Business Process Improvement

Z/Yen views an organisation as a set of risks and rewards. The unique set of risks and rewards defines an organisation and its likely performance. Most organisational risks and rewards at an operational level can be categorised as dealing with people, processes and results. People risk/reward covers a multifarious set of intriguing issues of motivation and commitment, results risk/reward covers some of the most interesting technical issues for eliciting performance-enhancing behaviour. Much neglected until the popularisation of business process re-engineering, business process improvement is often the core around which people risk/reward can be improved while re-enforcing a focus on key results.

Business processes are the sequences of activities which marshal an organisation's resources to deliver value to customers. A number of concepts are related - procedures, policies, value chains, process control, internal customer chains, operations and methods - to name a few. Despite the popularity of business process re-engineering, business process improvement relies on traditional systems analysis. The organisation is examined as a system attempting to meet a set of objectives; the system is deconstructed into sets of inter-linking processes; the value-added and resource-consumption of each process is examined; the linkages among processes, volumes and variability is analysed; the processes are examined to see if they can be eliminated, reduced, streamlined, sped-up or made more flexible; the analysis is simulated and piloted; the final conclusions are implemented. The approach is engineering-biased, looking at the organisation as a machine to be improved. Improved results can often be achieved through more radical transformation or change management to improve softer issues such as commitment. However, business process improvement has an important place in improving organisational performance. Benchmarking frequently holds an important role in calibrating what should be sought and what can be achieved.

For example, in one bank, Z/Yen worked on total business process transformation. The starting point for the bank was examining the cost of over 65 transaction types and over 10 million transactions annually. Z/Yen's people established that many of the bank's `working costs' were dangerously inaccurate, leading to poor decisions. Z/Yen staff initiated, with the bank's help, an extensive benchmarking study across two dozen similar organisations designed to establish front and back office costs for staff, systems, premises and financial charges. The study directed work toward areas with the highest likely return. The benchmarking work on its own identified costs which could be instantly pared, amounting to about 5%. Z/Yen staff then worked at a detailed level, including computer-based simulation modelling of specific transaction volumes and times, to develop with the bank's staff an agreed set of new, documented procedures for over 30 products which led to savings of over 15% in direct cost, but more importantly provided significant flexibility to handle markedly increased volumes.

Organisations cannot afford improper, poorly targeted, unnecessarily variable processes. Z/Yen has, arguably, performed business process improvement in most of its assignments and welcomes the hard-edged reward of business process improvement well-performed.