Use BPM to Drive Out Costs
From a Gartner Article...
Depending on which economist you want to believe, this recession will last a few quarters or perhaps longer. The typical reaction of most companies is to cut costs. A CFO looks at the earning targets for the upcoming quarter, projects lower revenues, and then figures out how much cost cutting is needed to make the original earnings target...
The 'ax man' approach is likely to leave gaping holes in your business processes. So, how can you fight the ills of the economy without killing your business? Gartner believes that one of the methods to do this is to look to BPM. BPM provides the management disciplines and the tools to surgically target problem processes and put them on the path to recovery. Importantly, this is done in the context of the organization as a whole.
My Thoughts...
In one of my previous blogs, I pointed out that your 'quote to cash' process is likely to be your highest value process. And that your other processes exist to allow your 'quote to cash' process to function properly...
So, as Gartner points out, the 'ax man' approach could disable one of these supporting processes or the 'quote to cash' process itself. Neither outcome is desirable.
Cutting costs within processes involves removing non-value added activities and finding better ways to perform activities. Business process management provides the management disciplines to surgically target problem processes and put them on the path to recovery. You will see that making these cuts would make sense whether the economy is good or bad.
It just seems clear to me that process improvement is the best place to look to cut costs rather than just arbitrarily 'laying off' employees. Let me know what you think...
Your Processes can be your competitive advantage...
Good points!
Makes perfect sense to me -- especially since you are talking BPM and not BPMS (always a point of confusion to most organizations, and how techies use BPMS to further confuse them).
There are many articles and wisdom out there that talk about organizations cutting heads, almost without regard to their a) core competencies or b) key processes. Much of the rationale for headcount reduction is based on getting rid of the highest paid -- who are often the most talented, knowledgeable, and valuable to the organization.
To me, without looking at the "organization as a whole" and the processes (as you rightly point out), organizations could be crippling themselves for years to come -- IF they can survive.
I tell clients to look for Waste, first; then, non-value added activities. Also important is to consider the Value-Added activities, which can help to increase sales, revenue, and reduce costs -- or combining activities.
Referenced your article on my website.
In my experience, in a nutshell the best approach to Business Process Management is to:
1) look at the inputs to a process (that are external to a company, or organization)
2) look at the corresponding outputs to the process.
3) Define quality metrics be they % success of the process (say sales), (or) the time the process took (efficiency) or drivers that should affect the process (credit)
4) Define an architecture and a process from end-to-end that requires no human touch points (customer initiated.......)
5) Realize the inevitable, that aspects of 4) are not possible, that customer touchpoints (at times) are beneficial, that there are parts of the process that require human judgement......
6) Install the metrics to measure the current process
7) Transform to the alternate automated process keeping a close eye on the metrics to measure the benefits and continuously improve.
Bob@Tapscott.com