Johannesburg, 23 Sep 2009
In the current economic climate, there is much focus on business process management (BPM) and how and why it is needed to improve and transform business.
However, to merely use BPM in any form as a cost- or risk-reduction strategy is to squander the real competitive advantages that it can bring. There is no doubt that a well-managed process-centric company is more agile, more able to keep costs under control and better equipped to understand the value of any investment it might make. But, is it in a better position to deliver real growth? No. In the final analysis, it is revenue growth that will deliver the ultimate long-term returns that investors are seeking, and process-centricity plays just a small part in that.
What must also be factored in is something that too many companies today seem to have forgotten - the concept of customer-centricity.
When bringing customer-centricity together with process-centricity, it becomes apparent that it is this combination that equals increased revenue. Studying successful organisations brings up another two factors: those of culture and the organisation itself.
If we accept that being process-centric enables greater agility and better financial control, then we can see the value in making use of techniques in this area. But it is revenue growth that is a key to long-term financial success. That means a focus on customer-centricity, which can be defined as the establishment of an intimate relationship with clients and understanding of their needs.
The equation for long-term success looks something like this:
Customer knowledge + customer-centric processes + a culture of service + customer oriented organisation = superior growth in profitable revenue growth
When looked at in this way, a critical fact becomes evident: essential business processes are not to be delegated or outsourced.
Outsourcing of non-core activity has a valuable part to play in serving customers and investors efficiently; we all want to know that we are getting our products and services at the best possible price. But, as customers, we do not expect the responsibility for serving us to be outsourced.
But, there is the notion of outsourcing using the label BPO (business process outsourcing). Does this mean directors are really outsourcing processes? A quick scan through the financial and business press will reveal many deals being done, but it also appears that in reality, they are just outsourcing departments or functions based on the traditional structure. Indeed, for many organisations to outsource business processes, or even processes, is probably impossible. Why? Because at this stage, so few organisations have actually mapped their business processes, so if they don't know what or where they are in the organisation, then how can they be in a position to outsource them?
If the equation presented is valid, it goes to the very heart of organisational success. By implication, that means it has to be managed by the CEO and the board of directors.
Process management can of course be delegated within an organisation. Indeed, in some ways, it is far better executed within the organisation, and the further down the chain of command, the better people are able to address the inefficiencies that may be present. But, again, we expect the company's management to take the ultimate responsibility for ensuring that all parts of the business operate as single co-ordinated unit.
Process management that uses the customer as the key focus and customer related metrics as the key ones has a tendency to simplify organisations, leading to lower costs and greater service. The result is customer benefit, meaning we are more likely to continue to do business in the future.
These are all examples of what can be achieved if the responsibility for BPM begins in the boardroom and is married to successful customer outcomes.
* Mark McGregor speaks and coaches all over the world. In September, he will present two unique programmes in Johannesburg. The programmes, sponsored by Global 360, Microsoft and Casewise, will address the “Business of Process Management” and “The People Side of Change”. In South Africa, Mark has worked with many organisations, including Eskom, Absa, MTN, Telkom and MultiChoice. Details are available at http://www.global360.com/markmcgregor.
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