BPM Guide (Part 2): Enterprise Process Management is Imperative for Every Organization
By Mike Raia Posted June 27, 2016
This is a guest series by Joanne Wortman, an independent business/technology consultant and freelance writer in the NY Metro area. She has almost two decades of experience providing business process optimization, organizational change management, M&A integration, and program management across many business sectors, with a concentration in manufacturing.
In our previous post, we introduced the concept of Business Process Management and gave a preview of the series. In this post we cover why BPM is so critical to organizations to remain competitive.
No organization can survive by remaining static. To remain competitive, today's businesses need agility to avoid profitability dips when they grapple with major changes resulting from:
- Shifting regulations
- Mergers, acquisitions or divestitures
- Marketplace shifts
- Global economic upheaval
- Launch of new products or services
- Adoption of new technologies
- Outsourcing internal business functions
Many organizations are struggling while trying to adapt to changes coming at them from several directions at the same time. In addition, there is always a need for incremental improvements in efficiency.
There are two ways to deal with these changes:
- A well-structured enterprise approach
- Isolated departmental initiatives
A successful departmental approach often grows into an enterprise initiative – success is contagious throughout the organization. Even though the departmental approach can be fruitful, it may also cause unintended harm if it is too narrowly focused. Here are just a few painful examples:
In a global organization, each regional sales team had independently designed sales reporting processes with different pipeline status definitions, making it impossible to design a single workflow, re-segment sales regions or analyze meaningful reports to gain insight into pipeline status and sales effectiveness.
- A customer service manager, working in a vacuum with a brand new ERP system, instructed the entire sales order entry team to overwrite the amount requested with the amount actually shipped, so that the company had no way to understand how many orders were shipping complete. The customer service agents were blindsided when fielding calls about incomplete orders, because when they viewed the order, it looked like the customer had received the amount they originally requested.
- A process team at corporate headquarters designed approval processes and assigned tight approval privileges. When the third shift at a production plant had no one available to authorize repair parts requests and swipe in to the spare parts cage, plant personnel had to destroy the parts cage to get the parts needed to keep the line running.
- An IT department manager tries to improve business satisfaction with IT by implementing every change request without instituting a formal change review and control process. Satisfaction goes down, because department A deems department B's changes a drag on efficiency. The changes were a Monday morning surprise to department A because the IT project manager only notified the requester in department B that the changes were going into production.
In these and other cases, narrow scoping that misses the crosscutting implications of process changes is the source of harm. Before interdependent business processes can be adjusted, there needs to be an enterprise level board that assesses the full organizational impact of proposed changes. The impact includes process changes, changes to roles and responsibilities, and potential changes to staffing levels.
The required changes are not always clear if the assessment lens is only focused on normal day-to-day operations. The impact on process variances can be significant. Consider this example of processes and roles/responsibilities issues that arose from the adoption of new technology:
- A rapidly growing packaged food company was new to the marketplace, and grew their brand aggressively through social media, which was the perfect way to reach the target demographic for their product: young moms who were looking for healthy foods for their children. A social media manager adeptly managed their Facebook page, Instagram postings, and Pinterest boards, serving up engaging content daily. When a product recall was necessary due to contamination at one of their plants, there was no way to deal with the venom that ensued on their Facebook page. The Facebook page referred disgruntled consumers to contact the consumer care line to obtain a refund. Consumer care could not handle the volume of calls and asked callers to log a complaint on the website, which crashed under the load. It was not clear who had authority to approve social media responses in a situation that could eventually result in litigation. The entire process for product recall management had to be designed on the fly, with several blunders that only increased consumer frustration and attracted additional media attention.
The Importance of IT and Business Collaboration
When we talk about an enterprise-wide approach, we mean engaging all departments and regions involved in business operations as well as the people responsible for the organization's information technology. No organization is so simple that it can design new processes and workflows and hand them off to IT for implementation. Today's process has become more iterative, especially in those businesses that have departments running key processes on cloud-based point solutions. Often, several process alternatives must be sketched out to give management the opportunity to weigh the pros and cons of full automation, semi-automation and competing data integration approaches.
There is No Time like the Present to Launch Your Enterprise BPM Initiative
The best time to pull together an enterprise level BPM initiative that delivers lasting results is during a lull in the change cycle. However, few businesses can carve out sufficient time to pull together baseline documentation of all their processes and get them under change control for upcoming and possibly overlapping changes.
The start time or timeline of major initiatives such as an ERP rollout can be adjusted to allow the time and resources to address the process definition work first. In one case, we saw a high-performing organization weave the process work into a major ERP project and use those processes as the basis for flawless integration projects when they acquired several large businesses. On the other hand, we saw a small, disorganized group of executives struggle with the integration of a larger business because they did not even have a formal documented process hierarchy, let alone documented processes. For the first client, their financial results during the integration period exceeded expectations. For the second business, the chaotic integration eroded financial performance for over a year.
The necessary factors for launching a robust approach to enterprise BPM (or extending a departmental BPM initiative) are:
- Strong executive support and ongoing communication from the top that makes the priority of enterprise BPM clear to everyone
- Allocation of resources from across the business and IT to the process design and management effort. This may involve backfilling key resources' day-to-day responsibilities.
- A formal process improvement methodology, lexicon and toolset so that everyone speaks the same language and all process teams produce the same results.
- A clear approval process for implementing process changes. It needs to include the identification and resolution of crosscutting issues.
- The initiative must be run like a true business project with defined responsibilities and milestones.
Next Topic: Establishing and Prioritizing the BPM Process Scope
The next post in our series will provide tactical advice on establishing the scope of your enterprise BPM initiative and prioritizing your process management efforts in alignment with your business strategy. We will include information on handling the multiple dimensions of process scope so that you can address process variation by region or division and deal with overlapping process changes from concurrent business and technology projects.
As always, we welcome your comments and questions. If you are struggling to get BPM launched in your organization or to extend its approach beyond initial success in one department, let us know what your challenges are. If you have been successful in making enterprise BPM a reality, let us know what your critical success factors were.