IT is enabler, the crux is BUSINESS PROCESS
Business process is always considered as next to Information technology in most of the companies. But truly speaking we cannot leverage IT if business process is not well defined. Further, Business process once defined is not the end of the game, it has to be revisited periodically because once defined it may be engineered keeping the current business dynamics and customers in mind.
Any business process which is not adding figures to organisation’s bottom line or top line, consider it to be a redundant. Business Process engineering, defining or re-engineering all make the same sense if the business is into delivering service or manufacturing. Business Process Management is viewed as a systematic approach to improve an organization's business processes, be it on manufacturing floor, in supply chain or in the product development area. Business Process Management also enable employees closest to the business -- the plant floor manager or procurement specialist.
Small and medium industry follow manual process which are disjointed. By eliminating manual processes, business organizations not only reduce costs but also optimize their product development departments for more successful product introductions, more closely link supply to demand, and improve on-time delivery and quality of products or services.
Generally, we find two types of IT projects
1 Business users initiate the IT solution – The risk in this type of project is the users come with a predefined solution in mind and wants exactly what is being done in the legacy. The legacy system may be right but may not be the best, as time keep changing everything! If we try to map the current system on to an IT platform, it is like automating what is being done manually. With this approach, we do not get any value addition.
2 IT initiating the IT solution – The risk in such projects is the solution may not be close to ground reality. Unless process engineers apply their mind and map the process, the IT solution defined will not be of any use and the IT application/solution will be redundant and moved to corner.
What is important in such scenario is, to treat IT only as a leveraging tool. The process that is being defined to run the business is important. The process will give the measurable points on benefit realization. Now the question is how to balance the above two approaches?
Involve the users’ community right from the initiation by conducting workshop and note down the expectations and suggestions.
Define the TO BE process and publish the derived results.
Again, conduct the workshop, take feedback/suggestions and finalize the process.
Set the business benefit realizations points and target as a goal of the project.
Once design and realization phase is complete, training and hand-holding is very important to increase the comfort level of users. Handle the change management in terms of changes with process, people, and system.
Do not start measuring the business benefits immediate after go live as stabilization need its own time.
Once the new system is stabilized, measure the benefits with intended results and continually follow: Plan, Deploy, Check, improve, measure.
What are different types of process exist?
If we see any industry, the generic process followed is……
1)Procure to Pay 2) Order to Cash 3) Order generation to customer retention 4) Hire to Retire 5) Record to report 6) Financial closure to Balance sheet generation and for any manufacturing industry (continues process or discrete) 7) Production plan to Inventory management is applicable.
How do you measure the process efficiency?
While there is every room for improvement, applying a quality tools like “Six Sigma” or Value Stream Mapping (VSM) would give the insights on the process efficiency. Lean Manufacturing or Lean thinking is another way of improving the process thus removing the non-value addition steps in a process.
Where are the areas of process improvements which can add value to the business figures?
Portfolio Management - Product selection and first to launch or how to present a differentiated product is the leading process to improve on the business figures to add top line.
Customer relationship and retention is another area which will help to boost your sales. In this process understand the need of the customer and improve the velocity in meeting the requirement. Any value added service will improve your customer base like, banks coming to your door step to open an account or conducting learning session on trading for DEMAT account holders.
If it is a manufacturing industry, reducing the WIP and product cycle time or improving the operational efficiency would be beneficial to a great extent. Similarly for a service industry, solving the customer issues, addressing the root cause of the issue to avoid the similar issue in future is what a process to be set.
Why a process has to be redefined or re-engineered.
Any process which has been set up has a life cycle for not more than a year especially when the customer needs and technology trends are changing regularly.
Does a process speak about automation?
Automation is one buzz word that usually misguide the management. In a process where there is no decision-making process and routine in nature can be automated. If a process requires a decision making, a decision-making tree would support to specify the algorithm. Automation also significantly improve the velocity, productivity and eliminate the paper resulting in improving the compliance for a regulated industry.
“The more flexible process you have, the closer you are to your customer needs”