Business Process Improvement projects generally use Lean/Six-Sigma techniques and some common sense to improve business processes. Project teams document the current state of business processes (As-Is mapping). Then they analyse Business problems and document the future state of operations (To-be mapping). Generally, it goes well up to documentation completion. The rubber hits the road when the project team starts planning for changes in business. They face challenges in every step of change (starting from agreement on new processes to providing training to end-users).
After all of this hard work, business receives limited benefit!
But why? Business processes have now been improved. Business should have measurable improvement.
So, what is wrong here?
There are two main reasons:
1. Ironically, project teams that take pride to break silos works within silo: Business Process Improvement projects takes pride of breaking business process silos. They look at end-to-end business processes (Value chains). Then, they try to make improvements in value chains.
However, teams do not realise that they are operating within the ‘process’ silo.
Just improvement in process silo will not make a big difference in bottom-line.Tweet
Why? I will try to explain with the help of an example:
Let’s assume; we want to improve the capability of the business to generate weekly invoices rather than monthly. To improve this capability, we have to consider factors like:
- Current organisational structure of invoice generation teams (e.g. Centralized, Distributed)
- Skill-set of team
- Sources of invoice information received by the team(s)
- Reporting requirements
- Capability of the software system to handle weekly invoicing
- End-to-end business process (Invoice generation value chain)
Note that to improve business capability, improvement in business process is just one of the action points.
Now, let us zoom out a little bit and consider the following questions:
- How project team would know which value chains should be improved?
- Who should decide if it is more beneficial for the business to outsource business process rather than trying to improve it?
- How will the project team ensure that there is alignment between Business Process Improvement initiative and Business Strategy?
I suggest business should look at a big picture (via Singh’s Business Reference Model). Business must follow the top-down approach by aligning all tiers outlined in Reference model.
2. Root cause of the problem is not addressed: Process improvement projects generally have a narrow scope. They look for inconsistencies in the process (defects – 6 Sigma term). They identify and try to eliminate different types of waste. However, the root cause of inconsistencies and waste is often not fixed. Merely, proposing new processes do not resolve underlying problems. For example, the root cause of different types of waste can be:
- Indecisiveness of management
- Lack of communication at management level
- Lack of reusability
Often the root cause of problems (like above) stays outside scope of process improvement projects.
So, what should the business do?
I suggest, the business should take the 3-prong approach.
The 3-prong approach:
- Develop a clear understanding of Business strategy and map initiatives that support delivery of strategy (Top-down approach)
- Develop strong leadership to drive change
- Develop a culture of continuous improvement within the business
What are your thoughts and experience in process improvement projects? I am sure you have some new insights that you would like to share. I will look forward to your comments!
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