IT-Led Process Reengineering: How Sloan Valve Reengineered Its New Product Development Process
Firms are faced with intense competition and rapidly changing customer preferences. To deal with this, they are forced to innovate and introduce new products and services at an increasing pace. Over the past two decades, organizations have developed their own product development (NPD) processes and the associated IT support systems, based on traditional approaches to timelines, design reviews and multiple levels of decision-making hierarchies. The approach commonly used is the six-sigma approach. This is a data-driven approach and methodology for eliminating defects from a process. Sloan Valve has strong cross-functional interdependencies. Continuous improvement methodologies are ineffective for addressing cross-functional, end-to-end NPD processes. Sloan set aggressive improvement goals and reached them with a radical change approach. They set out to dramatically improve the time-to market of new products and were able to reduce it from 18-24 months down to 12 months.
Sloan found a less complex way to get the NPD processes completed, and they were able to restructure the governance from involving 16 functional units to a dual strategic and process-level governance structure. Sloan had accountability issues. No single department could be held accountable for any problems encountered. But after redesign, it had a well-established process ownership.
Sloan Valve Company believed that investing in an ERP system would solve some of its communication problems stemming from the 16 functional units. Because of the focus on integration, enterprise systems are useful tools for an organization seeking to centralize operations and decision-making. No return was realized from this investment. Top management decided to hire a CIO who would be responsible for technology vision and leadership for designing, developing, implementing and managing IT initiatives for...