Why Focusing on Process Yields Big ROI
Every problem that arises in business can be tracked back to a process. Either the process is broken, people aren’t following the process, the process conflicts with other processes or a process is missing.
So often companies attack the symptom of a broken process and fail to consider the underlying cause of the problem. This is why having documented processes are critical to achieving and sustaining growth.
It seems simple enough – and many business processes are a simple series of actions. However, things get more “interesting” when many processes intertwine and run simultaneously. And when processes conflict, it gets expensive.
Here’s why focusing on process is critical to a profitable company.
Having formal processes allows for refinement and monitoring. For example, many ERP installs go awry not because the teams involved don’t have the necessary skill set, but because the process for selection or implementation (or both) were not clearly defined ahead of time. It is simply more expedient to have a clear roadmap for all involved.
A sound process is scalable. When people, process and technology are aligned, growth is faster and less costly. Only by documenting and refining processes, from financial to supply chain and beyond, can a company effectively scale its operations.
Documented processes can be refined and improved. When things go wrong, having documented processes allows for fast identification of problems. Often, tweaks in process can lead to significant changes in organizational performance.
Processes are documented to allow for understanding – not only within departmental units but across the organization. Without consistency in the process there is no way for teams to understand what can be done to meet a defined goal.
Communication and Training
If no one understands the process or is able to understand it then it cannot be successful. It is critical to communicate correctly and to train those involved to not only follow or implement the process but to be able to identify areas of improvement.
Case in point: Hersheys
The technical team at Hershey had been working hard to implement ERP solutions for more than three years. They had chosen to implement SAP ERP. This process went on during the peak periods when business was expected to do its best. The company had chosen to implement ERP by using a popular method whereby the whole process was brought into action at once. The implementation and the business process which followed it proved to be a major setback for the company. There was a heavy loss in profits and sales.
There were a number of problems that caused this debacle and all of them came down to process. For example, they tried to do too much at one time. Perhaps a better process would have been to stage the implementation according to the business’s needs and during a slower time in the market. Of course it is easy to look back in hindsight.
Clearly understanding the processes behind the operations of a business is critical to success whether you are simply updating the functionality of an accounting system or overhauling a complex procure to pay system. Processes are the building blocks that create successful outcomes.MCG-Casestudy-1.pdf (886 downloads)
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