Sales, meet Finance (redux)
Business process re-tweaking
Workshop Both public and private organisations deploy business applications as a way of providing a more joined-up view of company information across departments. In many cases the aim is to minimise re-keying – two people entering the same data, or worse, one person taking information from one computer system and typing it into another.
But there's more to be gained than simply saving time. Staff’s initial resistance to using new applications often disappears – as we saw for companies such as Cutting Edge – when people realise how much their work can benefit from sharing information with colleagues.
As people work more closely together and silos start to erode, inefficient working methods become more obvious. Individuals in different departments can start to think about how they might do things differently to make life easier for others.
In business speak, this is assessing the underlying business processes. Organisations large and small generally work according to practices developed over time to fit the business at hand. The processes that evolve from such a base are unlikely to require a complete overhaul, but there is generally room for streamlining, particularly as inefficiencies become apparent.
Duplicated or redundant effort are often the first things to be spotted. When Madge from accounts says to Jim in sales, “Oh, we don’t actually need that bit of information,” or when Jim says to Madge, “But we do that as well,” it is time to sit down and build a picture of the business process as a whole.
One medium-sized organisation rolled out a giant roll of brown paper and started sticking to it the forms, screen shots and other paraphernalia that made up its ad-hoc business process, then invited the departments involved to discuss it. It did not take long for the “a-ha!” moments to appear.
When Michael Hammer and James Champy wrote about business process re-engineering nearly 20 years ago (there's a handy summary here), they pointed out how hand-offs between people or departments were the most expensive part, in both time and money, of any process. Reducing these by, for example, avoiding switching back and forth between sales and accounts, or going back to the customer only once for any missing information, can have a big impact on efficiency.
What exactly is a business process anyway? The answer is that it starts on receipt of a request from a customer and ends when that request has been satisfied. This may sound obvious, but activities can sometimes end in limbo, with delivery deadlines missed and customers wondering what happened to their requests, while one department thinks it is the other’s job.
Clearly such limbo states are y wasteful and can leave customers with the feeling that they should have gone elsewhere.
Linking the process with the information it generates also has a beneficial effect on prioritisation. Faced with several dozen service requests at a time, the ability to link to information such as how much customers spent, or whether they received a good service, gives supervisors an important tool when it comes to deciding what to do first. Such information can also influence strategic decisions about where bottlenecks remain and what to change.
Making things simpler for staff and encouraging information sharing not only saves money but remove the shackles from growth. Frank Bandura, finance director at Italian restaurant chain Carluccio’s, says: “Although the volume of purchase and sales transactions has grown more than five times since our original implementation, the number of staff directly managing transactions has only doubled.”
As much as possible, business process change should be driven from the front line. We have all heard about ranks of highly paid consultants coming in and teaching people how to do their jobs, even though nobody knows accounts better than Madge and nobody knows sales better than Jim.
Information sharing offers a catalyst for discussions between knowledgeable staff about how business can be done better, harnessing experience rather than attempting to impose change from on high.