Generate Cost Savings and Improve Customer Satisfaction Quickly with Business Process Management
Business Process Management consists of powerful tools to generate dramatic improvements in key business processes in a timely manner. It can help you generate cost savings and improve customer satisfaction quickly by increasing efficiency and reducing cycle-time.
There is no doubt that as organizations seek ways in which to save money during uncertain economic times they will reach the conclusion that they have to work with fewer resources. But staff cuts can be detrimental in the long run if they are done without consideration of their impact on work flow because they reduce organizational productivity and staff morale and ultimately customers will feel the impact.
Many organizations remember the recession of the late 80s and early 90s. However, today’s situation is different. At that time, Reengineering was the strategy of the day and it was largely misunderstood and improperly employed-being used primarily to justify layoffs. Since then we have seen other “strategies of the day” including Lean Management and Six Sigma emerge into the mainstream. These strategies take some time to implement and are not “quick fixes.”
The difficulty today is that we need to get some quick improvements to deal with reductions in resources-including staff cuts and weaker sales. We probably do not have the time to engage in expensive and lengthy training, which is often necessary with Lean and Six Sigma programs. We must see improvements within a few weeks at most. One way to eliminate the detrimental effects of staff cuts and immediately generate savings is to apply Business Process Management.
What is Business Process Management?
Business process management (BPM) is a systematic approach to improving an organization’s key business processes. BPM activities seek to make business processes more effective, more efficient, and more capable of adapting to an ever-changing environment. It is a process that strives to align organizations with the wants and needs of clients and promotes business effectiveness and efficiency while striving for innovation, flexibility and integrations with technology. Business process management attempts to continuously improve processes. It could therefore be described as “process optimization.”
BPM will help you uncover cost reductions and reduce cycle-time-the amount of time it takes to go through a work process from beginning to end. It will help your organization to offset the detrimental effects of today’s uncertain economic environment and help you to remain competitive, innovative, and profitable.
Business Process Management combines the best of effective quality tools with the principles of Lean Management to create a quick analysis of key business processes in order to immediately increase effectiveness and efficiency.
The core elements of Business Process Management include the following activities:
Identify Key Business Processes
Key business processes are those processes which have maximum impact on the success of an organization, as these processes deliver results that are directed towards specific and measurable business goals. These are the business processes that an organization must excel at to remain competitive, in the industry – both now and in future. In other words these are the real value creating processes in the organization that customers and shareholders are concerned with. The senior management team must have an in depth knowledge and understanding of what the key business processes are, in order to drive improvements through planning and resource allocation, as these improvements will have the greatest effect on the business of the company.
In general there will not be many key business processes that an organization may have – a maximum of 12 to 15. Some of these key processes may be generic across the industry in which the organization competes – generally those that appear along the value chain, though each of the competitors may have a different approach to perform them. An organization may also have distinct key processes when compared to its competitors, which may be related to the organization’s specific issues that address its concerns of pursuing new opportunities, challenges that it needs to counter owing to its unique geographic location, market positioning, future aspiration, technology portfolio or local laws.
Intuitively people know the activities or processes that are important for the organization. For example for a manufacturing company, the importance of production process and sales process is well appreciated by all concerned. But there are other processes which have an equal or bigger impact on the organization though sufficient these processes never receive the deserved attention. Identifying key processes, [http://bia.ca/courses-qual-manage/business-process-improvement-kaizen.htm] aligning their outcomes to deliver the business goals, designing appropriate measures and allocating sufficient resources for their improvement is the key to the success of a company at market place.
Identify the “Voice of the Customer”
Voice of the Customer (VOC) is a systematic way to gather, integrate and analyse data in order to understand customer wants, needs and what represents value to them. Specifically it is a market research technique that produces a detailed set of customer requirements, prioritized in terms of relative importance.
The voice of the customer can be captured in a variety of ways and consists of both qualitative and quantitative research steps such as: direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, etc. Some of this data is available through internal feedback mechanisms. It is important to recognize that customers of each key business process will likely include both internal and external customers.
Develop the Current Value Stream Map
Value Stream Mapping enables an organization to identify and eliminate waste, thereby streamlining work processes, cutting lead times, reducing costs and increasing quality.
Value Stream Mapping documents beginning to end points of key business processes. It looks beyond tasks, jobs and organizational structures to focus on mapping out processes-sets of activities that might cross functional boundaries and which take information, materials, labour and other inputs and produce outputs, designed to meet customer needs.
It is a great opportunity for all subject matter experts to identify what is included in completing each portion of the key business process. The result is the creation of a detailed flowchart of this information. This process focuses on what is being done and why. It is not meant to be a review of whether or not an employee is performing their job correctly.
Measure the Process
Measuring the process includes identifying the direct costs, people costs, overhead costs and opportunity costs associated with a key business process. Gathering performance data will uncover immediate opportunities for improvement. They will clear up any discrepancies or conflicts in the current process and, once completed, also provide an opportunity to compare to an ideal Value Stream.
Complete a Root Cause Analysis of the key business processes
Root Cause Analysis is a problem-solving approach that identifies all of the blockages and barriers preventing the key business process from reaching an ideal state. It helps to uncover what is preventing the process from realizing the customer requirements.
Root Cause Analysis is one of the more engaging stages in business process management. The analysis team identifies all of the blockages and barriers preventing the business process from immediately reaching its defined “improvement” requirements.
Develop the Ideal Value Stream
Developing the Ideal Value Stream is the link back to reengineering and engages the analysis team to put aside what they know about the current key business process and design a new improved process that will address the root causes of all identified issues, concerns, problems and challenges with the current process. The Ideal Value Stream must also consider the Voice of the Customer and measurement data.
Once you have identified the present value stream and developed the ideal value stream you will need to find ways to close the gap between current and ideal. Problem solving is often used to generate a list of possible options and solutions that can be implemented to close the gap.
Develop the Implementation Plan
This final phase of Business Process Management includes the development of a detailed implementation plan to ensure that the solutions are successfully realized. This plan must provide details of the actions necessary to achieve the Ideal Value Stream. It will include a list of actions needed, a timeline for implementation, and a list of who will be responsible for undertaking planned actions, an explanation of how progress will be tracked, a monitoring system with milestones for measuring progress and a schedule of dates.
There is no doubt that as organizations seek ways in which to save money they will reach the conclusion that some staff lay-offs are imperative. However, it is also imperative that they analyze their key business processes in order to ensure that performance and employee morale is maintained. Otherwise, productivity will negatively be affected, staff motivation levels will decrease and the customers will feel the impact of these decisions. We will eventual come out of this situation. Let’s ensure we do so with our organizations ready to seize the new marketplace.