A new study from Logica Management Consulting and the Economist Intelligence Unit (EIU) indicates that nearly one third of business process change projects fail to improve process or corporate performance.
One third!
I originally thought that was a little high, but when I remembered that recently a survey indicated that over 50% of business processes are not working it now seems a little on the low side.
Putting some financial figures to the survey numbers, the global cost of failed business process projects is reaching around £7.8b, with the UK alone accounting for £1.7b. In the current financial climate these figures are very disturbing.
Looking at the study in more detail, James Campbell, management consultant at Logica Management Consulting stated “The spate of mergers and takeovers in the financial sector for example, over recent months has led to wide speculation about companies making redundancies in order to achieve savings. The key to delivering such savings, however, will be a complex transformation programme which will require significant investment in both people and technology. Such a programme of change will likely have several key elements, including alignment of business processes and supporting technology; real estate rationalisation and the disposal of non core businesses. Each of these elements brings both challenges and opportunities.”
A key finding indicates that companies who are successful in this arena tend to be more ambitious when planning change projects. They are much more likely to run cross-regional,
cross-departmental projects than unsuccessful companies. They are also more proactive
when planning change projects, don’t wait for problems to arise such as customer complaints or lost market share before implementing change reactively, but plan for change in order to improve business performance and involve customers and partners in that planning.
Of course running projects such as these does create other problems and these are discussed in my ebook "The Perfect Process Project", but overall it is clear that business process change is now more crucial than ever before, but also more likely to fail if not done correctly.
The 2008 Securing the value of Business Change report outlines findings from 380 executives in Western Europe, and assesses how companies evaluate the impact of business process change projects on process as well as corporate performance.
One third!
I originally thought that was a little high, but when I remembered that recently a survey indicated that over 50% of business processes are not working it now seems a little on the low side.
Putting some financial figures to the survey numbers, the global cost of failed business process projects is reaching around £7.8b, with the UK alone accounting for £1.7b. In the current financial climate these figures are very disturbing.
Looking at the study in more detail, James Campbell, management consultant at Logica Management Consulting stated “The spate of mergers and takeovers in the financial sector for example, over recent months has led to wide speculation about companies making redundancies in order to achieve savings. The key to delivering such savings, however, will be a complex transformation programme which will require significant investment in both people and technology. Such a programme of change will likely have several key elements, including alignment of business processes and supporting technology; real estate rationalisation and the disposal of non core businesses. Each of these elements brings both challenges and opportunities.”
A key finding indicates that companies who are successful in this arena tend to be more ambitious when planning change projects. They are much more likely to run cross-regional,
cross-departmental projects than unsuccessful companies. They are also more proactive
when planning change projects, don’t wait for problems to arise such as customer complaints or lost market share before implementing change reactively, but plan for change in order to improve business performance and involve customers and partners in that planning.
Of course running projects such as these does create other problems and these are discussed in my ebook "The Perfect Process Project", but overall it is clear that business process change is now more crucial than ever before, but also more likely to fail if not done correctly.
The 2008 Securing the value of Business Change report outlines findings from 380 executives in Western Europe, and assesses how companies evaluate the impact of business process change projects on process as well as corporate performance.
