A fundamental change in business operations of a firm – in order to improve its performance – can be termed as a Business Transformation. This blog discusses just two such Business Transformation scenarios where enterprise modeling can play the role of a catalyst.
1) Outsourcing or Shared Service Setup initiatives
Sourcing decision has come of age from being a one-off activity to being a classic strategic decision. Main objectives of these initiatives are typically aimed to align the existing business operations to adopt the new setup with outsourced or shared people, system and processes to improve overall performance while reducing costs, risks and the burden of control and compliance audit.
In a recent transformation program, Enterprise Modeling has been identified as one of the key enablers of Outsourcing or Shared Service setup and it beautifully fits as an integral part of this change wheel. Process architecture becomes the center piece of the puzzle, and typically used during the design of: Target Operating Model (TOM), Business Model, Organizational Charts, Roles and Responsibilities with RACI, Separation of Responsibility with different parties and can also be used for Training and transition exercises.
The BPM methodology supported by a BPA tool dramatically accelerated process capture in interactive workshops that drive high level of engagements. It results in improved understanding of TOM, single source of truth that aligns business and IT and, collaborative process improvement environment and ability to deploy changes that stick. P&G’s has setup Global Business Services (GBS) to transform the way business is done. P&G GBS deployed the MEGA BPA/EA Suite as the company’s system of record for business, information, application, and technology architectures. This has accelerated the transformation which resulted in $800MM cost savings and deliver Company’s digital strategy.
2) Performance Management & Benchmarking exercises
Continuous process improvement is the ultimate goal this is not possible without a performance management setup in place. Latest survey from APQC has confirmed that process architecture is the starting point for any organizational performance improvements initiative.
Based on these 2 arguments many firms have realized that collecting KPIs on a data-driven basis without linking them to the processes has little impact on efficiency or customer satisfaction. For instance, AXA France uses Software AG Process Performance Manager (PPM) to monitors KPIs to give managers a better understanding of the end-to-end behavior of claims management processes.
On the flip side of the coin, process benchmarking enables firms to compare process performance across regions, customer groups, internal organizations, competitors and other entities. You can compare KPIs such as throughput times and process costs among different regions, for example, or the complexity of the process structures behind these key figures. Currently many BPA tool vendors provide support both performance management and benchmarking initiatives; utilizing such tools and methodologies will not only enable a performance culture in the organization but also help setup a generic Performance framework and improve benchmarking capabilities.
The two scenarios discussed above presents a challenging business case for the BPM Service providers to introduce or enhancing enterprise modelling capability of their clients. I will discuss another interesting gateway in my next blog.