BPR in the Service Sector: Increased Efficiency through a Structured Approach
The concept of business process redesign (BPR) as a technique for reengineering a process to spur performance improvement has been well established for decades. However, many service sector organizations fail to consider the potential benefits that BPR can produce, as they assume process redesign can only benefit other industries, such as manufacturing. The increasing costs, cutthroat competition, and technological advances that have accompanied the rise of globalization have also been real challenges for the financial, consulting, engineering, and legal industries. Organizations in service industries such as these should be continuously evaluating their internal processes to identify areas where restructuring could drive serious improvement.
Professional service organizations’ most valuable assets are their employees. With this distinction comes several truths that distinguish their product from other industries. High levels of process variation and poor tracking of workflow are a result of a labor intensive service. Quality of service may vary depending upon who provides it and also on when, where, and how the service is implemented. Quality metrics can also be difficult to obtain, as they are often subjective. Time (billable vs. non-billable, time to delivery of service, etc.) is an exception to this rule, and as such it is often the focus of BPR in the service industry.
Organizations considering BPR should define their objectives. This allows management’s vision of the future to be compared to the current state. Once defined, objectives will provide the goals your improved processes will strive to obtain. Common objectives of BPR in service industries include:
- Reduced waste and increased efficiency of the service delivery process
- Increased consistency of the service outcome
- Increased customer satisfaction
- Increased throughput; more business processed using the same resources
- Reduced operating costs/higher profitability
Once the objectives are determined, the next step is to meticulously define the current state of your internal processes. Documenting the current state involves gathering and organizing data through a structured approach. Doing this provides a better understanding of the organization, and it may uncover hidden inefficiencies and opportunities for service improvement previously unknown to management. Inefficiency in the service sector can come in many shapes and sizes. Examples include:
- Waiting time: any delay between when one process step ends and the next step begins.
- Excess Transportation: unnecessary movement of materials or information.
- Defects: any aspect of the service that does not conform to the customer’s need.
- Over processing: trying to add more value to a service than what your customers want or will pay for.
After documenting the current state, the organization should design the future state of the process to reduce these inefficiencies. Minimizing manual data entry, cutting down process cycle time, and reducing manual analysis and routing are examples of how to do this. Implementing the future state design is easier said than done, but with proper guidance and top down governance the objectives listed above can be achieved.
There are many signs that your organization may be primed for BPR. Whether it be difficulties adhering to new statutory requirements, increasing customer demands, or internal changes such as the introduction of new enterprise wide technology solutions, BPR can be utilized to look at business processes from a clean slate perspective and determine how to reconstruct these processes to increase efficiency, reduce costs, and maintain high quality.
At Baker Newman Noyes, we have experienced professionals who are familiar with the ins and outs of business process redesign. By collaborating with our consultants you can ensure your organization takes a managed approach towards BPR and will receive the guidance needed to plan, create, and institute your business goals and strategies. For more information on BPR and to inquire how BNN can assist your organization, please contact Ilona Davis or your BNN advisor at 800.244.7444.
Disclaimer of Liability: This publication is intended to provide general information to our clients and friends. It does not constitute accounting, tax, investment, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.