Following is the literal description of a redesigned case at IBM Credit Corporation, taken from the book “Reengineering the corporation” by Hammer and Champy [29]. It is split up into several parts. Please read these and answer the questions. Our first case concerns IBM Credit Corporation, a wholly-owned subsidiary of IBM, which, if it were independent, would rank among the Fortune 100 service companies. IBM Credit is in the business of financing the computers, software, and services that the IBM Corporation sells. It is a business of which IBM is fond since financing customers’ purchases is an extremely profitable business. In its early years, IBM Credit’s operation was positively Dickensian. When IBM field salespersons called in with a request for financing, they reached one of 14 people sitting around a conference room table in Old Greenwich, Connecticut. The person taking the call logged the request for a deal on a piece of paper. That was step one. In step two, someone carted that piece of paper upstairs to the credit department, where a specialist entered the information into a computer system and checked the potential borrower’s creditworthiness. The specialist wrote the results of the credit check on the piece of paper and dispatched it to the next link in the chain, which was the business practices department. The business practices department, step three, was in charge of modifying the standard loan covenant in response to customer request. Business practices had its own computer system. When done, a person in that department would attach the special terms to the request form. Next, the request went to a pricer, step four, who keyed the data into a personal computer spreadsheet to determine the appropriate interest rate to charge the customer. The pricer wrote the rate on a piece of paper, which, with the other papers, was delivered to a clerical group, step five. There, an administrator turned all this information into a quote letter that could be delivered to the field sales representative by Federal Express.

(b) Which dimension of the Devil’s Quadrangle would be dominant for a redesign? Give an exact definition of the performance criterion. In their efforts to improve this process, IBM Credit tried several fixes. They decided, for instance, to install a control desk, so they could answer the rep’s questions about the status of the deal. That is, instead of each department forwarding the credit request to the next step in the chain, it would return it to the control desk where the calls were originally taken. There, an administrator logged the completion of each step before sending the paper out again. This fix did indeed solve one problem: The control desk knew the location of each request in the labyrinth and could give the rep the information they wanted. Unfortunately, this information was purchased at the cost of adding more time to the turnaround.