Process optimization often accompanies large-scale ERP implementations and digital transformation programs and may be an outcome of Mergers and Acquisitions activity. These initiatives offer an opportunity to analyze internal processes and make modifications while the new software is implemented or a business unit is brought on. However, companies should not just look at process optimization as part of a larger IT program; it is important to strive for continuous improvement at all times to maintain or elevate competitive advantage.
Based on extensive experience with process optimization, we have identified four critical success factors:
1. Ensure that process optimization has leadership support and aligns with strategic direction
Leadership involvement, particularly at the CEO or COO level, is critical to the success of any process optimization project. First, gaining initial approval from these executives requires a clear business case to show the value as well as competitive advantage gain. Second, most initiatives span business units or functions within a company, and high-level leadership typically drives the strategic direction and enforcement of changes. The right level of involvement from senior leadership keeps the initiative on task and ensures that benefits are quantitatively measured against strategic KPIs.
2. Set up an operating structure to solve problems and drive change in the organization
A steering committee comprised of leadership is useful to set strategy, approve decisions, provide direction, and support change as the team defines, designs, and rolls out the process optimization. A cross-functional, change-driven operating committee can add lasting business value during a process optimization initiative. Change management is one of the most challenging parts of these programs, so it is imperative to have a clear communication and training plan in advance of the roll-out, as well as plans for monitoring compliance across the organization. As outlined in the book, “Mindset – The New Psychology of Success,” by Carol S. Dweck, people tend to have either a fixed or a growth mindset. Fixed mindset individuals focus on failures while growth mindset individuals take challenges head-on and embrace failures as opportunities. It is important to mobilize the process optimization initiative with team members that have a growth mindset to find opportunities and be change agents within the organization. Members of the operating committee who prove to be resistant to change should be reassigned quickly to keep the process optimization initiative on track.
3. Use data and analytics to target areas for process optimization
Data and analytical reporting are the lifeblood of process optimization projects; however, many organizations lack clean master data or have immature analytical tools and processes. There is a critical role for metrics in aligning data priorities with business goals, as outlined in another insight post. Liberty helps leadership roadmap their data and analytic capabilities to allow their KPIs and tools to work for them. This helps identify and prioritize process optimization opportunities. At one client, Liberty’s analytical tools identified roughly $10M in missed discount opportunities. This provided a baseline for focused process optimization in the client’s end-to-end procure-to-pay processes. The data-driven approach broke down any barriers to change, as the analysis unveiled clear business value. We then defined KPIs and reports that leadership should build and monitor as processes were changed, providing industry benchmarks to track their process optimization success.
4. Define the ‘to be’ business process and enhance this with RPA
Robotic Process Automation (RPA) can add high value to an organization, but is dependent on clear definitions of to-be business processes. It is critical to do the foundational process optimization work, looking at the full end-to-end business process, to design the right role for a specific task. As a June 2018 Harvard Business Review article points out, “RPA does not redesign anything. It doesn’t ask whether we need to do this activity at all. It operates at the task level and not the end-to-end process level.” If an organization does not have clean data, clear accountability, and well rolled out holistic processes across business units, then adding RPA magnifies gaps and issues in the current business process. Once ready for RPA, companies should be very thoughtful in their development and rollout. A Liberty white paper outlines key success factors to implement RPA for the retail bank industry – including “start small and move fast,” “set realistic goals and expectations for your proof of concept,” and “ensure consistent executive sponsorship” – many of which could be applied as guiding principles for other industries.
Liberty Advisor Group can kick off and define a successful process optimization
Whether your processes need full optimization or you are looking to implement more advanced RPA efforts within your business processes, Liberty can provide expertise in organizational structure, process definition, change management strategy, and/or data and analytics solutions. Continuous improvement through business process optimization is something every organization should consider to strengthen business and gain a competitive advantage.
About Liberty Advisor Group
Liberty Advisor Group is a goal-oriented, client-focused, and results-driven consulting firm. We are a lean, hand-picked team of strategists, technologists, and entrepreneurs – battle-tested experts with a steadfast, start-up attitude. A team with an average experience of 15+ years, that has delivered over $1 billion in operating income improvement and over 300 M&A deals for our clients. Liberty has a proven track record in Business and Technology Strategy, Transformation and Assurance, Data Analytics, Business Threat Intelligence, and Mergers and Acquisitions. We collaborate, integrate, and ideate in real-time with our clients to deliver situation-specific solutions that work.
To learn how Liberty can support your process optimization efforts, contact Jason Juds, Principal at Liberty Advisor Group (email@example.com).