Optimizing Business Processes: What takes priority?

In an ideal world, all the processes targeted by a solution would be optimized, and all the non value added activities would be removed. But in reality, organizations often decide to keep the chosen solution, the one that is as “vanilla” as possible, to minimize times and costs. The question thus becomes: What processes do you invest in and focus on when implementing an IT solution?

Optimization

1- The opportunity

This situation occurs when a computer application, usually coming from outside the organization, is defined before a need has been established for it. The appearance of a new technology, the desire to do what a competitor is doing, or even an unplanned request from an influential member of the organization, are typical situations. For example, a manufacturer might decide to rebuild the Web portal intended for its distributors in HTML5, so they can renew their orders from a mobile device. Even though that source of inspiration entails major risks in terms of managing a project’s size, budget or deadlines, it may provide viable solutions with rapid gains or a solid return on investment. Such situations may also have the advantage of being technological pioneers in the matter.

2- The pain points

This strategy is followed when managers identify problematic processes or even “pain points”. It is crucial to analyze the causes and identify the processes and sub-processes affected by the problem, at the risk of automating the problem and having it repeat endlessly. For example, a service firm might have received complaints from its customers because it was late sending out important letters concerning preventive maintenance. After a root cause analysis, the analysts might indicate that the communication process between the departments needs reviewing, and the way letter issuing dates are calculated needs to be automated.

3- The organizational strategy

Though objectives, mission, vision and strategic direction are often seen as being highly theoretical, they should also be used to prioritize process reengineering projects. In short, that approach consists of analyzing the process architecture and asking which processes implement the organization’s organizational strategy. That involves choosing the processes that make up the value stream, rather than supporting activities, to maximize the impact. For example, a professional association may have as its mission to defend the public and, as an objective, to reduce the number of complaints from the public by 10% within five years. One way of doing that would be to optimize the map of inspectors’ routes. Using existing data, the association could target locations or members that are potentially more at risk so the inspections would be more frequent.

 

Ask the right questions

For managers, it thus becomes important to define the needs and properly choose the processes to be optimized so as to get the most out of every dollar invested in process management. Using a methodology may also be useful at the start of the process to be sure you are headed in the right direction. The major pitfalls are automating a defective process, or even uselessly expending resources on minor processes, to the detriment of the core elements of an organization’s mission.

This blog was inspired by the concepts of the J. Jeston and N. Nellis methodology (2006).

 

Leave a Reply