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BPM (Business Process Management), CRM and Cross-Functional Enterprise-Level Customer-Focussed Business Processes
BPM (Business Process Management), CRM and Cross-Functional Enterprise-Level Customer-Focussed Business Processes
Alan McSweeney
Objectives
To describe an approach to integrating operational processes into cross-functional customer focussed view for improved customer relationship management
Scope
Concerned with cross-functional, enterprise-level business processes associated with customers and how organisations can take a cross-functional view to drive customer satisfaction Not concerned with providing details on business process management, except where it is relevant to the crossfunctional customer-oriented view
Poor customer service is still pervasive despite awareness of the need for and benefits of improved customer service Many organisations have not changed their business processes to deliver improved customer service and provide what customers want Improved customer service means optimising end-to-end processes from the customer viewpoint
Involves linking multiple internal processes to get cross-functional view from customer perspective
Myth of CRM Customers are not outsiders We are all customers utilities, service providers, financial institutions, government agencies CRM is about how WE want to be treated When we talk about customers (THEM), we mean us
More Of
Value Responsiveness Involvement Consideration Dependability Flexibility
Less Of
Aggravation Time to Complete Transaction Rigidity Cost Bureaucracy Excuses Lack of Integration
More Of
Work Customers Sales Revenue Margin
Less Of
Personnel Facilities Cost
Need to balance management focus between more with less and most for less More with less focuses on internal reductions: cost, staff More for less focuses on external improvements Only a cross-functional view of business processes can achieve this balance
Internal processes focus on operational functions Cross-functional view links internal processes to get end-to-end customer view of organisation
Cross-functional processes are those that really affect customers from start to end
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Customer management
From customer acquisition to management to repeat business to up-sell/cross-sell
These processes cross multiple internal organisation boundaries and have multiple handoffs but they are what concern customers Cross-functional processes deliver value
Value to the customer Value to the company
Integrated cross-functional processes means better customer service and more satisfied and more customers
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The organisation sees the structure vertically and in a compartmentalised view and all to frequently does not see the customer viewpoint
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Creating a cross-functional view shows you how your organisation really works Can be used to identify real opportunities for savings as well as improvements Creates a win-win of More For Less and More With Less
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Focussing on cross-functional processes is a key way of influencing outcomes and delivering value
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Outcomes You cannot force customers to buy more products and services
Be Easy to Do Business With Be an Organisation Customers Want to Do Business With Generate and Maintain High Customer Satisfaction
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Outcomes You cannot force customers to buy more products and services
Be Easy to Do Business With Be an Organisation Customers Want to Do Business With Generate and Maintain High Customer Satisfaction
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You need to get senior management involved and senior management must make the commitment to get involved Must engage with the detail Must understand the business
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Products and services are becoming commoditised No real differentiators New products and services are readily and quickly replicated Times to market are becoming much shorter Start-to-end customer focus and service is real differentiator Integrated products and start-to-end focus and service are difficult to commoditise Combine service delivery with product/service Need to look at business in terms of start-to-end processes
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Cross-Functional Processes
Horizontal Cross Functional Processes Externally Focussed Link Operational Processes Cross Organisation Boundaries Vertical Operational Processes Internally Focussed
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Operational Processes
You have to have them, manage them, monitor them, update them You cannot ignore them or do without them They define day-to-day specific activities and associated controls But you need to ensure that operational processes exist with a larger enterprise ecosystem
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Cross-Functional Approach
Connects operational processes in a start-to-end view Identifies which key operational processes need to be improved Defines the information that needs to be collected Enables effective action to be taken Links measurement to achievement of business goals Becoming process-focused is a change in the way organisations operate from functions to processes
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Measuring the effectiveness of end-to-end cross-functional processes needs integrated information collection across operational processes
To measure from end-to-end
Closing the information gap is an essential prerequisite of implementing effective and usable business process management Responsibility of both the business and IT working collaboratively
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Data refers to the source figures and numbers. It is the raw material for analysis
Data gap is the absence of the tools and operational processes to consistently collect, store, manage the data and make available tools to perform analyses.
Action is the need for operational business processes to ensure that the information presented is used and acted upon The Data, Information, Action cycle means that there must be a continuum from collecting the raw data to using it effectively Process to achieve this must be embedded in the organisation
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Key Measures
Overall financial performance Performance of partnerships and alliances Product and service line profitability Client profitability Client acquisition and retention
Overall operational performance Performance relative to competition Delivery of profit and value to clients Client satisfaction Staff performance
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If you measure what matters to the customer then you will be measuring what is important to the organisation Creates an objective view of performance Bear in mind that what gets measured gets done
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Change of management attitude regarding customer centric processes Widen attitude to process management from operational to cross-functional Represents a significant effort and a new approach by management
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Design enterprise, crossfunctional processes to achieve business goals Define organisation structure 1. needed to operate the enterprise, 2. cross-functional processes IT systems that add value cross 1. functions 2. Cross-functional measurements 1. that link performance to costs and expenditure 2. Process for continuous 1. improvement 2. 3.
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The organisation chart by its nature emphasises vertical functions, seniority, vertical reporting lines Creates local domains of influence and vested interests An organisation chart view inhibits cross-functional process view Everyone is partially responsible so no-one has overall responsibility
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Measure what matters as work moves through the organisation through the individual operational processes Trends in these measurements will show the real health of your organisation
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Value chains add value and confer competitive advantage when defined and linked
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Need a clear understanding of the organisations operational processes Need to ensure that the operational processes are optimised Cross-functional processes involve collaboration between operational processes
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Effective cross-functional processes deliver on the organisations strategy Cannot divorce the organisations strategy from operational processes and their execution Collecting information on the performance of cross-functional processes will allow the execution of strategy to be effectively measured Linkage between strategy, crossfunctional processes and operational processes means individual process measurements can be linked to overall performance Allows goals to be connected to operational processes
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The following sample organisational models illustrate implementations of aligned cross-functional business processes and have the following core characteristics:
Enterprise-level process definition Focus on end-to-end cross-functional business processes that deliver value to customers Designed for simplified communication Common understanding of processes among process owners and users Simple structures and frameworks Appropriate use of external reference models and standards
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Core Processes
Processes That Create Value for the Customer
Product Delivery Order Fulfilment Customer Support
Enabling Processes
Processes That Supply Resources to Other Processes
Channel Management Supply Management Human Resources Information Technology Business Acquisition
Suppliers Processes
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Supply Chain
Innovate Plan
Source Sell
Make
Fulfil
Customers
Build
People
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Finance
Information
Environment
Governance
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Sample business process models have a common structure Generic structure that forms a template for specific actualisations
Operational Processes With Cross Functional Linkages Vision, Strategy, Leadership, Business Management Management and Support Processes
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Business Environment
Competitors, Governments Regulations and Requirements, Standards, Economics
Core Processes
Processes That Create Value for the Customer
Product Delivery Order Fulfilment Customer Support
Enabling Processes
Processes That Supply Resources to Other Processes
Channel Management Supply Management Human Resources Information Technology Business Acquisition
Suppliers Processes
Invoice Accuracy
Payment Times
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Identify and understand the cross-functional, enterpriselevel business process that create and add value Understand and define the metrics that measure crossfunctional, enterprise-level business process performance Define a plan for managing and improving cross-functional, enterprise-level business processes identifying priorities and resources Ensure there is sponsorship, ownership, accountability for results and recognition of achievements Communicate the vision to the organisation
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The Baldrige criteria framework focuses on continuous improvement that is concentrated on the customer, led by management, based on facts and data, and directed toward results
Organisational Profile: Environment, Relationship, Challenges
Strategic Planning Workforce and Human Resources
Leadership
Business Results
Process Management
Baldrige criteria framework is a superset of the crossfunctional business process management view of an organisation in order to deliver improved customer satisfaction Included here for the sake of completeness We are concerned specifically with cross-functional business processes relating to customer service and customer relationship management Baldrige criteria framework can provide a proven framework for this
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Business Environment
Competitors, Governments Regulations and Requirements, Standards, Economics
Core Processes
Processes That Create Value for the Customer
Product Delivery Order Fulfilment Customer Support
Enabling Processes
Processes That Supply Resources to Other Processes
Channel Management Supply Management Human Resources Information Technology Business Acquisition
Suppliers Processes
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Align
Supply Chain
Innovate Plan
Source Sell
Make
Fulfil
Customers
Build
People
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Finance
Information
Environment
Governance
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Aligned Processes
Understanding, defining and aligning business processes are key to success Aligned processes increase return Individual operational processes need to be connected to larger cross-functional processes
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Aligned Measures
Appropriate performance measurement available to all is important Need to measure results of cross-functional processes and constituent operational processes Ensures focus is maintained on what is important
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Dedicated, trained and skilled resources are important Need usable, functional technology providing process design, mapping features Ensure full-time responsibility
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Knowledge Sharing
Acquire and share internal and external expert knowledge Implement knowledge sharing technology Learn from others mistakes Use appropriate external expertise
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Need to communicate the need to operate in a business process oriented manner Need to sell the concept to personnel Showing results is necessary to get buy-in and sustain BPM initiatives
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Process Performance
Process Design
Cause Analysis
Process Redesign
Knowledge Management
Execution Improvement
Continuous Improvement
Process Improvement
Gap
Success
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Cross-functional processes need to be aligned with actions Performance of actions rolls-up to performance of process
Consists of one or more of Consists of one or more of
Sub-Process
Process
Process
Process
Process
Sub-Process
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Fulfil Order
You know what matters to customers You measure what matters to customers You identify and understand the key cross-functional, enterprise-level business processes You start initiatives that focus on cross-functional, enterprise-level business processes You link operational processes to cross-functional, enterprise-level business processes You reward personnel based on contribution to customer satisfaction and performance
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There will be problems You are encroaching on peoples territories You are creating waves Understand and deal with
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Summary
Too often organisations look to what is important to them and now what is important to their customers Too often organisations are structured along operational lines Poor customer service is still pervasive despite awareness of the need for and benefits of improved customer service A cross-functional view of business processes shows what is important to customers If you measure what matters to the customer then you will be measuring what is important to the organisation
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More Information
Alan McSweeney alan@alanmcsweeney.com
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