X-Engineering
Jim Champy Speaks to the LFM '05 Students
By Monica Nakamine
January 13, 2004
On December 1, 2003, Jim Champy, Chairman of Consulting at Perot Systems Corporation, headquartered in Plano, Texas, spoke to LFM ’05 students about the next frontier of engineering – X-Engineering.
“X-Engineering is the art and science of using technology-enabled processes to connect businesses with other businesses and companies with their customers to achieve dramatic improvements in efficiency and create new value for everyone involved,” said Champy. “X-Engineering is about connecting, collaborating, and harmonizing.”
In his book, X-Engineering the Corporation (Time Warner, 2002), Champy discussed the concept of X-Engineering and how it was born. Essentially, it is an extension of another popular notion of his, called “re-engineering,” which is geared toward process change within the organization. Going beyond company boundaries, X-Engineering takes re-engineering to a new level.
“Where re-engineering showed managers how to organize work around processes inside a company, X-Engineering argues that the company must now extend its processes outside – hence the X, which stands for crossing boundaries between organizations,” Champy said. “When an organization’s processes are integrated with those of other companies, all partners can pool their efforts and effectively become a new multi-company enterprise, far stronger than its individual members could ever be on their own.”
Champy used the healthcare industry as an example to demonstrate that no one company or organization within that industry should be an island. To bring down costs, improve efficiency, and streamline processes, the entire industry must be reinvented since the various components of the healthcare industry – doctors, hospitals, HMOs, insurers, patients, employers, etc. -- rely on each other to offer the services they are in business to provide.
“The solution would require cross-organizational process change, shifts in strategy, and the generous application of the Internet and related information technologies,” explained Champy.
Currently, for example, information should be available immediately for everyone to share without creating it multiple times as is done now.
The Internet, in fact, enables Champy’s X-Engineering concept. It is the essential network that can link individuals, companies, and industries, allowing them to share information that, in the past, would have been considered trade secrets.
“This openness and ease of information dispersal is the key to mobilizing a company and its customers, suppliers, and partners for a common purpose,” concluded Champy. “And that will enable almost miraculous efficiency.”