CPIOs to the Fore

Companies naming chief process improvement officers to drive change

Tempe, AZ  November 11, 2002  Increasing numbers of companies are seeking to drive cross-organizational process improvement by appointing a chief process improvement officer (CPIO), according to a research note from a technology consultancy.

Eric Austvold, research director in the Enabling Technologies Service at Boston-based consultancy AMR Research, wrote that while process improvement is everybody's responsibility at an enterprise, from the CEO on down, many companies are naming a senior executive to lead process reengineering efforts  and reaping benefits from doing so.

For example, Austvold cited Telstra, an Australian telecommunications company that has appointed a CPIO and that expects to cut $137 million in excess costs during the first three years of its process improvement initiatives.

Other companies that have named CPIOs include 3M, Air Products, Black & Decker, Delphi Automotive, Honeywell and ITT Industries, according to AMR.

Austvold offered several reasons for this trend. In addition to the potential savings that a CPIO can drive á la Telstra, this executive can provide high-level management of process improvement efforts. "The CPIO coordinates the process improvements needed across internal organizational, functional and geographic walls, as well as external cross-company boundaries," the analyst wrote.

To date, most process improvements have occurred within particular functions, such as finance, supply chain or marketing, with little progress in cross-enterprise processes affecting an enterprise's partners, suppliers or customers. "Implementing software from SAP, Oracle, PeopleSoft and Siebel has helped," Austvold noted, "but because very few organizations run a single instance of these enterprise software packages and because there are rigid and often inflexible processes embedded in the software, the company-wide process improvements often have not materialized."

AMR suggested that the CPIO will partner with an enterprise's chief information officer (CIO) to drive process improvements across an entire company. "A process czar, the CPIO will need to assemble new business processes by weaving together existing processes from enterprise software applications, requiring the [information technology] organization to create a loosely coupled application services framework, also known as a Services-Oriented Architecture (SOA)," Austvold wrote.

What's in it for the CIO? The AMR analyst predicted that with the addition of a CPIO to the executive ranks, CIOs will finally get the support they need from line-of-business leaders for upgrades to the enterprise's IT infrastructure to support process-centric applications.

The secret to perfecting your company's business processes might surprise you. To learn about how one multinational enterprise is working to avoid the pitfalls and reap the benefits of aligning technology and process, see "The Elusive Process Improvement Nirvana," the cover story in the October/November 2002 issue of iSource Business.

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