Anyone who decries the science of business process management would be wise not to do it in the hearing of Richard Welke.
Welke, head of the computer information systems department at Georgia State University in the US, is happy to admit business processes are his hobby horse. If the subject has been brought into disrepute by a succession of new names for the same old thing, Welke doesn’t consider that an excuse to disregard it.
“E-commerce has changed everything,” says Welke, and, in particular, it’s changed customer expectations. “The expectations get worse as the customer gets younger.”
Welke, a visiting professor at the University of Auckland’s centre of digital enterprise, last week ran an audience through all the recent variations on the theme of business process re-engineering. Synonyms for organisations that have had the treatment included agile business, self-service enterprise, virtual organisation and process-focused business.
Welke says the goal should be to create a customer-focused organisation; the starting point should be to identify the customer for each of the organisation’s processes.
“Thanks to e-commerce, the customer wants it — whether information or product — now.” They expect the supplier to know them; the product or service needs to be tailored; they want a one-stop shop with minimum total cost; and delivery by multiple channels.
The poster children for Welke’s digital enterprise are the usual suspects: Dell, Cisco and Amazon. However, retailer Wal-Mart and car maker General Motors rate mentions as companies that are successfully remaking themselves.
EAI (enterprise application integration) is one way not to go about it.
“Older organisations had functional silos that couldn’t communicate,” Welke says. “EAI was touted as the answer, but it hasn’t worked out.”
According to the professor, General Motors tackled its silos — which were geographical rather than functional — by appointing process information officers; they have titles like supply chain PIO, product development PIO and customer experience PIO, and each answers to a chief process officer.
But re-engineering can be a huge undertaking, says Welke, involving unravelling large numbers of processes and understanding their linkages. He advocates tackling the task by “normative” modelling, describing that as constructing a model from a predefined set of alternatives.
At the end of it all, as little as 20% of processes might be digitised, compared with the 50% or better that established e-commerce companies can claim. Another possible outcome is business process outsourcing, of which Welke approves, with the caveat that the processes being outsourced be well understood.
In the US, he says, there’s a trend for business process outsourcers to specialise in vertical markets. There’s also a backlash against outsourcing overseas, with the state of New Jersey prohibiting state agencies from doing so.
The much smaller scale of New Zealand organisations doesn’t render the whole subject irrelevant to them, Welke says. But he adds that there is a danger of the process focus, and its goal of business agility, being overhyped, as other cure-alls have been.
“Agility is more than integration; it’s a totally different way of thinking.”
Welke invited his audience to take issue with his assertions, saying that differences of opinion generally come down to semantics.