Summary
- Staying competitive in a volatile, uncertain, complex and ambiguous (VUCA) business environment, requires companies to be adaptive and responsive to lower risks for the business.
- One tactic is to continuously harmonize business processes. Process harmonization is about designing and implementing business process standards to achieve targeted business benefits, while ensuring a harmonious acceptance of the new processes by various stakeholders.
- The value is straightforward: Increased transparency and consistency lead to better integration, elimination of waste, and a cost reduction of up to 25%. Productivity is being increased by up to 50%, and cycle time reduced by 30%.
The Big Idea
Business Process Management is not new. Why should I bother?
To evolve alongside a dynamic market, companies need to respond faster to changing market needs. They must ensure smooth organisational transitions in which every element of every process can adapt to the necessary adjustments. However, many companies suffer from a lack of ability to integrate processes across the organization.
This leads to a number of pains that Management Teams need to solve:
- Organizational inertia: The resistance or difficulty to adapt to an evolving market, where changes are induced by customers and competitors. This change requires a swift response. However, these responses are often slow or insufficient when the business operating system is governed by bureaucracy.
- Missing opportunities to defend or gain market share: Capturing new business opportunities requires agility and speed to avoid other organizations moving in. While many companies react with setting up task forces and a lot of good intentions, they often get stuck in execution as the required alignment of processes is not available or the required new processes are missing at all.
- Delayed product launches and campaigns: The same is true for product launches or marketing campaigns that are not being delivered on time, due to process gaps or long process execution times.
- Excess cost and longer cycle times: Every process that doesn’t deliver value to the customer is waste. That is intuitive but most companies struggle to make processes and their efficiency visible. Process waste costs money through duplication of work, poor decision making and wasted time through lack of clarity.
Blueprint & Roadmap
“Let’s simplify to gain speed”: Becoming more adaptable through process harmonization.
The goal of process harmonisation is to achieve targeted business benefits that arise from standardisation. For example, a CIO who is dedicated to automating processes in his systems landscape isn’t able to do so until processes have been harmonized in order to facilitate that change.
Process harmonisation is a flexible practice that can be tailored toward the needs of your organisation, as opposed to the strictness of standardisation, which may be a more restrictive process than your business requires.
Process harmonisation should be performed with a broader focus than just achieving cost reduction, efficiency and reduced risks. It is also beneficial to accelerate the business and to capture market opportunities.
Creating Impact
Implementing process harmonisation leads to direct and quantifiable economic, societal, and environmental benefits:
Economic value
- Improved customer service: Process harmonisation delivers a more uniform customer experience. Elimination of duplications and unnecessary process variants (which can also be a source of errors) enables much more consistent delivery of value to customers. Increased customer satisfaction and retention leads to better sales performance.
- Increased efficiency: Process harmonisation leads to improved efficiency, by streamlining processes to operate with similar output at less cost.
- Reduced operational cost: Consolidating processes, structures and applications that are performing similar tasks is an essential element of reducing operational costs, and it’s a useful tool in every COO’s toolkit. The transparency that is gained from process harmonisation helps to get rid of duplicate processes and applications that are performing similar tasks. With the successful implementation of process harmonisation, it is possible to reduce up to 25% in costs and increase productivity by 50%, and more efficient process execution can lead to as much as 30% cycle time reduction.
- More effective post-merger integration: Process harmonisation facilitates a smooth and rapid integration of new acquisitions, through an effective on-boarding with clean and understandable processes to eliminate wasted time and resources.
Societal value
Higher motivation and morale: Process harmonisation’s societal benefits stem chiefly from the notion that they allow employees to truly “live” the processes with which they’re occupied, as opposed to spending time documenting processes, that are not an accurate reflection of reality – cutting down on wasted time has tangible benefits when it comes to morale and the working environment.
Environmental value
Less waste from production processes: The environmental value of process harmonisation is a result of an overall efficiency increase. Production processes that occupy space, use natural resources, or pollute will reduce their environmental impact, allowing the organisation to take an important step with regard to environmental responsibility.
Reference: J. Fernandez, J. Bhat, Addressing the complexities of global process harmonization. In: Handbook of Research on Complex Dynamic Process Management: Techniques for Adaptability in Turbulent Environments, IGI Global, 2010, pp. 368–385.
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