Process management

What is Process Management?

Process Management is a different view on the organisation and operations within a company. It is an alternative view to a departmental structure, which seeks to separate the company into divisions, sections, departments and teams, whereby each unit has its own agenda and responsibility. In such a model, organisational units tend to create barriers (particularly informational and communicative ones) around themselves, which reduce the quality of processes that are important for the company's success.

Process Management defines a process as a priority. A process means a sequence of tasks that have to be done without consideration of an organisational structure (e.g. process and order fulfilment). Then the process is assigned to responsible persons individually to carry out relevant tasks. Again, the result is an organisational structure that is now restructured, so as to support key business processes more efficiently.

Why is Process Management important?

Due to the fast development of technologies, own production is decreasing in importance as such, and gradually other activities that support this production process (e.g. logistics) are increasing in importance. Still more and more important is the present state competitiveness, business processes that are key for customer care and quality, such as delivery time and overall quality, and additional services related to the product. The internal organisational structure of any company has to be adjusted so as to meet these requirements. Traditional organisational structures proved to be too rigid in certain cases, and thus most companies have re-defined their internal processes and changed organisational structure accordingly.

What is the subject of Process Management?

Application of Process Management principles is usually referred to as Business Process Re-engineering (BPR). As this is applicable to any type of project, the company should start with a definition of objectives and their quantification. Objectives may vary, but usually addressed are issues as is cost reduction, number of staff reductions, customer service improvement, or a combination of more than one objective.

Since starting conditions in each company are different, the first step of the BPR project is an as-is analysis. This covers definitions of key business processes, estimates of opportunities for improvement by individual processes, and priorities for the next steps. Prioritising is important, because it is not feasible to re-engineer all business processes at once. Therefore, it is necessary to select those processes, where reorganisation will likely be successful and will bring tangible benefits.

Decisions on the process that will be re-engineered are followed by a draft proposal design. This design does not cover all details of the newly composed process, e.g. job descriptions, but it defines the basic logic of the process and departments (units) that will participate in the process. The draft proposal design is then carefully scrutinised to reveal any possible drawbacks and inconsistencies.

In the detailed process proposal, all inconsistencies are eliminated, all responsibilities and rights in the new process are defined, including the requirements of information technology support.

The following implementation phase demonstrates when the current organisation structure is changing or a new one is created, incentives are set up, information flows are adjusted, and employees are trained.

What is the deliverable of Process Management?

The result is a proposal on the project team, how to configure the company in such a way, that business processes of key importance in terms of competitiveness, will be performed efficiently and will operate as is expected by internal and external clients. Provided this proposal is approved by the management, new processes will be implemented.

What benefits can one gain from Process Management?

Benefits of a process management approach depend on defined objectives. As was mentioned earlier, a final set up of processes and its benefits is derived from selected objectives. In any case, a process management approach brings a new look at the importance of performed tasks, and thus helps to better define responsibilities for their quality. Erosion of a traditional departmental structure and a high level of attention to business processes across the organisation, contributes to the improvement of team work and of the corporate culture.

Why engage a consultant?

An external consultant may bring experience from similar projects in other companies, and thus he can help to speed up the project and reduce any risks of failure.

My own experience

- Reorganisation of the Head Office of a large Czech bank with an aim to reduce the number of staff;

- Process improvement in the maintenance division of a large Czech transportation company.