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Posted: August 11, 2011

To improve efficiency, try the “outside-in” approach

Look at core business processes from the customers' perspective

Anthony Nelson

As we start to climb out of a tough economy, executives are challenged to rekindle growth without immediately adding to payroll. A common move is to grasp for technology solutions such as customer relationship management software in the hopes that these will provide the needed improvements in operational efficiency to support market growth. Technology is, however, just an enabler. The first step should be to take your customers' external viewpoint and ask how you would want things to work if you were the customer.

This "outside-in approach" may seem simplistic, but it is a critical first step to understanding how your business processes drive bottom-line results. Business Process Management, as the broader discipline is called, can set you on the path to lower costs and continuous improvements in operational efficiency.

Most business executives have heard of Business Process Management, but when asked how it applies to their businesses, they struggle to define its practical value. Business Process Management is a process-centric approach to maximizing a firm's productivity by minimizing operational inefficiencies.

WHY NOW?

Any of the forces currently driving market change (increased competition, tighter capital markets, technology, globalization, commoditization) can be used to highlight the need for improving business process efficiency. Although there may be many ways to incrementally tweak processes to gain efficiency, improving core operations with a customer-centric view is critical to achieving lasting value.

Investing in Business Process Management makes sense today because it enables companies to ramp up capacity without increasing fixed costs. How? By providing a structured, scalable and replicable methodology for improving core business processes.

In addition, Business Process Management, through its focus on individual business processes, enables process visibility - the ability to clearly see where a process begins and where it ends.

We have all heard the maxim that you cannot improve what you cannot measure. It is equally true that you cannot measure what you cannot see. Process visibility enables the measurement of end-to-end process performance, making it possible for executives to make business decisions based on operational performance data instead of gut instinct or, simply, a best guess.

IMPLEMENTING BUSINESS PROCESS MANAGEMENT:

Identify your most important business processes. Not sure? Ask your customers.
Understand these key processes and how they function.
Identify how they can be improved.
Develop an action plan to implement the improvements and to measure the results. Continue refining your processes based on results data. And don't forget to include customers in the review process!

FINAL THOUGHTS:

Before committing valuable resources to a technology solution that promises to improve your bottom line, take the time to review how your business operates from your customers' perspective. Business Process Management helps you understand how your business processes impact your bottom line. Using this understanding to develop a plan to improve efficiency from the outside-in is a more effective and less expensive means to improving productivity and profitability.
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Anthony Nelson is a senior manager with the Denver office of North Highland-a global management consulting firm. Nelson has more than 20 years of experience in operations strategy, business process management, business process design and improvement, and marketing operations. He has worked with a variety of top clients in key industries such as financial services, high-technology and manufacturing.

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