Formalising what may previously have been ad-hoc business processes is a key issue when differentiating medium-sized organisations from small ones. Yet figuring out which processes need to be formalised or modernised, and in what priority, is a difficult task for leaders of medium organisations. Jyoti Banerjee checks out the options.
Processes new and old
Companies that want to exercise a competitive edge in the market, whether by launching an e-commerce channel or being first to market with a new product, have found that they are dependent on the state of their business processes if they want to succeed. Typically, their business processes are a mix of new and old, with only brand-new well-financed companies having the luxury of fully modern processes. Good processes do not guarantee success, though bad processes will certainly guarantee failure.
Great business processes drive up customer satisfaction and employee satisfaction. They enable a business to scale up and drive costs down. The challenge for managers of medium businesses is assessing which processes are broken and which ones should be fixed first.
The Enterprise 2007 study by the Institute of Chartered Accountants in England and Wales (ICAEW), an M Institute partner, found that 71% of all British companies in their survey were intending to improve their IT systems, as a significant financial objective of the business. A European study found that 56% of the companies that introduced new processes ended up introducing processes that were new to the market.
Why do business processes, and their related technologies, need to change anyway?
