pressing need, scope and staff the effort to fit in that
time window." The organization's climate surrounding such issues as
culture, leadership, and resource availability will also help
determine the answers to basic reengineering questions. 

The panelists generally agreed that the most important reason to
reengineer is to meet customer needs.  This may mean cutting costs to
lower price, as it did for Aetna, or decreasing cycle times, as it
did for General Motors.  Panelists stated that internal
considerations, such as increasing profits or determining capacity
requirements, may drive reengineering efforts.  However, they
emphasized that reengineering in response to meeting customer
expectations offered far more dramatic and compelling results than
reengineering based on internal factors. 

In an organization where the culture is properly positioned for
reengineering, process and project candidates should be assessed on
the costs and benefits anticipated.  The costs of a reengineering
project are the dollar value of the resources consumed; the
opportunity cost of using the resources for reengineering as opposed
to something else; and the human costs, measured in terms of
organizational morale.  The benefits realized for reengineering
include increased customer satisfaction, decreased operating costs
resulting from the elimination of nonvalue-added activities, and the
resources saved by operating more efficiently.  Costs and benefits of
reengineering should be presented in terms of the same metrics that
will be used to assess progress when the project is underway. 
"Quick-hitter" projects--ones with quantifiable benefits, little
cost, and short implementation time frames--can be used to "prime the
pump" for future reengineering activities.  Pilot testing is also a
useful tool, when possible, to build impetus for reengineering by
generating benefits, making converts of skeptics, and providing
lessons learned. 

Principle 5:  Process Owners, With
Cross-Functional Teams, Should Manage Reengineering Projects

Once processes are selected, process owners must be identified. 
Ideal process owners are usually responsible for or affected by a
significant portion of the process.  Panelists stated that process
owners should be respected, trusted members of the organization;
firmly engaged in reengineering efforts; and actively recruited
rather than assigned to their roles.  Such people are more likely to
attract team members that are willing to take the risks associated
with reengineering.  Process owners must be engaged in reengineering
because they will be responsible for implementing redesigned
processes. 

Process owners are also responsible for recruiting and managing
reengineering teams.  Panelists stated that teams should be limited
in size and composed of cross-functional membership.  Critical mass
for reengineering teams is 6 to 10 full-time members.  Having too
many members makes it difficult to get everyone together, while
having too few members places limits on what the group can
accomplish. 

Reengineering teams should have cross-functional representation to
ensure that the reengineering effort incorporates a holistic view of
the business.  It is sometimes appropriate to include information
technology people on the team, as they need to understand the
processes they will be designing systems to support.  Where
applicable, union representation is encouraged to maximize buy-in and
participation.  Participation of groups with oversight or audit
responsibilities would ensure that the new process fulfills legal
and/or regulatory requirements.  Panelists generally agreed that it
is also useful to incorporate a person who knows nothing about the
process to act as a catalyst, or a "yeast," to ask questions that
make the experts rethink the process.  Finally, it is important that
team members are people who will be instrumental in selling the
changes to others. 

Consensus existed among the panelists that it is vitally important to
clearly define the scope of the reengineering project.  Although
process reengineering must be done with respect to the whole, it is
impossible to try to reengineer everything in a large organization at
once.  Therefore, the tendency to expand the scope--"scope
creep"--must be avoided.  Periodically, the defined scope of the
project needs to be revisited to ensure the effort remains on course. 

The results of reengineering should be assessed against metrics that
have meaning for the overall organization and are customer-focused. 
Metrics that are financial in nature are not relevant in measuring
process performance.  While financial metrics can indicate a problem,
customer-focused process metrics are required to identify causes and
solutions.  Whatever the choice of metrics, it is important to
remember that the metrics should be representative of the
expectations of reengineering in terms of activities and benefits and
are tied to the overall goals of the organization.  Metrics that do
not add value to mission objectives are meaningless. 

Project plans should be based on a set time frame, with management
accountable for reaching the milestones.  Joe Matejek of Aetna
proposed the Aetna's 3-year model of no more than 6 months for
redesign of a process and no more than 2-1/2 years for full
implementation from the end of the redesign.  Time lines should be
strictly enforced.  One way to enforce implementation time lines is
to fund the project only for the time allowed.  At the end of the
project's life, removing the projected savings from the process'
budget allocation can serve as a powerful incentive to ensure that
reengineering projects are fully implemented and that projected
benefits are based on realistic assumptions.  Management
accountability is also vital in ensuring that implementation proceeds
according to plans.  Unless the leadership is as accountable as the
employees, change will not occur.  IBM changed its incentive
structure for senior executives to hold the leadership responsible
for change.  Incentive pay for senior executives is now based
primarily on IBM corporate performance rather than division
performance. 


   THE CHALLENGE FOR THE FUTURE
--------------------------------------------------------- Appendix I:3

Gains from reengineering will not be maintained if the vision and the
supporting attributes in the corporate culture are not
institutionalized.  After the effects of reengineering are realized,
continued efforts to improve reengineered process performance are
needed along with efforts to keep abreast of customer needs.  These
continued efforts require the same degree of cross-functional team
participation and senior management engagement as the original
reengineering efforts.  Finally, considering today's rapidly changing
environment, it is possible, if not likely, that an organization may
have to reengineer again to fulfill the future needs of its
customers. 

DOD's Director of Functional Process Improvement stated that the
principles presented in this report could apply equally well to DOD
as they do to the private sector.  The director also stated that DOD
has the added burden of extensive information sharing and
interoperability requirements.  He added that the real difficulty in
DOD's reengineering efforts lies with implementation. 

Military consultants present at the symposium stated that successful
reengineering efforts at DOD will require involvement and engagement
from the Secretary of Defense, with process ownership from uniformed
military leadership.  Because of the permanent nature of its
leadership, the consultants proposed that the Joint Chiefs of Staff
may be the organization in which to pursue joint approaches in
managing defense business operations.  The consultants also stated
that DOD's current reengineering efforts should focus on a few key
processes.  However, the consultants pointed out potential barriers
to reengineering.  These barriers include the rigidity in accounting
and budgeting systems and the absence of rewards and incentives that
encourage reengineering efforts. 


SYMPOSIUM PANELISTS
========================================================== Appendix II

James D.  Fischer:  Jim Fischer is a Corporate Headquarters Program
Manager of Process Management at IBM. 

While process management efforts began at IBM in 1989, the real
trigger to reengineering at IBM was an operating loss in 1993 of $8
billion.  Like Bell Atlantic, reengineering at IBM is framed by
response to customer requirements.  One reengineering project
involving manufacturing and services in IBM's parts logistics process
has generated savings of $100 million.  Reengineering has also helped
IBM handle the reduction of its workforce from 400,000 to 250,000. 

Joseph W.  Joseph:  Joe Joseph is the Manager of the General Motors
Knowledge Center, which is part of its North American Operations
Manufacturing Center. 

General Motors was involved in process improvement work prior to
moving into reengineering.  General Motors has focused many of its
reengineering efforts on design activities, which Mr.  Joseph said
can account for 70 to 95 percent of production costs.  In Mr. 
Joseph's words, "the impetus behind reengineering was to stay in
business." A 53-percent reduction in construction lead time and a
78-percent reduction in maintenance cost for a die cast tool design
are examples of significant improvement. 

Joseph M.  Matejek:  Joe Matejek is the Vice President of
Reengineering at Aetna Life and Casualty Insurance Company. 

Aetna is a 140-year-old, globally competitive firm.  In the late
1980s, Aetna saw its market share drop, prompting extensive customer
surveying and the use of focus groups to try to find the cause.  The
overwhelming finding was that consumers were primarily interested in
price and Aetna was not price competitive.  Therefore, Aetna's
reengineering efforts, which started in 1990, have focused on cost
reduction.  For Aetna, employees equal cost, making it necessary to
meet customer needs with fewer people.  The workforce has been
trimmed from 50,000 to 41,000.  Further reductions will bring the
total number of employees down to 38,000 by the end of 1994. 
Reengineering has resulted in a 25-percent cost reduction, while at
the same time enhancing customer service.  By the summer of 1995,
Aetna expects to have reengineered all of its business processes. 

James D.  Schoonover:  Jim Schoonover is the Director of Integrated
Operations and the Vice Chairman of the Corporate Operations Network
for DuPont. 

DuPont began its work in the area of reengineering in 1988.  By 1991
it had began to venture into integrated operations.  In 1992, DuPont
moved away from traditional functional organizations by eliminating
departments and focusing on the value chains it provides to its
customers.  Mr.  Schoonover characterized reengineering activities as
"vital to DuPont's survival," with savings amounting to about $1
billion a year. 

Gaye M.  Williams:  Gaye Williams is a Senior Member of the technical
staff in Business Process Engineering for Bell Atlantic.  Her
responsibilities include high-level business process mapping,
training on reengineering methodology, and facilitating process study
and process improvement teams.  Prior to joining Bell Atlantic, Gaye
Williams was an Associate Director of Business Process Engineering at
Texas Instruments. 

In achieving success, Bell Atlantic has focused on reengineering its
processes to better fulfill customer needs.  Cycle time in filling
orders for carrier-access service has been slashed, and error rates
approach zero. 


MILITARY CONSULTANTS
========================================================= Appendix III

Dr.  Albert M.  Bottoms (Retired, U.S.  Navy Senior Executive
Service):  Dr.  Bottoms has served as Science Advisor to the
Commander of the U.  S.  Seventh Fleet and the Navy Chair at the
Defense Systems Management College.  He is currently a visiting
professor of Undersea Warfare at the Naval Postgraduate School in
Monterey, California. 

Rear Admiral Rowland G.  Freeman (Retired, U.S.  Navy):  Admiral
Freeman had a varied naval career in operations and acquisition,
including research and development management.  He served as the
Administrator of the General Services Administration under President
Carter.  He is currently a consultant in the international logistics
area. 

General Joseph J.  Went (Retired, U.S.  Marine Corps):  General Went
served 38 years in commissioned service.  Following his assignment as
Wing commander, he served as the Deputy Commander of Fleet Marine
Forces Pacific; as the Deputy Chief of Staff for Reserve Affairs; as
the Deputy Chief of Staff for Installations and Logistics; and
finally, as the Assistant Commandant of the Marine Corps.  He is
currently a consultant on strategic planning for defense related
industries. 


DESCRIPTION OF BUSINESS PROCESS
REENGINEERING
========================================================== Appendix IV

Business process reengineering is a management technique for
achieving dramatic improvements in cost, quality, and customer
service by making fundamental changes in the way an organization
defines its mission and performs its work.  Business process
reengineering is based on a thorough understanding of an
organization's customers, their needs, and the environment.  Business
process reengineering is focused on improving business processes that
create and deliver value by satisfying the customer's needs. 
Generally, these processes cut across functional, geographic, and
organizational units. 

Business process reengineering is typically characterized by

a top management-driven effort to challenge the current
organizational mindset to one that is more receptive to customers and
the environment;

identifying and analyzing core business processes;

applying cost/service/quality measures to determine how effectively
they are meeting customer needs; and

making systemic changes to the organization's structure, culture,
roles, and responsibilities in order to support reengineered
processes. 


MAJOR CONTRIBUTORS TO THIS REPORT
=========================================================== Appendix V

NATIONAL SECURITY AND
INTERNATIONAL AFFAIRS DIVISION,
WASHINGTON, D.C. 

David R.  Warren
Nomi R.  Taslitt
Diane Blake Harper
B.  Scott Pettis
Arnett Sanders
Jeffrey M.  Stagnitti
Marilyn K.  Wasleski

