Expand or Decline?

For more than a century productivity in industries such as manufacturing, farming and construction has been increasing 3 or 4% year on year. In contrast, service sector productivity has been stagnant for decades, despite the continuing high level of investment in IT. Yet offshore, people are both our key asset and, as a scare resource, a key constraint. Unless we find better ways to use our working time the economy will stagnate.

Business Process Redesign

In response to this service productivity challenge, some businesses have achieved order of magnitude gains from projects employing business process redesign (“BPR”) principles popularised by Hammer and Davenport at the beginning of the 1990s. Often, but not exclusively, these relied on technology, but not by using IT to do the same things only better - there’s nothing so inefficient as rendering efficient that which should not be done at all. Major gains depend on ground-breaking change. Although efficiency can be improved a myopic focus on cost can miss bigger opportunities related to effectiveness, doing the things that create the greatest value for customers.

Take the case of a Jersey business that needed quicker management information. Processes had been meticulously designed some years ago. Originally based on manual documents, management information was produced several weeks after month end. In recent years the process had been made more efficient by using spreadsheets to reduce manual drudgery. But when management asked, “what information do we really need?” and (with staff) “how would we produce this if we were designing the process today?” They found that through better use of tried and tested technologies and focus on key requirements they could dispense with most of the steps and 80% of the paperwork. The bottom line was that critical information could be delivered in days not weeks and time was freed up for important, but currently neglected, business development tasks.

Information Technology

Process redesign has sometimes been seen as a ruse to persuade unwary managers to buy into another round of IT. But, whilst information technology can sometimes be important it is only an enabler. The opportunities arise from discovering what can be done through IT freed from the artificial constraints of existing ways of working. But, to be successful, a project has to be driven by business imperatives. This means senior business managers should remain firmly in the driving seat and will have to furnish the creativity and imagination to visualise new ways of doing business. Identifying the opportunities can begin simply by looking at how other organisations have gained competitive advantage with IT and what the technology you already have can achieve. Smaller businesses need not go to the "bleeding edge" to achieve strategic benefits

People

In financial services and public sector organisations, employees are often the keys to effectiveness gains. Consider for example the competitive advantage which can be won (or lost) at those “moments of truth” when customers meet employees and impressions of service quality are fixed. Investments in developing a skilled and capable workforce are not enough when poor processes and systems stonewall good people. Delivering the potential benefits depends on introducing better business processes, smart use of technology and redesign of jobs and management systems to provide the right environment for employees to create more value. Too many projects miss the mark for neglect of these factors.

Change Implementation

Information Technology and human resources are enablers for dramatic improvements but surveys indicate that up to 70% of projects fail to deliver. If you are contemplating an ambitious change you need both to be completely clear why this is worth pursuing and be able to recognise, mobilise and sustain the support you need to carry it through. Use a systematic, proven approach. Above all keep in view employee ability to assimilate change and pace accordingly. Generating commitment and support will be essential first steps, change places great demands on people which can be reduced by raising awareness and understanding. Reinforce the change with early results, consistent cues in management systems, behaviour and organisational culture. Anticipate and manage both the forces that will support your change and those that create resistance. Be bold, potential rewards are high and others have already started to reap the benefits.