Process-oriented thinking: good for your company and good for your customers
From process management to project management
Process-oriented thinking: good for your company and good for your customers
As customers we seldom give a moment’s thought to how far a product has to travel before it reaches us. The journey actually starts from the moment we have a question or a requirement. All the activities that contribute to the goal of satisfying the customer are called processes. The organisation of those processes, within one company or often also between several companies, is crucial for a company’s efficiency and ultimately also for customer satisfaction. The Operations & Technology Management competence centre has amassed a great deal of expertise on the architecture and strategic importance of processes. We brought together some of the School’s researchers for a round-table discussion: Prof. Dirk Deschoolmeester, who has been involved in research in this field right from the start, Erik Van den Broecke, Prof. Mario Vanhoucke and Prof. Stijn Viaene, all members of the young research team that is currently enthusiastically exploring this complex subject in depth.
Getting away from a silo mentality
Organisations are usually structured vertically into departments, each with their own isolated area of competence (“silo”) and headed up by a manager. Each department forms a link in the production process, irrespective of whether this involves making a material product or providing a service. Often the departments in an organisation are not alone in this process; they in turn can also depend on external companies that act as suppliers. Some companies also outsource a proportion of the tasks of a department, ICT being a good example.
A purely functional approach based on areas of competence is not, however, always conducive to the effortless, horizontal transfer of information from one department to another. This practice may cause delays and misunderstandings, which does not benefit either the company or the customer. A company therefore has to think not only in terms of areas of competence and departments, but also in terms of processes that the product has to go through. “The quality of an organisation is very much determined by the quality of its processes and procedures,” according to Deschoolmeester, who knows this only too well from experience. “A company must therefore analyse its own working practices from the tendering stage right through to delivery to the customer. A process-oriented approach assumes that you put the customer first, not the product.”
Technological developments have clearly expedited the tendency to think in terms of processes. ICT is not only capable of supporting the various processes; it is also useful in analysing their quality and making adjustments if need be. How companies manage to do this is one of the key areas explored by the research team in the Operations & Technology Management competence centre.
Processes are changed at project level
When a company decides to make its structure more process-oriented – often the company in question is a well-established business – it has to make many changes right across the board. An initiative to introduce changes in one department will have no effect, since a process spans several departments. “There are many methods to manage one project well,” argues Van den Broecke. “But if you want to change the whole company, for example in the case of a bank merger, you have to deal with a whole series of projects, sometimes hundreds of them, which together form one organisational programme. In that case, project management methods are inadequate if you want to get an overview of such a large mass of projects. The solution is for a programme manager to manage several related projects, while a portfolio manager sees to it that these projects are in line with the company’s corporate strategy. That’s the ultimate aim in fact: to implement your strategy by making process improvements.”
Revealing figures
You cannot change processes based on gut feeling alone. Projects, and at a higher level programmes and processes, will therefore have to be constantly gauged on performance. Viaene explains: “This may be limited to an analysis of the key performance indicators of the processes that you want to identify or adjust. But you may also decide to delve into a larger mass of data in a bid to filter out patterns that can be used to improve processes. The quantitative methods underlying all these measurements and attempts at pattern recognition are central to our research. We have found that few companies know exactly what they need to measure or how they can manage these measurements as a continuous process.” Accordingly, the researchers do not confine themselves to measuring techniques and instruments, but also concentrate on the visual presentation of the results obtained. “Filtering a large amount of data is one thing,” says Vanhoucke, “but presenting the relevant information in a comprehensible manner is something else we devote a great deal of attention to in our research. People aren’t interested in looking at endless lists of figures or Excel sheets. You have to turn them into clear graphs. Only then will you be able to perform a lucid analysis, on the basis of which you can prepare a report on which areas need to be adjusted. The same principle applies when you are monitoring and evaluating a project, programme or process.”
Theory and practice
Once you have the figures, correlations can be established and action taken. Approaching the issue from the point of view of process management, Deschoolmeester explains that it is important for a company to continually evaluate the processes it wishes to improve against, for instance, its structure, strategy, ICT support and the project portfolio that should bring about these improvements. “The relationship between the processes and the competencies and skills of employees is another important factor. If you want to introduce new processes in the workplace, you have to select the right people for the job.” Although the members of the research team concentrate primarily on rational analysis in process, programme and project management, they realise that human support is needed if the changes are to be implemented. “Analysing data and employing instruments and techniques is a way of supporting decisions, not making them,” explains Vanhoucke. “Ultimately, people have to be willing to translate a decision into tangible change.” Van den Broecke adds: “Change management clearly overlaps with our research interests, which tend to focus more on the processes and projects themselves.”
Thinking outside the box
In practice, processes do not usually take place within the clear-cut boundaries of one organisation. As a result of delocalisation more and more companies are splitting up into multiple legal entities and ambivalent contracts often lead to a complex jumble of alliances. “Business schools and consultancy firms have shown that alliance arrangements or partnerships produce win-win situations that are much more important than indulging in navel-gazing within one’s own organisation,” comments Deschoolmeester. “If you want to examine processes, you have to bring several parties together, which is not always easy to do.” Van den Broecke has come to the same conclusion within project management: “Some projects involve several entities, for instance where ICT is outsourced. The question is then how you can improve and coordinate collaboration at project management level so that it produces added value for the customer.” According to Viaene collaboration between several companies must be supported on various levels. “When it comes to strategy, organisation, processes and ICT, you have to come to a proper agreement and share information via standards. All stakeholders need to speak the same language, for instance when they’re talking about a ‘customer’, or when they want to coordinate their value chains to enable them to serve the same customer together. That calls for particular attention to information and process architecture, which is another area we tackle in our research.”
Pioneering work
To maintain and consolidate its position as one of the top international business schools, Vlerick Leuven Gent Management School gives priority to investing in research. “One of our School’s strong points is that we want to provide an answer to questions that concern the business community and we do that through our own research,” comments Viaene. “Companies commission us to carry out research, but we also do a lot of fundamental research that is not applied in business until a later stage.” Vanhoucke takes up this point: “There’s a huge difference between conducting fundamental research and translating it into a commercial environment. It’s our job to shed light on issues in an academically sound manner, issues that companies may not even be thinking about yet, but that we feel will become important within the not too distant future. At that early stage it’s not yet possible to muster a group of companies affected by the issues at hand, but we do test our ideas in a business environment. When we are deciding on topics for fundamental research, we draw our inspiration from problems that companies are wrestling with for which no solution has yet been found. We find, for instance, that quite a few projects in companies are unsuccessful. We take a close look at the situation to find out what went wrong. The advantage of doctoral studies is that you not only seek solutions, but also come up against a fair number of problems. That learning experience is invaluable for companies.”
Business Process Management Network
The Business Process Management (BPM) Network is an initiative of the Operations & Technology Management competence centre, which offers companies faced with major process changes a partnership in which the focus is on research, training and networking. Research members commit themselves for a period of at least three years. The network has outlined nine research areas in which the ins and outs of business processes are explored in depth. The starting point for research is the relationship between the structure of a company and its degree of process orientation. Other relationships are then scrutinised with the ultimate aim of determining what part ICT might play in supporting processes. One of the research themes that will be addressed in the BPM Network at some point in the future is the introduction of a process-oriented organisational structure within the traditional departments of an organisation and the associated problems of change management.
Info:
Peter Willaert
tel.: +32 (0)9 210 97 91
Research members: Delhaize Group, Dexia Bank, Pioneer Europe, BIAC / Switch, FOD P&O
Technology members: IDS Scheer, Microsoft
Prime Foundation Partner: Möbius
Vlerick Programme Management Research Centre
The Vlerick Programme Management Research Centre is a research platform for companies that are faced with the task of implementing a new corporate strategy. The research centre checks the status of the company’s programme and portfolio management and focuses on six key areas that play an important part in ensuring the successful implementation of the strategy, i.e. objectives management (making sure that everyone is pulling in the same direction), planning management (relating projects to one another), competence management (selecting the right people to oversee implementation) and a further three areas that focus on the strategy, opportunities and risks in the project portfolio.
Info:
Erik Van den Broecke
tel.: +32 (0)9 210 98 24
Research members: Mobistar, Thomson Compu-Mark, Threon
Foundation Partner: Ardatis
Training courses
ICT Management 10 days
Date: 6 February – 22 May 2006 (10 Mondays)
Venue: Ghent campus
Info: jurgen.willems@vlerick.be
Business Process Management Workshop
Date: 27, 28 and 29 March 2006
Venue: Ghent campus
Info: gaetane.beernaert@vlerick.be
Company-specific
The Operations & Technology Management competence centre also organises tailor-made training courses in IT management, Business Process Management and Project Management, or a combination of all three disciplines.
Info:
Erik Van den Broecke
tel.: +32 (0)9 210 98 24
New!
Business Intelligence Research Centre
In January 2006 the Operations & Technology Management competence centre will launch a new Business Intelligence research centre. Business Intelligence focuses on the efficient and effective use of information for operational, tactical and strategic management support in a modern business context. This includes investing in collection, storage, retrieval, analysis, data mining, visualisation and communication technologies. We have found, however, that the high expectations of value creation – more specifically better management – that are raised when companies invest in information systems all too often come to nothing in practice. In other words, this investment in Business Intelligence is often difficult to align with a company’s commercial operations and its management and thus falls well short of expectations. The new research centre aims to help its research members and the public at large to explore how both worlds can be brought more closely into line with one another.
Info:
Stijn Viaene
tel.: +32 (0)16 24 88 45
Orator - Issue 18 - December 2005