BPI: The CIO`s Secret Weapon

By Brian P. Watson  |  Posted 10-08-2008 Print Email
Companies turn to business process improvement to enhance productivity, cut costs and boost revenues.

For Keith Neely, delivering business process improvements began with one of IT's oldest, clunkiest tools.

When his employer, sporting-goods maker Mizuno USA, bought a new ERP system in 2000, the IT shop had a difficult time aligning day-to-day processes with the then-new technology. The philosophy at the time, says Neely, vice president for customer support and IT and now also the company's chief business process engineer, was, "This is what we used to do. We're going to try to do it the same way, even if we don't get any benefits out of the new system."

Subscribing to that philosophy didn't fly with Neely. He knew that the Norcross, Ga., company, which pulled in about $100 million in revenue back then, was up against fierce competitors--most of which were three to four times bigger. Instead, Neely took to heart an analogy the company's president used to describe the problem with the new ERP system: Mizuno had just bought an F-15 fighter jet, but it didn't have pilots who could fly it.

Neely put together a team that initiated a multistep approach to reengineering the company's call center operations--specifically in pricing and order entry--to match the capabilities of the new system. Those improvements, he says, helped Mizuno more than double its annual revenue, effectively growing the business and its prominence in the market, all without adding new employees to the call center.

Mizuno's gains in productivity, revenue, cost reduction and competitive differentiation closely mirror the top drivers for business process improvement cited by IT leaders in our new survey. Two years ago, in our last business process improvement survey, about two-thirds of the CIOs said BPI was their company's top priority. And it wasn't just talk: More than nine out of 10 IT leaders said their firms had revved up their BPI practices compared with the two prior years.

Fast-forward to today. Long-looming economic uncertainty has forced businesses to rethink their strategic goals, all while cutting costs. With BPI, they may just have their secret weapon.

"Over the last 15 to 18 years, people in the business community have realized that you can't do much in business process improvement without technology," says Barry Brunsman, Chicago-based managing director at business consulting firm Alvarez & Marsal. "The [question] is, What does it take to deliver change? Now they know it takes technology. Now it's in their DNA."

IT leaders and business executives alike cite business process improvement as a profit booster in any economic environment. In these tough times, though, CIOs are even more enthusiastic. Interest in initiating process improvements spiked 61 percent during the downturn, according to our new survey.

The top drivers for improving processes were quite similar during good times and bad, but IT executives signaled more urgency during more trying climates. For example, during good times, respondents cited productivity boosts as a top overall goal for business process improvement: 34 percent for companies with less than $500 million in annual revenue; 24 percent for companies making $500 million or more.

During a downturn, however, that number skyrocketed to 73 percent across all companies. Similar spikes were seen in other drivers, such as reducing costs, increasing revenue and keeping up with competitors.



 

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