Business Process Improvement

Definition: Business Process Improvement (BPI) is a systematic approach to help any organization make significant changes in the way it does business.

Defining what the organization's strategic goals and purposes are (Who are we, what do we do, and why do we do it?)

Determining who the organization's customers (or stakeholders) are (Who do we serve?)

Aligning the business processes to meet the customer's requirements (How do we do it better?)

The goal of BPI is a radical change in the performance of an organization, rather than a series of incremental changes

BPI is organized around outcomes, not the specific tasks required to reach the outcome. Organizations using BPI seek to eliminate the emphasis on routine that may not work well in an ever-changing political, business or legal climate.

Focus on the customer:
Many organizations fail to do this. Routine sets in. Resources within the organization start to be allocated based on political needs rather than business or policy needs. Meanwhile, customer needs may have changed to the point that the organization may no longer effectively serve the customer and faces economic pressure or political pressure.

Principles of BPI

Process alignment to Business Goals: An organization's goal should be the key driver for any business process. All process, people and resources should be aligned to business goals. This would facilitate the process changes in line with the organizations goal

Process first: Business process improvement process might result in thecnological upgradation, automation or staff reduction this not necessariy means BPI always lead to automation / IT budgeting. BPI focuses on incorporating cost effective and goal oriented process.

Customer focus: Changing customer needs emphasis the importance of business process being aligned to higher customer satisfication. The advent of new technology, increaing number boundary less organization, Free trade agreements poses greater challenge of serving different customers with varied preferences across globe

Benchmark regularly: An organization using BPI must continually and frequently determine if the costs of performing a business process outweigh the benefits. Therefore this organization must establish benchmarks, or a set of standards, against which the process must be measured. The benchmarks themselves must be quantifiable, attainable, and realistic.

Establish who owns a business process: Specific people, the process owners, must be placed in charge of a business process, be responsible for the performance and changes in the process, and be responsible for the success or failure of a process. Without personal responsibility, the process may fail.

Build control points into a process: There should be frequent points where the process owners and customers/stakeholders decide if the process is meeting current benchmarks and what they should do with the process. This may include halting the process if it fails to meet realistic benchmarks.

Standardize similar processes: Many organizations rely on an ad hoc approach to business processes. They make them up as they go along and change them without deliberate planning. A standardized system of preparing processes saves time, effort, staff hours, and money.

Make changes now: The change process should be done repeatedly, not merely once. Waiting for a perfect solution would mean no solution.

Use the right measures: Don't waste time taking process measurements if you are not going to use them to improve the process. The process slogan is worth remembering: "No process without measurement, no measurement without analysis, no analysis without action".

Methodology of BPI

Carrying out BPI is a project, so all principles of project management apply.

The first step in BPI is to define the organization's mission, existing structure and processes (AS-IS).

Then the BPI process owners should determine what outcomes would add value to the organization's mission and objectives (TO-BE).

Once the outcomes are determined, the organization's work force needs to be reshaped to meet the new missions and objectives, and a series of benchmarks, including cost metrics, should be put into place. It is during these latter steps that much of the resistance to BPI becomes apparent.

Information Processing and BPI
Although information processing is not meant to be the whole of BPI, it is a significant part of BPI. Successful BPI programs follow guidelines similar to these:

When designing new processes, do not think of existing procedures.

Put information processing power into the real work that produces the information rather than peripheral processes.

Move towards organization-wide data definitions (possibly initially by using gateways between existing systems).

Capture information once, at the source, without duplicating data.

Implementing BPI

Most resistance to BPI comes from within an organization. Managers do not wish to change existing structures; they reached their positions within the current system. The labor force may resist BPI because of fears of layoffs; however, an organization using BPI on a regular basis, argue many proponents, will already have the proper work force to meet existing business challenges.

Some organizations have implemented BPI on a smaller scale and report success. To do so, they learned the following lessons:

Start with a small process that can be completed in a short time frame.

Set clear timelines.

Do not spread resources thinly and focus on the short term payoff.

Management and primary stakeholders must be involved, or else even a limited implementation will fail.