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Archive for October, 2011

Compliance – A Driver for Business Process Management and Improvement?

October 27th, 2011 2 comments

Organizations that choose one-off solutions to react to regulatory and compliance requirements on a case-by-case basis, as they are impacted by them, will spend 10x as much as those who choose to design and implement business processes that have measurement, visibility, and proper controls built into them from the start ….

I believe it was Gartner that made this assertion some years back, and it has proven to be true for many.  Organizations with a solid process infrastructure already have much of what they need deal with compliance requirements. The fundamental tenets of good process management include measurement, visibility, predictability, consistency, and repeatability, and business practices implemented with these elements in place can easily be transferred into specific controls that can be measured and reported on a regular basis.    Organizations that do not have a good process infrastructure in place may find themselves expending huge resources to redesign bad processes and systems when new requirements come down the line, as they always do.  Ouch.

Download executive brief on compliance and process management our short executive brief that discusses the importance of process management in meeting compliance challenges

If your company is like most, you face growing regulatory and compliance demands that absorb time, money, and other valuable resources and, ultimately, sap your competitiveness. However painful, this is reality and faced with these realities, you want to find a way to meet compliance requirements that is objective, reliable, and efficient. Merely managing the issue by opinion can be very dangerous and expensive. Opinions, not matter how smart the “opiner”, have a tendency to not match reality. A better answer is to drive compliance to an objective, measurable specification.  Management by fear can be even more expensive, inducing you to greatly overspend on compliance and to shy away from reasonably acceptable risks that could mean far better business results.

And, let’s be clear, policies and procedures are not controls. A policy merely states an intention to do something; a control ensures that it is done, done repeatedly, and done up to standard. Moreover, policies have to be read, understood, and remembered, all of which opens many possible routes to failure.

Bottom line — work is accomplished through processes – and in no other way.  To reliably achieve compliance you must be able to improve those work processes or design new ones. In other words, the way in which you meet a requirement must be embedded in the work itself, not merely displayed on a policy document. In order to sustain compliance, you must be able to establish measurements and controls within those processes. Certainly, you may have policies that apply, but the way in which you build, operate, and control work processes constitutes how we meet a requirement.

Contact me if you’d like to discuss how basic process management and improvement approaches might help with your compliance challenges.


Applying Lean at an Operation Level for HR, Finance, IT and other Internal Service Functions Can Yield Good Results

October 21st, 2011 3 comments

Organizations are increasingly adding tried and true Lean principles, tools and techniques to their continuous improvement initiatives to eliminate waste, improve customer satisfaction and reduce unnecessary costs.  And rightly so.  Successful Lean routinely reduce operating costs 20% – 40% and cycle time by even greater margins, and those cost reductions often go straight to the bottom line.

Lean Operations, Lean Management in Internal Services FunctionsTraditionally, in applying Lean, trained teams identify then eliminate or significantly reduce the non-value added activities and related costs for specific processes within their operation.  But what if there are no “trained teams”?  What if process boundaries are unclear in a functionally silo’d organization?  Does this mean you can’t do anything to get results until significant infrastructure is in place?  I think not.

 

Download an overview of our approach for applying lean at an operations level for internal service functions a short overview of our approach to applying lean at an operations level to internal service functions


We’ve found that Lean concepts and tools can be leveraged at a higher, function or operation level  very effectively.  The good news is that this approach delivers impressive business results on its own in the short term AND sets the stage for even more impactful process level improvements.  This is especially true for back office / internal service operations like HR, finance, IT, sales and marketing, supply chain management, etc.

Lean applied at an Operation Level for internal service and back office functions like HR, Finance, Procurement, IT, Marketing and Sales, and Supply Chain Management can make an immediate business impact …

 

The idea is to identify a complete business operation‘s most impactful cost drivers, BEFORE tightening focus to any process/subprocess in the value stream.  For those of you that have done Lean at the process level, I know this sounds a bit strange and your first thought may be that the scope will be too big and nothing will get done. But, our experience is that this can work very well and be very impactful:

  • It can serve as a front-end audit function, greatly helping to identify next tier focus areas.
  • It recognizes and works within functional boundaries that exist in the enterprise, as opposed to attempting to force artificial process boundaries that, while may be desirable, do not exist
  • It maps and costs all key value streams of a targeted business function or sub-function, a necessary prerequisite for lower level improvements
  • Attacks waste organization wide,  in both the supply-side (internal function itself) and demand-side (customer, consumer of the output).
  • It consistently identifies low hanging fruit opportunities that can be realized immediately
  • It can be used to jumpstart a new lean initiative or address unrealized opportunities from earlier lean events.

Lean Operations (lean applied at an high-level operations level) can definitely be a powerful tool for enterprises that are looking for immediate cost savings and/or performance improvements in internal service operations, but don’t have the desire/bandwidth/budget to start up a formal Continuous Improvement program.   It can be applied to an entire operation (e.g. HR, finance, Legal, IT, etc)  in a relatively short time period, and it does not require a big investment in training and infrastructure.  For those organizations that do want to move to a more structured Continuous Improvement program, it can be an excellent way to jumpstart a BPM, Lean, Six Sigma, etc. program

Need to improve performance or lower costs in internal service functions like Human Resources (HR), Finance, Procurement, Supply Chain, IT, Marketing and Sales, or any other back office type function?   Contact me to learn more about our approach to applying lean at an operations level.