Ask five bankers what "reengineering" means and you will get 10 different definitions: radical business process redesign, clean-sheet operations planning, streamlining, and strategic technology deployment, to name a few.

But even with these differences, the word leaves a strikingly consistent visceral impression with people at any given level of an organization.

Executives see an unrealistic, idealized state of efficiency and productivity.

Project managers see headaches from unattainable goals combined with a lack of empowerment.

Rank-and-file employees see layoffs.

And consultants see dollars - lots of dollars.

Can banks and the financial services community get the benefits of reengineering without validating these unfortunate impressions? Can it be done without a permanent army of consultants?

The answer is yes, through a process called "micro'-reengineering."

Though most business operations, from manufacturing to financial institutions, would benefit from the "clean-sheet" exercise in which the ideal process is designed from scratch, the resulting utopian state is usually no more than a dream.

Even if a near-perfect business process is designed, the effort required to migrate from a bank's current state to a newly designed process is frequently overwhelming and very expensive. In addition, most reengineering projects are failures.

One way, though, to get 80% of the savings with just 20% of the pain is to look for "handoffs" in the company's business processes.

A handoff is where one individual or team relinquishes control of the work product or process to another group.

In most "fat" client operations, the processes generally exhibit a combination of numerous transfers of control, interdepartmental information requirements, and downtime, or null handoffs, resulting from changing decision environments.

Handoffs tend to be the most costly steps in a banking, investment, or insurance operation. As an example, an insurance claims process may start with a customer reporting to an agent who begins the case file, who hands it off to a claims adjuster, who might require additional information from the legal department.

After receiving the data, the adjuster might then pass the results to a supervisor who, in turn, will check with the compliance department for constantly changing coverage data. And while the case file is at one station, it generally cannot be worked on by another.

The chances of miscommunication are highest during handoffs, and error rates skyrocket, driving up operations costs through reworking efforts and lost time.

Handoffs are so critical, in fact, that we use their number and complexity as the major driver in determining potential savings from a process redesign. Handoffs equal cost, and to drive down costs, drive out handoffs.

To "micro-reengineer" your operation, aggressively target the handoffs in your business processes. After a survey of each handoff, interview those people directly involved in the operation. They are often the most able to determine which steps are the least necessary. Set priorities, and with visible senior-level support, take the following steps.

*Totally eliminate handoffs wherever possible, allowing one person or team to take the work product from start to finish. Often this requires breaking from tradition or culture in an organization, but in banking, most transfers of control are legacies of business needs from long ago.

*Provide the data that are required for the process to be completed. This sounds much simpler than it is. Do not accept relying on other departments for data. Make the information immediately available on demand. This may require additional technology deployment and training. Do not let historical turf boundaries derail this step. Nobody "owns" data except the next person or team that requires it.

*Arrange your firm's critical information dissemination structure so departments need not seek out the current status of various operating parameters; the departments that need to know should already have this information in real time. This frequently requires that executives rethink restrictive bank or insurance information policies, scrapping outdated need-to-know rules in favor of a more fully informed work force.

By focusing the business on the elimination of handoffs, tremendous savings can be achieved, with or without consultant assistance.

This does not mean that the effort can be pushed down to consultants or to middle layers of management, however. The drive must come from the top, and it must be sincere and visible.

The redesigning and elimination of handoffs is not reengineering in the strictest sense. But micro-reengineering pays remarkable dividends - and the management team will be sufficiently well versed in its business processes to take on a full-scale reengineering if it is deemed necessary and worth the risk.

Mr. Satloff is a managing partner of Fusion Management Consulting LLP in New York.

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