GAO

May 1997

Version 3

GAO/AIMD-10.1.15

United States General Accounting Office

Accounting and Information

Management Division

Business Process

Reengineering

Assessment Guide
PREFACE

Business process reengineering (BPR) began as a private sector technique to help

organizations fundamentally rethink how they do their work in order to dramatically

improve customer service, cut operational costs, and become world-class competitors. A

key stimulus for reengineering has been the continuing development and deployment of

sophisticated information systems and networks. Leading organizations are becoming

bolder in using this technology to support innovative business processes, rather than

refining current ways of doing work. Not surprisingly, BPR has captured the interest of

federal agencies, which are faced with an urgent need to reduce costs and improve

service to the American public.1

 This guide is designed to help auditors review business

process reengineering projects in a federal setting, determine the soundness of these

efforts, and identify actions needed to improve the prospects for their success.

The nine major assessment issues in this guide deal with elements considered by experts

to be stepping stones to successful business process reengineering. These issues cover a

wide range of activities, such as identifying customer needs and performance problems,

reassessing strategic goals, defining reengineering opportunities, managing reengineering

projects, controlling risks and maximizing benefits, managing organizational changes, and

successfully implementing new processes. Taken together, the issues in this guide

provide a general framework for assessing a reengineering project, from initial strategic

planning and goal-setting to post-implementation assessments.

COMMENTS ON THIS GUIDE

This guide was developed by the Information Resources Management Policies and Issues

Group, under the direction of Jack L. Brock, Jr. If you have questions or comments on it,

please contact John P. Finedore, Assistant Director, at (202) 512-6248

(finedorej.aimd@gao.gov) or Deborah A. Davis, Assistant Director, at (202) 512-6261

(davisd.aimd@gao.gov). We plan to periodically revise the guide based on comments from

users, private sector and government reengineering experiences, and our own

assessments. Other contributors to this guide are Mark Bird, John Christian, Mike

Alexander, Tom McDonald, Sharon Caudle, and Danny Latta.

 

1

See, for example, Reengineering for Results: Keys to Success From Government

Experience, Center for Information Management, National Academy of Public

Administration, 1994 (along with its 1995 update); Creating a Government That Works

Better & Costs Less: Reengineering Through Information Technology, National

Performance Review, 1993 (with annual update reports); and Reengineering Organizations:

Results of a GAO Symposium (GAO/NSIAD-95-34, December 1994).

1
For information on how to access this guide on the INTERNET, send an e-mail message

with "info" in the body to:

 info@www.gao.gov

or visit GAO's World Wide Web Home Page at:

http://www.gao.gov

Gene L. Dodaro

Assistant Comptroller General

Accounting and Information Management

 Division

Brian P. Crowley

Assistant Comptroller General

 for Policy

2
TABLE OF CONTENTS

Page

Preface 1

Table Of Contents 3

Introduction 5

Framework For Assessing 13

 Reengineering

Part A: Assessing the Agency's Decision to Pursue Reengineering 14

Assessment Issue 1: Has the Agency Reassessed Its Mission 15

 and Strategic Goals?

Assessment Issue 2: Has the Agency Identified Performance Problems 20

 and Set Improvement Goals?

Assessment Issue 3: Should the Agency Engage in Reengineering? 26

Part B: Assessing the New Process' Development 34

Assessment Issue 4: Is the Reengineering Project Appropriately 35

Managed?

Assessment Issue 5: Has the Project Team Analyzed the Target Process 40

 and Developed Feasible Alternatives?

Assessment Issue 6: Has the Project Team Completed a Sound Business 47

 Case for Implementing the New Process?

Part C: Assessing Project Implementation and Results 51

Assessment Issue 7: Is the Agency Following a Comprehensive 52

 Implementation Plan?

3
Assessment Issue 8: Are Agency Executives Addressing Change 57

Management Issues?

Assessment Issue 9: Is the New Process Achieving the 61

 Desired Results?

APPENDIX I: Glossary 64

APPENDIX II: Bibliography 69

APPENDIX III: Acknowledgements 73

4
INTRODUCTION

Federal agencies are being challenged to reduce the cost of government while improving

their performance. As noted in GAO's executive guide on strategic information

management,2

 achieving major levels of cost savings and performance improvement nearly

always requires that agencies redesign the business processes they use to accomplish

their work. Many of the largest federal agencies find themselves encumbered with

structures and processes rooted in the past, aimed at the demands of earlier times, and

designed before modern information and communications technology came into being. 

These agencies are poorly positioned to fulfill their mission and meet their strategic goals. 

They need to consider replacing outmoded work processes with streamlined ones that

more effectively serve the needs of the American public.

The need for agencies to reassess their business processes was recognized in the ClingerCohen Act of 1996. Among the provisions of this landmark information management

reform, agencies are required to determine whether their administrative and missionrelated business processes should be improved before investing in major information

systems to support them. In addition, the Office of Management and Budget (OMB) has

reenforced this by requiring that investments in major information systems proposed for

funding in the President's budget should, among other things, support work processes

that have been simplified or otherwise redesigned to reduce costs and improve

performance.3

 This recent legislation builds on other general management reforms. The

Government Performance and Results Act of 1993 provides the framework for defining

and measuring how well an agency is meeting its mission goals. And the Chief Financial

Officers Act of 1990 addresses the need for agencies to have accurate financial

information to understand and manage their operations.

BUSINESS PROCESS REENGINEERING: ONE MEANS TO PERFORMANCE

IMPROVEMENT

Business process reengineering is one approach for redesigning the way work is done to

better support the organization's mission and reduce costs. Reengineering starts with a

high-level assessment of the organization's mission, strategic goals, and customer needs. 

Basic questions are asked, such as "Does our mission need to be redefined? Are our

strategic goals aligned with our mission? Who are our customers?" An organization may

 

2Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994).

3OMB Memorandum of October 25, 1996, '"Funding Information Systems Investments,"

often referred to as the "Raines' Rules."

5
find that it is operating on questionable assumptions, particularly in terms of the wants

and needs of its customers. Only after the organization rethinks what it should be doing,

does it go on to decide how best to do it.

Within the framework of this basic assessment of mission and goals, reengineering

focuses on the organization's business processes--the steps and procedures that govern

how resources are used to create products and services that meet the needs of particular

customers or markets. As a structured ordering of work steps across time and place, a

business process can be decomposed into specific activities, measured, modeled, and

improved. It can also be completely redesigned or eliminated altogether. Reengineering

identifies, analyzes, and redesigns an organization's core business processes with the aim

of achieving dramatic improvements in critical performance measures, such as cost,

quality, service, and speed.

Reengineering recognizes that an organization's business processes are usually fragmented

into subprocesses and tasks that are carried out by several specialized functional areas

within the organization. Often, no one is responsible for the overall performance of the

entire process. Reengineering maintains that optimizing the performance of subprocesses

can result in some benefits, but cannot yield dramatic improvements if the process itself

is fundamentally inefficient and outmoded. For that reason, reengineering focuses on

redesigning the process as a whole in order to achieve the greatest possible benefits to

the organization and their customers. This drive for realizing dramatic improvements by

fundamentally rethinking how the organization's work should be done distinguishes

reengineering from process improvement efforts that focus on functional or incremental

improvement.

As will be emphasized in this guide, reengineering is not a panacea. There are occasions

when functional or incremental improvements are the method of choice, as when a

process is basically sound or when the organization is not prepared to undergo dramatic

change. But given the need to achieve "order of magnitude" improvements in many areas

of government, agencies should consider whether they have areas where reengineering

might be appropriate. The first three assessment issues in this guide focus on this very

issue.

HOW THIS GUIDE WAS DEVELOPED

Our guide is a distillation of elements typically emphasized in process redesign and

reengineering methodologies. The assessment questions deal with issues and activities

that reengineering practitioners have found to be critical in defining reengineering

opportunities and goals, ensuring that reengineering projects are well managed,

maximizing the return on resources invested in reengineering (including information

systems), and managing the many changes needed to implement a redesigned work

process.

6
To develop these assessment questions, we consulted with outside experts in the area of

public and private sector process redesign and reengineering to define the key concepts

and general approaches that were being taken to develop and implement new business

processes. We supplemented these discussions by reviewing the growing body of

literature and methodologies on process redesign and reengineering that have been

published by consulting firms and individual practitioners. Within GAO, we consulted

with staff having experience and expertise in areas germane to this subject, including

government results and performance issues, strategic information management,

performance measurement and benchmarking, and information systems design and

implementation. A draft of this guide was reviewed by reengineering practitioners, listed

in appendix III, from the private sector and state and federal agencies.

HOW THIS GUIDE IS ORGANIZED

The guide has nine assessment issues that are grouped into three major areas. The first

area, Part A: Assessing the Agency's Decision to Pursue Reengineering, focuses on

strategic and general management issues that need to be resolved before an agency4

embarks on a reengineering project. It includes the following assessment issues:

Assessment Issue 1: Has the Agency Reassessed Its Mission and Strategic

Goals?

Assessment Issue 2: Has the Agency Identified Performance Problems and

Set Improvement Goals?

Assessment Issue 3: Should the Agency Engage in Reengineering?

Part B: Assessing the New Process' Development picks up at the point where the

agency has decided to begin a reengineering project. The assessment issues focus on the

management of the reengineering team, the team's process redesign activities, and the

business case it develops to support a decision to begin implementing the new design:

Assessment Issue 4: Is the Reengineering Project Appropriately Managed?

Assessment Issue 5: Has the Project Team Analyzed the Target Process and

Developed Feasible Alternatives?

Assessment Issue 6: Has the Project Team Completed a Sound Business Case

for Implementing the New Process?

 

4We use the word "agency" throughout this guide to refer generically to any federal

department, agency, bureau, or office.

7
The last section, Part C: Assessing Project Implementation and Results, deals with the

problems involved in piloting and deploying a new business process. Both the human and

technical issues surrounding implementation are touched on, along with the need to

evaluate the performance and results of the new process:

Assessment Issue 7: Is the Agency Following a Comprehensive

Implementation Plan?

Assessment Issue 8: Are Agency Executives Addressing Change Management

Issues?

Assessment Issue 9: Is the New Process Achieving the Desired Results?

Under each of the nine issues, we list several "key activities" that the agency typically

should do to develop the information, manage the risks, and make the decisions needed

at that point. For each of the key activities, we provide a short discussion highlighting its

significance, along with a list of "key assessment questions" that evaluators can use to

probe how well the organization has addressed the issue. Because reengineering is very

situational, these questions are framed at a high level, delineating the general line of

inquiry that evaluators should pursue. Evaluators will need to augment these high-level

questions with specific subquestions of their own that are designed to explore the

agency's specific circumstances.

RELATION OF THIS GUIDE TO GENERAL MANAGEMENT LEGISLATION

Many of the issues in this guide are reflected in recent management reform legislation,

particularly the Government Performance and Results Act of 1993 (GPRA), the Chief

Financial Officers Act of 1990 (CFO), the Paperwork Reduction Act of 1995 (PRA), and

the Clinger-Cohen Act of 1996.

Reengineering starts at the same place as GPRA, by calling for a careful reassessment and

(if necessary) a redefinition of an organization's mission, goals, customers, and

performance outcomes. GPRA requires agencies to anchor performance improvement in

sound strategic planning.5

 Federal agencies are to develop a strategic plan that includes a

comprehensive mission statement, outcome-related strategic goals, and a description of

how the agency intends to achieve those goals. In doing this, agencies are to consult with

their customers and stakeholders, as well as the Congress, and take into account other

 

5The performance improvement approach specified by GPRA is consistent with how

successful public and private sector organizations pursued management reform initiatives

and became more results-oriented. See Executive Guide: Effectively Implementing the

Government Performance and Results Act (GAO/GGD-96-118, June 1996).

8
factors in the general environment that affect their ability to accomplish their missions. 

As mentioned earlier, agencies need to define their strategic direction (where they need to

go and what they need to accomplish) before expending time and resources on improving

how they do their work. Only then can an agency be in a position to assess whether its

activities, business processes, and resources are properly aligned to support its mission

and achieve desired outcomes. 

The CFO Act focuses on the need to significantly improve the government's financial

management and reporting practices. Having appropriate financial systems with accurate

data is critical to measuring performance and reducing the costs of agency operations.

The PRA and the Clinger-Cohen Act emphasize achieving program benefits and meeting

agency goals through the effective use of information technology. For example, the

Clinger-Cohen Act explicitly requires agency heads to analyze the missions of their

organizations, benchmark and assess the performance of their business processes and,

based on this analysis, redesign their mission-related and administrative processes (as

appropriate) before making significant investments in information technology to support

those missions. In plain terms, agencies should maximize the potential of technology to

improve performance, rather than simply automating inefficient processes.

REENGINEERING AND INFORMATION TECHNOLOGY

Given this legislation, a key assessment issue for evaluators is determining whether major

agency investments in information technology will in fact support a redesigned business

process. The issues in this guide provide a framework for determining whether an agency

is, in fact, engaged in reengineering a process.

As indicated in figure 1, work processes, information needs, and technology are

interdependent. When a reengineering project leads to new information requirements, it

may be necessary to acquire new technology to support those requirements. It is

important to bear in mind, however, that acquiring new information technology does not

constitute reengineering. Technology is an enabler of process reengineering, not a

substitute for it. Acquiring technology in the belief that its mere presence will somehow

lead to process innovation is a root cause of bad investments in information systems. 

The Clinger-Cohen Act seeks to remedy this by insisting that process redesign drive the

acquisition of information technology, and not the other way around.

9
Figure 1: Relationship of Mission and Work Processes to Information Technology

D e fines

Execute

Cons ider

Emp loys

M ission

W o rk Processes

Dec isions

Inform ation

Techno logy

Acco m p lis h

G u ide

Support s

Processes

Further guidance on the relationship between process reengineering and technology

investment decision-making can be found in Information Technology Investment: Agencies

Can Improve Performance, Reduce Costs, and Minimize Risks (GAO/AIMD-96-64,

September 30, 1996) and in Assessing Risks and Returns: A Guide for Evaluating Federal

Agencies' IT Investment Decision-Making, Version 1 (GAO/AIMD-10.1.13, February 1997).

CAVEATS TO THE USER

As illustrated in figure 2, reengineering a business process drives changes in other aspects

of the organization that support and control the process.

10
Figure 2: Reengineering Drives Many Changes

Because so many issues are interconnected in reengineering, evaluators need to scope

Core

Processes

Management and 

decision support

structures

People and

organizations

Information 

and

technology

Policies and

regulations

Reengineering

 

their assessments broadly and take a holistic view of the effort. For example, an agency

that is in the midst of designing a new process should have previously laid a solid

foundation for change by clarifying its mission, identifying customer and stakeholder

needs, assessing performance problems, setting new performance goals, and determining

that reengineering is an appropriate approach to take. Even implementation issues need

to be considered in the early stages of the project, so that executives can begin preparing

the agency for changes in goals, values, and responsibilities.

Furthermore, although the nine issues in this guide are presented in a sequence, many of

them include activities that should be occurring throughout the reengineering effort. For

example, strong executive leadership in leading the effort and managing change (issue 3)

should be a constant force from start to finish. Without it, even the best process design

may fail to be accepted and implemented. Similarly, the business case for reengineering

(issues 3 and 6) should be a dynamic document that is periodically updated to reflect

changes in costs, benefits, risks, customer needs, agency priorities, and other key factors.

11
One final caveat. Evaluators should keep in mind that this guide provides a general

framework for assessing key reengineering issues. It is not intended to be a complianceoriented checklist or to prescribe a specific, rigid set of steps for conducting a

reengineering project. Reengineering is far too situational for such a rigid approach. 

Evaluators will need to use good judgment in applying this guide to an agency's specific

circumstances. The overall aim should be to help the agency understand the issues,

problems, and risks that are encountered in reengineering, so that the agency can manage

them effectively and bring its project to a successful conclusion.

OTHER SOURCES OF INFORMATION

The bibliography in appendix II provides sources for more information on reengineering. 

Detailed information on any topic in this guide can be found in many of the books and

articles listed.

In addition, information on related topics, such as strategic information management,

systems development, information management, and financial management is available in

the following GAO guides and methodologies:

• Strategic Information Management (SIM) Self-Assessment Toolkit (Exposure draft)

October 28, 1994.

• Assessing Risks and Returns: A Guide for Evaluating Federal Agencies' IT

Investment Decision-making, Version 1 (GAO/AIMD-10.1.13, February 1997).

• The System Assessment Framework, Version 1.0, A Guide for Reviewing

Information Management and Technology Issues in the Federal Government

(GAO/AIMD-10.1.12, August 1996).

• Financial Audit Manual (GAO/AFMD-12.19.5A, June 1992).

12
FRAMEWORK FOR ASSESSING REENGINEERING

• Part A: Assessing the Agency's Decision to Pursue Reengineering

• Part B: Assessing the New Process' Development

• Part C: Assessing Project Implementation and Results

13
PART A

ASSESSING THE AGENCY'S DECISION TO PURSUE

REENGINEERING

Assessment Issue 1: Has the Agency Reassessed Its Mission and Strategic Goals?

Assessment Issue 2: Has the Agency Identified Performance Problems and Set

Improvement Goals?

Assessment Issue 3: Should the Agency Engage in Reengineering?

Federal agencies are under increased pressure to perform better with fewer resources. 

The impetus to improve comes from (1) recognition that agency budgets cannot continue

to grow like they have in the past and (2) legislation--specifically, GPRA and the ClingerCohen Act. These laws focus on analyzing missions, assessing agencies' performance,

revising processes, and achieving results. Measuring how well the agency's core business

processes perform in terms of cost, quality, and timeliness in serving customers helps the

agency prioritize areas for improvement, decide whether reengineering is in order, and

make a compelling argument for investing time and resources in redesigning a process to

achieve better results. The issues, activities, and questions discussed in this section are

intended to help evaluators assess an agency's decision to pursue reengineering as a

means of bringing about major improvements in performance.

14
ASSESSMENT ISSUE 1

HAS THE AGENCY REASSESSED ITS MISSION

AND STRATEGIC GOALS?

Key Activities for the Agency:

• Reassess the agency's mission and priorities.

• Reassess how well the agency's products, services, and delivery

modes align with the needs of its customers and stakeholders.

• Identify and assess the impact of other change drivers, such as

changing mission, demographic shifts, budget cuts, and downsizing.

• Define and map the business processes that are key to meeting

customer and stakeholder needs.

Before a decision on whether to reengineer can ever be made, federal agencies must

clearly know their mission and have established strategic goals that explain the purposes

of the agency's programs and the results they are intended to achieve. Well-defined

missions and strategic goals form the foundation for the key business systems and

processes and thus help ensure the successful outcome of their operations. Leading

organizations strive to ensure that their day-to-day activities support their organizational

missions and move them closer to accomplishing their strategic goals. Such strategic

planning is also required by GPRA. Under GPRA, agencies must consult with both the

Congress and other stakeholders in developing missions and strategic goals. They must

also identify the external factors that could affect their ability to accomplish what they

set out to do.

1.1 Has the Agency Reassessed Its Mission, Outlook, and Priorities?

Unlike many private sector companies, a federal agency cannot independently make major

shifts in mission, lines of business, and customer base. However, there is pressure from

both executive and legislative branches--as evident in the passing of GPRA--for federal

agencies to take a hard look at their roles and responsibilities. Reassessing customer and

stakeholder needs and other change drivers helps the agency to reevaluate and clarify its

15
strategic vision and goals. It also fosters an understanding of the source, nature, and

priority of demands on its resources.

This reassessment helps provide direction and focus for an agency's efforts to improve its

performance. For example, the reassessment could show that over time, goals, priorities,

and activities that were once key elements of its original mission are now much less

important. Similarly, new issues and mandates may have arisen that have become major

activities for the agency--perhaps even its main business--thereby calling for changes in 

mission priorities. Further, some activities may no longer need to be done, or could be

better performed by other federal agencies, state and local governments, or the private

sector. 

Key Assessment Questions

Has the agency identified important changes that could result in a major

redefinition of roles and restructuring of the agency?

Is the agency's strategic planning focused on highest priority customer and

stakeholder needs and mission goals?

Has the agency developed explicit mission goals that involve tailoring products and

services to the needs of key customer groups?

Has the agency revised its strategic plan, as appropriate, and formed a consensus

on the goals it is trying to accomplish, for whom, and by when?

1.2 Are the Agency's Products and Services Aligned with Customer and

Stakeholder Needs?

Reengineering is customer-focused and outcome-oriented. Before an agency embarks on

a reengineering effort, it should have a comprehensive understanding of who its current

and future customers are and what their needs and expectations are as key input for

improving the type, cost, quality, and timeliness of the products and services provided. It

is also important to consider the business needs of the staff working within the agency

(internal customers) and third parties outside the formal boundaries of the agency who

are involved in delivering the services and products, such as state and local governments

which help administer a federal program.

Along with customers, stakeholders are another important source of requirements. 

External stakeholders include the Congress, oversight bodies, key interest groups, and

others who oversee, fund, or are affected by the agency's activities. Internal stakeholders

include agency staff who would be directly and personally affected by changes in a

particular business process. Stakeholders have a great impact on any improvement effort

16
and, when ignored, can jeopardize the success of the effort. While it is impractical to

satisfy the needs of all stakeholders, the agency should identify and prioritize key

stakeholders' needs and identify areas of consensus, where support for improvement is

naturally strong. It is also important to identify areas of fundamental disagreement that

may make process improvement much more difficult to achieve.

Key Assessment Questions

Has the agency identified the external customer base for each of its major products

and services? 

Has the agency identified the external customers' current and anticipated needs,

expectations, and priorities for each major product and service? What are their

relative importance in the customers' eyes? What means did the agency use to

identify and validate the customers' needs, values, and priorities (interviews, focus

groups, surveys)?

Has the agency identified its internal customers and third party providers and their

needs and expectations insofar as they affect the key processes that provide

products and services to external customers? Has the agency analyzed how

projected demographic changes may affect its customer base?

Is the agency using external and internal customer requirements to make major

decisions about strategic goals, budgeting, and resource allocations? Is the agency

focusing more attention on satisfying the requirements of its internal customers

rather than its external customers?

Has the agency identified stakeholders for each major product and service? Has

the agency identified and documented their needs, concerns, and priorities?

Has the agency identified the key areas of agreement and disagreement among

customer and stakeholder groups regarding mission, strategic goals, products and

services, and performance? How serious are the differences? How well has the

agency been able to broker trade-offs in these areas of disagreement?

Has the agency analyzed whether its products and services are aligned with

customer and stakeholder needs and business goals?

Has the agency analyzed whether its products and services are being delivered in

ways that best meet these needs?

17
1.3 Has the Agency Identified Other Forces for Change?

Along with customer and stakeholder expectations and needs, other factors can be

powerful motivators for undertaking major performance improvements, such as cabinetlevel policy initiatives, budget and personnel reductions, pending reorganizations,

devolution of functions to the state and local level, widespread pressure for governmental

reform, and documented problems with fraud, waste, or abuse. The agency should

determine which of these factors must be considered in assessing the need to change.

Key Assessment Questions

What other factors has the agency identified that are driving it to change business

processes and achieve dramatic improvements in performance?

Has the agency considered the impact of these change drivers in its strategic

planning?

1.4 Has the Agency Defined and Mapped Its Mission-Critical Business

Processes?

Agencies need to develop a common understanding of the processes they use to produce

their products and services before they can set about to improve them. Like large private

sector organizations, agencies can have a confusing web of interconnected processes and

subprocesses, many of which cut across several functional departments. It is important

to define what the components of each process are, as well as the process' boundaries,

dependencies, and interconnections with other processes.

As a start, the agency should map each of its core processes at a high level. High-level

process mapping typically results in a graphic representation depicting the inputs, outputs,

constraints, responsibilities, and interdependencies of the core processes. This high-level

map provides managers and staff with a common understanding of how the processes

work and how they are interconnected. This mapping should be done quickly. As

discussed in assessment issue 5, more detailed mapping is done after a process has been

selected for reengineering.

Key Assessment Questions

Has the agency identified its core business processes for each major product and

service? Have the processes been mapped at a high level?

Do the agency's process maps show the connections and interrelationships

between core processes?

18
Do the agency's process maps show the complete chain of related activities within

the agency?

1.5 Criteria

The Clinger-Cohen Act of 1996 (P. L. 104-106, Division E; February 10, 1996).

Sections: 40 USC 1413(b)(2)(C)

40 USC 1423(5)

The Government Performance and Results Act of 1993 (P. L. 103-62, 

August 3, 1993). 

Section: 5 USC 306

OMB Circular A-11, "Preparation and Submission of Budget Estimates,"

June 13, 1996. 

Section: OMB A-11 43.2(b)

OMB Circular A-130, "Management of Federal Information Resources,"

February 8, 1996

Sections: OMB A-130 App. IV 8b(1)

OMB A-130 8b(3)(b)

Executive Guide: Effectively Implementing the Government Performance and

Results Act (GAO/GGD-96-118, June 1996). See practices under Step 1: Define

mission and desired outcomes.

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994). See Practice 4: 

Anchor strategic planning in customer needs and mission goals.

19
ASSESSMENT ISSUE 2

HAS THE AGENCY IDENTIFIED PERFORMANCE PROBLEMS

AND SET IMPROVEMENT GOALS?

Key Activities for the Agency:

• Measure performance and identify problems in meeting mission

goals and the needs of customers and stakeholders.

• Benchmark against the goals and performance of leading

organizations.

• Establish ambitious performance improvement goals that are

mission-oriented and meaningful to customers and stakeholders.

• Select and prioritize processes to be improved.

Leading organizations recognize that improvement goals should flow from a fact-based

performance analysis and be directed at achieving organizational missions. These

organizations typically assess which of their processes are in greatest need of

improvement in terms of cost, quality, and timeliness. By analyzing the gap between

where they are and where they need to be to achieve desired outcomes, agencies can

target those processes that are in most need of improvement, set realistic improvement

goals, and select an appropriate process improvement technique. One method often used

is benchmarking. Benchmarking provides reference points for defining ambitious, yet

achievable, performance goals and also helps the agency learn methods that others have

used to improve their business processes.

2.1 Has the Agency Assessed the Gaps Between Current Performance and

Customer/Stakeholder Needs?

Measuring the performance of its major processes helps an agency to determine how well

it is meeting its mission goals. Processes with gaps between desired and actual

performance are, by definition, candidates for improvement. Small gaps can often be

bridged with a narrowly focused improvement effort. Processes with very large gaps may

be so fundamentally inefficient that they need to be completely reengineered in order to

meet performance goals.

20
Ideally, under GPRA, an agency should have measures for all its major processes to track

cost, quality, and timeliness. Cost covers the resources needed to produce and deliver the

products and services. Quality covers things such as reduction or elimination of errors or

rejects and rework, as well as the customers' satisfaction with the products and services. 

Timeliness concerns not only the amount of time it takes to complete the process, but

also how long it takes to deliver the output to customers.

It is important that performance measures not be focused only on internal operations. 

Measures also need to capture performance from the customers' point of view--cost to the

customers in terms of time or expense, the quality of the product or service as delivered,

and the speed with which the customers' needs are satisfied.

Key Assessment Questions

Does the agency use performance measures consistent with the requirements of

GPRA to determine how well it is meeting desired outcomes and to identify and

assess any performance problems?

What indicators (quality, cost, time, etc.) are used for each core process? Are

these indicators adequate for measuring current and future performance

requirements? 

Has the agency involved customers and stakeholders in developing the

performance indicators? 

How well is the agency performing in relation to customer expectations?

a. Has the agency identified any gaps between customer needs and current

performance?

b. How satisfied are customers and stakeholders with the current performance

levels of the agency? How has the agency ascertained this?

c. What, if any, performance information does the agency have for the past

several years to show performance trends for each core process? 

d. What do the trends suggest as to the adequacy of the processes to meet future

demands by customers and stakeholders?

2.2 Has Current Performance Been Benchmarked Against Leading

Organizations?

Benchmarking is the comparison of core process performance with other components of

the agency (internal benchmarking) or with leading organizations (external

benchmarking). Benchmarking is a key tool for performance improvement because it

provides "real world" models and reference points for setting ambitious improvement

21
goals. Benchmarking helps to (1) identify the gaps between the agency's process

performance and that of leading organizations and (2) understand how these leaders have

changed their structures, work processes, and lines of business to improve performance

dramatically. When used in conjunction with performance measurement, benchmarking

provides a powerful means of establishing a compelling business case for change.

Many processes that seem unique to the government actually have counterparts in the

private sector, especially in generic areas such as claims processing, loan management,

real property maintenance, logistics, inventory management, etc. Also, it is important to

note that the benchmarking partner does not have to be a similar organization, or even do

similar work. For example, Xerox used L.L. Bean to improve order fulfillment. Looking

at processes in dissimilar organizations can actually lead to the most fruitful

improvements because it stimulates new thinking about traditional approaches to doing

work.

Key Assessment Questions

Has the agency benchmarked the performance of its core processes against

internal or external benchmark partners?

How did the agency select its benchmarking partners? Were dissimilar

organizations included? Were state and local governments known for excellence in

innovation included?

Were the customer interfaces of the processes benchmarked?

What were the benchmarking results and how is the agency using these results in

establishing performance goals?

2.3 Are Improvement Goals Focused on Outcomes Important to Customers and

Stakeholders?

Using customer and stakeholder performance requirements, performance measurement

data, benchmarking results, and an analysis of other change drivers, the agency should

identify and assess the performance gaps between its current performance and

customer/stakeholder requirements and then set improvement goals for bridging the gaps. 

These improvement goals should be sharply focused on outcomes linked to the agency's

defined mission and what needs to be accomplished.

The goal-setting process requires careful consideration. Performance goals should be

realistically achievable to avoid negative consequences if they are not met, such as

employee disillusionment or customer dissatisfaction. Ambitious goals, for example, may

need to be broken into increments and staged in over time. On the other hand, setting

22
goals that are too modest can be counterproductive. They may lead the agency to focus

on optimizing current work processes that are inherently inadequate, thereby further

entrenching them and making them more difficult to change. "Stretch" goals help

challenge and motivate an agency to fundamentally rethink how it does its work.

Key Assessment Questions

Has the agency developed goals based on a careful, fact-based analysis of its

performance and environment and has the agency linked the goals to mission,

customer needs, and current performance?

Has the agency stated its goals in measurable terms, such as cost, quality, and

timeliness?

Do the goals drive improvements that are valued by customers and stakeholders?

Do the goals challenge the agency to achieve performance improvements

comparable to those achieved by industry leaders?

Has the agency established a sound performance measurement system that

produces measures at each organizational level that demonstrate results, are

limited to the vital few, respond to multiple priorities, and link to responsible

programs?

Has the agency systematically linked its improvement goals to the agency's

strategic planning and budget decisions?

2.4 Has the Agency Selected and Prioritized Processes for Improvement?

As a first step, the agency should decide which process performance gaps must be

narrowed or closed, either because of current performance problems or gaps anticipated

for the future. The result should be a list of processes or major subprocesses that are

candidates for improvement.

The agency then should decide which processes or major subprocesses should have the

highest priority for agency action, based on formal selection criteria. The selection

criteria might emphasize:

• processes with the strongest link to organizational mandate and mission, and the

highest impact on customers;

23
• processes with the biggest potential return on the resources invested in improving

them (e.g., processes that cut across several functional units where opportunities

to reduce hand-offs, reviews, cycle time, and costs may be greatest);

• processes where change management issues can be more easily resolved because

there is strong consensus among the organization, stakeholders, and customers on

the need for change;

• processes that can be redesigned with currently available resources and

infrastructure; 

• less complex processes where improvement goals can be achieved within a short

period of time and experience can be gained in reengineering.

The selection criteria should be clearly articulated, since it will become an important

element in creating a convincing business case for change.

Key Assessment Questions

Has the agency identified any performance gaps where dramatic improvements are

needed, indicating candidates for business process reengineering?

Which core processes and subprocesses have been targeted for improvement? 

What performance improvement goals have been set for them?

Given the strategic vision and goals of the agency, the performance gaps, customer

and stakeholder needs, and other change drivers, has the agency targeted the most

critical products and services?

What selection criteria were used to prioritize and target processes for

improvement? 

Were customers' and stakeholders' viewpoints included in making the selections?

2.5 Criteria

The Clinger-Cohen Act of 1996 (P.L. 104-106, Division E; February 10, 1996).

Section: 40 USC 1423(4)

The Paperwork Reduction Act of 1995, as amended (P.L.104-13, May 22, 1995).

Section: 44 USC 3506(b)(3)(C)

24
The Government Performance and Results Act of 1993 (P. L. 103-62,

August 3, 1993).

Sections: 5 USC 306

31 USC 1115

31 USC 1116

The Chief Financial Officers Act of 1990, as amended (P.L. 101-576, 

November 15, 1990).

Section: 31 USC 902(a)(3)

OMB Circular A-11, "Preparation and Submission of Budget Estimates,"

June 13, 1996.

Sections: OMB A-11 15.6

OMB A-11 34.1

OMB Circular A-130, "Management of Federal Information Resources," 

February 8, 1996. 

Section: OMB A-130 App. IV 8b(1) 

Executive Guide: Effectively Implementing the Government Performance and

Results Act (GAO/GGD-96-118, June 1996). See practices under Step 2, Measure

Performance.

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology, (GAO/AIMD-94-115, May 1994). See Practice 1: 

Recognize and communicate the urgency to change information management

practices; Practice 4: Anchor strategic planning in customer needs and mission

goals; and Practice 5: Measure the performance of key mission delivery processes.

Government Business Process Reengineering (BPR) Readiness Assessment

(General Services Administration, November 1996). See section on "Develop

Performance Measures."

25
ASSESSMENT ISSUE 3

SHOULD THE AGENCY ENGAGE IN REENGINEERING?

Key Activities for the Agency:

• Decide whether any of the processes needing improvement should

be reengineered.

• Assess the agency's readiness to engage in a reengineering project.

• Develop and communicate a compelling business case for initiating

a reengineering project.

• Integrate the reengineering project into the agency's overall strategy

for improving mission performance.

• Develop and begin implementing a change management plan.

After completing the previous activities, the agency should know which of its core

processes needs improvement in order to fulfill mission goals, satisfy customer and

stakeholder needs, reduce costs, and provide high-quality products and services. If the

gap between current performance and agency goals is large, business process

reengineering may be an appropriate course of action. However, before engaging in a

reengineering project, executives need to understand and accept their critical role in

managing the fundamental organizational and cultural changes involved in reengineering. 

They must also determine whether the agency has the skills needed to pursue a

reengineering project successfully. Training, tools, and external support may be needed.

If the agency decides to initiate a reengineering project, it should begin to develop and

communicate a compelling business case to customers and stakeholders that supports

this decision. The business case is a critical step in change management because it helps

to build early support for reengineering both within the agency and among customers and

stakeholders. Initially, the business case will be a high-level definition of the performance

problem being addressed, the objective and scope of the reengineering effort, action

steps, responsible parties, and time frames. It establishes the conceptual foundation for

the reengineering effort. As the project team completes its process redesign work, the

business case will be enlarged and updated to present a full picture of the benefits, costs,

and risks involved in moving to a new process.

26
3.1 Should Any of the Agency's Poorly Performing Processes Be Targeted for

Reengineering?

As discussed in assessment issue 2, the agency should have identified and prioritized the

processes that need improvement. The agency now needs to choose appropriate

improvement approaches for improving them and integrate these efforts into a

comprehensive improvement program.

When should reengineering be considered? Several broad screening criteria could be

used, which build upon information gathered in the first two assessment questions.

 

• Is the process of strategic importance to the agency's mission?

• Does the process urgently need dramatic improvement in order to meet the

agency's own performance goals?

• Is there a high level of customer and/or stakeholder dissatisfaction with the

process (quality, timeliness, cost)?

• Does the process have a long cycle time with many sequential activities, multiple

hand offs, checkpoints, and significant waiting time between work steps (e.g.,

processing a benefits claim)?

• Did benchmarking show that other organizations can do the same (or analogous)

process much better?

• Is the process highly dependent on information, so that information technology

might be used to speed the work flow, collapse work steps, and improve realtime

decision-making?

In addition to considering these generic criteria, the agency will need to define selection

criteria that are specific to its particular situation and goals.

Key Assessment Questions

Did the agency consider a full range of improvement approaches in dealing with its

performance problems (e.g., continuous process improvement, outsourcing,

streamlining, and privatizing, as well as reengineering)?

Is it apparent from the selection process that the agency understands the tradeoffs

involved in choosing one improvement approach over the other in terms of

resources, costs, risks, return on investment, and time to complete?

27
What decision criteria did the agency follow to select the process(es) targeted for a

reengineering project? Did the criteria take into account the type of information

that should have been developed under the first two assessment issues and the

criteria listed in question 3.1 above?

3.2 Is the Agency Ready to Engage in Reengineering?

An agency can rush into reengineering without a good understanding of what it is getting

into. Although reengineering may be the preferred approach, success does not come

easily. Reengineering is fraught with political, organizational, process, and people issues

that must be well managed for the effort to succeed. Assuming that the agency has a

candidate process for reengineering, the agency head and top executives need to assess

readiness of themselves and the agency to pursue reengineering.

The first and, by far, the most critical readiness factor to consider is the need for strong

executive leadership. There is no substitute for the personal involvement and support of

the agency head and top executives in the reengineering effort. Before embarking on a

reengineering project, the agency's executives need to understand that the effort will

demand much of their personal attention and involvement. Executives must play major

roles in (1) continually communicating the purpose and goals of the reengineering effort

to customers and stakeholders, (2) demonstrating personal involvement and support at all

stages of the reengineering effort in order to maintain its momentum, and (3) managing

the potentially extensive changes to the agency's organizational structure and values that

may be needed to implement the new process. These roles cannot be delegated without

significant loss of credibility regarding the seriousness of the effort.

Executives must also assess whether the agency possesses all of the skills needed to

pursue reengineering. They may find that the agency needs to make a significant

investment in providing the training, tools, resources, and expert advice needed to carry

out a reengineering project. Also, if the agency has not engaged in reengineering before,

it may need to develop experience in reengineering on smaller-scale projects before

engaging in larger efforts. Consultants can help guide an agency's effort, especially by

providing a methodology for structuring the project and special skills for process analysis. 

However, the agency should have enough of a skill base so that it can retain leadership

and control over the project and carry out most of the work.

Key Assessment Questions

Do the agency head and the top executives have a basic understanding of the

principles of reengineering, through training or experience?

Do the agency head and the top executives actively demonstrate their commitment

to the reengineering effort (participation in planning, making presentations,

28
engaging in worksite discussions, meeting with customers and stakeholder groups,

etc.)?

Has the agency assessed what reengineering skills and tools it has available

internally? Are staff skills, tools, and experience adequate for carrying out a major

reengineering project?

What plan does the agency have to develop needed reengineering skills?

To what extent must the agency rely on help from other sources (consultants,

federal agencies) to fill shortcomings in skills? Does the agency have enough of a

skill base so that it can lead the reengineering project itself, rather than turning it

over to an outside source?

3.3 Has the Agency Developed an Initial Business Case for Starting a

Reengineering Project?

If the agency decides reengineering a process is the appropriate course of action, it

should create an initial business case for going forward with a reengineering project. The

initial business case should include a discussion of legislative mandates and mission

goals, customer and stakeholder expectations, performance problems with target process,

opportunities to improve based on benchmark organizations, and other factors for change. 

It also should cover the consequences of not achieving dramatic improvements in the

target process and how this failure to act would impair the capability of the agency to

carry out its mission. The business case should also touch on the potential political

ramifications of making fundamental changes to the current process, both positive and

negative.

This initial business case is essentially a high-level document aimed at convincing

customers and stakeholders that reengineering the selected process is the appropriate

means for achieving performance and cost-savings goals. It is a key tool for agency

executives to use in communicating the rationale and objectives of the reengineering

effort and for managing expectations, particularly with the agency's own staff. Updated

versions of the business case should be developed as the reengineering project proceeds

and as additional information is developed by the project team. After the project team

has defined an alternative process design, the business case should be fully fleshed out

with specific details on the proposed new process and make a rigorous, fact-based case

for proceeding with implementation. This more detailed version of the business case is

discussed later under assessment issue 6, "Has the Project Team Developed a Sound

Business Case for Implementing the New Process?"

29
Key Assessment Questions

Has the agency developed an initial business case for reengineering the target

process that builds on the assessment issues discussed earlier in this guide?

Does the initial business case present a credible outline of the potential cost

savings and other benefits to be derived from reengineering the target process? 

How did the agency make a preliminary determination of the potential costs,

benefits, and risks of reengineering the target process? Did it use benchmark data

and best practices from leading organizations?

Has the agency communicated its initial business case to customers and

stakeholders? Do they understand the case and agree with it? Where are the

points of disagreement?

If the agency decides to pursue reengineering, how will it address any unresolved

issues/concerns that were identified as a result of its assessment of internal and

external barriers to change?

3.4 Is the Proposed Reengineering Project Integrated Into the Agency's Overall

Improvement Strategy?

The reengineering project should not only support the overall strategic vision and goals of

the agency, but should also be compatible with other process improvement projects that

may be underway. The agency should have an overall improvement strategy that provides

a means to coordinate and integrate the various improvement projects, set priorities, and

make appropriate budget decisions. This is especially important if multiple improvement

projects are to be pursued at the same time. The strategy should include a discussion of

what improvement projects are necessary, how they are interrelated, the order in which

they will be pursued, and their goals, time frames, resource requirements, and key

participants. 

Key Assessment Questions

Does the agency have an overall strategy to guide its improvement efforts,

prioritize them, and allocate resources to support them?

Is the agency using the strategy as a means to coordinate and integrate all of its

improvement projects?

Has the linkage of the proposed reengineering project to this overall strategy been

clearly spelled out?

30
3.5 Have Agency Executives Begun a Program to Manage Expectations and

Facilitate Change?

Agency executives must begin early to build support for reengineering within the

organization and with its external customers and stakeholders, mobilize the agency's

talent and resources for a reengineering project team, and authorize the substantial

actions necessary to change operations and policies. Senior executives are best

positioned to explain the agency's situation and goals, and define credible standards for

success. The sustained, conspicuous personal involvement of executives sends a strong

signal that the agency is determined to improve performance. Since reengineering

involves major changes to the way an agency does business, agency executives need to

identify and manage the key internal and external barriers to change.

Within the agency, executives should start involving managers and employees in the

reengineering project as early as possible. Executives need to continuously communicate

to the staff that large-scale problems exist and need substantive corrective action. 

Executives should begin to develop and carry out a formal change management plan to

bring the agency's values into line with the goals of reengineering. As with the business

case, the change management plan will grow and become more specific as the

requirements of the redesigned process are developed. Training and career enhancement

may be needed, as well as counseling and outplacement assistance for any downsizing

that may result.

 

Outside the agency, executives should be working hard to achieve a broad-based

consensus that a major process change is needed to meet agency goals. Reaching such

consensus in a political environment is often difficult to achieve, since interested parties

may have conflicting opinions about what needs to be done. For this reason, executives

should reach out early to the customers and stakeholders of the process being

reengineered and involve them, where possible, in the effort. Ongoing communication

about the goals and progress of the reengineering effort is crucial, since negative

perceptions could be formed and harden at an early stage, making the implementation of

the new process more difficult to achieve. Agency executives need to work with

customers and stakeholders to negotiate their viewpoints and develop mutually acceptable

solutions.

As discussed in assessment issue 8, this change management plan needs to be well

underway by the time the new process is ready to be implemented. If change

management is delayed, it will be very difficult to build support and momentum among

the staff for implementing the new process, however good it might be.

Key Assessment Questions

Are agency executives devising and implementing a formal change management

plan to provide a comprehensive and coherent framework for their efforts?

31
What specific actions have top agency executives taken to implement this plan and

communicate to managers and staff their clear commitment to the reengineering

effort and the urgency to improve agency operations? Is this communication

ongoing to build and maintain momentum for change?

Have executives identified areas within the agency that might be barriers to

reengineering the target process (organizational values, entrenched interests,

narrow headquarters authority over field operations, etc.)? What is the plan for

dealing with them?

Are executives realigning agency values, incentives, and reward systems to focus

sharply on achieving outcomes important to customers?

Have executives identified potential external barriers to reengineering the target

process in terms of legislation, regulation, policy issues, and political interests? 

What is the plan for dealing with them?

What steps have executives included in the change management plan to identify

and address customers' and stakeholders' concerns about the specific process to

be reengineered? How well are executives addressing these concerns?

3.6 Criteria

The Clinger-Cohen Act of 1996 (P. L. 104-106, Division E; February 10, 1996).

Sections: 40 USC 1413(b)(2)(C)

40 USC 1423(5)

The Government Performance and Results Act of 1993, (P. L. 103-62,

August 3, 1993). 

Sections: 5 USC 306

31 USC 1115

OMB Circular A-11, "Preparation and Submission of Budget Estimates," 

June 13, 1996. 

Section: OMB A-11 15.2(3)

OMB Circular A-130, "Management of Federal Information Resources," 

February 8, 1996. 

Sections: OMB A-130 8b(1) 

OMB A-130 7o

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994). See Practice 1: 

32
Recognize and communicate the urgency to change information management

practices; Practice 2: Get line management involved and create ownership;

Practice 3: Take action and maintain momentum; Practice 6: Focus on process

improvement on the context of an architecture; and Practice 11: Upgrade the skills

and knowledge of line and information management professionals. 

Executive Guide: Effectively Implementing the Government Performance and

Results Act (GAO/GGD-96-118, June 1966). See Practice 10: Create incentives; and

Practice 12, Integrate management reforms.

Government Business Process Reengineering (BPR) Readiness Assessment

(General Services Administration, November 1996). See sections on "Gain

Leadership Commitment," "Plan for Action and Communicate," "Anticipate Risks,"

and "Identify Resources and Roles."

33
PART B 

ASSESSING THE NEW PROCESS' DEVELOPMENT

Assessment Issue 4: Is the Reengineering Project Appropriately Managed?

 

Assessment Issue 5: Has the Project Team Analyzed the Target Process and

Developed Feasible Alternatives?

Assessment Issue 6: Has the Project Team Completed a Sound Business Case for

Implementing the New Process?

The previous sections focused on the agency's decision to embark on a reengineering

project. The following sections highlight the activities involved in designing a new

process. These focus on establishing a well-managed team to analyze the existing

process, design possible alternatives, and determine the benefits, costs, and risks of each. 

After completing these activities, agency executives and the reengineering team should

have a solid basis for selecting an alternative process and preparing a well-documented

business case for implementing it. 

34
ASSESSMENT ISSUE 4

IS THE REENGINEERING PROJECT 

APPROPRIATELY MANAGED?

Key Activities for the Agency

• Establish an executive steering committee and project sponsor to

support the reengineering project.

• Establish an owner for the process to be reengineered.

• Form a qualified, trained, well-led team to reengineer the target

process and its supporting structures.

• Establish a clear team charter that defines project goals, resources,

constraints, and deliverables.

• Select and follow a reengineering methodology to guide the project.

Each reengineering effort should be structured and managed as a formally chartered

project with clear objectives, tasks, and time frames. Once agency executives have

selected a reengineering project, the management structure for the effort is defined,

including scope and expectations, human and technical resources, and the reengineering

methodology that will be followed.

4.1 Does the Reengineering Effort Have Ongoing Executive Support?

Agencies should have the equivalent of an executive steering committee, headed by the

agency leader, to support and oversee the reengineering effort from start to finish. Only

the top executives can build credible support among customers and stakeholders,

mobilize the talent and resources for a reengineering project, and authorize the actions

necessary to change agencywide operations. The executive committee defines the scope

of the reengineering project, allocates resources, ensures that project goals align with the

agency's strategic goals and objectives, integrates the project with other improvement

efforts, monitors the project's progress, and approves the reengineering team's

recommendations. In carrying out these responsibilities, the executive committee keeps

stakeholders apprised of the reengineering team's efforts.

35
The committee should designate one of its members as the sponsor for the reengineering

project. Often, the executive sponsor is from one of the functions in the process that is

being reengineered. The sponsor serves as the liaison between the reengineering team

and the executive steering committee, and works with the team to resolve policy issues,

overcome internal roadblocks, and keep the project on track.

Key Assessment Questions

How does the agency provide executive-level oversight and support to the

reengineering effort? Does the agency have an executive steering committee (or its

equivalent) to initiate, oversee, and support its reengineering projects? 

What are the steering committee's roles and responsibilities? What is its

membership? Does it include executives from the process being reengineered? 

How often does it meet and what have been its major discussion items and

decisions?

Does the executive steering committee coordinate the work of the various agency

improvement efforts (including reengineering projects) to prevent duplication or

the development of solutions that work at cross-purposes? 

Have agency executives communicated frequently and consistently with customers,

stakeholders, and staff about the reengineering project?

Does the reengineering project team have a member of the executive steering

committee who acts as its sponsor to help:

a. facilitate communications with the executive steering committee?

b. obtain and allocate the necessary resources (e.g., funds, tools, people)?

c. remove internal barriers for the process owner and project team?

d. manage relationships with internal and external stakeholders?

e. provide guidance on policy issues?

Does the sponsor have a high level of personal involvement in the reengineering

project?

4.2 Has a Process Owner Been Designated?

The process owner is the person who will ultimately be responsible for managing the

performance of the newly designed process. In some cases, the process owner may be

someone currently associated with the existing process, but not necessarily. The process

owner should be closely involved--if not actually leading--the reengineering team.

36
Key Assessment Questions

Has the agency assigned a process owner for the process to be reengineered?

Is the process owner closely involved in the reengineering project? What is his/her

role on the reengineering team?

4.3 Is the Reengineering Project Being Carried Out by a Skilled Team?

Reengineering should be carried out by a formally chartered team which, under the aegis

of an executive steering committee, has the responsibility for performing the day-to-day

activities of the reengineering effort. The team normally maps in more detail the current

process to be reengineered, creates alternatives for a new process (including the

possibility of eliminating it altogether), defines process measures for the newly designed

process, and develops and facilitates an implementation plan.

Team members should include people who work within the process being reengineered

and represent several organizational levels. The team may also include outside suppliers,

employee unions, consultants, and others who bring different skills and perspectives to

the team and are able to think "out of the box." Because of the variety of skills needed at

different phases of the reengineering project, the composition of the team may change

over the course of the project, but a core of team members should participate throughout

the entire reengineering process for continuity.

Key Assessment Questions

Do the project team members represent all of the functional disciplines affected by

the project and can they represent the viewpoints of their respective areas?

Does the team include members who are outside the target process, even outside

the agency, who can stimulate innovative thinking about how to change the current

process?

Have the team members been trained in process analysis and reengineering

techniques? Do they have access to tools useful in supporting their work

(groupware, process modeling software, etc.)? Does the team have access to

technical/expert support both inside and outside the agency?

Are team members primarily dedicated to working on the project (i.e., more than

50 percent of their time)?

37
4.4 Is There a Reengineering Team Charter and Project Plan?

The executive steering committee and/or the project sponsor generally work with the

team to develop a team charter and project plan. A team charter and project plan provide

objectives and direction to the project team. The charter outlines the scope and goals of

the project, the team's authority and interactions with the executive committee and

sponsor, and any special considerations that may put constraints on the project's potential

solutions. The project plan lays out the activities, deliverables, and time frames for the

effort and serves as the baseline for managing activities and measuring progress. It is

important that the plan allow the team some flexibility to set direction of their work. 

Along the way, the team may encounter problems or new opportunities that require some

adjustments or revisions to specific tasks.

Key Assessment Questions

What is the reengineering team's charter? Does the team have the authority to

negotiate with people within the agency, as well as those outside who may be

affected by reengineering, such as suppliers or third-party providers?

What has the agency defined as "sacred cows," if any, for each reengineering

project? Are these constraints based on assumptions or have they been freshly

reviewed and discussed with stakeholders and customers? Can they be overcome,

if necessary?

Is there a formal project plan for each reengineering effort?

a. Are the goals and objectives clear and measurable?

b. Have all assumptions been explicitly stated?

c. Have all tasks, responsibilities, and deliverables been identified?

d. Have schedules and deadlines been clearly stated?

e. Have needed skills and resources been identified?

4.5 Is the Team Following a Reengineering Methodology?

Successful reengineering hinges on following a proven methodology for managing the

project. A sound reengineering methodology provides a structured framework that

defines in detail the activities that the team needs to complete and alerts the team to key

issues that it must address. It provides a basis for establishing project milestones and

lends discipline to the whole effort. A methodology also facilitates communication by

having a common language in place with which to discuss reengineering across the

agency. 

38
Several methodologies have been published (see the bibliography in appendix II). 

Methodologies can also be brought in by consulting firms that have established

reengineering practices, though the agency needs to be sure that the firm has a track

record of reengineering successes with a field-tested methodology.

As noted in assessment issue 3, consultants can help a reengineering effort by bringing

specialized knowledge, skills, and experience. For example, they can help train the

reengineering team in skills such as process mapping and simulation. It is important,

however, that the agency retain ownership of the reengineering effort and actually carry it

out with its own reengineering team.

Key Assessment Questions

Is the team using a reengineering methodology to guide its work? Has the

methodology been tailored to the agency? Is the methodology consistent with the

issues in this assessment guide?

Is the team actually using the methodology to plan and carry out the reengineering

project?

Is the team working with an outside consultant? What is the consultant's role?

4.6 Criteria

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115). See Practice 1: Recognize and

communicate the urgency to change information management practices; Practice 2: 

Get line management involved and create ownership.

Government Business Process Reengineering (BPR) Readiness Guide, (General

Services Administration, November 1996). See the section entitled "Structure

Reengineering Teams."

39
ASSESSMENT ISSUE 5

HAS THE PROJECT TEAM ANALYZED THE TARGET PROCESS

AND DEVELOPED FEASIBLE ALTERNATIVES?

Key Activities for the Agency

• Map and analyze the target process in enough detail to identify the

costs and causes of performance breakdowns.

• Design alternative processes and test their effectiveness through

simulations and/or limited pilots.

• Assess the impact of potential barriers to implementing the

alternative processes.

• Develop a performance-based and risk-adjusted benefit-cost analysis

of each alternative process.

Reengineering a process depends heavily on the expertise of the team and its ability to

create innovative, yet practical, alternatives. The team must focus not only on designing a

new workflow, but also on thinking through the broader changes to the agency's support

structures and systems to implement the new process. Ideally, the project team should

develop more than one alternative process and assess the risks, costs, and benefits of

each. The team should identify internal or external barriers to implementation and what

actions might be effective in overcoming them. Once the team and the executive steering

committee select a preferred alternative, they should secure commitment and support

from key stakeholders and customers before proceeding with implementation.

5.1 Has the Team Analyzed the Target Process?

After the reengineering project is selected and resources and responsibilities are assigned,

the project team needs to develop a deeper understanding of the target process'

workflow, problem areas, and improvement opportunities. This is largely done through

more detailed process modeling. The current process should be modeled in enough detail

to (1) provide the agency with a common understanding of the process, (2) establish a

performance baseline at the process' activity level from which to measure improvements,

40
(3) identify problem areas and non value-added activities that need to be changed or

eliminated, such as excessive hand-offs, reviews, rework, and queuing time, and

(4) understand exactly what will be changed and who will be affected when moving from

the current process to a new process. This last point is particularly important for

successful implementation.

Normally, the team will build on any high-level process mapping done earlier (see

assessment issue 1). The detailed modeling should identify all of the current process'

activities and tasks, staff roles and responsibilities, and links and dependencies with other

processes. Modeling tools and other analysis techniques include flowcharting, tree

diagrams, fishbone diagrams, and business activity maps. Speed in completing this

modeling is important; the team should not get bogged down in elaborate analysis.

Key Assessment Questions

Has the project team developed a model of the existing process to be

reengineered?

a. Has the process workflow been mapped down to the activity or task level, so

that all the key elements that drive the performance of the process have been

identified and understood?

b. Are there performance data (e.g., costs, time, throughput) for the activities

within the process?

c. Has the mapping been validated by the people who actually do the work as

well as the process owner?

Has the process' information flow been mapped? Have the supporting information

systems and other key enablers been identified?

Has the team used a disciplined process to quantitatively measure the cost and

performance of activities and resources for the process?

Have the jobs, skills, and specialized knowledge of the people performing the work

been identified?

Have the organizational components involved in the process as internal suppliers or

customers been identified?

Have all external customer and supplier interfaces been identified?

Have the regulations, policies, laws, and assumptions underlying the process been

identified?

41
5.2 Has the Team Developed Feasible Alternatives to the Current Process?

Based on what it learns in analyzing the existing process, the team begins its redesign

effort--the creative part of reengineering. The first step is to develop candidate alternative

work processes and consider the tangible and intangible costs and benefits of each. The

team should explore each alternative thoroughly enough to convincingly demonstrate the

potential of each option to achieve the desired performance goals and fully describe the

types of technical and organizational changes necessary to support each goal, and, if

possible, test key assumptions. For each alternative, the team should also consider

opportunities for information technology to support the proposed process. 

The team should use a cost-effective method for conducting its preliminary assessment of

alternative processes. Such methods include prototyping, limited pilot testing, and

modeling and/or computer simulation. These methods vary in terms of cost and

effectiveness. As process reengineering alternatives evolve, the team should continue to

discuss them with customers and stakeholders. This not only helps to promote buy-in,

but can also provide additional insights into issues that the team may have missed. Also,

the team should continually update its process models based on changes to the new

process, analysis of barriers and risks, and results from pilot tests.

Key Assessment Questions

For each proposed process alternative, did the team include a detailed workflow

and a thorough description of impacts on other processes and the overall work

environment?

a. Has the team documented the new workflow, with all of the interfaces and

dependencies noted?

b. Has the team documented the new information flow?

c. Has the team identified and documented the impact of the proposed process

on the agency's information and system architectures, along with any needed

changes?

d. Has the team identified changes needed to:

• organizational structures,

• management systems,

• job descriptions and skill requirements,

• personnel compensation and reward systems,

• human resources policies (training, hiring, incentives), and 

• facilities?

e. Has the team identified any changes to legislation, regulations, policies, and

rules that would be required to implement the alternative process?

42
Has the team identified the constraints and assumptions that may affect the cost

and benefits of alternative solutions? Did they estimate the impact of constraints

and assumptions on the alternative process?

Has the team conducted a preliminary feasibility test of the alternatives through

simulation or other means? Have they clearly and accurately documented the

results of the feasibility test?

Has the team clearly expressed the quantitative and qualitative benefits in mission

or program improvement terms (e.g., changes in quality, cost, speed, accuracy, or

productivity)?

Has the team developed performance indicators for the newly designed process? 

Are these measures aligned with the agency's strategic measures?

Has the team assessed how information technology could best be used to support

the alternative work processes?

a. Did the team have access to expertise to explore information technology

opportunities?

b. Did the team develop results-oriented information technology performance

measures--both quantitative and qualitative--which can form the basis for

measuring the impact of the proposed information technology investment?

Has the team aligned its new process alternatives with key stakeholders' and

customers' expectations and performance requirements?

a. For any significant deviations from key stakeholder performance requirements,

did the team assess the impact of these deviations on the stakeholder and the

agency's performance goals?

5.3 Has the Agency Identified and Assessed Potential Implementation Barriers?

The team should identify potential barriers to implementing alternative processes. The

purpose of barrier identification is to find unusual or major obstacles that will need to be

overcome in order to implement a new process. Political issues should be a key concern. 

Other concerns include entrenched workplace attitudes or values, an insufficient number

of employees with the skills required for the redesigned roles, collective bargaining

agreements, incompatible organizational or physical infrastructure, current laws and

regulations, and funding constraints. The impact of these barriers and the costs of

addressing them (such as staff training, hiring, and relocation) need to be factored into

the benefit-cost analysis.

43
Barriers that arise from internal skepticism and resistance to change are to be expected

and can often be overcome through the use of employee education, change management

activities, and successful pilot testing of the new process. Perceived regulatory barriers

may actually be within the agency's authority to change, though rule-making should be

built upon consultation with stakeholders. Other barriers may require ongoing negotiation

with stakeholders throughout the implementation of the new process. If the

reengineering team determines that the risks and costs of implementing a preferred new

process appear too great, they may need to pursue one of the less ideal, but more

feasible, alternatives that they developed.

Key Assessment Questions

Has the team identified potential barriers to implementing the process alternatives?

Has the team obtained and analyzed the concerns of stakeholders to help identify

and define potential barriers? Is there a feedback mechanism to discuss how

concerns are being met?

Has the team used "lessons learned" from its own improvement efforts, as well as

other organizations' reengineering efforts, in assessing and overcoming potential

barriers?

Has the team categorized/ranked barriers based on their potential impact on

implementing the alternative process?

a. Did the team attempt to quantify the potential impact of key barriers and their

relative risk (i.e., probability of the barrier being actualized)?

b. Was the impact of key barriers considered in modeling and the risk adjusted

benefit-cost analysis?

Has the team identified ways to overcome the identified barriers?

a. Has the team determined the level of effort and resources required to mitigate

the barriers?

b. Has the team considered the resources required to address barriers in its

benefit-cost estimates?

c. Has the team identified a contingency or risk mitigation strategy for critical

barriers should they persist as a new process is being implemented?

Has the team ensured that key cultural barriers (e.g., training and skills required

for new jobs, entrenched culture, incompatible support structures, fear of

downsizing) are addressed in its change management strategy?

44
Has the team accurately incorporated information on key barriers (including

potential impact, probability of occurrence, risk mitigation strategy, and resources

estimated to address barriers) into its design of process alternatives? 

5.4 Has the Team Developed a Performance-Based, Risk-Adjusted Analysis of

Benefits and Costs for Each Design Alternative?

The team should develop a performance-based benefit-cost analysis for each alternative to

provide (1) the foundation for comparing the baseline benefits and costs with proposed

alternative processes and (2) a basis for decisionmakers to use in selecting a feasible

alternative process that meets performance goals. Performing a benefit-cost analysis is

consistent with the GPRA's requirement for agencies to develop annual performance plans

with annual performance goals and indicators to measure performance.

The team should factor into the analysis the results from its analyses of barriers and risks

in implementing the process alternatives. The analysis should also include quantitative

and/or qualitative estimates of the expected benefits and costs (to the agency and others)

based on established definitions and practices for the program. Both tangible and

intangible benefits and costs should be identified, assessed, and reported. The team

should also recognize that the benefit and cost estimates of alternative processes are

often uncertain because of the imprecision in both underlying data and modeling

assumptions. According to OMB Circular A-94 "Guidelines and Discount Rates for

Benefit-Cost Analysis of Federal Programs", useful information in a report about

uncertainties would include the key sources of uncertainty; expected value estimates of

outcomes; the sensitivity of results to important sources of uncertainty; and, where

possible, the probability distributions of benefits, costs, and net benefits.

Key Assessment Questions

Has the team identified risk factors associated with implementing each alternative?

a. Did the team quantify and rank risks?

b. Did the team perform a sensitivity analysis on key process variables and

assumptions?

c. Did the team document how specific risk factors will be continually monitored

to minimize exposure?

Has a risk-adjusted benefit-cost analysis been prepared for each alternative that:

a. Relies on systematic measures of mission performance?

b. Is consistent with OMB Circular A-94 "Guidelines and Discount Rates for

Benefit-Cost Analysis of Federal Programs?"

c. Is at a level of detail appropriate to its size?

45
d. Considered non-monetary benefits and costs?

Has the team assessed how well each alternative meets the goals of the project?

Has the team established a structure for achieving benefits?

a. What are the expected ongoing benefits and costs of the reengineering effort? 

b. How will benefits will be recovered and managed during the new process'

lifecycle?

c. How long before a "break-even" point is reached?

d. How long before full benefits are realized?

5.5 Criteria

Clinger-Cohen Act of 1996 (P.L. 104-106, Division E; February 10, 1996).

Sections: 40 USC 1423(5)

40 USC 1423(3)

The Paperwork Reduction Act of 1995, as amended (P.L. 104-13, May 22, 1995).

Section: 44 USC 3506(b)(3)(C)

The Federal Acquisition Streamlining Act of 1994 (P.L. 103-355, October 13, 1994).

Section: 41 USC 263

OMB Circular A-130, "Management of Federal Information Resources," 

February 8, 1996. 

Sections: OMB A-130 7o

OMB A-130 8b(1)

OMB A-130 App. IV 8b(1)

OMB A-130 8b(1)(b)

OMB A-130 8b(1)(c)

OMB Circular A-11, "Preparation and Submission of Budget Estimates," 

June 13, 1966.

Section: OMB A-11 15.6

OMB Circular A-94, "Guidelines and Discount Rates for Benefit-Cost Analysis of

Federal Programs," October 29, 1992.

46
ASSESSMENT ISSUE 6

HAS THE PROJECT TEAM COMPLETED A SOUND BUSINESS

CASE FOR IMPLEMENTING THE NEW PROCESS?

Key Activities for the Agency

• Select a feasible process alternative with a high return on

investment.

• Develop a formal business case for implementing the new process

that describes benefits, costs, and risks.

• Use the agency's capital investment review process to evaluate the

business case and decide whether to proceed with implementation.

Given several possible process design alternatives, the reengineering team and the

executive steering committee need to settle on one. The new design must be feasible to

implement, given the various constraints and barriers that face the agency. There must

also be a high return on investment in the project, in terms of improved performance

and/or reduced costs. The initial business case for the reengineering project (see

assessment issue 3) should now be updated and enlarged to present detailed qualitative

and quantitative analyses in support of selecting and implementing the new process in

terms of benefits, costs, and risks. It should also lay out--at least at a high level--the plan

for implementing the new process. The completed business case becomes a key

document for agency executives to use in deciding whether or not to go ahead with

implementation.

6.1 Has the Agency Selected a Feasible Process Alternative with a High Return

on Investment?

As previously discussed in assessment issue 5, the reengineering team should consider

and analyze alternative processes that will allow the agency to meet or exceed its

performance goals. The team's analysis of alternative processes should have considered

benefits, costs, and risks. The team should also have determined the performance results

that each could be expected to achieve through such techniques as computerized process

simulation and/or limited pilot testing. However, consideration still needs to be given to

several other factors relating to general feasibility, including agency-level budgetary,

47
management, and political issues. Because these factors relate to agency-level

considerations, the executive steering committee should be involved in comparing the

alternatives in the context of these additional factors and selecting one of them.

The executive steering committee and the reengineering team should work together to

establish criteria for selecting the most value-added alternative to implement. This often

involves setting up a selection matrix and scoring system by which alternatives are

ranked against each other in various categories, such as benefits, implementation time,

costs, payback time, risk, amount of change needed in various areas to support the

process, etc. 

Key Assessment Questions

Did the agency establish a relative ranking of the process alternatives that took

into consideration the various pluses and minuses of each one?

Have all the major change management issues associated with the preferred

alternative been identified and discussed? Do there appear to be any

insurmountable barriers?

Does the preferred alternative represent the best balance of feasibility versus

return on investment for the agency?

Did the executive steering committee make its final selection in consultation with

its other executives and line managers as well as stakeholders and customers?

6.2 Has the Agency Updated Its Initial Business Case for the New Process?

Once the agency selects the process alternative that it wishes to implement, it should

revise and enlarge its initial business case for the reengineering project (see assessment

issue 3). The updated business case becomes a key document for justifying the funds and

other resources needed to implement the new process.

The initial business case should be expanded to include up-to-date information on

customer and stakeholder expectations, how current processes are failing to meet those

expectations, and opportunities to improve based on benchmark agencies. The new

process being proposed should be fully described, along with the performance measures

that will be used to assess how well it is meeting improvement goals and achieving

promised benefits. Not only the "end state" of the process should be described, but also

the intermediate steps that will be taken to get to full implementation. In addition, the

business case should contain information on any options for implementation that need to

be considered.

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Key Assessment Questions

Does the updated business case include a performance-based and risk-adjusted

benefit-cost analysis for implementation alternatives? Does it appear that

reengineering the process will yield a large return on investment?

Does the updated business case identify resources, responsibilities, and a schedule

for implementing the new process?

Have the agency's top executives communicated the business case to key

congressional committees, OMB, and other stakeholder and customer groups to

secure their support for full implementation?

How does the agency intend to address any unresolved concerns expressed by

these groups? Are any of their concerns serious enough to prevent the project

from going forward?

6.3 Has the Agency Used Its Capital Investment Review Process to Assess the

Business Case?

The agency's capital investment review process should be used to review the completed

business case and decide on whether the new process should be funded and

implemented. Because reengineering typically includes investment in new information

technology, provisions of the PRA and the Clinger-Cohen Act calling for an information

technology investment review process may apply. Specifically, agency heads are to

(1) design and implement a process for maximizing the value and assessing and managing

the risks of information technology acquisitions, (2) integrate budgetary, financial, and

program management decisions in this process, and (3) use this process to select, control,

and evaluate the results of information technology initiatives.

Key Assessment Questions

Does the agency have a sound capital investment review process?

Has the proposed reengineering project gone though the agency's capital

investment review process?

Has the agency used quantitative as well as qualitative decision criteria for

comparing the expected benefits, costs, risks, and returns associated with

implementing the reengineering project?

49
Have any information technology acquisitions needed to support the new process

been reviewed and approved by the agency's information technology review

process?

Has the agency established a management process for controlling and evaluating

the reengineering project once implementation has begun?

Has the agency defined performance measures--derived from annual performance

targets, long-term goals, and the agency's mission--for the prospective new process,

and does the agency's capital investment review process assess the prospective

reengineering project in the context of meeting performance goals?

6.4 Criteria

The Clinger-Cohen Act of 1996 (P. L. 104-106, Division E; February 10, 1996).

Sections: 40 USC 1425(c)(2)

40 USC 1412(c)

The Federal Acquisition Streamlining Act of 1994 (P.L. 103-355, October 13, 1994). 

Section: 41 USC 263

OMB A-11, "Preparation and Submission of Budget Estimates," June 13, 1996.

Section: OMB A-11 43.2(b)

OMB A-130, "Management of Federal Information Resources," February 8, 1996.

Section: OMB A-130 8b(3)(b)

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994). See Practice 1: 

Recognize and communicate the urgency to change information management

practices; Practice 4: Anchor strategic planning in customer needs and mission

goals; Practice 6: Focus on process improvement in the context on an architecture

Evaluating Information Technology Investments: A Practical Guide, Version 1.0,

Office of Information and Regulatory Affairs, Information Policy and Technology

Branch, November 1995.

Assessing Risks and Returns: A Guide for Evaluating Federal Agencies' IT

Investment Decision-making, Version 1 (GAO/AIMD-10.1.3, February 1997). 

50
PART C

ASSESSING PROJECT IMPLEMENTATION AND RESULTS

Assessment Issue 7: Is the Agency Following a Comprehensive Implementation

Plan?

Assessment Issue 8: Are Agency Executives Addressing Change Management

Issues?

Assessment Issue 9: Is the New Process Achieving the Desired Results?

Implementation is the most difficult phase of the reengineering project. Ideas are turned

into actions, and the agency's natural resistance to change must be overcome. The

following sections highlight the kinds of activities that the agency should pursue to ensure

a reasonable transition to the new process; manage the human and technical issues

surrounding implementation of the new process; and assess the results of its

reengineering effort. This section also stresses the importance of ongoing performance

measurement and feedback to continually improve the new process once it is in place.

51
ASSESSMENT ISSUE 7

IS THE AGENCY FOLLOWING A COMPREHENSIVE

IMPLEMENTATION PLAN?

Key Activities for the Agency

• Establish a transition team and develop a comprehensive plan to

manage implementation.

• Manage training and workforce redeployment issues.

• Conduct pilot tests of the new process prior to full implementation.

Having decided to implement the new process, the agency now faces the formidable

challenge of turning concepts into reality. An implementation plan should be developed

that spells out the work that needs to be done, with time frames, milestones, decision

points, and resource allocations. Training and workforce issues are important elements

of an effective implementation plan. Pilot testing provides a method for refining the

process and building support for full implementation of the new process across the

agency.

7.1 Has the Agency Established a Transition Team and Developed a

Comprehensive Implementation Plan?

The agency needs to establish a transition team to manage the implementation process. 

This team should include the project sponsor, the process owner, members of the

reengineering team, and key executives, managers, and staff from the areas directly

affected by changeover from the old process to the new.

Agency executives and the transition team should develop a detailed implementation plan

that lays out the road to the new process. Critical elements and milestones should be

identified and their progress closely monitored by the executive steering committee. 

Timetables for all actions should be specified, and the individuals responsible for

overseeing and performing tasks should be assigned. Highly visible executive-level

leadership and encouragement is especially important at this stage. Agency leaders must

show that they are personally committed to seeing the new process put in place.

52
Key Assessment Questions

Has the agency prepared a written plan for pilot testing and agencywide

implementation of the new process that:

a. Identifies all tasks, timeframes, and needed resources for an orderly transition?

b. Structures the roll out of the new process in a way reasonably suited to the

nature of the process and the work and structure of the agency? 

c. Assigns roles and responsibilities for implementation to the individuals who

will do the work of the new process? 

d. Provides a means for collecting and sharing implementation problems and

solutions? 

e. Provides for close monitoring during implementation?

Has a transition team been established to guide the reengineering effort? Is the

team made up of the project sponsor, the process owner, members of the

reengineering team, and key executives, managers, and staff from the areas directly

affected by the implementation of the new process?

Has the transition team made necessary arrangements with the agency's

administrative offices to transition smoothly from the old process to the new (e.g,.

budgeting, accounting, purchasing, maintenance, and legal counsel)?

Are executives and managers affected by the process change actively promoting

and facilitating the implementation of the new process?

7.2 Has the Transition Team Addressed Workforce Training and Redeployment

Issues?

Training and redeploying the workforce is often a major challenge and generally requires

substantial preparation time. When a process is redesigned and new information systems

are introduced, many of the tasks workers perform are radically changed or redistributed. 

Some positions may be eliminated or cut back, while others are created or modified. 

Workers may need to handle a broader range of responsibilities, rely less on direct

supervision, and develop new skills.

Key Assessment Questions

Has the transition team identified the new tasks, roles, responsibilities, reporting

relationships, and training needs required by the new process? Have position

descriptions and classifications been revised to reflect the new skills and

responsibilities of staff in the new process?

53
Has the transition team identified how many employees, and which employees,

would be affected by redeployment, retraining, or reductions-in-force? Has the

agency developed training programs?

Has the transition team met with other governmental agencies and private

businesses to learn about the successful ways to plan workforce redeployment,

retraining, and reductions? 

Are agency executives working closely with employee unions to minimize the

potential for adverse effects of the implementation on its members, and to make

use of union suggestions where feasible?

Has the agency provided career counselors and outplacement assistance as needed

to help employees plan new career paths or seek new employment?

7.3 Are Pilot Tests Being Used to Evaluate and Refine the New Process Design?

Pilot testing is an effective--and usually necessary--tool for moving the agency successfully

to full implementation. Pilot testing allows the agency to (1) evaluate the soundness of

the proposed process in actual practice, (2) identify and correct problems with the new

design, and (3) refine performance measures. Also, successful pilot testing will help

strengthen support for full-scale implementation from employees, outside stakeholders,

the Congress, and the public, and help secure the funding needed for a smooth rollout.

The length and extent of pilot testing will vary depending on the complexity of the

changes being driven by the new process. For example, a complex process that affects

regional offices across the nation may require a series of pilot tests. Agencies should be

careful, however, not to test beyond the point of diminishing returns. No matter how

much testing is done, only full implementation can reveal all of the potential problems

with the new process.

The transition team should develop a formal evaluation process to determine the

efficiency and effectiveness of the new process, both during pilot tests and full

implementation, in meeting the agency's performance goals. The process should also

allow the agency to pinpoint trouble spots, so that corrective actions can be developed

quickly.

Key Assessment Questions

Has the transition team selected a pilot testing strategy that is suited to the new

process and considers the concerns of stakeholders?

54
Has the transition team ensured that the testing unit fully understands the pilot and

that employees are sufficiently trained and understand their roles?

Has the transition team developed performance measures and data gathering

procedures to be used during the pilot? Do the measures reflect project goals?

Has the transition team defined success criteria for the pilot test?

Has the transition team carefully measured the performance of the pilot test and

identified any corrective actions required?

Has the agency gathered customer, stakeholder, and employee feedback about the

pilot test? Were any needed corrective actions identified?

Has the transition team made changes to the design of the new process as a result

of cost or performance problems uncovered during the pilot? Has the revised

process design been pilot tested with satisfactory results before proceeding to full

implementation?

7.4 Criteria

Clinger-Cohen Act of 1996 (P.L. 104-106, Division E; February 10, 1996).

Sections: 40 USC 1423(3)

40 USC 1412(c)

40 USC 1426

The Government Performance and Results Act of 1993 (P.L. 103-62, 

August 3, 1993).

Section: GPRA 31 USC 1115

The Chief Financial Officers Act of 1990, as amended (P.L. 101-576, 

November 15, 1990).

Section: 13 USC 902(a)(3)

OMB A-11, "Preparation and Submission of Budget Estimates," June 13, 1996.

Sections: OMB A-11 34.1

OMB A-11 15.2(3)

The System Assessment Framework: A Guide for Reviewing Information

Management and Technology Issues in the Federal Government, Version 1

(GAO/AIMD-10.1.12, August 1996).

55
Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994). See Practice 11: 

Upgrade skills and knowledge of line and information management professionals.

56
ASSESSMENT ISSUE 8

ARE AGENCY EXECUTIVES ADDRESSING CHANGE

MANAGEMENT ISSUES?

Key Activities for the Agency

• Prepare and follow a change management strategy.

• Encourage staff to accept new ideas and adopt the new process.

• Prepare staff, managers, and executives for changes in their roles

and career expectations.

The implementation of a new process is typically the most failure-prone phase of the

reengineering project because of an organization's natural resistance to change. 

Frequently, the greatest challenges lie not in managing the technical or operational

aspects of change, but in managing the human dimensions of change. Widely shared

agency perceptions, based on assumptions deeply rooted in the agency’s culture, can

translate into a belief that reengineering is unnecessary, unworkable, or unfair. As

indicated in assessment issue 3, agency executives need to begin managing change early

in the reengineering effort.

Some experts caution that unless planning and accountability for change management is

given a separate focus, the effort will not be managed well. During the implementation

phase especially, agency executives must be in the forefront in dealing with the social,

psychological, and political resistance to changing the way work is done. Executives

must also recognize that their own roles and responsibilities may need to undergo change

as well.

8.1 Are Agency Executives and the Transition Team Refining and Implementing

the Change Management Plan?

As noted earlier in assessment issue 3, agency executives should begin building a change

management plan from the very beginning of the project. Executives and the transition

team should revise this plan to (1) present the goals and objectives of the new process in

concrete, "nuts-and-bolts" language and (2) link the new process to specific issues,

questions, and challenges involved in implementation (e.g., work roles, relationships,

57
performance expectations, supervisory methods, and career path). The plan should

include periodic checkpoints for assessing and responding to the opinions and attitudes of

staff about the perceived consequences of the new process.

Key Assessment Questions:

Has the agency refined its plan for facilitating needed cultural changes across the

agency? Does the plan:

a. Identify specific change management tasks? 

b. Align the change management tasks with the project and implementation

timetables?

c. Assign responsibilities to specific individuals for carrying out change

management tasks?

d. Provide for periodic assessments of employee needs, concerns, and reactions?

Did the agency use outside experts to help its executives and the transition team

to:

a. Become more aware of underlying organizational and cultural issues that can

pose obstacles to reengineering? 

b. Incorporate proven techniques for managing these obstacles and achieving

change objectives? 

8.2 Are Senior Executives Encouraging Acceptance of the New Process?

Breaking down cultural assumptions can be uncomfortable for both staff and

management. Senior executives will need to reiterate the performance problems,

customer dissatisfactions, budgetary pressures facing the agency, and opportunities to

achieve agency goals by finding better ways to do work. By their own example,

executives should encourage staff to question current assumptions about how the

agency's work should be done. This creates a more open atmosphere to admit

frustrations, offer suggestions, and support something new and better. By taking these

steps, executives introduce three important new ideas to the agency's culture--a processcentered view of the agency; the possibility that "things really can change around here;'"

and the idea that groups and individuals can get credit for implementing solutions. The

agency's culture will gradually change as staff come to share their perceptions of the new

situation and collectively subscribe to new norms, expectations, and responsibilities.

58
Key Assessment Questions

Have senior executives clearly identified and explained the agency's concerns

regarding customer service issues and other change drivers, and emphasized that

major improvements are imperative?

Has the communications effort directly addressed the common objections to

change, and explained why change is necessary, workable, and beneficial? Was the

communications effort begun early in the process (once customer service issues

and performance improvement goals have been identified)?

What formal and informal opportunities have senior executives provided for

employees to provide feedback about the operational and personal problems they

face during implementation?

Have senior executives made a commitment to assist employees to make the

transition to the new process? How was this commitment communicated and

reinforced to the employees?

Have executives called attention to the efforts, contributions, and innovations of

employees during the reengineering project, and widely shared the credit for

success with everyone?

8.3 Has the Agency Assisted Staff and Managers to Take on New Roles and

Responsibilities?

Staff may lack confidence in their ability to do their new jobs in the reengineered process. 

For example, workers may feel uncomfortable with a new role of having to deal directly

with the public. Similarly, those who previously followed well-defined procedures, and

were rewarded for doing so, may now have to make judgments and select procedures

appropriate to a new situation: they are rated not only on compliance, but also on

problem-solving abilities. The change management plan should include provisions for

helping employees to overcome concerns about the new ways of doing business.

Executives and managers often speak of resistance to change from employees or outside

groups. But management itself can resist the full implications of changing a work

process. As a result of reengineering, staff often have a broader range of responsibilities

and are empowered to make decisions and take actions with less direct supervision than

before. Executives and managers must establish new working relationships with

employees, placing more emphasis on their role as facilitators, teachers, or coaches, and

less as directors and controllers. This transition can be difficult. Executives and

managers who fail to change with their staff put the reengineering effort at great risk. 

59
Key Assessment Questions

Has the agency provided training to its staff, managers, and executives to prepare

them for the new roles and responsibilities called for by the new process?

Have executives and managers negotiated new, clear understandings about how

authority and responsibility for the new process will be allocated?

Have executives included managers in making any needed changes to the agency's

managerial structure?

Has the agency reoriented its performance appraisal and reward process to the

implementation of the new process and the fulfillment of performance

improvement goals?

Have executives involved managers in defining the agency's policies and

procedures for using agency performance indicators to assess managerial and staff

performance? 

Has the agency provided career counseling or outplacement assistance to

individuals at all ranks who have lost their positions, who must develop new career

plans, or who chose to resign?

8.4 Criteria

Executive Guide: Effectively Implementing the Government Performance and

Results Act (GAO/GGD-96-118, June 1996). Step 1, Define mission and desired

outcomes; Practice 10, Create incentives.

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994). See Practice 1: 

Recognize and communicate the urgency to change information management

practices; Practice 2: Get line management involved and create ownership;

Practice 3: Take action and maintain momentum; and Practice 11: Upgrade skills

and knowledge of line and information management and professionals. 

60
ASSESSMENT ISSUE 9

IS THE NEW PROCESS ACHIEVING

THE DESIRED RESULTS?

Key Activities for the Agency

• Measure the performance of the new process.

• Determine if the new process is achieving the desired results.

• Use performance measurement as a feedback loop for continuously

improving the new process.

An agency has no way of knowing if the new process has produced the desired results

unless it has meaningful performance measures. Good performance measures generally

include a mix of outcome, output, and efficiency measures. Outcome measures assess

whether the process has actually achieved the intended results. Output measures

examine the products and/or services produced by the process, such as the number of

claims processed. Efficiency measures evaluate such things as the cost of the process

and the time it takes to deliver the output of the process (a product or service) to the

customer. Ongoing performance measurement provides the feedback which is so critical

for continual improvement and future successes. 

9.1 Does the Agency Have Performance Measures in Place for the New Process?

The agency should be gathering performance data on the new process--just as it should be

doing for its other processes, as called for by GPRA. The data should be complete,

accurate, and consistent enough to determine how well the process is meeting its

performance goals and whether further improvements are needed.

Key Assessment Questions

Did the transition team identify the necessary data for routinely assessing the

performance of the reengineered process on a long-term basis? Do the

performance measures include a mixture of outcome, output, and efficiency

measures? Are the measures linked to the agency's strategic goals?

61
What measures for the new process did the agency actually decide to put in place? 

Do they differ from the team's recommendations? If so, why?

Are the measures integrated into the agencywide performance measurement

system? 

9.2 Is the New Process Achieving Its Planned Performance Goals?

As part of its business case for implementing the new process, the agency should have

established specific performance goals for the reengineered process. These goals should

include a mixture of intermediate goals to be met at various stages during the

implementation phase, as well as ultimate performance goals for the process after it has

been fully implemented and institutionalized. The intermediate goals are particularly

important because the agency should be able to start showing a return on investment in

the early stages of implementation.

Key Assessment Questions

Are agency executives, managers, and staff actually using the measurement data

being gathered to assess the new process' performance?

 

Do the measures show that performance goals are being met and that the project is

on track for achieving its expected return on investment?

What action is the agency taking to correct any shortfalls in expected

performance?

9.3 Is the Agency Using Performance Information to Continually Improve the

New Process?

The gains achieved by the new process can erode unless the agency continually monitors

its performance and makes further refinements. Managers should use performance

information to continually improve work processes, identify performance gaps, and set

additional improvement goals, as needed.

Key Assessment Questions

Does the agency encourage managers and staff to use performance data to find

ways of further improving the new process?

Does the agency periodically assess process performance goals in order to

determine the potential for achieving higher levels of performance?

62
9.4 Criteria

Clinger-Cohen Act of 1996 (P.L. 104-106, Division E; February 10, 1996).

Sections: 40 USC 1423(3)

40 USC 1425(c)(2)

40 USC 1426

The Government Performance and Results Act of 1993 (P.L. 103-62, 

August 3, 1993).

Sections: 31 USC 1115

31 USC 1116

The Chief Financial Officers Act of 1990, as amended (P.L. 101-576, 

November 15, 1990). 

Section: 13 USC 902(a)(3)

OMB Circular A-130, "Management of Federal Information Resources," 

February 8, 1996.

Section: OMB A-130 8b(3)(b)

OMB Circular A-11, "Preparation and Submission of Budget Estimates," 

June 13, 1966.

Sections: OMB A-11 15.6

OMB A-11 34.1

Executive Guide: Effectively Implementing the Government Performance and

Results Act (GAO/GGD-96-118, June 1996). See Step 3: Use performance

information.

Executive Guide: Improving Mission Performance Through Strategic Information

Management and Technology (GAO/AIMD-94-115, May 1994). See Practice 5: 

Measure the performance of key mission delivery processes.

63
APPENDIX I

Glossary

Activity Analysis: the analysis and measurement (in terms of time, cost, and

throughput) of distinct units of work (activities) that make up a process.

Activity-Based Costing: a set of accounting methods used to identify and describe

costs and required resources for activities within processes.

Alignment: the degree of agreement, conformance, and consistency among

organizational purpose, vision, and values; structures, systems, and processes; and

individual skills and behaviors.

"As Is" Process Model: a model that portrays how a business process is currently

structured. In process improvement efforts, it is used to establish a baseline for

measuring subsequent business improvement actions and progress.

Baselining: obtaining data on the current process that provide the metrics against which

to compare improvements and to use in benchmarking.

Benchmark: a measurement or standard that serves as a point of reference by which

process performance is measured.

Benchmarking: a structured approach for identifying the best practices from industry

and government, and comparing and adapting them to the organization's operations. Such

an approach is aimed at identifying more efficient and effective processes for achieving

intended results, and suggesting ambitious goals for program output, product/service

quality, and process improvement.

Benefit-Cost Analysis: a technique to compare the various costs associated with an

investment with the benefits that it proposes to return. Both tangible and intangible

factors should be addressed and accounted for.

Best Practices: the processes, practices, and systems identified in public and private

organizations that performed exceptionally well and are widely recognized as improving

an organization's performance and efficiency in specific areas. Successfully identifying

and applying best practices can reduce business expenses and improve organizational

efficiency.

Business Case: a structured proposal for business improvement that functions as a

decision package for organizational decisionmakers. A business case includes an analysis

64
of business process performance and associated needs or problems, proposed alternative

solutions, assumptions, constraints, and risk-adjusted cost/benefit analysis.

Business Process Reengineering: a systematic, disciplined improvement approach that

critically examines, rethinks, and redesigns mission-delivery processes in order to achieve

dramatic improvements in performance in areas important to customers and stakeholders.

Change Management: activities involved in (1) defining and instilling new values,

attitudes, norms, and behaviors within an organization that support new ways of doing

work and overcome resistance to change; (2) building consensus among customers and

stakeholders on specific changes designed to better meet their needs; and (3) planning,

testing, and implementing all aspects of the transition from one organizational structure

or business process to another.

Continuous Process Improvement: an ongoing effort to incrementally improve how

products and services are provided and internal operations are conducted.

Core or Key Process: business processes that are vital to the organization's success and

survival.

Cultural Assumptions: beliefs about the internal workings and external environment of

an organization which, having worked well in the past, have gradually come to be taken

for granted, and which provide the basis for group consensus about common events and

circumstances. Cultural assumptions function as the unifying themes of organizational

culture.

Customer: groups or individuals who have a business relationship with the organization;

those who receive and use or are directly affected by the products and services of the

organization. Customers include direct recipients of products and services, internal

customers who produce services and products for final recipients, and other organizations

and entities that interact with an organization to produce products and services.

Cycle Time: the time that elapses from the beginning to the end of a process.

Decomposition: breaking down a process into subprocesses and activities.

Executive Steering Committee: the top management team responsible for developing

and sustaining the process management approach in the organization, including selecting

and evaluating reengineering projects.

Fishbone Diagram: a graphic technique for identifying cause-and-effect relationships

among factors in a given situation or problem. Also called Ishikawa Diagramming.

65
Function: a set of related activities that is part of a process, often known as a

subprocess within a process. Organizations often divide themselves into functional units,

such as purchasing, product development, order fulfillment, etc.

Input: the financial and nonfinancial resources the organization obtained or received to

produce its outputs.

Information Engineering: an approach to planning, analyzing, designing, and

developing an information system with an enterprisewide perspective and an emphasis on

data and architectures.

Information Technology Investment Review Process: an analytical framework for

linking information technology investment decisions to strategic objectives and business

plans in organizations. The investment process consists of three phases: selection,

control, and evaluation. This process requires discipline, executive management

involvement, accountability, and focus on risks and returns using quantifiable measures. 

Guidance on the investment review process can be found in the Office of Information and

Regulatory Affairs' guide, entitled Evaluating Information Technology Investments: A

Practical Guide, Version 1.0 and GAO's guide, entitled Assessing Risks and Returns: A

Guide for Evaluating Federal Agencies' IT Investment Decision-making, Version 1,

(GAO/AIMD-10.1.3, February 1997).

Integrated Definition for Function Modeling (IDEF): modeling techniques designed

to capture the processes and structure of information in an organization. IDEF0 is a

process modeling technique; IDEF1X is a rule or data modeling technique.

Model: a representation of a set of components of a process, system, or subject area. A

model is generally developed for understanding, analysis, improvement, and/or

replacement of the process.

Modeling or Flowcharting: a graphic representation of the activities and subprocesses

within a process and their interrelationships.

Outcome: the ultimate, long-term, resulting effects--both expected and unexpected--of

the customer's use or application of the organization's outputs.

Performance Gap: the gap between what customers and stakeholders expect and what

each process and related subprocesses produces in terms of quality, quantity, time, and

cost of services and products.

Performance Measurement: the process of developing measurable indicators that can

be systematically tracked to assess progress made in achieving predetermined goals and

using such indicators to assess progress in achieving these goals.

66
Process Management Approach: approaches, such as continuous process improvement,

business process redesign, and reengineering, which can be used together or separately to

improve processes and subprocesses.

Process: a set of activities that produce products and services for customers.

Process Owner: an individual held accountable and responsible for the workings and

improvement of one of the organization's defined processes and its related subprocesses.

Risk Analysis: a technique to identify and assess factors that may jeopardize the success

of a project or achievement of a goal. This technique also helps define preventive

measures to reduce the probability of these factors from occurring and identify

countermeasures to successfully deal with these constraints when they develop. 

Root Cause Analysis: a technique used to identify the conditions that initiate the

occurrence of an undesired activity or state.

Sensitivity Analysis: analysis of how sensitive outcomes are to changes in the

assumptions. The assumptions that deserve the most attention should depend largely on

the dominant benefit and cost elements and the areas of greatest uncertainty of the

program or process being analyzed.

Simulation Modeling: a simulation model is a computer program that replicates the

operations of a business process and estimates rates at which outputs are produced and

resources are consumed. Models test the consistency of the facts, logic, and assumptions

used by planners to design a proposed business process, to compare alternative business

processes, or to test the sensitivity of a process to changes in selected assumptions. 

Models help decisionmakers to assess the potential benefits, costs, and risks of alternative

processes and strategies.

Stakeholder: an individual or group with an interest in the success of an organization in

delivering intended results and maintaining the viability of the organization's products and

services. Stakeholders influence programs, products, and services. Examples include

congressional members and staff of relevant appropriations, authorizing, and oversight

committees; representatives of central management and oversight entities such as OMB

and GAO; and representatives of key interest groups, including those groups that

represent the organization's customers and interested members of the public.

"Stretch" Goal: a goal that requires a significant change in the performance (quality,

quantity, time, cost) of a process.

Subprocess: a collection of related activities and tasks within a process.

67
"To Be" Process Model: a process model that results from a business process

redesign/reengineering action. The "to be" model shows how the business process will

function after the improvement action is implemented. 

Total Quality Management: an approach that motivates, supports, and enables quality

management in all activities of the organization, focusing on the needs and expectations

of internal and external customers.

Value-Added: those activities or steps which add to or change a product or service as it

goes through a process; these are the activities or steps that customers view as important

and necessary.

World Class ("Leading") Organizations: organizations that are recognized as the best

for at least one critical business process and are held as models for other organizations.

Workflow: a graphic representation of the flow of work in a process and its related

subprocesses; including specific activities, information dependencies, and the sequence of

decisions and activities.

68
APPENDIX II

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72
APPENDIX III

Acknowledgements

We asked a number of BPR practitioners to comment on the exposure draft of this guide. 

They provided us with a wide range of insights and ideas for improvement, and we have

sought to include as many of these as possible. We wish to thank the reviewers for their

encouragement, and for sharing their time and expertise with us.

Jim Barber

North Carolina Department

 of Public Instruction

Profesor Tim Bergin

Department of Computer Science

American University

Dr. Phillip Bodrock

Hammer & Company

David A. Brigham

Department of Veterans Affairs

Mark Britton

ANDRULIS Research Corporation

Carolyn Burstein

U.S. Patent and Trademark Office

Harry Carnes

U.S. Customs Service

Judith B. Douglas

General Services Administration

Vaughn Frick

Gartner Group

Geoff Gardner

The Geoff Gardner Group, Inc.

Sandra J. Hale

Enterprise Management, International

Mary M. Harlow

The MITRE Corporation

Dr. Jerome B. Hilmes

Computer Sciences Corporation

Al Hyde

Brookings Institution

John A. Koskinen

Office of Management and Budget

Brain Lawrence

Royal Mail

Russ Linden

Russ Linden & Associates

Jerry Russemano

U.S. Patent and Trademark Office

Peter Robustelli

Juran Institute

Peggy Trout

James Martin Consulting

73
Steve Wasko

U.S. Internal Revenue Service

Michael S. Yeomans

Department of Defense

(511005)

74