Not for EveryoneBy David Strom | Posted 2010-04-08 Email Print
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Many companies have capitalized on the benefits of business process improvement, including productivity gains, cost savings, reduced project lead times and the integration of key technologies to reduce supply-chain costs.
Not for Everyone
BPI isn’t for every organization, however. A company has to want to be organized and accept the software’s organization schemas for its work processes. And some BPI efforts fail.
“Some of these products are very robust with excellent features,” eCity Interactive’s Weinberg says. “Then they get unleashed to the team, and no one explains how they are going to be used. It’s best to determine your process first, and then use software to implement it.”
But BPI can codify what is going on in an organization—things that could be hard to analyze otherwise. “Sometimes the loudest complainer knows that something is going wrong, but not why or where,” explains consultant Chaney. “Using these tools, we can figure out what is breaking down.
“Normally, the biggest stumbling blocks and most fearful staff are the line managers. The workers down on the line know that things could be improved, but the managers think they’re doing a good job. One line manager told me that they had already improved things. But by the time we got through, we shaved 40 percent of their activities that weren’t value-added or productive.”
Completing More Projects
Oregon Freeze Dry in Albany, Ore., has also benefited from BPI technology. The custom freeze-drying manufacturer has been using Realization Technologies Execution Management software for years. The product is based on critical-chain project-management theory developed by Eliyahu Goldratt. This theory looks at constrained resources and can reorder schedules to maximize output.
“We’ve been able to complete more projects than we did before we used this tool,” says Alan Huster, the firm’s process engineering manager.
The company divided its projects into three groups: regulatory groups, those that sustain their business, and those that can offer new profits and grow the company. “If you understand the differences, you can gain a lot from critical-chain management,” Huster says.
BPI is working well for Oregon Freeze Dry, which completed more than 500 projects last year and continues to grow revenues. “Using this software has become very ingrained in our company,” Huster says. “When we are 10 percent of the way through a project, we already know whether we’re tracking properly. With traditional project management tools, it usually takes until you’re 90 percent done to know that you’re off-target.”
Using this software has also made it easy to identify bottlenecks. “Early on, one person in R&D did all of our labeling work,” he explains. “From the number of tasks accumulating for this person within the system, it became apparent that this was the bottleneck.
“We have to get regulatory approval if we change any of our ingredients, and then we have to change our food labels. It is a cumbersome thing to keep up with. We made some changes to relieve the load on this one person, and the overall project output quickly increased.”
The key to the company’s success was training. When the technology was first deployed, Oregon Freeze Dry hired an outside value-added reseller to help coach its staff. In addition, the company holds project team meetings each morning to discuss delays and other issues that can be quickly resolved with everyone in the room.
“Using this tool has removed a lot of stress from people’s daily activities,” Huster reports. “They don’t have to worry about what they’re going to be doing tomorrow because all their tasks are in the system. The tension of trying to keep track of what everyone else is doing and figuring out your own role goes away.”
A BPI solution also helped streamline the monthly account-closing process for Nationwide Insurance. “We had to coordinate inputs from several thousand separate items and produce a monthly report to management and stockholders,” said Charlie Lee, former assistant vice president, process management, at the Columbus, Ohio-based company. “It was a very chaotic and flawed.”
Nationwide chose Pegasystems’ Smart BPM Suite to automate this task since the company already had the software in-house, notes Lee, who is now vice president of shared services operations for Endurance Services Ltd. in White Plains, N.Y. “We went from a perpetual closing—we would just about finish one month’s close before starting on the next month—to a process that now takes less than half the time.”
Nationwide took about a year to implement the new process and gradually won over the various stakeholders and managers. “Eventually, our executives could see what they contributed to the process and the value of the system,” Lee says.
When used properly, BPI can bring big benefits to a company’s bottom line. The trick is knowing how and where to get started.