In the current economic environment, managers are being asked to examine their operating expenses and make substantial cuts to their cost structure.   Often times, this manifests itself in short-term actions that typically prove costly to the long-term strength of the company.  Additionally, any large-scale initiatives even with perceived value are placed on hold or cancelled.  To combat the difficult markets, companies can look towards process improvements to make immediate impact as well as position a company for long-term growth.

What many companies have learned is that through careful examination of their processes, they are able to make substantial improvements to the bottom line without sacrificing quality or making a substantial initial capital investment.  In this month’s edition of Insights, we will examine the power of focusing on processes, some of the impediments that companies face in becoming a process-centric company, and most importantly how to overcome these impediments and where to begin.

At the heart of every company are its business processes.  By definition, a business process is a collection of related, structured activities that produce a service or product that meet the needs of a client.  Products and services are the “what” for every business.  They are the reason companies exist.  Business processes are the “how”.  They are how companies deliver value to their customers.   At the most simplistic level, for every process there is input, usually a customer need and an output, the fulfillment of that need.  What happens in between is the process.  Given that the shortest distance between two points is a straight line, understanding the inputs and the outputs, companies can construct a sequenced of steps, or process, to most efficiently navigate from Point A to Point B.  Sounds pretty straightforward, right?  So why do companies have such a hard time effectively documenting, managing, and optimizing their processes?  We will explore this next, but first let’s look at how business processes can unlock value in an organization.

Processes exist at varying levels throughout an organization.  They can be extensive and complicated such as the process by which a company produces something.  These processes can often be the competitive advantage that a company holds to allow them to be better, faster, and cheaper than their competitor.  Process can also be routine tasks such as monthly financials, or hiring an employee.  The performance of the process directly impacts measures such as time, quality and cost.  By analyzing processes with respect to their measures, companies can often find ways to improve them.

Process analysis starts with a process map.  A process map is nothing more than a pictorial representation of a process using defined modeling constructs that allows a common view of the process for the enterprise.  From the process map, the process can be examined, improved, communicated, and measured to understand how the process is performing today and how it could perform tomorrow.  More on this topic will be discussed later in How Do We Start?

The benefits of focusing on processes can be substantial.  More importantly, the ROI can become astronomical because the initial investment is often very small.  This is of importance given current conditions.  Managers are being held to do more with less while at the same time unable to invest heavily on any cost reduction initiatives.    Many companies can experience double-digit reductions in cycle times and costs while improving quality and customer satisfaction simply by focusing in on what they already do and challenging the “how” of the status quo.

So if process improvement is the answer, why aren’t companies actively pursuing these opportunities?  There are many reasons.  Often times, companies are too close to their own business to allow themselves to think differently on how to do things or to challenge the status quo.  For many established companies, processes have been embedded over decades and are not very easily changed.  Too often, companies become complacent and stuck in the “how we’ve always done it” mindset.  By taking a stepping back and examining business processes, companies can sometime overcome this view and make substantial improvements.

Many organizations are not equipped with the right skill sets or methodologies to allow for a process-based approach.  It takes some practice to be able to document a process effectively and analyze that process for improvement opportunities.  Too often, the front-line employees that truly understand the process are not equipped to improve on it.  In many cases these same employees are not empowered to make changes or manage through the bureaucracy to have their voice heard.

Lastly, for many companies, they have difficulty in understanding where to begin or even worse have begun but due to difficulties their efforts have been viewed as failures.  Although it sounds straightforward, embarking a process effort can often be overwhelming and without expertise and careful planning can end well before it begins.

To overcome these obstacles, there are several things that companies can do to ensure success with their process improvement efforts.  We will explore these next.

It is important for any initiative to understand where you are before you can determine where it is you are going.  The Process Maturity Assessment can help companies establish a baseline for where they are in regards to their process initiatives. 

To be successful, companies need to have clearly defined standards for how they will capture their processes as well as a roadmap for who they will bring process to the enterprise

Training is an often-overlooked afterthought to many improvement initiatives.  But without effective training, those that you depend on to carry forward will be ill equipped to do so.

To enable it all, a Center of Excellence is required to provide oversight, focus, and resolution to process efforts.  A CoE will be responsible for developing and managing the processes by which process improvement efforts are conducted.  They are the process managers for process management.