AIA has engaged with numerous organisations on both Strategic and Operational improvements. Business Process Reengineering has been used as a method to unlock capacity and efficiency in processes that generate value. It has been used as tool for discovering strengths and weaknesses within an organisation’s Operating Model.
The discipline of Business Process Re-engineering describes a method of developing efficiency and effectiveness within the organised activities stakeholders perform in driving strategic goals through their interactions with each other and the assets at their disposal. As organisations grow, the number of interactions that can occur grow exponentially, producing complexity that often acts in resistance to the execution of the strategy. Many of these interactions are in processes that directly create value which the organisation delivers to market. It is essential, therefore, to understand these processes that drive value creation, with a focus on enhancing their utilisation. Business Process Re-engineering plays a role in firstly identifying the necessary processes within the organisation (process effectiveness) before developing improvement strategies that reshape and contour them for alignment and improved productivity (process efficiency).
Business processes lie at the intersection of an organisation's Business and Operating Model and determine the activities that resources go through to deliver value to their respective markets. The Business Model provides the framework for which organisations create and capture value. Variables such as the customers, the products (or services) to be provided and the channels to introduce the former to latter are described within this model. The Operating Model defines the resources at the organisations disposal and how they interface in just the right manner to enable the creation and capturing of value.
The focus of Business Process Redesign is enabling efficiency and effectiveness between the Operating Environment and the Operating Model although this should not occur in isolation. Business Process Redesign is one part of a multidimensional organisational improvement landscape that has boundary effects on other aspects of the organisation. These range from Business and Corporate Strategy to Corporate Governance.
This was evident when business processes were mapped and analysed for a growing organisation within the tax administration industry. The intended outcome of the assignment was to develop processes that ensured better service delivery to internal customers while keeping costs under control. This is common when expenditure growth supersedes income growth and measures are required to ensure better utilisation of the resources available.
The analysis and redesign of processes uncovered the need for resilient mechanisms that enabled better governance of activities within the organisation. Policies had been developed that governed the execution of the Operating Model, yet analysis revealed that some policies had gaps which affected the interpretation of responsibilities when executing specific processes. Additionally, a lack of transparency promulgated a culture which engendered misgivings both vertically and horizontally in the organisation. Admittedly, even if processes were refined to achieve better efficiency and effectiveness, the environment within the organisation would not make them sustainable.
To synopsise, business processes required redesign to improve efficiency; however, the current policy framework and lack of transparency posed risks to a successful turnaround.
This is where a consultative approach became essential in producing real change within the organisation. Consultation with stakeholder across the organisation revealed digital infrastructure at the organisation's disposal that was not utilised to their full advantage. This infrastructure was integrated with the process solutions developed to fulfil the requirement of transparency within the Operating Model. A change in culture was immediately apparent as accountability became a focal point in the execution of processes, thus producing a sense of thoughtfulness in the work individuals within the organisation perform. Interestingly, accountability did not just flow from the bottom upwards but from the top downwards unlocking new culture dynamics that had the potential to add further value in the current work that the organisation performs.
Furthermore, findings from the initial process analysis endorsed a closer examination of a critical business unit in the form of a work study. The greater transparency afforded through the Business Process Re-engineering provided objective information to make better decisions on the future of the business unit.
This is what is meant by realising the full value of Business Process Re-engineering. It is exploring all outcomes of the analysis conducted to establish a platform for sustainable change. Business Process Redesign can become a tool of discovery; enabling decision makers to get a better understanding of the engine that creates value within the organisation.
Sometimes that engine needs a few bolts to be tightened here or there to improve delivery. In some instances, entire units may demand complete change. In both cases, Business Process Re-engineering can guide efforts to develop and embed that change. More than just a tool, it is a holistic look at an organisation revealing opportunities for real change.
Lwandle Fakazi is consultant at AIA, who has worked on several process improvement projects across industries and sectors.