The Economy and Process Improvement
- September 18, 2008
- 0 Comments
After watching the market gyrate a bit over the last weeks, months… year?… and as a business owner, I get a lot of questions from friends about how the economy is affecting our business, or our customers. I’d be lying if I said there was no effect. Clearly, some of our customers are making tough business decisions, altering forecasts, and making plans to deal with a tougher financial environment.
But I’ve noticed something else. The pace of process innovation and change hasn’t slowed. If anything, it has increased. This is entirely appropriate- process improvement can save a company a lot of money, and typically it is money that goes straight to the bottom line (much like an improvement in pricing performance will go straight to the bottom line).
We see customers focusing on process innovation for the following ends:
- Making a location-specific process global (applying best-of-breed across the enterprise)
- Making a global process location-independent (no longer dependent on a single call-center location)
- Extracting savings from commodity processes
- Measuring performance of BPO (Business Process Outsourcing) contracts against SLAs through BPM.
- Making it possible to utilize BPO companies in combination with internal staff on a single process
- Improving on differentiated processes
- Measuring adherence or increasing adherence to Risk Management processes
We’re seeing less focus on refactoring processes for growth, and more focus on refactoring for savings. What’s the difference? When you are building a process for growth, the concern is that the process that handles 1000 calls a day won’t handle 10,000. That you need a process to help you scale that 10x growth curve, and to help people who are new to the process cope with the process. Often this means taking a process suited for experts and making it accessible to new employees. When you’re refactoring for cost, you’re looking for the defects. In a call-center process that’s eliminating the need for call-backs, dropped calls, calls that finish without conclusion. So you look for root causes and look for preventative measures, quality control on data entry, etc. You look for elimination of non-value-adding steps in the process, and for eliminating bottle necks that cause one area or another to be overstaffed.
Not every company is making these investments, and the companies we work with are already narrowed to a select group that are already pursuing process excellence via BPM – but it feels as though most companies are not panicking and they are focused on these tried-and-true ways to improve their bottom line.
One of the reasons we offer bite-sized packages to customers (and prospective customers) is because there is an element of “you have to see it to believe it” with process improvement. I’ve seen a few of our relationships go from a 1-hour session to a 2 day working session to a 4 week study to a 3 month roll-out. Each piece a palatable risk-reward investment to move down the path toward process improvement, rather than signing up for a boil-the-ocean endeavor.
Now that the day is over, I’m happy to see the market ended up for the day. But regardless of the market ups and downs, we see real value and real need for process improvement all around us. And consistent investment in those activities will yield results in good times and bad.