EE615 Blog for Brett Elrod

January 13, 2011

Business Process is, simply, the logical ordering of the collection of activities required to produce a product or service. Not all processes are good but many times they happen naturally with little or no documentation. This leaves a lot of room for poor processes to be improved upon. More times than not a companys processes need serious thought can often be modified to yield various results that should be more efficient, profitable, and on-time. As we engineer and/or re-engineer our approach to business operations we can achieve real and measurable improvements by focusing on the specific deliverables important to stakeholder. A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action (1).

Business process can be categorized as primary and support processes. Some processes result in a product or service that is received by an organization’s external customer. We call these primary processes. Other processes produce products that are invisible to the external customer but essential to the effective management of the business. We call these support processes (2). A mistake often made by process owners is overlooking the support processes. Experienced process owners can differentiate the relationships between primary and support processes important to success because they know how, for example, the refinement of the back-end support processes can upset customers and other stakeholders. How often have you heard that the customer is upset over a billing issue? In this case, where competition is very tight and all other things are equal, a poor billing (support) process can be all it takes for your customer to buy from your competitor. Therefore, as a process owner, we cannot afford to overlook any process that might improve operations. Sure, support process improvements are not as glamorous as primary process improvement but in many cases support process improvement can have significant impact.

Business Process should be viewed as a business tool even though many view it as a concept. Obviously, there are individuals with exceptional business process talent that can operate at the conceptual level but for the rest of us we need to become proficient with tools like lean BPM and Kaizen.

BPM (Business Process Management) is a well known method of process improvement in todays organizations. With BPM it is essential to measure the ROI by developing a cash flow chart for ‘hard’ benefits, costs, and corresponding criteria” (3). BPM is focused on the business alignment with customer needs. Like Kaizen, this is a continuous improvement methodology. There are many applications available to help process owners utilize BPM methods.

Kaizen is a Japanese tool for continuous process improvement. A literal translation of kaizen could be to become good through change. At its most basic, the concept of kaizen is one of restructuring and organizing every aspect of a system to ensure it remains at peak efficiency (4). Another key concept of Kaizen is that of involving every employee because every employee in the process as all employees are encouraged to submit business improvement suggestions on a regular basis. Without cultural buyoff at the Executive level Kaizen can be difficult to implement.

Whatever the case may be businesses need to perform process improvements with specific goals in mind. A failure to continually improve can mean disaster to a business. There are many paths to achieve business goals and process improvements but larger companies that fail to manage with BPM, Kaizen, etc. run the risk of failing as a company due to a lack of process control. Embracing process improvement and investing in training, techniques, and software tools should be seriously considered to safeguard against changing market factors. Knowing how to work through various business impact scenarios and understanding the relationship between primary and secondary processes will help process owners be more successful and yield measurable results, like saving money, meeting customer timelines, and just about every other facet of efficiency.

References:
1. Thomas Davenport (1993). Process Innovation: Reengineering work through information technology. Harvard Business School Press, Boston
2. Rummler & Brache (1995). Improving Performance: How to manage the white space on the organizational chart. Jossey-Bass, San Francisco
3. http://www.appian.com/campaigns/google/gartnercritical.jsp?utm_ campaign=Google_Gartner_Critical&utm_source=PPC&_kk=BPM&_kt=67475926-4ea6-49b5-8554-2085916bfa67&gclid=CPblkLrBsKYCFUHr7QodzHZSZg 4. http://www.wisegeek.com/what-is-kaizen.htm

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2 Responses to “EE615 Blog for Brett Elrod”

  1. Dustin Cornelius said

    I thought the blog post was insightful and makes sense.

  2. denise jeffries said

    I enjoyed the discussion about business needing to have specific goals in mind. There is always alot that can be improved, but tying areas to improve to business goals at least has the business spending its money on what is important to them.

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