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By CIOinsight  |  Posted 03-01-2004 Print Email

Strategy

Modeling can help you get smarter about your processes, but specialized software is really only warranted for complex processes.


Does your company really need a modeling tool? Business process management can certainly be done without one, and if your company's processes aren't particularly complicated or don't change very often, you may not need one. The big initial gains for modeling users are cost savings and time to market, so if more speed isn't an issue, and your processes are already lean, you most likely don't need a modeling tool.

If paper seems too primitive, you can always create a model with such programs as Microsoft Visio or even Microsoft Word—and for smaller companies that may be the way to go. But for companies whose complex process information needs to be shared—with, say, SEC regulators for Sarbanes-Oxley compliance, or the executive team in charge of merger strategies—it may make more sense to go with a product that not only simulates proposed process changes but can also generate reports detailing the bottom-line savings.

How does it work? First you map out your "as is" process, the process as it currently exists. This means gathering data from people actually performing the process you're evaluating to learn exactly how things are done—your company's order-fulfillment sequence, for example. Once the "as is" process is documented, you can figure out where improvements might be made.

For any "horizontal" processes that cut across business unit boundaries, this requires collaboration from a number of departments, including the line-of-business people whose process you're modeling; the finance department, which understands the costs of the process and related assets; human resources, which can offer insight into which employees should be assigned to specific tasks; and adjacent departments that will at some point be affected by the new workflow. (If you're modeling your company's entire sales process, it's probably best to include the marketing people in the discussion, or you'll likely be leaving out critical steps.) Simulating work through the "to be" process allows you to determine how much volume the process can handle, and where bottlenecks might occur. Once you're satisfied with the new scenario, modeling tools let you analyze the gap between the current and future models.

When Hewlett-Packard Co. merged with Compaq, in 2002, modeling helped executives figure out how best to integrate a wide variety of the companies' previously separate processes. Starting with the supply chain, the executive team mapped out the processes used by each company, decided which would stay and which would go, and then created a new process model for the merged corporation. Says Joe Francis, H-P's senior director of IT business process management: "We would put them up side by side and ask the question, 'Which one is the better fit in each area?' And you do that process by process, and then in the end we reintegrated that information into one coherent process." With its supply-chain integration initiative complete, H-P now plans to model every process in the company to address new customer-focused strategies.

Ask your business unit heads:

  • Do you have any processes that could be made easier through modeling?

    Ask your COO:

  • What are our critical processes, and could they benefit from more speed?

    Tell your CFO:

  • Modeling can help us document our financial procedures for regulatory compliance.


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