As technology's benefits hit the wall, one provider believes business process management can boost competitiveness
Mesa, AZ — June 23, 2003 — "Adaptability — everybody's talked about it for years and years, but so few companies have achieved it because we've tried to throw technology at every single problem," says Daryn Walters, vice president of worldwide marketing for HandySoft Corp., a provider of business process management and automation solutions.
The trouble with that technology-centric approach, Walters says, is that adaptability is not necessarily a technological issue. "There are a lot of great technologies out there, but adaptability is a business issue," he suggests, adding that, in his view, companies too often still do not necessarily understand the core business processes that are vital to their business and how to modify those processes and make them better.
Adaptability has become a key issue today for companies that are trying to bring products to market faster to meet ever-evolving consumer demand and to drive incremental increases in revenues. But oftentimes these companies find that their current, largely manual business processes and, moreover, their information technology infrastructure do not support the flexibility that companies need to compete in this environment.
As an example of how legacy processes can hamper adaptability, Walters cites a large customer of his company. This manufacturer had a capital acquisition process that was "very convoluted, involving way too many people; error-prone and costly." As a result, when the company tried to bring a new product to market, frequently by the time all the "i's" had been dotted on the approvals for the equipment necessary to manufacture the new product, "it was almost too late, because they had run out of time, they'd missed their market opportunity or they were late to market," Walters says.
As for how IT systems impede adaptability, the HandySoft veep asserts that the root of much process rigidity can be traced to the enterprise systems installed at major companies in the run-up to the millennial roll-over. "People were scurrying to address the Y2K problem and invested billions in technology," Walters says. "But no one was asking, 'Why are we doing this? To what end? What types of problems are we trying to solve?'" As a result, companies often found that their systems locked them into processes that could not adapt to changes in the market environment.
Now, with the economy sputtering and investment dollars scarce, many enterprises have sought not only to trim their spending on new IT systems but to better leverage the systems they had installed over the past decade, all the while trying to accelerate time-to-market cycles and reduce costs. Walters believes the best way to attain these seemingly mutually exclusive objectives is to identify and streamline the core business processes that drive a company's competitive advantage.
Of course, Walters' take on this problem is not necessarily surprising, given that his company, HandySoft, offers tools for automating specific business process issues without requiring changes to an enterprise's IT infrastructure or lengthy implementations.
One of the solution provider's customers, for instance, Continental Teves, a $10 billion manufacturer of brake and chassis systems, is using HandySoft's business process management (BPM) and workflow platform, dubbed BizFlow, to manage engineering change requests. The company must comply with very rigid quality standards and stick to very specific manufacturing specifications, and it brought in HandySoft's solution in to help support an engineering change process that had been very manually intensive.
The company's legacy change process used upwards of 20 different forms and involved collaboration with many different departments, systems and people, and it extended overseas, as well. To initiate the process, an employee might have to fill out an engineering change form with various required details, put the form in an inter-office mail pouch and send it overseas for someone to add information to it, sign off on it, put it back in an inter-office mail pouch or fax it to another division for additional input.
"The processes were slow and in many cases failed because either someone missed a signature, didn't fill in the appropriate information or filled in the information but not in the proper way," says Walters. In addition, the process involved a significant amount of manual document look-up. "A document would come into a particular department, and the department head would have to go into an ERP system, do a manual look-up for certain information and then manually go back in and fill it in on the document," Walters explains.
To streamline the process, the company identified the primary documents necessary to support this process and then moved those products online, or "mirrored" them, using the forms design capability in the HandySoft solution. Essentially, the customer was able to replicate the necessary documents, process steps and rules involved in making an engineering change — such as which fields in a form must be filled out by whom, who has to sign off on approvals, what the timeframes are to support this process.
Moreover, the company was able to identify on the forms which fields correspond to data in external systems. That way, as the process moves forward from Step One to Step Two, rather than requiring a person to look up information to populate those fields, the form could automatically read the data out of the necessary database or application and pull those data back into the form to pre-populate the fields with the relevant information.
The payback for the company has come in the form of reduced cycle times for change orders, as well as a reduction in the number of errors due to entry mistakes and the amount of time that engineers and others had to spend dealing with paperwork. Overall, Continental Teves estimated the automated process would produce annual savings of $1.3 million. Perhaps most importantly, the company was able to respond much faster to the demands of its customers for changes in products.
Accounts payables is another process ripe for automation, according to Walters. As an example of how BPM workflow can help an enterprise in this situation, he says that HandySoft recently implemented an A/P process that allows a company to scan and load an incoming invoice into an electronic document management system (EDMS), whereupon the process routes the document to the A/P department and to the appropriate line-of-business executive for approval. Then a step in the process does a call to the ERP system to do a validation, matching the invoice against a purchase order and, in the case of a three-way match, a shipping receipt. If those steps are complete, the process goes to the next step automatically, the invoice goes into the A/P system and a check gets cut. In the event of a discrepancy, the system rejects the problem invoice and kicks it over to the line-of-business executive for resolution before the process goes back to A/P to have a check cut. Walters says this automation can help cut down on queries to a company's call center from vendors wondering where their money is, and it can help companies get their prompt-pay discounts.
Of course, not every process is going to require automation, and in this regard Walters says that many HandySoft customers are using BizFlow as part of quality-related programs. "Quality initiatives like Six Sigma and ISO 9000 allow companies to have a methodology for not only identifying the key business processes but for measuring the process as it stands today, analyzing it and identifying inefficiencies, changing it and then rolling it back out to the business users," Walters explains.
These types of initiatives will be critical for companies, Walters asserts, because they are core to how a company differentiates itself in the marketplace. "There are processes that you won't have to take online," he says, "but the majority of your business processes are what you do, your competitive advantage, and that requires you to look for ways to do them better."
What's missing in B2B? Plenty, according to Procter & Gamble Chief Information Officer Stephen David. For this CIO's view of what companies need to be focusing on today to ensure they will be competitive tomorrow, read "What's Still Missing in B2B?," cover story in the June/July 2003 issue of iSource Business.
For more information on the latest solutions for business process management, see "BPM Rising," the Net Best Thing column in the October/November 2002 issue of iSource Business.
