Article

Business Process, Technology Strategy

Optimizing Business Process Operations: Strategies for Excellence and Innovation

Posted on March 11, 2024

By Claudia Miller

April 18, 2024

Today’s business environment has changed considerably since early management innovations driven by pioneers like Peter Drucker. Drucker was able to conceive of the information-driven workplace when he developed his framework of ‘Management by Objectives’, and its emphasis on measuring performance as the defining criteria of operational success. Now relied on as a major pillar in the Business Process Operations community, even Drucker probably could not have visualized the central role of web-enabled dashboard reporting of Key Performance Indicators (KPI’s), the business process transformation capabilities offered by contemporary web services, or the now central role that business process optimization plays in the performing business as an institution. This article will provide a summary review of the advanced strategies commonly found in today’s operations environments, highlighting many of the technical innovations that are making process transformation a commonplace affair for any organization. Finally, several case studies are presented that are emblematic of these new trends in business process optimization.

Introduction

The core defining purpose of any business is to create value from which profit may be earned. The margins between value creation and profit grow increasingly thin in a globally connected marketplace, as vendors and customers have radically increased contact with one another and each other. Within the global economy, it is no longer sufficient to provide a unique service at all, but rather one must enter a crowded marketplace no longer constrained by geographical proximity; language barriers; local or national laws, in some cases; or lack of access to data on trending, sourcing, etc. Business Process Operations, as a dedicated field of interdisciplinary management, applies objective strategies and principles to drive increases in value creation by accounting for these factors and re-balancing the equation of value production by virtue of measured optimization.

Theoretical Framework of Business Process Operations

The division of labor has long been a central focus of social institutions, foundational to the very advent of government and social order on which they are predicated. “Work”, in this sense as a Twentieth century practice, underwent its most significant transformation since the Industrial Revolution with the advent of “Taylorism.” Developed by Frederick Taylor, and famously implemented by Henry Ford in his automotive production plants, Taylorism sought to foster efficiency by focusing on the productivity of individual staff members and their suitability to tasks. By dividing tasks and roles appropriately, Taylor reasoned, greater efficiencies might be gained.

Now considered rather outdated, contemporary Business Process Optimization approaches focus on value-chains as more holistic, end-to-end entities situated within a global business milieu. Kaizen, or “change-good”, grew as a set of best practices in mid-century Japanese manufacturing. With its emphasis on continuous, incremental improvement, and encouraging openness and transparency on the part of management, Kaizen was an important front-runner to the contemporary “flattened” organization. The possibility of process transformation was open to all, running counter to “Taylorism”, often critiqued for its emphasis on evaluation of individuals rather than on processes as a whole. Within Kaizen organizations, or Total Quality Management (born out of the Toyota Production Model, or TPM), any worker or manager can trigger an incremental process improvement simply by identifying the opportunity and suggesting an innovation. This culture of continuous innovation led to a reputation for quality in Kaizen manufacturing in Japan that has now become a global hallmark of a performing organization.

Another important callback to Drucker in Business Process Operations transformation that is in tune with Kaizen and other “Lean” methodologies is to view the worker and the organization as symbiotic; aligning the values and goals of the worker with those of the organization forms the low-hanging fruit ripe for efficiencies. “Lean” organizations go out of their way to find such overlaps, encouraging their resources understand and augment their roles in the bigger picture of creating a “minimum viable product” in as few steps as possible, and playing to the strengths of the team as a whole.

Want to learn more? Book a meeting with us today!

Technological Innovations in Business Process Operations

The discipline of Management aside, recent innovations in the software space have transformed contemporary Business Process Operations even further. The rise of Business Process Management Systems, or BPMS’s, has radically altered the landscape of business process transformation. Unlike the manufacturing operations on which Kaizen was developed, many business processes today are automated using information technology (IT). These components are more nebulous and less hands-on; a BPMS suite allows innovators to model steps within their organization in one, end-to-end location, allowing for a critical intersection between operations resources and the IT teams that support them. Ideally, the operations and IT teams interact in a continuously evolving business platform with an eye towards performance and efficiency, the essence of Kaizen in the information age. Core to its functioning a BPMS suite will also allow for the creation and monitoring of Key Performance Indicators (KPIs) to track the end-to-end functioning of operations; these KPIs allow administrators to quickly find “hot spots” where processes are running into trouble, allowing for effective resource intervention and/or IT innovation.

There is a rapidly burgeoning field that takes this automation even further: machine learning and Artificial Intelligence (AI). Once a data ecology like a BPMS is created, a domain of information is now open to analysis. Heuristically-trained neural networks can operate over such a space, and with solid modeling techniques, machine “intelligence” can be arrived at wherein patterns are recognized, and opportunities for innovation are identified. There is often much alarm at the idea of such systems “reinventing” resource roles and organizations, but practitioners in the field are quick to identify that such systems simply identify efficient and non-efficient patterns, human through and through. As of this writing, at least some level of heuristically-driven Business Process Operations modeling is being readily adopted as a major performance component to most organizations’ process improvement teams.

Strategies for Business Process Optimization

Pivoting to the practical, here are several strategies most organizations could benefit from when it comes to Process Optimization:

  • No More Big Bangs. Previous operations models which rely on large-scale rollouts, major implementations, or sudden changes to operations cultures should be scaled back in favor of smaller, incremental changes first. A team with the background and decision-making authority to identify such opportunities, such as a “lean transformation” group, should be established and encouraged to “test, measure, and adjust” their operations model following such incremental changes.
  • Consolidate Process Planning. Organizations should strongly consider a BPMS system where possible, and otherwise attempt to stage business process transformation within a common area of the enterprise. Meaningful analysis and redesign of operational processes relies on all areas of the enterprise being represented.
  • Identify, and Continue to Identify KPI’s. Easier said than done, managers and staff should strive to define those KPI’s that capture the essence of their value creation with respect to processes. Key metrics are those tied directly to Time, Quality, and Consistency of processes that all lead to Profit in the marketplace. Far from a once yearly or quarterly activity, KPIs should continue to be explored and tested.
  • A Culture of Continuous Improvement. Fostering an empowered workforce who are connected to the value creation of their organization, welcome feedback wherever it is found regarding possible process optimization.

Organizational Culture and Change Management

As is seen in the field of emergency management, the role of organizational culture cannot be overemphasized; it has been demonstrated to be a direct causal factor in an organization’s ability to respond to task backlogs during novel events and crises. Organizations which tend to have a “flattened” response to task resolution achieved by their processes are often those where resources feel decoupled from the processes which they implement. Opportunities for process transformation are reserved for a select few, and usually without input from the larger resource base as Kaizen and other methodologies this article explored would recommend. On the other end of the spectrum, organizations with across the board buy-in but little process rigor tend to see a swell of activity that then tapers off. The performing organization with a program of continuous process improvement across all stakeholders but with the discipline of Business process Management can generate but also sustain such exponential swells in activity.

An organizational culture that emphasizes constant but manageable change puts itself in the best position possible to adapt to changing market events, with Business Process Optimization as the toolset for these adaptations.

Case Studies

Two case studies are offered here for consideration. From a manufacturing perspective, Sunil Kumar (see References) discusses the role of Kaizen in identifying bottlenecks within a small-to-medium business operating in rural India. By identifying KPI’s, Kumar was able to implement the “five whys” technique with plant resources, identifying root causes in the machining process that were challenges to value creation. Two Kaizen “events” that gave the manufacturing team the opportunity to brainstorm various fixes resulted in two major innovations, which were then in turn seen as tangible progress within the KPI’s.

Pivoting towards an information operations model, Zheng (see references) performed a case study noting the addition of a BPMS package into the operations of a drinking water company in the Netherlands. Due to a more competitive landscape, the company introduced a BPM program and accompanying Agile methodologies to “lean” out its processes. A Process Team was founded and empowered to track the company’s value life cycle from initial customer contact to delivery. Making assessments of each part of the process and using the BPMS to track the results, the process team and its adopted changes increased the efficiency of key delivery cycles by over two-hundred per cent, and saved the company 1,6 million Euros.

Conclusion

In this article, the importance of Business Process Optimization for the contemporary organization was discussed. Building on key principles from Management by Objectives, Kaizen/Total Quality Improvement, and other Lean/Agile principles, it was seen that competition in the global marketplace necessitates the use of such tools to balance value-generation with profits. The BPMS, and other automation, are tools readily adopted by organizations to achieve such ends, but they must be coupled with an organizational culture of continuous change and improvement to be effective.

References

Axford, Barrie. Theories of Globalization. Polity Press, 2014.

Beech, Colin E., et al. “The Dynamics of Organisational Response: Simulating Cultural Change.” International Journal of Complexity in Leadership and Management, vol. 2, no. 1/2, 2012, p. 74, doi:10.1504/ijclm.2012.050399.

Drucker, Peter F. (Peter Ferdinand), 1909-2005. Classic Drucker : Essential Wisdom of Peter Drucker from the Pages of Harvard Business Review. Boston :Harvard Business Review Book, 2006.

Kumar, Sunil, et al. “Process Improvement through Lean-Kaizen Using Value Stream Map: A Case Study in India.” The International Journal of Advanced Manufacturing Technology, vol. 96, no. 5–8, 2018, pp. 2687–2698, doi:10.1007/s00170-018-1684-8.

Lanz, Rainer, et al. “Offshoring of Tasks: Taylorism versus Toyotism.” World Economy, vol. 36, no. 2, 2013, pp. 194–212, doi:10.1111/twec.12024.
“Operations Management: Process Types.” IvyPanda, 30 Oct. 2023, ivypanda.com/essays/operations-management-process-types/.

Samudrala, Suresh. Machine Intelligence: Demystifying Machine Learning, Neural Networks and Deep Learning. Notion Press, 2019.

Suárez-Barraza, Manuel F. KAIZEN-21: The Philosophy of Continuous Improvement and Operational Innovation in the New Global Environment. Emerald Publishing, 2023.

Zheng, Gongyao. “Implementing a business process management system applying Agile development methodology: A real-world case study.” Rotterdam, DU: Un published Erasmus School of Economics, 2012.

Steve Solt headshot

Claudia Miller is the AVP of Professional Services at KDG. Experienced in HTML, CSS, SCSS, and custom WordPress functions, Claudia’s flexibility has enabled her to move seamlessly between custom applications, websites, databases, and crowdfunding platforms with tremendous success, no matter the industry or the issue a client is facing.

Want to learn more? Book a meeting with us today!

Recent Posts
KDG logo

Revolutionize Your Operations

Streamline your operations, enhance efficiency, and unlock sustainable growth with tailored business process strategies

Share this post!

Explore More: Related Insights

  • Article
    The Risks of On-Premises Proprietary Platforms: Time to Migrate?
  • Case Study
    Exeter Orthodontics: Building a Site That Scales With Business
  • Article
    Celebrating 20 Years of KDG