03/7/19

You Can Improve Your Process Without Breaking the Bank

By Eric Fairchild, Senior Principal at NEOS

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 and business case approval. The proposal of overhauling how a business does its business is scary to face. Won’t it be a big, long ordeal? Won’t it press political hot-buttons? Can multiple stakeholders agree on the scope? 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 riskier.

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 if approached thoughtfully. I mean this both in an absolute sense and relative to the potential benefit. Process improvement, when done correctly, will not break your 2019 budget. In fact, if tangible improvements are rolled out rapidly, the savings incurred may be able to “self-fund” future work.

When process improvement is done correctly, it’s strongly aligned with business strategy and goals. Objectives are set at the outset, and work is divided into easily digestible bites or iterations. The first iterations should always be those that are linked to the highest strategic value to the business and have the lowest 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 too hard, at least not yet.

Process improvement becomes a costly proposition when practitioners attempt a big-bang style redesign and roll-out, or when strategic alignment is unclear. An “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 or disconnects between stakeholders 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 is planned carefully, and aligned with strategy. NEOS uses a proprietary Business Value Linkage Model to ensure changes are aligned with strategy and stakeholder expectations, this or something like it is vital to ensure the first iteration yields tangible benefits and sets the stage for future investment and success. Consider the alternatives and make an informed choice rather than being intimidated by the hype around budget and project length.

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