Competitive Advantage in an Era of Change:

accenture

Competitive Advantage in an Era of Change:

Competitive Advantage

in an Era of Change:

11 Typical Business Situations

where Business Process

Management Delivers Value


It has been said many times: In business, as in life,

the only constant is change.

However, this sentiment has never been more widely shared

than today. Faced with an unprecedented volume and pace

of disruptive marketplace shifts, global organizations are in

need of transparency, agility and compliance, quality and

efficiency as well as improved networking with external

partners and increased internal employee integration -

important components of responsiveness to major change.

Business process management (BPM) is a management

discipline that can help businesses attain these important

attributes. It adds pace and certainty, moving new strategies

into technical or people-based action. It helps “get things

done”. And while building a lasting BPM capability requires

the development of new skills and abilities, it also promises

to help today’s global organizations manage many of the

most challenging marketplace developments they face,

thereby generating immediate value. Companies that

embrace BPM today will enjoy a significant and lasting edge

over the competition. Establishing a “BPM Process” means

creating competitive advantage that is very difficult to copy.

1


Change: a constant in

today’s business world

As industries around the world size up

their opportunities and challenges, they

are confronting a rapidly and continuously

changing business environment.

Technology has blurred segment lines,

allowing new competitors to leapfrog

entry barriers and provide consumers with

disruptive new offers. Rapid technological

change also has compounded the

complexity that global organizations

must manage, from the need to integrate

social media into customer service to

the increasing use of wireless devices

across the business. And because the

most recent downturn did not affect all

regions of the globe equally, many wellestablished

companies now face stronger,

more aggressive, and better-equipped

international competitors. Add to these

factors an increasing regulatory burden

for many global companies and a renewed

focus on energy and the environment, it

becomes clear that the extent of change

with which today’s enterprises must

grapple is unprecedented—and likely to

remain so.

To respond effectively to that change,

businesses’ operations must be

transparent, agile and in the same

time compliant with legal and other

regulations, deliver highest quality and be

efficient, and be part of various external

networks with their market partners

while integrating employees within the

organization. Companies have to meet

all those goals which seem to contradict

each other. However, BPM can help.

3

A powerful ally for

companies facing

dynamic conditions

For roughly two decades, business process

management (BPM) has been a trusted

method for aligning key operational

processes with corporate strategy and

bringing them up to speed as part of

major transformational efforts. More

recently, however, a growing group of

leading organizations have come to

appreciate the power of BPM to help them

gain critical competitive differentiation in

a changing world.

How does BPM do all of this? Its power

lies in its ability to help organizations

tighten the integration among business

strategy, IT and people-based execution—

in other words, translate business

strategies into technology deployment

and the actual work that people do on a

daily basis. BPM can help organizations

manage the entire lifecycle of their

most critical processes, from design

through implementation, execution, and

monitoring and control. BPM translates

the hand-offs and inter-relationships

among the business, its people and its

technology resources into manageable,

reconfigurable enterprise process assets

that enable the systematic use and reuse

of all process-related information,

and that can be altered, upgraded and

streamlined as a company’s goals and the

environment evolve (Figure 1).

In Accenture’s experience, such a

powerful BPM capability is implemented

using a process approach. It is

implemented through the “process

of process management.” The BPM

process is at the center of a BPM

capability blueprint, outlining the

infrastructure required as well as

the organizational components. Core

infrastructure components are:

Figure 1: BPM’s power to transfer strategy into technology-and-people-

based execution


Figure 2: BPM Capability Blueprint

• Content/Data - for example,

process models

• Applications and infrastructure -

for example, process repository tools or

process execution engines

• Policies and standards - for example,

modeling guidelines

The organizational components of a

process of process management are:

• Roles and responsibilities -

for example, the definition of a process

architect or a process owner.

• Organization – for example, how a BPM

center of excellence is defined and

positioned in the organization.

• Competencies or Offerings (what

a BPM organization delivers to the

company) – for example, management

of a process repository or process

improvement projects.

• Culture – for example, aspects of the

end-to-end process thinking.

All those capability components

are supported through operating

principles, like the link to strategy, and

help in delivering key outcomes like

transparency, agility, compliance, quality,

efficiency, external networks and internal

integration. The BPM capability blueprint

is shown in Figure 2. At the heart of this

blueprint is the BPM process, the process

of process management that brings all

those components together resulting in

a functioning business process: It’s, for

example, not enough to set up a center of

excellence when the process is not clear

how it delivers value to the organization;

it doesn’t help to train people in process

improvement methods if the process is

not clear how they deliver improvement

projects to the company; it doesn’t

provide benefits to create a process

repository if the process about how to

use it is not defined, etc. The process of

process management enables the benefits

from all the components described in the

BPM capability blueprint.

Those BPM competencies are, in most

cases, not developed just out of the blue.

Rather, their development is triggered by

specific business situations in which BPM

delivers immediate value.

4


Figure 3: Examples of Key Trigger Points for Business Process Management

How BPM supports key

business situations

BPM can be used to support and improve

a wide variety of large-scale initiatives an

organization may undertake by providing

a solid underpinning for managing the

transformation of key processes. Some of

the most important examples for those

“trigger points” are shown in Figure 3.

Standardization Initiatives

A machinery company had different

service process in each of the 72

countries had different service

processes. This created tremendous

cost, and maintaining different software

applications led to confusion with global

clients. The standardization of those

processes based on a process repository

and modeling approach helped to

eliminate those issues, reduce cost and

improve quality and consistency of their

services. An appropriate governance

structure enabled lasting effects and

kept companywide standards in place.

In a world of spiraling complexity, an

increasing number of organizations are

seeking advantage in standardization.

Indeed, greater levels of process

5

standardization boost responsiveness

to change by speeding and simplifying

process upgrades and revisions across

geographies and divisions, while ensuring

that highly efficient best practices

are used to the fullest extent possible.

Through BPM, companies can use a

business process repository to identify

and define process standards and

implement them effectively across the

organization. In addition, BPM governance

and infrastructure are critical to

managing and enforcing those standards.

Post-M&A Rationalization

An oil and gas company acquired a new

firm. Then it was necessary to define

what the processes should look like after

the merger. For example, which existing

process could be used companywide,

which had to be newly defined–and which

were different in the various business

units. These challenges were addressed

through a modeling effort, using the

Accenture reference models as a starting

point. The newly defined processes were

then rolled out using the web-based

publishing component of a process

repository.

While mergers and acquisitions usually

are launched with the goal of boosting

shareholder value, inconsistent and

overlapping business processes can rob the

new entity of its desired efficiencies and

undermine the achievement of synergies.

BPM can help: Merging organizations

can use business process repositories

to identify optimal practices from each

contributing organization, as well as

design completely new processes. BPM

governance also plays a role, ensuring

that enhanced processes are implemented

consistently throughout the new

organization, while BPM managed services

can help the new entity use a third party’s

infrastructure to achieve integration and

its benefits more quickly.

Innovation and Growth

A high tech company closed a new

contract allowing them deliver ten

times more products within to the next

five years. Now they had to figure out

where they had to invest and scale their

processes. To gain transparency over

their processes, they used a process

modeling tool and repository. They

simulated key processes to identify

bottlenecks. This allowed the company

to identify exactly where to improve

their processes and where to focus

their investments. The BPM governance

organization helped them afterward

to execute the necessary changes.


In today’s dynamic global marketplace,

ongoing, productive innovation is merely

the price of entry—whether that innovation

is geared toward developing new products

or new processes or services. And for

innovation to not sap an organization’s

other key initiatives, it must be done as

cost-efficiently as possible. BPM allows

organizations to identify and manage their

most promising innovation and growth

opportunities—including process and

service innovations that can enhance the

customer experience, boost competitive

differentiation, add efficiency and

responsiveness, or slash costs. BPM also

can allow organizations to manage growth

and innovation proactively by simulating

post-innovation scenarios and thereby

identifying and addressing negative

impacts to key business processes and

potential bottlenecks. Such simulations

can make clearer the impact of various

tradeoffs and, thus, help guide where

investment should be made to most

effectively spur growth. Governance

comes into play here as well, enabling

innovative organizations to enact business

rules that ensure innovations result in

profitable and sustained growth.

Next-Generation Process

Automation

A major financial organization decided to

use a highly flexible process execution

engine to support a claims process,

making it faster and more cost efficient.

However, they quickly recognized that

the technology alone didn’t help them

achieve their business goals. In order to

benefit from such a business process

management system they had to define

their process carefully in the form of

models that apply the system in a way

that really creates value. In addition they

also put the governance organization

in place helping them handle change of

processes and continuous improvement.

What if all of an organization’s key

business processes could be completely

or partially automated? IT systems would

interface with each other and exchange

vital information automatically, employees

would receive timely and accurate cues to

perform specific duties, and production

facilities would run at optimal efficiency

levels with minimal human intervention.

BPM can help bring this vision to life.

Leading business process repositories make

it simple for process owners to reach the

level of understanding and clarity required

to automate complicated, cross-functional

processes, as well as document process

steps and enable seamless integration

between processes and technical systems.

In addition, robust BPM governance can

help organizations define who is allowed

to change an automated process, who

needs to approve any changes, and

who makes the changes happen—all

of which are critical to ensuring that

process automation generates its desired

efficiencies without creating unintended

business disruptions. An overall BPM

capability allows an organization to

benefit from the flexibility of nextgeneration

process automation systems.

Risk Management

A major consumer goods company had

a powerful process repository in place,

created to roll out a new operating

model. In order to mitigate operational

and financial risk they included a risk

description in their process models as well

as the related mitigation processes. They

then generated their risk manual from the

process repository. This became a major

component of a successful roll out of the

new operating model, creating significant

cost reductions with very low risk involved.

The power of BPM to help organizations

manage and reduce risk is proven. BPM

gives companies the ability to create

alternative processes that can operate

without the use of specific resources—a

given plant or distribution center, for

instance. When unanticipated disruptions

involving these resources occur, the

organization simply switches over to one

of its alternative processes and business

continues uninterrupted. The keys to

achieving such a scenario: strong business

process models identifying various types

of risk and mitigation processes, a

tested process repository, and a robust

governance structure. In addition,

BPM managed services can reduce

risk when they include performance

guarantees for key processes.

Emerging Competition

A high tech company producing

compressors noticed increasing

competition from companies they

hadn’t seen in the market before. To

stay ahead of the competition, they

needed a differentiator that they could

implement quickly, but wasn’t easy to

copy. They used a BPM modeling and

repository approach to define and roll

out a new delivery model, providing

compressors to their client and managing

them through the internet. They started

selling “compressed air” instead of

compressors as a product. The process

governance organization enforces the

desired service level agreements.

One of the hallmarks of the current

business environment is a rising tide

of aggressive new competitors. BPM

can help any organization improve its

strength in this tough new environment.

The transparency of BPM allows

organizations to measure the performance

of differentiating processes, compare

them with the competition, and easily

make adjustments. Furthermore, BPM

governance enables organizations to make

well-informed decisions and execute

rapidly, ensuring that these adjustments

are enacted with alacrity throughout

the organization. A well-managed BPM

process is also not easy to copy, hence

the BPM capability is an important

competitive advantage by itself.

Cost Reduction

A medical high tech company needed

some immediate cost reduction but was

also looking for a new management

approach. They brought transparency

to their processes using a process

modeling and repository approach. This

enabled a systematic weak point analysis

based on the models, which allowed

them to identify several redundant

activities. They were able to therefore

execute immediate actions resulting

in substantial savings. In parallel they

starting using the process repository as

an ongoing management instrument,

built a governance structure to execute

effectively on resulting actions and

rolled out the BPM based management

approach in their organization.

6


One of the hallmarks

of today’s business

environment is a rising

tide of aggressive new

competitors. BPM can

help any organization

improve its strength

in this tough new

environment.

7


Most organizations experienced strong

pressure to reduce costs during the

most recent recession—and now that

the upturn has commenced, ongoing

cost reduction has become woven

into the fabric of many businesses,

especially those with global customers

and competitors. BPM’s process models

and repositories allow these businesses

to conduct a systematic analysis of their

processes, finding opportunities to reduce

costs and boost efficiency. In particular,

BPM can help companies reduce the

number of handoffs between individuals

and functions within a process, eliminate

non-value-added steps, improve

data quality and thereby eliminate

redundancies and unnecessary work,

replace sequential activities with parallel

work streams and, most importantly,

simulate the positive and negative impact

of these changes. Once organizations

have identified the right process changes

to drive the most substantial and

sustainable cost savings, strong BPM

governance can ensure those changes are

executed as consistently as possible.

Establishment of a BPM Unit

The CIO of an insurance company had

heard about the power of BPM. He

wanted to benefit from that approach

and appointed a Vice President to build

such a BPM capability. In order to make

that quickly and effectively happen

they decided to use the BPM capability

blueprint and the integrated process of

process management as a basis. They

developed a systematic roadmap to BPM

that allowed the delivery of immediate

benefits while establishing lasting

capabilities. This roadmap has been

executed step by step and revised on a

yearly basis.

Given the benefits of BPM to global

organizations, it comes as no surprise

that many currently seek to establish

in-house BPM capabilities and centers

of excellence. This can be achieved

by establishing a “process of process

management.” A company can use BPM

to design, implement and control this

process of process management—in

essence, applying BPM to itself.

Core Systems

Implementation

A large utility company had decided to

standardize most of their operations

based on a leading ERP system. Instead

of making this a purely technical exercise

they decided to integrate BPM as an

enabler to real business value. They used

the Accenture BPM reference model for

utilities in a process repository tool to

define their end-to-end processes. The

process models were loaded into the

implementation component of the ERP

system, allowing a process-oriented

configuration. Then they used the same

models to design the test scenarios and

in training their staff. The result was a

systemic implementation of processes

and a realization of the previously defined

goals. Then they built a BPM organization

that kept on updating and using the

process models for general improvement

initiatives or to benefit from ERP upgrades.

Major technology implementations—for

example, the rollout of a new ERP system—

can consume vast amounts of time, energy,

resources, and organizational focus. And

without tight linkages to the business

and a strong process orientation, such

implementations can suffer from scope

creep, constantly shifting requirements,

and an insufficient focus on business

value. Conversely, organizations that

apply their BPM capabilities to core

systems implementations can structure

configuration and technical work around

key business processes and outcomes,

as well as take advantage of execution

environments to keep projects on time,

within budget, and fully aligned with

business goals and processes. The end

result: greater business value.

Major Transformation

Programs

A major global services company decided

to transform itself to have an even

stronger customer focus while reducing

their cost through a massive system

consolidation. They used BPM to identify

core processes and prioritize the system

consolidation by applying a repository

based modeling approach. The same

process models, capturing knowledge

about their existing and new processes

were used to train and educate people on

an ongoing basis.

Business and IT Transformation are major

steps an organization must take to move

to the next level of performance. Failure

is not an option – it would most likely put

the organization out of business. BPM

can help to reduce that risk to a minimum

and make sure that the results of the

transformation are really long lasting

and not just temporary. A BPM roadmap

defines how the various BPM components

are used during the transformation. The

process models in a repository allow whatif

analysis, upfront simulations and after

the transformation, a way for continuous

management and improvement. The right

BPM governance organization helps move

the transformation forward and execute

an ongoing improvement approach.

Compliance Initiatives

A major pharmaceutical company

needed an even more thorough

approach to safety and compliance.

They integrated compliance procedures

as detailed process models in their

process repository and linked key

documents to those models. The flow

of data and documents were supported

through a simple workflow system.

The result was a powerful compliance

management process based on BPM.

In many industries—for instance, financial

services, pharmaceuticals, food and

beverage, and energy—compliance

with regulatory mandates consumes

considerable time, attention and resources.

As governments increasingly seek to

protect economies, consumers and the

environment from unscrupulous business

practices, such global organizations find

themselves ensnared in a complex web of

changing rules and regulations. In such

cases, a mature BPM capability allows an

organization to build, publish, enforce and

revise safety and compliance processes,

thus ensuring that its operations stay

within rules and guidelines, regardless of

how complex or dynamic.

In sum, BPM typically has value in most

large-scale business and IT initiatives

as well as in smaller incremental

improvement environments. Therefore,

an increasing number of organizations

have started building sustainable

BPM capabilities and rolling out

BPM as a management discipline.

8


Business and IT

Transformation

are major steps an

organization must take

to move to the next

level of performance.

9


Conclusion

The global business environment is

characterized by challenging and

unpredictable economic conditions,

constant technological evolution, and

new, strengthened competitors with

disruptive business models and value

propositions—all of which can lead to

situations that require BPM and can

trigger the need to develop sustainable

BPM capabilities.

Indeed, BPM is a powerful ally for today’s

leading organizations as they navigate

many contemporary business challenges.

By boosting their transparency,

agility and compliance, quality and

efficiency as well as improving external

networks and internal integration,

BPM helps these organizations deal

with change successfully and take

greater strides toward achieving

sustainable high performance.

About the Author

Dr. Mathias Kirchmer

Dr. Mathias Kirchmer is Executive Director

for Business Process Management

(BPM) at Accenture. He leads the global

BPM-Lifecycle Practice, as well as

the program for the development of

Accenture’s Business Process Reference

Model Repository across industries and

functional areas. His special field of

expertise is to set up BPM capabilities

that deliver both immediate benefits as

well as durable competitive advantage.

Before joining Accenture, Dr. Kirchmer

had been for 18 years with IDS Scheer,

a leading provider of business process

excellence solutions, known for its

BPM software, the ARIS Platform.

He was a member of the Extended

Executive Board, including roles

as CEO Americas, Japan, and Chief

Innovation and Marketing Officer.

During his career, Dr. Kirchmer has

developed deep knowledge in approaches,

methods, tools and software for the design,

implementation, execution and controlling

of business processes. He has applied

this know-how in companies of various

sizes and industries around the world.

Dr. Kirchmer is an affiliated faculty

member of the Program for Organizational

Dynamics of the University of

Pennsylvania as well as a faculty member

of the Business School of Widener

University, Philadelphia.

In 2004 he won a research fellowship

from the Japan Society for the Promotion

of Science. He is the author of numerous

publications, including five books. The last

one is entitled “High Performance through

Process Excellence – From Strategy

to Operations” and was published in

November 2008.

Dr. Kirchmer holds a PhD in Information

Systems from Saarbruecken University

(Germany), a Masters in Business

Administration and Computer Science

(“Wirtschaftsingenieur”) from Karlsruhe

Technical University (Germany) and a

Masters in Economics from Paris-IX-

Dauphine University (France).

10


About Accenture

Accenture is a global management

consulting, technology services and

outsourcing company, with more than

244,000 people serving clients in

more than 120 countries. Combining

unparalleled experience, comprehensive

capabilities across all industries and

business functions, and extensive research

on the world’s most successful companies,

Accenture collaborates with clients to

help them become high-performance

businesses and governments. The company

generated net revenues of US$25.5 billion

for the fiscal year ended Aug. 31, 2011.

Its home page is www.accenture.com.

Copyright © 2012 Accenture

All rights reserved.

Accenture, its logo, and

High Performance Delivered

are trademarks of Accenture.

12-0376 / 11-4641_SL

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