Friday, October 23, 2015

Do Strong Processes Deliver Better Business Results

Strong business processes have better chance to deliver a better result.

Business processes are a group of business activities undertaken by an organization in pursuit of a common goal.  A business process usually depends on several business functions for support and focuses on "how" the business is run.  Business processes underpin capability, with effective and efficient processes, you state in delivering better organizational results. This is a foundation for Operational Excellence initiatives.

“5W + 1H” Strategy Navigation: Normally, an organization does not start with business processes--rather, it starts with vision, goals, and objectives--then the capabilities required to meet those goals and objectives. Only when consensus is reached on the needed capabilities, is it time to fashion processes for executing those capabilities. So, you have the traditional “5W+1H” questionnaires:
WHO (The organization, or future organization),
WHAT (Capabilities needed),
WHEN (The expected execution date),
HOW (The business Processes),
WHERE (The organizational structure by which the business processes are organized into manageable elements), and, of course
WHY (What the customer is willing to buy)

Business capabilities are an abstraction of business outcomes. Having the alignment of business capabilities is key, then business processes. Using capabilities allows you to focus on "what" the business needs and not "how" the business run. Capabilities are implemented by People, Process, Information, and Technology. There is a logical flow to the thought processes that evolve (or preferably engineer) capability requirements into processes:
-Situation - requirements, expectations, competitors, capabilities, trends.
-Strategy - purpose, value proposition, business model, implementation plan.
-Deployment - business systems, business processes, tasks, knowledge, review.
-Performance - customer experience, effectiveness, efficiency, productivity, compliance.
-Outcomes - customer, business partner and employee loyalty, financial health, shareholder delight.

Mapping strategy-capability-process to close strategy and implementation: Important business processes reviewed regularly, refined regularly and is transparent across the business should help bring into alignment most of the key parts of the business. However, many organizations do not have alignment between strategic intentions and their ability to execute those intentions. Sales, Marketing, Operations, Customer Service, Purchasing, Warehouse all come into play. Reporting can be as simple as a range of visual tools that highlight inventory days, customer satisfaction, supplier lead times, sales etc.

Strong business processes have better chance to deliver a better result. Therefore, process management is not a one-time project, but a tough journey that the senior executives should understand and navigate through because processes underpin business capabilities, and capability underpin strategy execution. Therefore, it’s worth the effort to gain top-down buy-in and bottom-up adoption.


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