Adopting a Business Process Approach to Management - 6 Critical Steps

1. Determine Who Are Your Customers andcustomer acquisition (identify prospect, qualify
Stakeholders, and What Benefits Your Organisationprospect and establish contract) and order fulfilment
Offers Them(receive order, produce and assemble order, and ship
In our previous article we emphasised the customerorder) sub-processes.
stakeholder focus of the business process approach4. Select Appropriate Metrics Based on Critical
to management. The first step is therefore clearlySuccess Factors for the Identified Processes and
determining who those customers and stakeholdersOverall Strategy
are. Who buys or uses your product or serviceIt is well known that measurements and rewards
offering? Who makes the buying decision? Whatdrive behaviour. To ensure proper balance between
exactly are they buying in terms of benefits? Whofocus on past/current performance, and the need to
else is affected by your activities and what are theirbuild capabilities that drive future success, we need
expectations?metrics that track results, processes, organisational
A small pharmaceutical manufacturer of multivitamins,capability and the environment.
antibiotics, syrups and OTC medicines for children,Result measures are generally lagging in that they
located in a large African city, was trying to answertrack past performance. By the time the result is
these questions for their own organisation. Theymeasured, it is too late to do anything about it.
came up with the following.Customer/StakeholderProcess measures are generally leading and
and Benefits Soughtprescriptive, since they predict future performance.
Wholesalers: Availability, reliable delivery, favourableActing on factors that affect these measures will
payment terms, margins, marketing supportimpact on future results. Care must be taken that
Retailers: Availability, quality, clear product information,metrics which drive the desired behaviour and
pricecustomer valued outcomes are selected.
Suppliers: Guaranteed business, prompt paymentHaving determined the critical factors that drive
Hospitals and HMOs: Quality, pricedelivery of customer and stakeholder metrics or
Doctors: Quality, efficacy, product informationindicators of performance must be chosen, with
Consumers: Price, efficacy, pleasant tastetargets for each measure, and cascaded down to
Shareholders/bankers: ROI, growthindividual sub processes. A line of sight must exist
Regulatory authority: Safety, quality, efficacybetween overall organisational measures and the
2.Determine the Value Chains that Deliver thesedetailed measures at process and activity level.Our
Benefitspharmaceutical company chose to measure four
The information obtained from the above step shouldcategories. At the top level, the chosen metrics
be formed into benefit clusters. Next, trace thosewere:
benefits back from your products and servicesFinancial - ROI, earnings from new products
through to the inputs. The identified paths form yourCustomer/ consumer: Market share growth, price vs
value chains or end to end core business processes.competition, value perception, on time delivery
Our pharmaceutical company took this step andInternal: Process improvement index, employee
concluded they had one major value chain consistingsatisfaction index, environmental compliance index
of two major processes - the new pharmaceuticalsLearning/growth: Number of patents, applied learning
development process and the sales and productionindex
process.5. Appoint Process Owners for Each Core Process
All the benefits to the customers and otherA major flaw of the functional orientation is that
stakeholders are derivable from their product range,there is no one within the organisation that has a
their distribution and market support and theircomplete view of the process as experienced by the
information dissemination.customers and stakeholders. The appointment of
3. Decompose into Processes and Determine theprocess owners overcomes this flaw.
Process BoundariesThe job of process owner is to manage the
The previous step yields an end-to-end view of theprocesses in the critical areas of improvement,
organisational value chains. We now need toboundary management, metrics, collaboration and
determine the core processes and sub-processesadvocacy. The process owner coordinates the
that make up these value chains, and the supportfunctions and activities at all levels of the process,
processes that enable them. The determination ofand has the authority and ability to makes changes
process boundaries should combine top-down andto the process. He is responsible and accountable for
down-up approaches applied iteratively.Listing out theits outcome.
major processes in the value chain as we did in the6. Begin a Never Ending Cycle of Business Process
previous step, is top-down. We might then take eachImprovement
major process identified and using the followingWith your core processes defined and documented,
procedure suggested by Patrick and McDermott,appropriate metrics selected and process owner
break them down into sub processes.appointed, the next step is to begin an improvement
Brainstorm the milestones or necessary results of thecycle.
processUsing process diagrams, value stream maps and
Link the milestones together, such that the output ofmetrics, determine the current capabilities of your
one is the input of the nextcore processes. Identify and quantify areas of
Note steps within one-to-one, one-to-many andgreatest opportunity using information from customer
many-to-one relationships from the above. Assemblesurveys, comparison of your process performance
all one-to-one steps to form the individualwith a similar ideal process, etc.
sub-processes within the major process.Continuous business process improvement is the
In the case of the pharmaceutical for example, wesubject of our next article. Be sure to watch out for
might find, after going through this sequence that theit.
sales and production process decomposes into the