"For struggling companies, business process management is a lifeline that helps them survive by reducing and avoiding costs in this volatile and turbulent economy." So says Gartner - one of the leading business research organisations in the world ("It's a Matter of Survival: Use BPM to Drive Out Costs", 12 March 2009, Elise Olding, Gartner RAS Core Research Note G00165528).
I totally agree. In today's cost conscious environment there are only a few guaranteed ways of reducing your costs or increasing your bottom line. One is to reduce staff - the option nobody really wants to do. The other is to become more effective and efficient with what you already have.
So follow the Gartner advice:
Let's look at some of these in a little more detail :
Gain a competency in BPM now. The world of BPM is deemed to be complicated because it encompasses such a large area of specialisation. There is enterprise strategy, process modeling and analysis, process execution, decision management, Six Sigma, process governance and goodness knows which other buzz words - all of which muddy the waters. The fact of the matter is that BPM is a little like the Wizard of Oz - it seems bigger and more important than it is, but in fact there is a little man behind the curtain who is controlling everything. Of course it helps if you have someone who has done this before working with you (Hint, hint - a small consultancy you may be aware of), but the key is make sure you have someone senior who is looking after this and has responsibility for making this happen. A BPM competency could be as simple as having one individual in the organisation who has an overview of every project you are doing to ensure there are no 'silly' overlaps, duplications or mis-communications from a process point of view. Or it could be a whole department who have had specialist training on BPM methodologies, Enterprise Architecture, modelling notations, decision management and supporting tools. The key point here is to make this someone's job and hold them responsible for making it happen.
Before you wield the cost-cutting axe, construct a high-level business process model to understand the impact of head count and resource cuts across the enterprise so that you do not decrease process efficiency and inadvertently drive up costs. Common sense, I would say. But as we all know, common sense isn't that common. This, basically, is a long way of saying 'look before you leap'. Don't think that removing the most inefficient part of your business will immediately slash your costs, because often it won't. There are linkages between all parts of your busienss - whether you think there are or not. As a result removing one part of the support infrastructure - such as, say, an inefficient department (think 'Customer Support Group') might, indeed, cut down your overhead. But at what cost? Perhaps the work performed within that department updates other parts of your customer information and as such removing it will leave gaps in your data and understanding. These gaps manifest themselves as problems later on in your process - problems which will inevitably take longer (and cost more) to fix than you saved by canning the department. Use something plain and simple to document your high level business. Start with brown paper and post-it notes if you want. Transfer this to (eugh!) Visio for a pretty picture (or even worse, Powerpoint). But whatever happens ensure you capture key information about the process: Inputs, outputs, responsible roles, work performed, and measures. When you've finished take a look and try to understand simple things such as "Does all the output from process A go somewhere else?" If it doesn't, why are we producing this? "Does all the input needed for process B come from somewhere else (in the right format to be used)?" If it doesn't, then what part of the process should be in place to make this happen? A simple model of your business (even at a high level) will ensure you have an overview of the impact of removing or changing one part at the expense of the others.
Use BPM to manage your business case justification and measurement processes. This relates, primarily, to identifying those parts of the business which would merit being shut down (or, contrarily, those which are marked for shut down but which shouldn't be). A review similar to the one mentioned above will provide you with some valuable data to help you understand the key impact of a shut-down decision. Imagine being able to go into your CEO with some valuable BPM-sourced information which will tell him or her that the decision he or she is about to make regarding shutting down the internal market research department is wrong. With appropriate data you can prove that this decision might come back and bit him or her on the butt within 6 months because data from that department feeds directly into the marketing function and effects targetting of marketing dollars (as an example). There are other examples where this would be apropriate. The key here is to make the decision on the basis of a gestalt view of the business rather than just a narrow, money based view of a single department.
Identify processes where costs may be high and there is not a focus on measurement. Target one of these processes for your first or next BPM project, and demonstrate tangible results. What you don't know about your processes may be costing you money. I think this is very much linked with the second recommendation. If you have followed that recommendation and documented your business processes (even at a high level) this is the opportunity to identify high-cost processes. It involves doing a little more work (or getting someone in to do the work for you) and digging a little deeper. But at the end of the day it then becomes a strict mathematical equation to understand which process costs you more, or which ones do not have the appropriate level of measurement. Target these processes and put together a small, focused, project to solve the problem. It will reap dividends.
Summary:
As Elise at Gartner says "BPM can be a powerful tool that plays a critical role in the survival
of your company — it can reduce costs, ensure compliance, avoid mistakes and create the visibility needed to manage processes as assets to your enterprise." Who am I to argue?
I would encourage you to read the Gartner report, understand the detail held within it and read it in context with the advice offered here. It is possible that the thing that is stopping you from looking at BPM in your organisation might not be barrier to entry at all. In these days of reducing income and increasing costs, can you really afford not to look at ways to increase efficiency?
For more about me check out my "About Me' page
All information is Copyright (C) G Comerford
I totally agree. In today's cost conscious environment there are only a few guaranteed ways of reducing your costs or increasing your bottom line. One is to reduce staff - the option nobody really wants to do. The other is to become more effective and efficient with what you already have.
So follow the Gartner advice:
- Gain a competency in BPM now.
- Before you wield the cost-cutting axe, construct a high-level
business process model to understand the impact of head count and
resource cuts across the enterprise so that you do not decrease process
efficiency and inadvertently drive up costs. - Use BPM to manage your business case justification and measurement processes.
- Identify processes where costs may be high and there is not a focus
on measurement. Target one of these processes for your first or next
BPM project, and demonstrate tangible results.
Let's look at some of these in a little more detail :
Gain a competency in BPM now. The world of BPM is deemed to be complicated because it encompasses such a large area of specialisation. There is enterprise strategy, process modeling and analysis, process execution, decision management, Six Sigma, process governance and goodness knows which other buzz words - all of which muddy the waters. The fact of the matter is that BPM is a little like the Wizard of Oz - it seems bigger and more important than it is, but in fact there is a little man behind the curtain who is controlling everything. Of course it helps if you have someone who has done this before working with you (Hint, hint - a small consultancy you may be aware of), but the key is make sure you have someone senior who is looking after this and has responsibility for making this happen. A BPM competency could be as simple as having one individual in the organisation who has an overview of every project you are doing to ensure there are no 'silly' overlaps, duplications or mis-communications from a process point of view. Or it could be a whole department who have had specialist training on BPM methodologies, Enterprise Architecture, modelling notations, decision management and supporting tools. The key point here is to make this someone's job and hold them responsible for making it happen.
Before you wield the cost-cutting axe, construct a high-level business process model to understand the impact of head count and resource cuts across the enterprise so that you do not decrease process efficiency and inadvertently drive up costs. Common sense, I would say. But as we all know, common sense isn't that common. This, basically, is a long way of saying 'look before you leap'. Don't think that removing the most inefficient part of your business will immediately slash your costs, because often it won't. There are linkages between all parts of your busienss - whether you think there are or not. As a result removing one part of the support infrastructure - such as, say, an inefficient department (think 'Customer Support Group') might, indeed, cut down your overhead. But at what cost? Perhaps the work performed within that department updates other parts of your customer information and as such removing it will leave gaps in your data and understanding. These gaps manifest themselves as problems later on in your process - problems which will inevitably take longer (and cost more) to fix than you saved by canning the department. Use something plain and simple to document your high level business. Start with brown paper and post-it notes if you want. Transfer this to (eugh!) Visio for a pretty picture (or even worse, Powerpoint). But whatever happens ensure you capture key information about the process: Inputs, outputs, responsible roles, work performed, and measures. When you've finished take a look and try to understand simple things such as "Does all the output from process A go somewhere else?" If it doesn't, why are we producing this? "Does all the input needed for process B come from somewhere else (in the right format to be used)?" If it doesn't, then what part of the process should be in place to make this happen? A simple model of your business (even at a high level) will ensure you have an overview of the impact of removing or changing one part at the expense of the others.
Use BPM to manage your business case justification and measurement processes. This relates, primarily, to identifying those parts of the business which would merit being shut down (or, contrarily, those which are marked for shut down but which shouldn't be). A review similar to the one mentioned above will provide you with some valuable data to help you understand the key impact of a shut-down decision. Imagine being able to go into your CEO with some valuable BPM-sourced information which will tell him or her that the decision he or she is about to make regarding shutting down the internal market research department is wrong. With appropriate data you can prove that this decision might come back and bit him or her on the butt within 6 months because data from that department feeds directly into the marketing function and effects targetting of marketing dollars (as an example). There are other examples where this would be apropriate. The key here is to make the decision on the basis of a gestalt view of the business rather than just a narrow, money based view of a single department.
Identify processes where costs may be high and there is not a focus on measurement. Target one of these processes for your first or next BPM project, and demonstrate tangible results. What you don't know about your processes may be costing you money. I think this is very much linked with the second recommendation. If you have followed that recommendation and documented your business processes (even at a high level) this is the opportunity to identify high-cost processes. It involves doing a little more work (or getting someone in to do the work for you) and digging a little deeper. But at the end of the day it then becomes a strict mathematical equation to understand which process costs you more, or which ones do not have the appropriate level of measurement. Target these processes and put together a small, focused, project to solve the problem. It will reap dividends.
Summary:
As Elise at Gartner says "BPM can be a powerful tool that plays a critical role in the survival
of your company — it can reduce costs, ensure compliance, avoid mistakes and create the visibility needed to manage processes as assets to your enterprise." Who am I to argue?
I would encourage you to read the Gartner report, understand the detail held within it and read it in context with the advice offered here. It is possible that the thing that is stopping you from looking at BPM in your organisation might not be barrier to entry at all. In these days of reducing income and increasing costs, can you really afford not to look at ways to increase efficiency?
Reminder: 'The Perfect Process Project' is still available. Don't miss the chance to get this valuable insight into how to make business processes work for you.
Click this link and follow the instructions to get this book.
For more about me check out my "About Me' page
All information is Copyright (C) G Comerford
