Business Process Improvement: Is it Right For You?

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The benefits from business process improvement (BPI) are substantial and immediate. In addition to resolving major process issues, like bottlenecks in a firm's customer supply chain, BPI improves service, cuts costs and generates competitive advantages. Perhaps most important, BPI also boosts profitability.

But BPI isn't right for everyone. With profit margins shrinking more and more these days and costs skyrocketing, today's firms must be sure that BPI is right for them before embarking on any BPI project. Conducting a thorough process review and asking the right questions can help determine if it is.

Definitions

BPI is a systematic approach to changing the way organizations do business. Unlike other reengineering efforts, like TQM, Performance Management, or Six Sigma, which implement isolated changes in a specific process, BPI fosters enterprise-wide changes in an organization's operation. In the right situation, it's a powerful tool for boosting organizational efficiency and responsiveness. In the wrong situation, it drains corporate budgets and disrupts service.

BPI focuses on customers' needs and wants. BPI bases its activities on outcomes, not routines, puts processes-not automation-first, employs automated planning tools and benchmarks regularly. It also builds control points into processes. BPI's goal: Make changes now.

More specifically, BPI revolves around answers to questions such as, who are we? What do we do? Why do we do it? Whom do we serve? What is important to those we serve? How can we do it better? By defining an organization's strategic goals, determining the organization's customers and aligning business processes to meet customer needs, BPI fosters changes in performance that generate dramatic gains throughout an organization.

How Can a Firm Know if BPI is Right For Them?

Before embarking on a BPI program, a firm must determine if BPI is right for them. Conducting a thorough review of the target process is Step One. The review tells if a firm needs "a simple tuck or radical surgery." One company conducted a five-step review that proved extremely beneficial, saving them a substantial investment in IT by identifying non-IT changes. Instead of buying an expensive CRM solution, it generated dramatic improvements in responsiveness and customer satisfaction by re-staffing and identifying the right problem processes.

Ask the Right Questions

In addition, firms should ask themselves key questions such as, how much does the process we're focusing on matter to the organization's success? A major source of BPI error is failure to identify which processes contribute significantly to an organization's performance. Improving a process does not generate substantial performance changes if that process is of minor importance. Only those processes promising dramatic gains in effectiveness and efficiency or significant enhancements to a value chain qualify as BPI projects.

Another key point to consider is whether there is a specific goal in mind. The inability or reluctance of an organization to determine where they want to go with BPI is another major BPI error. Organizations failing to identify specific BPI goals often waste both time and money on projects providing little impact on an organization's performance.

An important question to ask is, will the organization support these changes? The need for support from senior management is paramount. Most business people have been involved in projects doomed from the start because senior management never bought in to the idea. Without the backing of senior management, nothing substantial will happen and nothing of significance will be accomplished.

Firms also need the support of the other members of the organization, those users involved in the organization's day-to-day operations. Changes initiated by a BPI project affect these workers the most. They need to be kept informed of the benefits of process improvement activities as well as negative outcomes that might ensue if a project fails. Without their support, the project can never overcome the challenges it meets.

Finally, is the project consistent with the organization's mission and vision? If not, then the answers to the other questions, even if they are unequivocally in the affirmative, might not matter. The organization's mission and vision should ultimately drive process improvement activities. If they do, the project will most probably have a dramatic impact on the organization's performance, and its bottom line.

Examples of BPI in Action

The two examples that follow demonstrate how firms can garner substantial benefits from BPI. Each example is different, and each provided competitive advantages while helping firms meet customer needs.

BPI Case Study #1

Moving heavy freight is a complex process that often requires the involvement of multiple transport agents. In doing so, logistics firms process enormous amounts of transactional data daily. To provide self-service functionality to customers, one firm allowed client users to dial in to their system over dedicated lines to create shipments, view billing details and even generate bills of lading.

Unforeseen issues often crop up when moving large pieces of freight, however. The firm was unaware of these issues in real time, and as a result, their customers did not receive real-time status updates. Deliveries often sat idle until the firm or its customers made decisions regarding the most appropriate action to be taken. To remedy the situation, the firm created a value-added customer self-service system that ensured a standardized way of doing things. The enhanced communication system enables the firm and its customers to be acutely aware of any issues that could stall the delivery. They can accurately assess the situation and take the most appropriate action necessary to keep the supply chain moving. The system also enhanced the firm's internal communications. Now, more than 1000 corporate users can access the same customer information.

BPI Case Study #2

A division of a large multi-billion dollar medical instrumentation company needed to address problems with its help desk, which had been relegated to fighting fires. Management wanted to create a proactive support center based on industry-recognized best practices. Using data generated from an on-site study and interviews with key personnel, management chose a multi-tier process system in which specific process roles were introduced and linked to specific resource levels. The division performed simulations to uncover potential resources bottlenecks and define appropriate levels under specific call volumes. The simulation allowed the division to align its resources with the expected level of incoming calls and provide specific guarantees to the user community.

Conclusion

Implementing a BPI project like the ones described here is like initiating any other project. All the basic rules that apply to implementing other projects apply to initiating a BPI project as well. Because introducing a BPI project is costly in time and money, however, firms should conduct a thorough process review before embarking on any BPI effort. In addition, they must answer several key questions. Following these actions can certainly help them decide if BPI is right for them.