Business Process Management
Business Process Management?
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James Brimson in his book "The Handbook of Process-based Accounting, Leveraging Processes to Predict Results published by American Institute of Certified Public Accountants, says:

  • "process management is continuously improve (change) the processes and activities of an organization to effectively and efficiently meet or exceed changing customer requirements

  • Achieved by progressively implementing many changes to ensure the process is made better than its previous performance.

  • Activities and processes have process controls in place to monitor the process as it is being performed.

  • Cost must be viewed in terms of used and unused capacity cost rather than traditional fixed and variable distinction. Separating used and unused component enables management to understand root cause of problem rather than burying the variance in the wrong place."

Very successful organizations have found that you can only improve so much if you continue to focus just on improving activities within a department or cost center. Just like in a real race, the least efficient portion of the race is the hand off between runners. Likewise the least efficient portion of any organization is the handoffs between departments, cost centers, vendors, and customers.

Process management starts with processes rather than cost centers or functions as the basic building blocks. The  management process is totally focused on processes. Everything from planning and budgeting to performance management are focused on management.

The various links to the right will give the reader insights into the various components of Process Management.

However, the basic premise of process management is that processes are a better way to manage an organization because they follow all the steps from start to finish of a process so that the organization does not sub-optimize. As one of our clients founds, that improvement in one cost center may in fact reduce quality and increase cost for the entire organization.

An insurance company had a performance measure to answer all claims calls in 6 minutes. After some effort they were able to achieve this performance measure. However, they achieved this performance by not completing all the information that was required. A higher paid claims adjuster had to call back the person making the claim. This was more expensive because of the extra time required by the higher paid person. Also, the delay caused hard feelings for some people filing the claim resulting in more lawsuits.

By changing the performance measure to focus on the entire process, the company was able to reduce the total cost of the process as well as to improve customer satisfaction. Think about how often this type of cross functional handoffs negatively impact your organization.

Read more about these business process management system topics by clicking the various links to your right.

Call John Antos, Jim Brimson or Pat Dowdle at 972.980.7407 to find out how Business  Process Management can help you achieve your goals.

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Six Sigma-Process Management
Statistical Process Control SPC
System Process
What is The Process
Workflow Management

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