Operational excellence can be achieved by effective process redesign
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New research from the Centre for Innovation and Service Research identifies best practice in process redesign
There are many stories and anecdotes of world-class organisations that have been very successful in carrying out process redesign initiatives. Based on those success stories, popular books by authors such as Hammer, Champy and others have identified an extensive set of best practices of process redesign.
These best practices have since been successfully applied across a wide range of organisations and industries.
What is not so well understood is whether some best practices are truly universally - applicable to all business operations. Moreover, process redesign typically involves using several best practices simultaneously. The research looked at which combinations of redesign practices work best to achieve operational excellence in particular organisational contexts.
The study included 16 popular best practices including ‘outsource’, ‘automate’, ‘manage exceptions’, ‘divide tasks’, and ‘reduce customer contact’. Practitioners were then asked to rank these 16 practices based on their perceptions of relative success in improving operational performance in their organisations. The best practices were positioned on a grid with a fixed distribution, between -3 (least successful) and +3 (most successful). Four archetypes representing the shared viewpoints of four unique groups of respondents were extracted from the dataset.
Firstly, the results show that the best practices of removing non-value adding (NVA) tasks and re-sequencing tasks are generally applicable to improve all operational processes. These best practices were largely consensual across the respondents. The data also suggests that these are used sequentially as the foundation of process redesign programs. An organisation embarking on a process improvement journey needs to identify and eliminate NVA tasks from the process first, and then proceed to optimise the ordering of the remaining tasks. These principles sound obvious – effective methods always do.
Secondly, the team identified four different strategies of process redesign: “employee-focused”, “cost-focused”, “hybrid” and “workstream-focused”. Therefore, there are at least four different ways to achieve operational excellence through process redesign. Each strategy consists of a certain configuration of best practices, in summary: the “employee-focused” strategy requires redesigning processes for increased flexibility and the execution of a high variety of tasks. It relies on empowering employees and maintaining regular touch points with the customer; the “cost-focused” strategy is all about achieving efficiency gains through process automation and the use of specialists; the “hybrid” strategy looks to simultaneously maximise efficiency and offer high levels of customer service by breaking down the end-to-end process into distinct front and back-office parts; finally, the “workstream-focused” strategy adapts the operational system to the situation at hand through managing exceptions and establishing separate processes for normal and exceptional customer orders.
Frederic Ponsignon who led the research team said: “We feel that our results can be useful for companies that are about to embark on a process redesign journey and face a strategic choice in determining how they want to achieve operational excellence. It can be difficult and challenging to navigate through the wide range of best practices to redesign operational processes.
“Previous research has shown that practitioners tend to fall back on a small set of popular best practices because of a lack of evidence-based guidance. By articulating specific and distinct redesign strategies, our research can help managers select the most appropriate set of best practices to deliver the required improvements in operational performance.
“Overall, our findings clearly suggest that process redesign is best approached through the application of one of four strategies along with two foundational best practices. First of all, our recommendations are that regardless of process characteristics, product or service orientation, and business and organisational contexts, new redesign projects should concentrate on identifying and eliminating the non-value adding tasks from the process. Next, managers should address process optimisation based on the most natural sequence of execution of the remaining tasks.
“Furthermore, we have identified and articulated four distinct process redesign strategies and managers should be consistent about which one they adopt. Each of the four strategies can potentially be implemented with equal success to redesign any operational system. The choice of the strategy to adopt is ultimately dependent on the current requirements and priorities of a particular organisation.”
Date: 9 April 2013