Building a Business Process Center of Excellence

High-performing companies make business process improvement a core competency. These leading firms share a common characteristic: they continually find clever ways to improve the process of process improvement.

Ross Wainwright, executive vice president of SAP North American Services, the provider of enterprise application software, points to a business process reengineering (BPR) initiative with a large Canadian grocer. It implemented a massive project to improve inventory management, centered on using mobile technology and bar code scanners. The challenge was to explain to a far-flung workforce how all their roles fit into the effort.

“The company created a visual analogy with a subway map to help employees get a mental image of the business transformation they wanted to achieve,” he explains. The workflows of different departments were depicted as subway lines, with stops and line changes representing how the grocer’s different departments interconnected.

“This helped everyone understand the relationship of, say, the retail stores with the inventory and finance departments,” Wainwright says. “By painting a picture of the different work streams, dependencies and timing, it helped executives educate the company’s 140,000 employees about how they would all merge together.”

This simple but powerful idea spurred quicker buy-in and deeper collaboration.

As companies develop successful BPR projects, they’re giving greater thought as to how to capture, promote and disseminate the best process improvement ideas that are created throughout their organization.

As a result, high-performing companies are implementing business process competency centers or business process centers of excellence (CoE). These committees set priorities, create a strategy map, standardize procedures and collect best practices for business process initiatives.

“A center of excellence provides visibility in the company about the idea of business process improvement, and helps the idea catch on in organizations that might otherwise be resistant to change,” says Frank Castellucci, co-founder and managing partner for New Jersey-based Axiom:1, a consulting firm specializing in business process management (BPM).

One study found that nearly half of companies that experienced a clear, measureable improvement from BPM have implemented a CoE. Of the companies that failed with BPM, a mere 4 percent have a CoE.

The success of a CoE, like the success of business process reengineering (BPR) itself, hinges on buy-in from the top. “A center of excellence can be on shaky ground unless the manager is a direct report to the CEO or COO,” Castellucci says. “You don’t want a center of excellence buried in IT or even in finance.”

A CoE, he says, should be run by somebody with a more holistic view who understands BPR shouldn’t always be quantified down to the last dollar, but also by metrics like improved customer satisfaction.

He also suggests the members of the CoE come from a wide cross-section of the organization, rotating in and out every two or three years so the taskforce would “be kept lively.”

A CoE can tend to important elements that are often overlooked in the rush to achieve tactical benefits, such as standards, service levels, and process ownership and governance. Issues such as who owns a process become increasingly tricky as processes move from single departments to multiple groups or divisions across the globe.

Ideally, though, a CoE doesn’t simply perform the role of process cop, but collects the best ideas throughout the enterprise, so the skills and experience of all employees can be leveraged.

“If you’re doing it right, a CoE is keeping a knowledge library and being proactive about presenting ideas for constant process improvement,” Castellucci says.

One example of how a CoE can promote new ideas is the emerging, but hotly debated area of “Social BPM.” Traditionally, business processes are imagined by top managers, developed by architects, and then rolled out to the workforce at large. Many end users don’t see the process changes until late into the project, such as during the training period.

Social BPM turns this process around, using social networking tools to allow employees and customers to play a more integral part at the start of and throughout the development process.

While many applaud this basic concept, there are concerns that a crowdsourcing approach to process improvement can lead to anarchy, with everyone who wants to participate involved in every phase of design, implementation and operation of a business process. A CoE could play an important intermediary role in this process of inclusion, governing levels of participation while allowing a company to harvest new ideas in a controlled and organized manner.

SOURCE: Wall Street Journal