A review of new software products that can make a big difference to your business

BPI made simple

By Michael Burns

Welcome to Work in process, the new incarnation of Test Drive. Why the name change? With last month’s launch of CAmagazine’s redesign,we are taking the opportunity to change the focus of this column. Rather than analyse individual systems for readers in the market for new software, we will provide advice on how to improve business process using technology. We will still review major software releases, and we will still publish our vendor surveys on ERP/accounting software, customer relationship management, professional services automation and business intelligence. But we will group them in the September issue.

This month, we will lay the groundwork for a series of articles on business process improvement. A BPI project may be initiated for a number of reasons. If a new ERP system is required, you should consider it the best opportunity you will ever have to overhaul your business process. But most companies would prefer to make the most of what they have before resorting to a new system. They might decide to redesign their process or implement an upgrade that embeds a better way of doing things. Another opportunity for improvement arises when a review of internal controls is required. As noted in “CEO challenge” (January/February, p. 34), “Companies should view their assessment of internal control over financial reporting as a business improvement opportunity, not just a regulatory compliance task.”

Let’s begin with a definition of business process. It’s a collection of interrelated tasks, initiated in response to an event — a customer order, for example — that achieves a specific result for that customer. A process will span departments: it could start with an event that originates in sales and end with a shipment of goods. Also, the customer could be internal.

To begin any BPI project, you should define your scope and objectives. In defining scope for a process such as order processing, you will want to identify the triggering event (again, say a customer order), the specific result (a shipment), the customer, other stakeholders in the process, participants, timing and what is not included in the scope. One big problem with projects is scope creep. For example, a participant may realize part way through the project that it would be helpful to generate a purchase order for a customer order. This may be a great idea, but if it is included in scope, the project will either be delayed or will cost more to complete. To avoid this, you will need a clear definition of scope in the beginning and good project management skills throughout.

The objective of business process is to support an organization’s goals. One way to accomplish this is to identify the organization’s critical success factors. A CSF is what an organization must do well in order to be successful. For example, a distribution company may differentiate itself by offering fast delivery. If the business process supports the CSF, it can be deemed effective. But how effective is another story. We recommend the use of key performance indicators (KPI) to measure the extent CSFs are achieved. For example, the cycle time (the time between order placement and shipment) would be a good KPI for a CSF of fast delivery. You could use a chart like the one above to document CSFs and KPIs.

The KPI goal is especially important when you are implementing a new system or improving business process. The goal will let you know whether you have been successful and will act as a motivator throughout the process. After all, BPI is not just about technology or systems. The best systems or business processes will fail without motivated people.

Michael Burns, MBA, CA, is president of 180 Systems (http://www.180systems.com/), which provides independent consulting service, including business process review, system selection and IT audit. Michael can be reached at 416-485-2200 or mburns@180systems.com.