Operational efficiency through balanced people, processes and technology
By Swapnil Narkhede, Project Manager
Operational efficiency is the minimising of waste and the maximising of resource capabilities in delivering quality products and services to customers. Products and services are delivered to customers through processes, so in order to gain operational efficiencies, the processes have to be optimised. However, processes cannot get work done by themselves. They have to be executed or enabled by people and/or technology. Hence, in order to obtain optimum performance, the right balance between people, processes and technology has to designed and achieved within your organisation.
How to do this?
To achieve operational efficiency, organisations must determine their value chain, the core organisational business processes that create value for your customers. Accompanying these core processes will be management and support processes. A process change initiative has to demonstrate some quick wins in terms of performance improvements, so it is important to commission process improvement initiatives for those 20% of processes, which gain 80% of the value added work done for the organisation.
How to improve process?
It is important to create a ‘burning platform’ – a sense of urgency - for process change. Having identified the process area for improvement, the first step must be to start with mapping the ‘As-Is Process’. Once the As-Is process is mapped, pain points or bottlenecks in the process can be defined. For every pain point in the process, detailed root cause analysis must be undertaken. This is an important step as radical improvements can be achieved by eliminating the root cause rather than eliminating the symptom. Performance metrics such as time, cost etc must also form part of As-Is process mapping. It is important during process mapping to identify the information access sources, and the state of information, rather than just focusing on the activities.
The next step is to define the performance metrics for the ‘To-Be’ (future) process and the mapping of the To-Be process. Depending upon the need of the organisation, several principles of process redesign can be utilised. Centralisation of tasks, decentralisation of tasks, parallelisation of tasks, automation of tasks by technology are some of the principles that can be used while redesigning the process. The new process will then require people to execute them. Depending upon the changes to the process the functional roles may change. This may result in the job design of new roles and responsibilities; which could necessitate training existing staff to undertake new roles. To support the people during process execution, the processes and procedures must be consistently documented. This documented information must be easily accessible so that ‘on the job’ support can be available. Depending upon the information storage and workflow requirements, there may be development of new IT applications to support the process.
Thus changes to people, process and technology enable organisations to see radical improvements in performance. To sustain these improvements, there must be a governance mechanism to monitor changes. Similarly, a culture of continuous improvement must be introduced in the organisation. A process to way of thinking, adopting a continuous improvement mindset, a single source of easily accessible well documented information, the understanding of the dependency of performance on 3 elements (i.e people, process and technology), along with governance mechanisms, will enable organisations to gain operational efficiency. The benefits are reductions in costs, time reduction and improvement to the quality of products and services, which all contribute to the organisation’s efforts to gaining and maintaining competitive advantage under changing market conditions.
Discuss with TP3 ways to create balance between your people, processes and technology on 1300 658 388 or email info@TP3.com.au.