Use BPM to Drive Out Costs
From a Gartner Article…
Depending on which economist you want to believe, this recession will last a few quarters or perhaps longer. The typical reaction of most companies is to cut costs.
The ‘ax man’ approach is likely to leave gaping holes in your business processes. So, how can you fight the ills of the economy without killing your business?
A company is a collection of processes. The key process [highest value] in any company is their ‘Quote to Cash’ process. And, the other processes exist in support of that process.
So, as Gartner points out, the ‘ax man’ approach could disable one of these supporting processes or the ‘quote to cash’ process itself. Neither outcome is desirable.
What you don’t know about your processes may be costing you money. Gaining visibility into your processes can help you see where money is being spent, the consequences of work activities and dependent actions.
Addressing all of your processes doesn’t make sense. I believe there is an 80/20 rule. Managing the 20% of your processes [the processes that are most important to creating value] will get you the greatest [80%] benefit.
Cutting costs within processes involves removing non-value added activities and finding better ways to perform activities. Business process management provides the management disciplines to surgically target problem processes and put them on the path to recovery. You will see that making these cuts would make sense whether the economy is good or bad.
Identify the [20%] the processes that are most important to creating value for your company
Target one of these processes for your first [or next] BPM project
Measure this process as is [before]
Remove non-value added activities [being careful of supporting processes]
Look for ways [innovate] to have make this process more efficient
Measure – Making sure that your changes were actually improvements
Gartner sees BPM as one of the strategic management disciplines. They see companies moving from using BPM to survive to helping their organization to thrive.
I see Process Management [improvement] as the best place to look to cut costs rather than just arbitrarily ‘laying off’ employees.