Operational Excellence Climbing up the Corporate Agenda
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Businesses are increasingly aligning their strategy with Operational Excellence (OpEx) to drive sustainable, enterprise-wide transformation like never before. Statistics from the PEX Network Biennial State of the Industry Report 2015 show encouraging signs, with 52.9% of professionals stating their OpEx programs are expanding. Bizagi CEO, Gustavo Gomez, says Operational Excellence on the C-Suite agenda is "not just a ‘good thing’ – it’s a mandatory requirement."
With many organizations already practicing a multitude of lean, six sigma and process improvement methodologies to cut the fat internally and boost operational efficiencies, now is the time to instil a new culture, led by senior management, with true employee engagement and with customer-centricity at the heart of everything we all do. Aligning strategy with operational excellence to drive sustainable, enterprise-wide transformation is critical to the successful implementation of OpEx and it is certainly creeping up the corporate agenda.
By in large, organizations believe that they are doing a slightly above average job in leading their OpEx programs, with professionals in the PEX Network Annual Survey voting the success of their OpEx programs at 6.1 out of 10.
This paper focuses on several key focal points from the PEX Network Annual State of the Industry Report to further highlight how Operational Excellence is climbing up the corporate agenda, process alignment, the core competencies of OpEx, with further thought leadership insights from Gustavo Gomez, CEO of Bizagi, who touches on why the C-Suite are finally on board the OpEx train and what metrics are needed for a successful Operational Excellence program.
Key takeaways in this article, include:
- Process alignment and the core competencies of Operational Excellence;
- Results from the PEX Network Annual Report, highlighting key Operational Excellence trends and challenges for organizations over the next 12 months;
- A closer look at the methodologies and solutions organizations are planning on investing in over the next 12 months, including Business Process Management (BPM);
- Insight from the CEO of Bizagi, Gustavo Gomez, shares his thoughts on C-Suite Operational Excellence and the key metrics which are needed for success
OpEx and Process Alignment
Core competencies of Operational Excellence include driving strategic performance through operational excellence and what the fundamental strategic pillars are of an OpEx strategy. Best practices and the main pain points for process and operational excellence professionals are ultimately to see how Operational assists them in their day jobs and how customer-centricity can be boosted.
Operational excellence is strategic because it helps with your bottom line as well as your top line. Operational excellence can help to streamline your operations and processes, aide your customer-centricity efforts and bolster your top-line.
OpEx is more important today than ever before as most organizations have already conducted traditional lean approaches, but now need to cut the fat further whilst providing better products and services for a more demanding technologically-savvy customer. You can’t survive today without automated processes and you can’t automate if you’re processes and operations are not optimized. Operational Excellence can therefore be the key to optimize and automate.
There are two components to successfully align your operational excellence efforts effectively with business strategy. The first is top-down, as you need to define what you’re trying to achieve and how you’re going to measures it. There’s no excellence without measures and these need to be communicated clearly, concisely and transparently to all levels of your organization. Employee engagement and buy-in from the frontline staff is imperative to success. Not managing the change of strategy and mindset will lead to an unsuccessful OpEx program. A bottom-up approach is also needed as you needed to constantly monitor and measure not only your processes but also the impact that changes are having. You can’t wait for a monthly SLA report, you need to be reactive and predictive in your approach to ensure that you can react quickly and in real-time in some instances.
At Bizagi, they follow a good philosophical approach that OpEx programs can use, which is: "Start Small, Think Big and Scale Fast". You need to start small by coming up with the right metrics, goals, but think forwards in the mid to long-term about what you want to fundamentally change and where you want to get to. Once you’ve got clear objectives, strategy-led initiatives can develop and progress quickly. When everyone in the organization is bought-in on your OpEx program and transformation efforts you can scale the initiative quickly.
Key 2015/16 OpEx Facts
Operational Excellence is gaining huge buy-in and traction in the market at the moment. We are seeing more and more operational excellence senior executive roles appearing and appointments being made within organizations across all industries. Based on the results from our Biennial Report, the term which best approximates driving process transformation is now Operational Excellence, with 20.53% of our professional respondents voting for this definition.
Respondents were also polled on what the current 2015 scope of their OpEx deployment looks like: 36.2% say it’s "Enterprise-wide" and 26.0% say OpEx is "being deployed in more than one business unit". A plethora of departments and functions are applying OpEx methodologies but the department with the highest OpEx adoption rate is within General Business Units, which 67% of respondents said was being experienced.
Leadership and Cultural Strategy is the number one process improvement focus for organizations in 2015/16, with just under half (47.1%) of organizations identifying this as a main focus of programs.
Faced with growing demand from customers, businesses are striving to transform the performance of their operations, but employing the right best practices in project management and other key areas such as engagement, leadership and training are critical to success.
In our Annual Survey, we asked organizations to categorize how they view their own process and operational excellence functions, 32.9% of respondents said that they view these functions as "a way to help the organization deliver its strategic objectives". Delivering culture and leadership change across organizations was highlighted by 8.9% of practitioners as a key function to adopting process and operational excellence programs.
Respondents were also asked to predict whether the numbers of dedicated process and operational excellence staff would increase, remain the same or decrease over the next 12 months. While 40% believe headcount numbers will not change going into 2016, 39.1% believe process improvement employee numbers will increase. Encouragingly, only 6.1% of organizations believe that numbers will fall, which is particularly interesting when one looks at 17.9% of respondents view programs as "a way to cut costs by improving productivity and/or reducing headcount". OpEx is therefore very much more about improving productivity.
Operational Excellence maturity levels with formal process / operational excellence programs have varied vastly over the past few years. Last year, 21% of respondents said that they didn’t have a process or operational excellence program, however, that figure has now halved to 10.5%, showcasing a higher program adoption rate. Organizations with lower OpEx maturity levels, which have had a program for 1–2 years, grew from 12.25% in 2014 to 18.5% in 2015. Back in 2013/14, 25.4% and 22.0% of respondents said their programs had been up and running for 1 -2 years or 3 – 4 years respectively. This figure has fallen to 18.5% and 17.9% in this year’s survey with a boost in longer-term programs being seen in our results. Organizations with programs of 7 – 10 years have sustainably increased from 8.5% to 13.9% over the past two years too. The biggest takeaway here though is the higher rate seen with programs with 11 or more years, with a 291% increase from 3.4% of organizations in 2013 to 13.3% this year. The average maturity level is certainly growing and sustainably.The current perceptions of programs are encouraging with 52.9% of professionals stating they are expanding, an increase from 42.4% in 2013, and the level of programs being dismantled or at risk has dropped considerably from 13.6% two years ago to this year’s figure of 5.1%.
To effectively manage and develop OpEx programs, organizations are looking at a number of different methodologies and solutions over the next 12 months. Topping the results, 46.69% of professional respondents in our PEX Network Annual Survey identified Business Process Management (BPM) as a solution being currently used to support OpEx projects or initiatives, with 16.36% stating that they plan to implement BPM over the next 12 months. Gustavo Gomez adds: "From the Bizagi perspective, BPM is all about the business, and solving business challenges. So the more senior the executive involved, the better the results will be."
Bizagi Insights: OpEx on the Corporate Agenda
PEX Network also spoke to Gustavo Gomez, CEO of Bizagi, to find out more about how aligning strategy with operational excellence to drive sustainable, enterprise-wide transformation is so crucial and how OpEx is climbing up the corporate agenda.
PEX Network: Why do you think that OpEx is moving up the C-Suite agenda?
Gustavo Gomez: Most of our projects (if not all) involve a high level business executive. From adidas and Old Mutual to BAE and many others, the route towards operational excellence is very much on the C-Suite’s agenda. And that’s not just a ‘good thing’ - it’s a mandatory requirement. To get results and to promote them, you need a champion. From the Bizagi perspective, BPM is all about the business, and solving business challenges. So the more senior the executive involved, the better the results will be.
PEX Network: In theory, OpEx is all about getting the right metrics in place and organizational leadership helping to drive transformation. However, in practice, many companies fail to drive programs sustainably and enterprise-wide. Why do you many struggle with this?
Gustavo Gomez: In order for business transformation to be effective and to deliver results enterprise-wide, you need some very clearly defined goals and associated measures. How else can you measure the success – and sustainability - of such an initiative? For many businesses however, the results don’t come fast enough: C-level execs simply don’t have the patience for it. At Bizagi, we know that results have to be produced fast, and they have to go viral if BPM is to overcome its reputation for long and complex implementation projects. That’s why our mantra is ‘No metric, no project’ is embedded from day one. Utilizing our ‘Quickstart’ project methodology among other tools and techniques ensures that Bizagi customers get results in just seven weeks. It’s also important to understand that BPM is not one process. It is a long-term initiative. You produce one process, get results, then you move to the next, gradually bringing together all the organizational silos.
PEX Network: What do organizations need to address in order to help drive business performance through OpEx & strategy?
Gustavo Gomez: In our view, the following are the key ingredients businesses need to put into place to drive operational excellence:
- Choose the right process: if you don’t get this right then your BPM initiative will fail. Ensuring that you define start and end dates, fix broken / manual processes, and that the process impacts around 70% of the business for example, will ensure that your pilot delivers value to the core organization.
- Align metrics with business objectives and ensure these are easy to measure.
- Define the first process clearly and ensure it meets the success criteria.
- Ensure the first process can be delivered fast – in weeks not months (Bizagi ensures that customers see results in just 7 weeks which is why we have ZERO failed projects).
- Start small, think big and scale fast: define a strategy to ensure your processes go viral.
- Have a high-level sponsor: the more senior the sponsor, the more successful the project
About Bizagi
Bizagi is the global Business Process Management (BPM) solution author, who disrupted the BPM market with its freemium model. Over 350 global customers including adidas, GE, Mars, BBVA, Old Mutual, Generali trust Bizagi with over $10bn transactions and the largest BPM projects globally.
Bizagi Collaboration Platform transforms businesses resulting in improved operational efficiencies, shorter time to market and better adaptability achieved at 30% of the in-house development costs and 50% of the competitive systems. Our enterprise customers gain significant competitive advantage by using Bizagi’s software to streamline mission-critical processes (cross-functional, complex and international) as well as mundane daily routines.
How can business people have time to innovate without getting bogged down with mundane tasks? That was the question Bizagi founders were asking themselves when the company was born in 1989. Conceived in Colombia and now a highly successful $57M global business, Bizagi boasts the largest user community in the enterprise software space with350+ enterprise customers including GE, BAE, Old Mutual and adidas.
Disrupting the market
Bizagi’s secret: its freemium model. By enabling customers to model and digitize complete processes without financial commitment, enterprise organizations are able to improve their operational efficiency, time to market, compliance and customer service among others. Why did Bizagi decide to offer free software as early as 2008? Our philosophy was, and continues to be, simple – Bizagi create great products; we are confident that they work, and are as intuitive as any social media app.
The gamble paid off
Today, the Bizagi Community is a loyal base of over 3M subscribers, people who use the software to model their processes graphically without coding and then automate/digitize them by creating end user applications and connecting them with external systems, all for free. Utilizing its Spark Project Methodology, Bizagi is able to deliver a fully digital process in 7 weeks, delivering tangible ROI that engages stakeholders and ensures long-term momentum for the BPM initiative. We also provide a wealth of quality self-service eLearning resources to significantly shorten your learning curve. Only when people are ready to run these processes across the enterprise, do they contact Bizagi.
Many of Bizagi’s customers started using its free software and only got in touch when ready to roll-out 100s of processes across the enterprise, namely Audi or Mars.
Recognitions
Bizagi is listed in Red Herring’s Top 100 most innovative companies worldwide, and last year, was named ‘Most Promising Technology Company’ by the PwC Accelerator. Bizagi software has also been ranked Top Performing BPM Suite by Fraunhofer Institute, Europe’s largest research institute recognized two years in the row among ‘Top Global Innovators’.
About Bizagi BPM products
The Bizagi platform has been designed from the ground up for reuse, integration and business/IT collaboration. A layered architecture keeps business people engaged through the whole BPM lifecycle which removes the organizational silos and ensures that the outcome meets the business objectives. The BPM portfolio includes Bizagi Modeler: a BPMN-based process modeling tool to encourage business/IT collaboration via clutter free, drag-and-drop process flowchart design, Bizagi Studio: a free process digitalization platform to unlock the power of process flowcharts via code-free integration, form design, user interface and reuse and Bizagi Engine to execute previously automated processes. The company also enables its customers to integrate with existing IT assets such as SAP and SharePoint and ‘supercharge’ processes through its free store of ready-made processes and widgets available via its Process Xchange and Widget Xchange.
Headquartered in the UK, and with offices in Europe, USA and Latin America, Bizagi is supported by a strong implementation partner network worldwide. For more information, visit www.bizagi.com
Topics:
BPM
Organizational Change
Lean Six Sigma
Process Excellence
Change Management
Business Agility
OPEX
