Thursday, September 3, 2009

Business Process Reengineering Requires Leadership and Automation

When it Comes to Business Process Reengineering, Leadership and Automation Go Hand in Hand

Business process optimization is at the center of the agenda for many businesses today. In the past, efficiency may have been code language for layoffs and cutbacks – a strategy of doing less with less until the business cycle recovered and managers could start reporting gains again that would give business leaders the confidence to expand. But this is not efficiency; this is just monitored growth and retrenchment. True efficiency is not simply a matter of doing the same things more or less, but rather of doing things differently and yielding a better result. The typical IT manager is worried about data integration. CIOs are responsible for optimal results, however, and push their managers to go beyond data integration to achieve improved business process management and optimization. In this regard, business metadata has an important role to play.
“Business metadata emphasizes the most important aspect of IT: making computers and information technology useful to the businesspeople themselves; not indirectly, but directly. Business metadata is about clarification and meaning; it is about enhancing reports and one dimensional data to be turned into information, allowing data to be turned into information and the information to be turned into wisdom.” William Inmon, Bonnie O’Neil and Lowell Fryman, Business Metadata (Burlington, MA: Elsevier, 2008).

As the degree of integration increases in a business and moves beyond data integration to true business process management, sustainable competitive advantage can be achieved. The notion that better use of information can lead to competitive advantage is not novel.
“At a time when companies in many industries offer similar products and use comparable technology, high-performance business processes are among the last remaining points of differentiation. Many of the previous bases for competition are no longer available. Unique geographical advantage doesn’t matter in global competition, and protective regulation is largely gone. Proprietary technologies are rapidly copied, and break-through innovation in products or services seems increasingly difficult to achieve. What’s left as a basis for competition is to execute your business with maximum efficiency and effectiveness, and to make the smartest business decisions possible. And analytical competitors wring every last drop of value from business processes and key decisions.” Thomas Davenport and Jeanne Harris, Competing on Analytics (Boston: Harvard Business School Press, 2007).

Top executives can not expect these improvements to happen on their own nor should they expect that they can simply demand process efficiency from their organizations. Business process optimization demands a culture shift and symbiotic relationship between the CIO and IT managers within the enterprise.
“Leaders must also create an environment conducive to reengineering. Urging people on isn’t enough. Any rational person in a corporate environment will react warily, if not cynically, to an executive’s insistence that he or she can break the rules, defy the received wisdom, and think out of the box. So, while half the leader’s job involves urging the process owner and reengineering team to perform, the other half involves supporting them so that they can perform.” Michael Hammer and James Champy, Reengineering the Corporation (New York: Harper Collins, 2003).

Supplying the right technology to the IT organization is another fundamental. The degree of integration possible must span data exchange, data transformation, process modeling, process simulation, workflow automation, business rules automation, process monitoring and optimization. A robust business process management solution will include all of these capabilities.

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  1. Since the introduction of Reengineering the Corporation by Michael Hammer and James Champy back in the early 90s, business process reengineering principles and processes has faced enormous challenges. The primary challenge is the willingness of managers and workers to embrace and adopt reengineering solutions for the fear of losing their jobs, positions or influence in the workplace. Now, another reengineering trend is emerging called Income Reengineering. Income Reengineering principles and processes are the counterbalance to business processes reengineering in that Income reengineering seeks to link worker prosperity to reengineering applications.

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