You Can Improve Your Process and Keep Your Fortune
Sometimes it seems as though business process improvement initiatives get put through the wringer more so than other types of investments when it comes to budget allocation. The proposal of overhauling how a business does its business is scary on its face. Won’t it be a big, long ordeal? Won’t it press political hot-buttons? Won’t it be expensive? In the face of (perfectly valid) concerns like these, it’s a sadly common mistake to just shut down and play it safe, sticking with the process status quo. Ironically, this is often even more risky.
If there truly is a pressing business case for modernizing a process, then leaders would do well to consider something that we at NEOS have found over the years: It’s not going to be expensive. I mean this both in an absolute sense, and relative to the potential benefit. Process improvement, when done correctly, will not be what breaks your 2016 budget, or any budget.
When process improvement is done correctly, it’s strongly aligned with business strategy and goals. Objectives are set at the outset, and work is cut up into easily digestible bites. The first bites should always be those that have the highest strategic value to the business and the lowest possible degree of complexity. At the end of the first iteration, you will see the effects and feel tangible benefits, and nobody has had to do anything hard, yet.
Process improvement becomes a costly proposition when practitioners attempt a big-bang style redesign and roll-out, or when strategic alignment is unclear. “All at once” roll-out can quickly become a change management nightmare, and doesn’t provide management with any flexibility or ability to prioritize important processes. Unclear strategic alignment leads to difficulty generating buy-in and will make realizing business gains challenging.
The key thing to remember is that things are expensive in comparison to one another. For example, $100 is expensive for a haircut, but cheap for a car. Process redesign should be compared to other ways of dealing with regulatory penalties, reputation damage, or efficiency challenges. Just breaking the rules and paying fines is one way to deal with regulatory changes. In comparison to a giant fine, a process effort addressing key controls begins to look like a bargain.
When considering a process redesign effort, make sure that it’s planned carefully, and aligned with strategy. Consider the alternatives, and make an informed choice rather than being intimidated by the hype around budget and project length.