Today’s business environment is full of challenges, both internal and external to the organizations and that we operate in. These increased pressures – which can come from all stakeholders – have forced organizations to embrace change, become more nimble and cross-functional, and ultimately become increasingly responsive to the needs of those that we serve. In order to attain the capabilities and implement the organizational structures necessary for success, organizations have undertaken significant investments (paired with a commitment to increased future returns) to transform their business processes and operating models.
Realizing the value of business process transformation is dependent on the steps that are taken to make sure the change is sustainable. Executive leadership must make it a priority to engage the entire organization in the change, and select the right cross-functional leaders to embrace the change and lead the new cross-functional organization. Selecting leaders with the right level of influence and personality is critical to ensuring that the value of investments made are fully realized.
The Process Owner as a Value Creator
Executive leaders generally understand that process improvement initiatives are significant in terms of projected increases in revenue and profitability. However, there tends to be a lack of understanding as to the amount of emphasis that must be placed on selecting the right leaders to drive the change and sustain the improved process.
Business Process Owners (BPOs) must be carefully selected, and need to have the right level of cross-functional decision making authority and influence. While the organization might be organized functionally (e.g. Sales and Distribution are different functions), it is critical that processes are organized cross-functionally (e.g. Order-to-Cash). The BPO must be empowered to make decisions across functions, breaking down traditional barriers and building consensus across the enterprise such that everyone is driving toward a common goal.
In addition to understanding the role of a BPO in managing an end-to-end business process, it is important to understand the unique characteristics that are present in successful BPOs.
5 Critical Characteristics of Successful BPOs:
- Experience managing several teams of senior level resources, usually leading a line of business or a major functional organization
- Deep knowledge of the company’s culture, business practices, and long-term business strategy
- Strong process background “Soft power” within the organization (ability to influence and implement change outside his/her reporting structure)
- Vested interest in the success of the process
Based on this set of characteristics, the incumbents selected for BPO roles should not be middle-managers who manage small teams, nor should it be a role for “rising stars” as a path to the C-Suite. These roles should be filled by experienced, highly-respected executives within your organization who wield a great deal of influence outside of their direct spans of control.
Tools for Success
In order to be successful, a BPO must have full authority and accountability for process design, process performance and review, as well as communications, training, and implementation. Just as business tends to ebb and flow, processes continue to evolve as market conditions change. Process owners need to champion those changes and drive that evolution of change to stay competitive.
There are also elements of psychology, application involvement, environmental variations and differing theories of practice that will play important roles in the design of a BPO solution. However, at its most basic premise, the solution lies at the integration between process and organizational readiness for change. Processes, as we know, are activities that are performed to create value for the customer. Organizations are groups that are designed to work together toward a common goal. The inherent issue is that functional organizations do not enable efficient end to end processes, but instead promote repeatable, less efficient production.
Once an organization fully understands their processes and the alignment of these processes to strategic intent, then they can begin to break these down to see where the organization’s intent promotes, intersects, and collides with these processes.
The BPO Benefit Case
Typically, there are five types of benefits associated with empowered, cross-functional Business Process Owners championing change in the organization:
- Savings. This comes in the form of less training materials, reduced transaction costs due to increased coordination and cost stability, and one owner with staff that has a clear understanding of process direction.
- Alignment. The company now understands the effects of changes to their processes before they happen. Process performers work toward creating applications that support and enhance their processes instead of developing work-around processes to get by systemic limitations.
- Flexibility. Now that processes are standardized and costs of operation are down, companies can be more responsive to market demands and more fluid with their resources. A main driver of this flexibility is that cross-process visibility enables one to see redundancies across the organization.
- Visibility. BPOs are able to continue to improve the enterprise’s processes by making performance visible. This is accomplished through clear, visible metrics that have agreed-upon definitions. These metrics should be visible on an easy-to-understand scorecard that is regularly reviewed, and people at all levels in the organization should be held accountable for the performance of their metrics.
- Governance. Governance is critical to BPO success, and should play a role throughout the process. Through process councils, management reviews, and various escalation and issue management processes, governance ensures process success at both a strategic and tactical level.
In order to successfully implement a BPO solution, it is critical to consider your organization’s differentiating factors, and select process owners that will be able to effectively lead process transformation and champion organizational change, so as to exploit those differentiators and maximize value.
Business transformation initiatives can produce bottom line results empowering the workforce to drive solutions that increase profitability and delight customers. Despite this understanding, very few businesses have the capacity to change and successfully transform their organizations to treat processes as strategic assets. Even less have moved beyond the conventional hierarchical organization to an environment where cross-functional business process owners (BPOs) are accountable for sustainably high performing business processes.
An integrated BPO solution enables organizations to understand their end-to-end processes, and to better leverage them across the enterprise. The process owners will not only design and execute processes that are operationally efficient and customer focused, but also responsive to market conditions. In addition, they are able to influence and implement the changes that are needed to drive improvement in the organization.
By moving to this process ownership-centric framework, organizations have evolved beyond tweaking products and outputs. These organizations are now focused only on products that provide bottom line value and the processes required to maximize their contribution. They understand how change impacts processes, employees, products, suppliers, and most importantly, customers.