Most organizations have little understand of their enterprise-level processes – and how those processes affect their success. Remember, most companies are organized by function but are experienced by their customers within a process. Aligning the customer experience with core processes will ensure a company is organized correct while also cutting needless process costs.
Enterprise processes are characterized by a strategic focus that occur at a global layer or within a major function of the organization. In their book, Execution, the Discipline of Getting Things Done, Larry Bossidy and Ram Charan assert that every company has three core – or global – processes: Strategy, people and talent and operations. Other’s will assert that there can be upwards to ten or even twenty global, core processes for an organization. More specific examples of global processes include revenue management, corporate governance and risk mitigation, management development programs, vision and mission planning (as defined in the CBRA) and so forth – these are processes that have both global and long-term effects on the business.
However, regardless of the number of processes, one should take a hard look at several aspects of those global processes:
- External entities that the business touches – whether they are vendors, partners, customers, government or community constituents
- Data flow into and out of those entities relative to the business itself
- Prioritization of the major processes in terms of importance to the organization as well as importance to the customers
- Accurate visual representation of these processes in written form
Taking a close look at these aspects will help us identity who the high impact parties are to our business – whether those parties are customers, partners and so forth.
But an assessment of enterprise processes will also have an inward focus in which we articulate the internal organizational units within the company and identify the various roles (sometimes called user types)
within those units. Identifying user locations is important to understanding business processes. From this information, an organization chart can be drawn that shows the relationships between organizational units. Note the organization chart is not built for function or reporting purposes – instead, it is drawn from a unit-relationship standpoint.
Both the external and internal assessments will help us understand who we serve, how data flows into and out of our organization and how that data flows within our company. Be sure to pay attention to data velocity as well as data security. By the former, you want to ensure you have good data flow as it moves through the processes as well as its’ own lifecycle. If velocity becomes constipated, then you have either a process or personnel issue to fix – neither of which may be an enjoyable experience.
As an overlay to the first two parts of the assessment (external and internal), you’ll want to map out the major functions of the organization and the major business processes performed by the organization. If you’d like, inserting a 4th layer (or a sub-overlay) focused on where monies are expended within these processes and functions will help you as a business owner or leader understand how “leaning up” a process can save you real dollars, even though a leaner process will not be seen directly on the Income Statement, Balance Sheet or the Cash Flow Statement.
Shared Services tend to me major, but horizontal functions in an organization – such as accounting, finance, human resources and so forth. Vertical functions tend to be those that are either service or product specific, such as research and development, sales, customer service and so forth. A functional diagram is then drawn to that the business understands what its’ critical functions really are. Be sure that the high-level responsibilities of each function are described in clear, unambiguous language.
Performing this type of assessment is absolutely visceral to understanding how an acquisition or a divestiture might impact the current business. You’ll also begin to see areas of redundancies and gaps – opportunity to cut costs and make processes more efficient. This information can be used for budgeting and resource allocation decisions as well. The net effect is a more profitable company, even if revenue is not increased.
This exercise is also used to assess whether an organization is “on track” to fulfilling its’ long-term vision that is derived from its’ core ideology.
There are some downsides to performing an Enterprise Process Assessment. For example, it is costly to maintain the integrity of the relationships over time that are derived from the initial assessment. Relationships take time and energy and usually cost both parties to maintain. Also, if the company is not strategically and process focused, this exercise will be of little use because they won’t value the information that is derived from this assessment.
However, for those companies who intend to be process and strategically focused, an enterprise level process assessment can be a strategic tool that is used to ensure the company stays on course with its’ core ideology while also surfacing opportunity costs inherent in fat or redundant processes.
Bill English, M.A., M. Div.
Associate, The Platinum Group