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Russell Mickler, Principal Consultant, has over 17 years of professional experience leading and managing IT organizations.
How Can I Re-engineer a Business Process?
Written on September 16, 2010
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Business Process Analysis (BPA) is the process of taking a close look at a business problem and considering how technology could reduce friction.
Friction is cost – dollars or time associated with labor, transportation, waiting times, approvals, warehousing, distribution, downtime, error-rate, or corrective service. And these are just examples. A business process with a lot of friction is slow and expensive. When thinking about tech strategically, we attempt to use technology solutions to reduce costs by making each step faster, more accurate, and more reliable. We get rid of the friction!
Generally, there are five steps to BPA:
1. Map out the process. Pretty simple: pen, paper, flowchart. More sophisticated tools could be Functional Specifications or computer-aided diagrams. This doesn’t have to be sophisticated. Just document your investigation.
2. Identify the problem. This is where we might try to identify problems with time, error-rate, labor, speed, or intermediaries. What’s the friction? Ask yourself, “why is it in this process?”
3. Consider potential solutions and how each solution could provide value. If technology could be applied to the problem, how could it reduce friction? What would that value be – dollars, time, accuracy? Less labor cost? Less complexity? Ease of use for your client?
4. What technologies could be used to implement the solution? Now, this is where your technology consultant or IT personnel could come in. Precisely what technologies could be acquired or utilized to reduce or eliminate friction? Managers may need some help here in figuring out what the next step might be.
5. What changes in organizational processes, policies, or behaviors would be required? Finally, after thinking about what technologies might be required, now think about the wider organization. What kind of policies, behaviors, practices, or misconceptions with your team will have to be resolved before you can implement?
BPA is incremental. We apply BPA in phased steps as to first measure where we started and what we changed. Therefore, with each incremental change to the business process, we should be able to measure a material difference (faster processing, less cost, happier customers, lower expenses, etc.), and we should see a curve trending-upwards for improving the process. That’s a measured, managed, and disciplined approach to the problem of process improvement.
Re-engineering is a similar idea to BPA but more radical. Re-engineering presumes that technology can dramatically re-shape the business process without elaborate study. Think about just doing steps 2 and 4. Bang! An overnight change using tech to yield immediate results – the friction is gone! The process is streamlined. Now, the benefits may be very rewarding but re-engineering could also be risky: assumptions may guide our decisions about what tech to implement, the capabilities of our staff to adapt to it, and the root of the actual problem. Tech is expensive, and there’s no such thing as a magic pill. Example: the core problem may be our management style, or a problem with our vendor’s invoices, and not our tech at all! Careful: re-engineering may lead you down a path where you might make some costly mistakes. An incremental approach is a less risky, more time-intensive approach that tries to study business problems and gradually improve upon them.
Either way, BPA and re-engineering steps are used to improve business processes, reduce friction, and provide real value back to businesses. Now that’s how IT is used strategically!
R