*SIM Paper Competition:* Business Reengineering at CIGNA Corporation: Experiences and Lessons From the First Five Years

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Abstract

Considerable uncertainty and confusion exists about what business reengineering is and when it succeeds. This paper provides a longitudinal view of CIGNA Corporation's experiences in business reengineering since 1989. CIGNA is a leading provider of insurance and related financial services throughout the United States and the world. Between 1989 and 1993, CIGNA completed over 20 reengineering initiatives, saving more than $100 million. Each $1 invested in reengineering has ultimately brought $2-3 in returned benefits. This article describes projects with major payoffs: operating expenses reduced by 42%, cycle times improved by 100%, customer satisfaction up by 50%, quality improvements of 75%. It also highlights how CIGNA's reengineering started small and how learning was used to escalate from this quick hit to reengineering larger and more complex parts of the organization. CIGNA's reengineering successes have also required a willingness to allow failure and learn from failures. Only about 50% of the reengineering efforts bring the type of benefits expected initially. Repeated trials are often necessary. CIGNA's lessons can help other firms anticipate what they will experience as they ascend the learning curve of business reengineering.

Additional Details

Author J. Raymond Caron, Sirkka L. Jarvenpaa, and Donna B. Stoddard
Year 1994
Volume 18
Issue 3
Keywords business reengineering, business process redesign, longitudinal case s tudy, insurance industry, knowledge transfer, organizational learning, radical change, strategic alignment
Page Numbers 233-250