Developing Business Processes and Operations - Essay Example

Developing Business Processes and Operations Table of Contents Executive Summary 4 Introduction 4 Need for Development 5 Developmental Process 6 Business Process Development 7 Operational Development 7 Improvement vs. Innovation 8 Performance Objectives 8 Importance of Benchmarking 8 Case Study 9 Description of the Current Situation 9 Proposal for Change 10 Expected New Situation 11 Fishbone Diagram 11 Application to the Case 12 Workflow Diagram 14 Application to the Case 14 Decision Matrix 15 Application to the Case 15 Justification of Change 16 Implementation of Change 16 Conclusion and Recommendations 17 References 18 Executive Summary The company discussed in this report is a start up organisation which is having three main businesses, viz. online journalism, academic content development and management research. Three teams – A, B and C look after these businesses and each one id performing quite well. Team C has steadily been a profit centre for the company and has a solid overseas clientele. Recently, it was found that this team is not being able to match up to its past performance standards and rate of rejections are also increasing. Through a brainstorming session various reasons were found to be responsible for this problem and the management zeroed in lack of an editor and latest software as the prime reasons. Applying tools such as fishbone diagram, workflow diagram and decision matrix, it was found that appointing an editor will be the most logical and feasible solution to level the situation. Introduction Business concept had undergone a major change in 1980s. “It was the realization by management that the business and manufacturing processes, not the people, is the key to error free performance” (Harrington, 2007). Since then, organisations have been continually striving to escalate the business processes and related operations to the level of perfection as it has been observed through the 1990s till date that “stockholders are not looking for good quality – they want perfection” (Harrington, 2007). For the purpose of this research I have chosen a start up organisation which consists of three teams each handling a distinct process. Team A performs online journalism and prepares news reports for various websites; Team B prepares international tests preparatory tools and Team C caters management solutions to retail clients. The three teams are autonomous in their functioning and have individual team leaders. A separate business development team headed by the CEO looks after networking and client development. Team wise client allocation is determined through weekly meetings as well as on ad hoc basis. The company has been enjoying considerable reputation in its sector and is also planning to diversify its operations and services in other locations as well. It is in a growth mode and is looking forward to increasing its employee base in terms of the existing units and especially a dynamic marketing department. Following implementation of this plan the workforce is expected to be doubled over a period of 9-12 months. It is also expected that the revenues will be remarkably enhanced in the next quarter. Need for Development The current business scenario is highly process driven. Organizations have been showing an increased trend of combining the concept of parallel organisation with that of team based performance (Axelrod, 2003 P. 11-15). The objective is to attain strong customer focus and to deliver perfection. With changes in global business environment, process development is being perceived as a tool to improve the organisational value chain (Harmon, 2003 P. 45-47). The responsibility of making processes error free goes to human activities which can be perfected through implementation of HRM tools such as motivation, counselling, coaching, and training and development (Armstrong, 2006). Process development in itself is a complex activity which requires a strong organisational capital of collective KSAs. Hence, an organisation’s capability to efficiently strategise and implement process development adds to its competitive advantage (Pisano, 1997 P. 10). Developmental Process This resembles any other developmental programme and consists of the following steps: 1. The management decides upon the quality standards that require to be maintained in terms of manufacturing process, product features, value proposition and end user. 2. The management observes how the product differs from the consumers’ expectations. Generally when a product fails to meet the demands of the customers in terms of quality, the management turns to quality planning and control (Young, 2009 P. 117-118). 3. Quality planning and control follows gap analysis in order to enhance quality, thereby reducing cost and maximising revenues (Roberts, 1994 P. 93-96). 4. Quality performance is evaluated by using relevant metrics in order to check for its sustainability. This is required to ensure accomplishment of long term objectives (Office of Government Commerce, 2002 P. 89-93). 5. Integration is the final step, wherein the strategies formulated on the basis of the preceding steps are incorporated in the organisational processes in order to bring about the necessary changes. Business Process Development Any business process requires successful integration of the internal components. This is the first step towards alignment. Then process automation is carried out by combining business rules with process repositories. Finally, the process should be collaborated with the external entities such as customers, etc. Following successful implementation, all round integration is performed in order to manifest the fundamental goal of business processes – aligning the business with customer requirements (Jeston & Nelis, 2006 P. 187-190). Operational Development A comprehensive planning of internal operations requires the development of an operations manual. It is worth mentioning that such a manual should not be a detailed one, i.e. the instructions should not be very specific. Lack of flexibility may often prove to be counterproductive for the organisation (Abrams & Kleiner, 2003 P. 155-156). While devising a developmental regimen, the key characteristics have to be highlighted in order to achieve goal identity, the current competitive advantages of the organisation as well as those that it desire to achieve should be outlined in order to enhance goal clarity and; cost and time should be efficiently managed for the purpose of economy. Post implementation, there should be a comparative analysis of problems addressed and those overcome by developing the operations. This is necessary in order to check for the overall efficiency of the program (Abrams & Kleiner, 2003 P. 175). Improvement vs. Innovation A developmental process which is incremental as well as continuous is called “continuous process development” (Merlyn, Parkinson, Youngman & Phillips, 1994 P. 123-125) and it aims at streamlining existing processes through removal of inherent defects. A process which is radical while being discontinuous is termed as “process reengineering” (Merlyn, Parkinson, Youngman & Phillips, 1994 P. 123-125) and it employs creative combination of human as well as information technology enablers in order to conceive novel processes. Performance Objectives Performance objectives need to be clearly communicated by the top management to the process owners prior to the commencement of developmental planning. These can be identified through risk identification, identification of risk source, measuring risks and by evaluating and monitoring risk (Anderson & The Economist Intelligence Unit, n.d. P. 29-37). Importance of Benchmarking A continual quest to reach and ultimately cross the benchmark helps organisations achieve process and functional excellence. Benchmarking is vital for organisational success as it is a very potential and powerful process of continuous learning through which a corporate can learn from the best practices and incorporate the same in its own business activities (Codling, 1995 P. 127-128). Case Study Description of the Current Situation On a whole the organisation is performing well but during a recent performance appraisal discussion the management had discovered that Team C’s performance has declined over the previous fiscal. The management was worried owing to the fact that Team C had established itself as a profit centre. As the company aims to achieve error free operations, it is paying major attention to the fact that most of the rejections are on the grounds of quality. This is praiseworthy owing to the fact that the total number of rejections constitutes 2% of the orders. The management has analysed the process dynamics through a process flow diagram as appended below: Figure 1: Process Flow Diagram The functional process cycle in the company starts with project allocation. Team leader-Team C allocates the projects to the team members on the basis of their domain. Generally cross functional approach is adopted for complex projects which require multiple interpretations. On a targeted basis a draft is prepared within 1/3rd of the total allocated time and is submitted to the client through team leader. On getting accepted and approved by the client, the draft is worked upon and finalised. The group edits the report and forwards to the team leader who finally sends it across to the client. In case of rejections, the team leader tries and coordinates with the client and streamlines his expectations within the team’s KSA spectrum and communicates the requirements to the members. Generally, the problem arises when the members run short of time and hasten the editing process. Certain loopholes escape their scrutiny and get passed on to the client. As a result the quality gets deteriorated and in turn hampers the team as well as the company’s credibility. Being a part of the service industry, this is a major problem that the company faces as it is not being able to achieve customer delight to the extent that it expects. Proposal for Change During a brainstorming session across the three verticals, it was found that Team C’s revenues have slumped to some extent. This was unanimously voted to be central problem as Team C had consistently been a star performer and such a problem poses a vital threat to the organisation’s viability. Subsequent discussions led to the conclusion that the Team is facing problems due to its personnel, methods and technology. It was also discovered that the workflow was not smooth. After the draft report is prepared, often it so happens that the team cannot afford to spare ample time for editing the draft. Hence rejection rate increases. This in turn increases the pressure on the team leader as he has to coordinate more often with the client. This affects the image of the team to some extent. Training and development is a relevant solution that can bring about necessary changes in KSAs and reduce the chances of performance related complains. The company needs to design a T & D policy in order to institutionalise a proper training system. Moreover it will involve deployment of budget and will not be feasible given the size and position of the company. A recruitment drive can help the company increase its workforce. There should be a thorough planning prior to this owing to the cost involved. Appointing an editor was found to be the most feasible and logical solution for minimising the quality related problems. During the brainstorming session few members had come up with a suggestion of 24X7 operations. This is a debatable alternative because a start up company will be hardly able to sustain such a move due to financial constraints. Installing latest software and tools is a good strategic option, but it won’t be a cost effective decision for the company. The management has given a positive nod to installing some software that is indispensable. But purchasing the whole range of relevant software won’t be a wise decision. Expected New Situation In order to get a comprehensive idea about the new situation that is expected by the management, three tools, viz. fishbone diagram, work flow diagram and decision matrix were used. Fishbone Diagram Conceptualised by Kaoru Ishikawa, the fishbone diagram is also known as the cause-and-effect diagram as it helps in identifying various alternative causes behind a problem. It is generally used as a part of brainstorming sessions to facilitate team based thinking (Tague, 2005, P. 247). Application to the Case Applying the decisional alternatives to a fishbone diagram, the problem and its causes were elaborated as the following: Figure 2: Fishbone Diagram Through rigorous discussions, the causes behind the problem were summarised as under: Personnel: The personnel related issues were found to have ensued from two areas, viz. Training and Employee Retention. Though the organisation has informal training modules for fresh recruits, on account of being a start up, it is yet to institutionalise a formal training and development policy. This is a serious impediment because the members of Team C have to work across specialisations which often require knowledge of varying concepts and tools. A formalised training policy can enhance the competencies and KSAs of the employees on an incremental and systematic basis. Owing to the lack of training and development, Team C members find it difficult to cope with the technicalities of projects that differ from one another in terms of domain and other requirements. This in turn increases the work pressure and affects performance. As a result, attrition takes place thereby magnifying the workload on a reduced workforce. The company should take necessary measures to enhance employee motivation through incentives and competent training and development. Methods: Methods related causes were found to be Editing and Quality Compliance. As the client base of the organisation is mostly overseas, there are issues arising out of differences in time zones. Due to this Team C often runs out of time in meeting deadlines. As a result few reports go unedited and in turn reduce customer satisfaction and increase the rate of rejections. The company can probably go for a 24X7 operation whereby it can cater to all time zones with equal importance, but as it is a start up, funds for supporting such a decision will be a constraint. Owing to attrition Team C has been facing serious problems in meeting quality standards. Due to minimum lead time available for most of the projects, the members are committing mistakes in understanding and analysing the problems sent across by the clients. Technology: Regarding technology, the company is facing problems because of the fact that most of its clients use software which its present infrastructure cannot support. Being a start up the organisation cannot afford much software which is required for more efficient problem analysis. Cost efficiency is a major constraint which is retarding the organisational competence. Owing to this, Team C often loses contracts to rival companies and suffers financial loss as an outcome of that. Workflow Diagram A workflow diagram represents a sequential flow of organisational activities that are required for the complete accomplishment of a process (Satzinger, 2008 P. 141). This is actually a flowchart which is used to denote the steps that a process goes through from its start to its completion. Organisational processes are generally complex and hence a workflow diagram helps in analysing them stepwise and diagnosing the problems at their points of origin. It also helps in making the steps coherent with each other and to other processes. Application to the Case The team should recruit an editor who can scan the report for errors before submitting the draft as well as the final report. Even during the project allocation and planning stages, there should be a team meeting in order to assign the charge of a project to the person who can execute it in the best way. But this hardly happens due to lack of enough manpower. Hence the team should also recruit more members. Figure 3: Workflow Diagram Decision Matrix This is a tool that facilitates decision making by selecting the best decisional alternative from the opinions generated by multi voting or brainstorming. It is a rational approach by which the management can take conclusive decision from among a basket of choices (Haimes, 2004 P. 149-150). Application to the Case Figure 4: Decision Matrix Five decisional alternatives were selected discussed. These were T & D policy, recruitment drive, taking an editor on board, initiating a 24X7 operation and procuring the latest software. The alternatives were ranked on the basis of three attributes, viz. management difficulty, cost and stability. Management difficulty and cost being negative attributes higher rank assigned to them signifies lower risk while stability being a positive attribute, a high rank signifies high compatibility. Again, on the basis of their relative importance to the organisation the three attributes were given specific weights. Normalised weights of individual decisional options were calculated by multiplying the rank and relative weight of each attribute and adding them. It was found that the normalised weight for the decision of taking an editor on board was the highest at 8.40 while that for the decision of initiating a 24X7 operation was the lowest at 1.00. Hence, the most obvious decision that the management can possibly take in order to enhance the performance of Team C is the immediate recruitment of an efficient editor. Justification of Change During a dry run with a temporary editor it was found that number of rejections over a period of one month was reduced by half. On the basis of a cost benefit analysis it was observed that the extra cost involved with this decision included the salary, benefits and training cost of the editor. The management decided to reduce this cost by appointing an experienced incumbent who won’t require training. The benefits of appointing the editor were found to be reduction of rejection rate to 1%, enhanced repeat business and referrals, profitability and customer delight. Under similar conditions, the company can expect near similar results on a real time basis. Implementation of Change The company should start developing a T & D policy and should simultaneously start looking for a competent editor. An editor should be on board within a month to immediately rectify the situation. Once profitability starts showing positive change, recruitment drive can be started. 24X7 operations and latest software can be kept on hold till the later part of the year. Figure 5: Gantt chart for the Execution of Plan within a Time Frame of 12 Months Conclusion and Recommendations Developing business processes and operations is a change process which is implemented in response to environmental dynamics. It is quite clear from the previous sections that developmental activities aim at enhancing competitive advantage and hence, are important corporate activities. They are need based and situational activities but owing to the environmental instabilities their implementation often has to be spontaneous. To ease such implementations, organisations should continually perform environmental scans and competency mapping along with benchmarking, for developing their existing processes and operations on a continuous basis. Based on the observations made during the course of research, the company should be recommended to appoint an editor for Team C for enhancing the quality of the reports so that the rate of rejections is significantly reduced and customer delight is boosted. This will in turn help the company to get repeat business and referrals and will thus increase its profitability and client base. 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