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CEO Online Magazine (Ezine): COO & Operations

Business Process Management by Peter Peterka

Business Processes are a group of activities which are recurring in nature and contribute significantly to the growth and development of the business. Managing these activities efficiently so that maximum business benefit can be captured is better known as Business Process Management. If you think that Business Process Management deals with mundane tasks, you are very far from the truth. Large organizations with good business process management skills have even managed to put an abstract activity such as Innovation as part of their process management cycle. Even thinking or strategizing for the future is part of a Business Process. Thus the first step in understanding Business Process Management is to understand the range of activities which qualify as Business Process and only then can they be documented and subsequently managed.

The first step when implementing Business Processes in any organization is to understand the lifecycle of a business process. Key questions which need to be answered are 'when does the process get triggered?', 'which business activity does it impact?', 'what are the steps in business process?', 'What the key parameters against which they can be measured?' and so on.

Once these key questions are answered and documented, you can put see the outline of a defined business process. All business activities are made up of multiple business processes and business process management is to make sure that these processes are working together for the greater benefit of the organizations. Some of the key points to consider when setting up business processes are discussed in the rest of this article.

Keep in mind that these processes will be managed by people. A business process should not be very rigid; neither should it be too open ended. There should be some room for innovation within the process as well as that is the business process can be improved over a period of time. Many management gurus consider successful organizations those which have captured the DNA of a business process within their working framework.

Simple documentation and automation also makes business process automation work in the long run. If you are using software to automate your business process, it should be made sure that people have been suitably trained on it and rather than change the way of working of the company, the software conforms to the process that you already follow. The automation should be complimentary to business and not anti-productive. It is imperative to remember that Business Process Management is suppose to save time and resources in an organization and should be approached with that principle in mind.

Adherence to Business Process throughout the organization is a must for any organization to gets it full impact. Developing or outlining a business process without true permeation with the company, is like giving a bird wings but asking it not to fly. It is successful implementation and following of a set business process which will save time and money in the organization and bring about greater efficiencies. Following business processes also helps in getting the most out of the people employed in the company without going back to the drawing board each time a familiar situation comes up.

The term Management in Business Process Management makes this activity an ongoing one. One a business process has been set and put in automated or semi-automated motion, it is critical that the process is reviewed at regular intervals to evaluate the affectivity of the process. A facility to maintain feedback from users of the process much be implemented and periodical review of the process and feedback from users will help in implementing changes and improving the process on an ongoing basis. A mature organization is one which has managed to implement the Business Process of Managing Business Processes effectively.

The Business Process Management process has been an established business activity for quite some time. If you are keen to ensure that you harness the complete benefits of Business Process Management in your organization, you can bench mark it against some of the leading standards such as ISO 9001:2000, SEI CMM and Six Sigma. Some industries have industry specific business process management certifications. Benchmarking allows you to go full throttle in business process management as well as provide you excellent ammunition to increase the value of your organization in front of customers, suppliers and employees.

Business Process Management and 6 Sigma

Six Sigma is powered by principles which are governed by continuous improvement. In pure terms, Six Sigma helps manufacturing organizations reduce the number of errors or reduce the number of defective products manufactured by them. This is achieved by a regular sharpening of the process and constant monitoring on processes and how they can be improved.

However, Six Sigma today has moved on from the manufacturing realm of business and is also very much a part of the services industries where the spirit of the process is lauded. Constant improvements are sought in almost all industries today. A reason for the phenomenal success of this business process and quality management and practice has been the short term and long term impact it has on bottom line of the business.

Six Sigma is not a process which begins to show results only over a long period of time or results which can only be measured by abstract measurements. In fact its results can be measured right away by the reduction in the number of faulty products, reduction in returns from customer and reduction of useless inventory. A before and after the Six Sigma implementation can easily highlight the benefits to the organization. If you are new to this concept and have only heard about it on the passing, here are some vital answers to frequently asked queries:

What does it take to implement Six Sigma in an organization?
It takes phenomenal operational efficiency and discipline as well as organizational leadership to implement Six Sigma. Since the concentration of the manufacturing process has to be reducing the number of defects or defective products, each process has to be scrutinized closely and amended to work towards this goal. In-house champions make this quality conscience-ness possible as it is not possible for all processes and involved managers to be highly quality conscience. Technology is also a great enabler in the implementation of Six Sigma as it helps reduce faults to a large extent.

A number of professionals are required to be employed to be able to implement this business process improvement method in an organization. There are individuals who have in-depth knowledge about the principles of Six Sigma as well as manufacturing processes (some even have specialized working knowledge pertaining to some specific industries such as automobiles, aircrafts, etc).

Achieving Six Sigma certification in your organization requires you to execute one project completely in the recommended process. Documenting the process and training existing business and manufacturing heads forms a large part of the implementation of Six Sigma processes. An organization also requires investments within the company by way of people, man hours, machine hours, technology etc to implement Six Sigma.

Getting familiar with the nomenclatures of Six Sigma:
The Total Quality Management process of Six Sigma has gained popularity over the past few years specially as businesses have become more quality conscience and as manufacturing processes become more complicated. The key industries implementing Six Sigma are Healthcare, Banking, Insurance and Construction. The two prominent methodologies are DMAIC (Define Measure Analyze, Improve and Control ) and DMADV ( Define, Measure, Analyze, Design and Verify). There is also operational hierarchy when it comes to Six Sigma. Apart from the senior Management, there are Champions, Master black belts, Black Belts and Green Belts who have a predefined role in the implementation of Six Sigma in the organization.

If the benefits are so prominent, why are more companies not implementing Six Sigma?
Six Sigma has not changed much from the time it was put together way back in the 1980s. The success factor has been the absolute number of achieving 3.4 defects per million products which is phenomenal. Even with this measurement, Six Sigma has largely remained a territory for the large companies and very few small to medium enterprises have ventured in this direction. The primary reason has been the cost of implementing this process is very prohibitive. The man power resources required to manage the process is equally difficult.

Some organizations which are very convinced about this quality management procedure adapt something called the Lean Six Sigma. The Lean Six Sigma has the same spirit but lesser number of defines processes and steps and is quite suited for smaller organizations.

Six Sigma which started at Motorola can be found as an initiative in most large quality conscience organizations which have a commitment to quality and a vision for better products and services to their customers.

About the Author

Peter Peterka is President of Lean Six Sigma us. For additional information on Six Sigma Black Belt or other Six Sigma Online Certification contact Peter Peterka.

This page is sponsored by IIM Executive Education Programs