What is Your Business Process Value Strategy?

IBM has a formal strategy to drive customer strategic value with business process automation. The external high-level objective is to help customers see the advantage of automating their processes in order to drive more value to their customers and profit to the bottom line. Of course the internal objective is to use IBM resources to implement this objective.

Do you need to automate to drive strategic
value with your business processes?

Many businesses find that they are unprepared for an automated integrated business system that relies upon the use of business rules that will operate off of business data and either directly or indirectly make decisions that determine how the business operates and how the customer is served.

This proved to be a serious problem for companies implementing Y2K initiatives, which often included migrating to an upper tier business system that imposed a level of business rule discipline that many businesses were ill prepared to handle. Consequently many system modules were not implemented due to the overhead that was required to manage the rule set that managed the system. This was a new way of managing the business, which many senior executives and owners were unable to make a quick adjustment and adopt the new paradigm. As a result they replaced the supposedly aging system that may have had years of life remaining but had uncertain date concerns that created a premature obsolescence and the older system was replaced by a far more expensive system that far exceeded the needs of the organization.

The moral to the story is that in a rush to solve one problem many others were created at great cost because the foundation – solid process, business rules, and organization discipline – was not in place. You do not turn a Ferrari over to a new driver without an evaluation of aptitude and maturity along with sufficient training and experience.

What is a business process value strategy?

Whether you run your business totally manual or with some level of automation or with fully integrated automation you need to have defined (and documented) processes that explain the what, when, why, and how of each process, paper move, customer contact, etc. Each process or groups of process should have some measurement associated with it. This may be a metric or an entry in the financials that allow you to associate a cost or value to that process or processes.

A process value strategy would be to target business processes that represent a significant opportunity to improve a metric that would, for example:

  1. Reduce the order-to-delivery time for a customer, or
  2. Improve the quality of incoming material, reducing scrap or returned material and improve the throughput of manufacturing processes, or
  3. Reducing the number of errors on incoming orders so that they can be entered same day 99% of the time versus only 60% of the time, or
  4. Change the approval time for an engineering change order from days to hours, or
  5. Change the reporting of financial results from the 10th working day of the month to the 5th working day of the month.

In each of these examples the strategic value of the process would be increased. To accomplish these objectives business rules would need to be tightened, possibly new ones defined and new process relationships established within and across department lines. With successful execution and implementation the increased value to the business will be experienced and you will reach your strategic value process objective.

Too many businesses manage the “moment” while others manage their processes. Can both be successful and profitable? Possibly but I would wager that the process grounded operation will consistently out perform the other and benefit from a stronger foundation of how they operate and what action to take when faced with uncertain or unexpected business conditions. Which business would you want to be with?

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