Many large, global businesses grapple with the complexity of their processes, the scale and expanse of their operations, changes in the market and changes in their customers’ expectations. Over time, business processes supported by antiquated technologies become inefficient. Costs escalate while the customer experience gets worse.
A way out of this challenge is to create a process excellence capability. Such a capability allows for the critical reimagining of business processes to ensure that the organization moves with the times and has the agility to transform itself based on business needs, all the while improving the customer experience. In our experience, when this is done right, companies can expect to gain anywhere between 15 and 25 percent efficiency gains.
Setting up such a process excellence capability requires these key ingredients:
- Leadership must provide systemic support. Building a process excellence capability starts with a well-intentioned and purposeful desire from executive leadership to set up such a capability. Leadership and employees should buy into the need. A clear articulation of the vision and its benefit to the firm will motivate employees and create the case for change. The vision should include a plan for how the organization will support the effort, training, KPIs and an articulation of the impact on all employees. The vision should fit into the firm’s culture and leadership should help reinforce it as part of the organization’s new way of doing business.
- Develop a coordinated roadmap. Setting up a process excellence capability will require a coordinated and well-planned strategy to bring in the right set of people, establish the right processes and deploy the right technology. It’s critical to establish how the capability plans to engage with other functions across the organization and what partnerships will exist within the organization and between functions. Develop a roadmap for how the capability will grow and what it will focus on, and consequently, the resource requirements over the years.
- Leverage technology. Process excellence is synonymous with the use of technology to improve the way we work. Technologies that enable intelligent process automation (IPA) are becoming more and more prevalent and cheaper to adopt. Robotic process automation (RPA), AI and machine learning are getting embedded into analytics and the proliferation of big data is accelerating the development of machine learning models that have commercial applications. A process excellence capability is expected to bring these solutions to the company. One of the biggest transformations that the capability can enable is nudging employees to become more tech savvy and adopt a digital way of working.
- Manage a significant change. Setting up a process excellence capability is not a small exercise. There’s change to be expected at all levels within the organization. Employees must work differently, embracing process excellence frameworks, adopting new tools and technologies like business process management software and RPA, measuring business process outputs and impact and more. There is change for internal partner capabilities because they will play a supporting role in implementation and execution of improvement initiatives. And there is change for the external partners of the organization as they may also be required to enhance or update their processes to help the organization realize the full impact of process excellence.
With so many different stakeholders at all levels, having a change management capability is extremely important to drive the cultural shift that is expected to make process excellence an integral part of the culture. Most process improvements (even the ones that succeed in having a positive impact) will encounter resistance and fall short of potential unless appropriate communication and change management is put in place. This holds true not just for initial setup of the capability, but also for the ongoing engagement and evolution. Every improvement or transformation project undertaken by the process excellence capability team should embed change facilitation as a staple in its approach.
- Sustain a culture of process excellence. Leaders must think differently and promote a culture of process excellence to ensure that the change sticks. Solidifying a new firm culture requires positive reinforcement of the right behaviors, as well as enablement through developing the right frameworks, governance, technology for the job and training and skill development to raise the process excellence quotient. One of the ways to measure if the organization and its employees have embraced process excellence is to conduct periodic health check surveys on business processes. Defining common minimum practices of operations for each service line and measuring them annually will tell you how functions are evolving over time. Defining an operations maturity model, (which takes common minimum practices as an input and layers them on other factors, including customer satisfaction and project management) could provide a strong framework to benchmark business operations and help create improvement and transformation plans.
A process excellence capability, if established right, can deliver transformative results for a company. There isn’t one right way to do it and every firm must find their path to the right capability that makes sense for their business. The core components mentioned above are only a few critical pieces that must come together to create such a capability and deliver that impact.
BLOG POST: Has AI Reached Peak Hype?