Managing by Processes for Dummies
Blog: BPM Leader
What is the best management strategy for the company? How can I make my business more efficient? These are the key questions business owners and top executives ask themselves nowadays.
In this article, we would like to share our experience and show the value of the process-based approach for the medium and large businesses.
Three management problems – one management approach
A small company with its founder at the helm normally does not experience any problems when it comes to establishing effective communication between employees. Complicated issues can be solved in a short time, as employees have no difficulties in reaching each other. The company founder stays close to the personnel, motivating them and keeping their focus on organizational goals.
As the company grows, the number of personnel increases along with the number of new tasks that have to be completed. At this point, the company’s top managers face three main challenges of medium and large businesses:
- How to create added value for customers?
- How to improve efficiency?
- How to avoid stagnation and find new ways for business development?
The process-based management approach proves to be a smart answer to all three questions, as it solves them most successfully.
How much do your company´s processes contribute to creating customer value?
Delivering value to customers is a result of activities that make up the company’s core process. This process must be efficient and keep up with the customer needs.
As a rule, the core process is automated and organized by some means or other; a business cannot function properly otherwise. However, it is a common situation when the company’s core process is supported by various IT systems, which are not sufficiently flexible to meet changing business demands. Instead of improving the process, the company tries to force customers to act according to its own rules.
A process-based approach offers a fundamentally new method of managing processes
- Customer-focused processes. A BPM (Business Process Management) system represents a process as a chain of activities where each step must contribute to creation of customer value. It organizes each step of a value chain, making it more transparent and thus more manageable. You can make sure that each operation conforms to the customer’s expectations and helps to create valuable product or services.
- Continuous improvement. Good understanding of real customer requirements is critical to the success of any business. A company able to keep in contact with clients and quickly adapt to their changing needs, gains a competitive edge. A BPM system provides possibilities for non-technical users to optimize processes without much effort, as far as no programming skills are required to change the business process logic.
- Automation. With a BPM system, you can reduce manual efforts by automating human-centric tasks. This will mitigate risks of human error, save time, increases productivity, and thus create additional value for your customers.
How can a BPM system help to improve efficiency?
- BPM makes things clear. It´s not an easy task to evaluate the output of the office employees, since their duties are rather broad and mostly centered around the computer. Take the case of business analysts, they have to solve complex tasks, which involves strategic planning, analysis, assessing and so on. Their efficiency and productivity can’t be measured by the amount of data they analyze or the number of business requirements they determine.
Using a BPM system, you can configure, collect and calculate business process metrics and key performance indicators. With these statistics, you can evaluate employees’ performance and see how much each of them contributes to achieving organizational goals.
- Control and monitoring. Another problem is a low level of personal responsibility when working in a big team. The bigger the company, the lower employee engagement is likely to be. Many employees don’t bother to put much effort in their work, as they are sure the superiors will pass it over.
With BPM it is easy to control schedule compliance. Each employee, being a part of a process, receives his or her own tasks. A BPM system allows you monitor task progress and evaluate personnel workload. You can easily identify the bottlenecks (tasks where the resource load is greater than its capacity) and reallocate the resources by changing the direction of the business process.
- Improves cross-departmental teamwork. As it often happens, each department is committed to achieving its own objectives and is not willing to share resources with the rest of the company.
A business process identifies a way in which various departments can work together to achieve organizational goals more efficiently. It clearly defines roles and responsibilities of each process participant. Different departments don’t need to fight over the same resources. Being part of one process, they collaborate in order to achieve better results and increase the output.
A complex IT structure holds back the development of a company
All businesses operate within an environment of change. To stay relevant in an ever-changing market, a company must have an ability to adapt to the current conditions.
Only yesterday, your company was one of few who could guarantee on-time delivery. Today all your competitors provide the same level of service. To beat the competition you must change and improve your business processes. After having analyzed the market, you decide to implement after-sales support to differentiate yourself and make your business stand out.
To change the established operational processes you need the support of the IT department. As a rule, IT structure of the medium and large companies is quiet complex and lacks flexibility. It may turn out that to reprogram the system your IT-specialists will need about six months, and the cost of the system update will be higher than the initial cost of implementation.
Now you face the dilemma whether to postpone the development, as it requires too much money and resources, or give up on your goals and implement only part of your plans. Unfortunately, in this case, your business becomes less efficient and you lose part of the profit.
A BPM system covers the full cycle of interaction with the customer from the first contact to the shipment of goods. The logic of teamwork across departments is contained in one BPM system. Therefore, you can change your business processes without much effort and implement the concept of continuous improvement. At the same time, the integration with other IT systems provides all necessary data for successful process execution. BPM enables your team to move fast because there’s no need to wait until IT translate your business requirements into codes, builds, tests. It ensures alignment of your goals with high customer satisfaction.
As you can see, BPM successfully deals with the three main problems of medium and large businesses. It greatly contributes to creating customer value, because it makes company processes more transparent and manageable, reduces customer’s risks and adjusts processes to real customer’s requirements in no time. BPM greatly impacts personnel efficiency due to its ability to coordinate cross-functional teamwork and measure employee’s productivity. Finally, it offers unlimited possibilities for continuous development, as it requires minimal resources to keep the business up-to-date with constantly changing market conditions.