Understanding Process Analysis and Innovation
Understanding Process Analysis and Innovation Today’s business reality is highly competitive. Companies must consistently generate month-to-month financial results while continuously building a long term sustainable business model. Current environment in all industries demand performance along both dimensions. Infinite number of competitors, demanding customers, inequable markets and impatient investors increase the complexity. While in modern world more businesses has comparatively equal excess to the resources, the way how efficiently they use and process these resources became an competitive advantage by itself. Every company has business processes which cover pretty much everything they do, but not all of them succeed in efficiently using the processes to their full capacity. Business processes can be tool for innovation and barrier for it. Although organizations have been improving their processes for a long time, especially with the boost of ERP systems popularity, business processes redesign is still a concern for management. Process reengineering in coherence with business strategy allow to reinforce innovative capacity in the company and change all company culture, providing at the same time greater value to customers and revenue to shareholders, but achieving sustainable business improvement requires integrated team efforts linked to business priorities. For business processes reengineering to be effective the company should have appropriate IT architecture competency and administrative capacity to execute the changes. As it is stated in Prahalad & Krishnan readings for this session, it is critical for success that “management recognizes that a deep understanding of how to translate the business model to its business processes and the role of ICT in enabling these processes”. But to make just processes change is not enough, because these changes influence other aspects of business and usually create need for more changes: organizational charts
References: Prahalad & Krishnan, Chapter 2: ―Business Processes: the enablers of innovation. The New Age of Innovation: Driving Co-Created Value Through Global Networks, Harvard Business Press (2008) Michael Hammer, ―The Process Audit, Harvard Business Review, April 2007 Hall & Ericson, ―When Should a Process be Art, not Science, Harvard Business Review (March 2009)