Can business process re-engineering add value to my business?

In an increasingly competitive and complex global marketplace, there is a growing need for businesses to define and redefine business processes in order to improve customer service and keeping costs low by eliminating redundancies. As organizations have grown over the years, organically and through mergers, inefficiencies have risen, including the duplication of processes for the same function across lines of businesses.
Business Process Improvement has been identified as a priority for organisations to achieve efficiency through process improvements, identify problem areas and developing long-term
solutions that are flexible and scalable as businesses grow.

Is this your current situation?

• High manual intervention leading to increased costs;
• Complex processes lacking consistency across groups;
• Low productivity;
• Complex and disparate systems;
• Integrating systems for seamless information flow;
• Spiralling cost  Frequently changing compliance regime forcing you to change processes and rules.

But you actually like to

• Process automation with minimal manual intervention for higher productivity
• Flexibility for changing process flows
• Ability for business users to change business rules
• Rule change on the fly with immediate percolation
• Ability to cope with ever-changing compliance regime
• Reduced process variability

Then it is time to consider business process re-engineering. These are the 6 steps to successfully optimise your business processes.

Step 1 - Which processes need optimisation?

Core processes are those that are key to organizational effectiveness, provide value to clients and establish a competitive advantage. The client must care that the process works well and by doing it well, the provider will be able to better position itself .

To know what core business processes require optimization it is important to understand the critical business processes in organisations as well as the process and operational bottlenecks. The first step is to understand the business landscape, identifying key business drivers and the critical business domains. The business do
mains that are best candidates for process initiatives & improvements are being identified through tools such as the Process Prioritization Balanced scorecards.

Step 2 - Define the current state?

Once the core business processes have been identified, the current way of working needs to be captured into a process map. This is called the “as-is” process. The purpose of as-is process map is to gain an understanding of the quality and efficiency of current operations and the existing performance. The benefits of this assessment are to:  

1. Develop a common understanding of the current processes; 
2. Describe the inputs, sequence (work flow) of steps, hand-offs/transfers, approvals, people, technology, and business rules involved in producing outputs;
3. Identify opportunities for improvement;
4. Potentially create a “baseline” of measures (e.g., process time, costs, resources, etc.) that describe current process performance;
5. Identify the gap between client business needs and current performance;
6. Identify parts of the current process that are non-value added from the client perspective.

At the core of the process improvement lies the definition of process boundaries and the construction of the high- and low-level As-Is process flows and process maps that illustrate the business processes, the process
activities and their inter-relationships.

Step 3 - Process analysis

With the current process mapped, the focus now is on determining the baseline and possible improvement opportunities. One can determine the baseline of the as-is process through:

1. Process time analysis – determining how much time each step in the process will take and including time in between steps due to e.g. system requirements;
2. Approvals and handoffs – assess the number and purpose of the approvals and hand-offs;
3. Value-added analysis – assessing the process from the client’s perspective i.e. what are the value added activities for which the client is willing to pay and which directly affect the completion of the product or service provided;
4. Benchmarking – comparing current performance with “peers” e.g. other agency offices, other UN agencies or those organizations considered “best-in-class”. Benchmarking should not be limited to UN and / or development partners but may include private sector organizations

Step 4 - What will the future hold for us? 

The future state is defined by the To-Be Business Processes. Process optimization is achieved through process re-engineering that aligns the business processes with the business drivers and helps achieve improved service levels as well as time, error and cost reductions.

The 7 themes of process innovation (7Rs) can help to trigger out of the box thinking.

Step 5 - Test and communicate 

With the newly designed process comes the most important element of re-engineering i.e. the challenge of implementing the proposed changes. Communicating changes and determining the impact of the changes to the way we work (i.e. managing change) is an integral part of this toolkit. Therefore, one should ensure that for example the process changes are carried forward into the job design and into the overall change implementation.

Step 6 - ROI Measurement

ROI Calculation based on cost, benefits and business value analysis.

Based on LTS experiences with Business Process Re-engineering in a significant number of private- and public sector enterprises we have the following sets of success and fail factors:

Success factors for BPR

• Clear Vision. Develop a clear vision of the goals and objectives of the organization and of its success;
• Senior Management Commitment.  Gain strong commitment from senior management from initial planning through implementation, including identifying an executive sponsor;
• Project Planning.  Conduct sufficient project planning and preparation with defined scope, roles, and tools for each phase;
• Change Management.  Utilize an effective and structured change management process, including developing a strong communication plan;
• Staff Support.  Build staff support and buy-in for the proposed solution;
• Team Commitment.  Gain team member commitment to the project and build a team with the right mix of skills;
• Understand Business Issues.  Develop a clear understanding of business issues (client needs, performance, standardization) and the BPR Solution. 
• “Quickly” Review As-Is.  Document and review high-level “as is” business process with a caution against spending too much time on “exceptions to the rule” and specific cases. 
• Always Have a Goal.  Show progress and demonstrate results by having short, medium and long-term targets;
• Follow-up, follow-up, follow-up …. To make sure that things get done! 

Fail factors for BPR

• Lack of Alignment.  BPR effort is not tied to organization goals, objectives and/or client expectations;
• Lack of Commitment.  Teams cannot ensure success if they lose senior management support or if team members do BPR “on the side” while they are performing day-to-day tasks;
• Lack of Communication.  Not everyone is informed early and the staff concerned by the changes are not engaged throughout the process.  Not everyone is on the same page;
• Improper/Insufficient Planning.  Changing scope or focus will damage integrity and commitment;
• Lack of Understanding of Business Challenges. Business case is not clear or is weak, and thus the changes will not address the real needs of the business;
• Ignore the End Users.  If the solution designed does not take the needs of the end user into account, change will not be successful. End users will resist and cannot or will not implement the new process;
• Team Member Selection.  Without dedicated, strategic thinkers that can champion change, the improvement process will not succeed;
• Lack Enabling Technology.  If decisions are made on the basis of the existing technologies (e.g. the bank cannot provide electronic interface), one will not be able to design the optimal process;
• Easily Overcome by Challenges.  If the team gets bogged down by a specific step in the process and does not keep the bigger picture in mind, the team will loose motivation and may get stuck in a particular phase. 
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"We have been working with LTS Consulting, a professional industrial  engineering provider for the past 2 years on a number of projects. During the course of their engagements they provided us with amongst others, Business Process Re-engineering and Modelling services. They have executed their work with professionalism , demonstrating integrity and skill, delivering quality outcomes."

Jonathan Cawood

Director PWC

LTS Consulting offers superior solutions for critical business needs, to learn how LTS can help your business contact us