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Business Process Restructuring An Overview of Applied Processes and Methodologies

TableofContents
POSITIONINGSTATEMENT INTRODUCTION BUSINESSPROCESSRESTRUCTURINGOUTSOURCEORINSOURCE APPLIEDPROCESSESANDMETHODOLOGIES
LISTENTOSPECIFICNEEDSANDREQUIREMENTS:.. FORGESUSTAINABLEBUSINESSRELATIONS:.. STARTWITHPILOTPROJECTS:. EVALUATERESULTSANDGETFEEDBACK:. INSTALLINTELLIGENTSYSTEMSFORFULLSCALEIMPLEMENTATIONS: MONITORPROGRESSMADEANDIDENTIFYDISCREPANCIES:... ASSESSSCOPEFORPROCESSVALUEADDITIONS: MAKEWAYFORIMPROVEDINTEGRATIONWITHOTHERPROCESSES:...

3 3 4 5

BENEFITSOFBUSINESSPROCESSRESTRUCTURING
EVALUATINGFEASIBILITY: STARTINGSMALLPILOTPROJECTS: REGULARUPGRADESANDIMPROVEMENTS: VALUEADDITIONS:..

CONCLUSION

Positioning Statement
Businessprocessrestructuringisoftendefinedasanevolutionarytrend,quiteakintotheindustrial revolutionofthepastandtherapidlytransforminginformationalageofthepresent.However,when analyzedindetail,italsobecomesobviousthatongoingrestructuringexercisesaremoreofareflex actioninresponsetoGlobalization,intensecompetition,andrisingbusinesscomplexity.Opinions mayvary,butthefactisthatoverthepastdecade,businessprocessrestructuringhasprovenitself asthemosteffectivetoolfordevelopingandsustainingbusinesscompetencies,reducingoperational costsandaugmentingefficiency.Thiswhitepaperwillhighlighttheprocesses,tools,techniquesand conceptsthathelpachievecriticalbusinessobjectivesdescribedabove.

Introduction
WithGlobalization,competitionhasincreasedsubstantially,forcingbusinessestodevelopsuitable adaptabilitywiththeirimmediatebusinessenvironment.Ontheonehand,therearethecustomers withtheireverchangingneedsandontheotherthereisthemarketitself,whichisconstantly redefiningthebasicsofevolution.Sincesuccessdependsonhowwelladaptationsarecarriedoutto suittheeverchangingdynamismofthesetwofactors,itbecomesessentialthatexistingbusiness processesbereviewedandanalyzedonaregularbasis.Thebasicaimshouldbetoassessthe overalleffectivenessofcriticalbusinessprocessesandtocheckwhetherornottheycanbeimproved upon.Ifthereisscopeforimprovement,businessprocessrestructuringautomaticallybecomesthe nextstep,becauseitnotonlyhelpsimproveprocessefficiencyandquality,butalsoallows businessestoachievesignificantcostsavings.

Business Process Restructuring Outsource or Insource

Whenfinallythedecisionismadeinfavorofbusinessprocessrestructuring,thenextbigquestionthat confrontsbusinessesiswhethertohireservicesofathirdpartyserviceproviderortocreateaninhouse teamforcarryingoutthetargetedrestructuringworks.Whileinsourcingmayprovidecompletecontrol overongoingrestructuringexercises,itispresentlynotthepreferredchoiceforbusinesses.Theobvious reasonisthatitlacksthemeritsofoutsourcing,whichhasbecomewidelypopularworldwideinrecent years.Describedbelowaresomecriticalfactorsthattiltthebalanceinfavorofoutsourcing: Insourcingmaynotbesuitablebecause... Restructuringexercisesrequirespecialexpertise,domainknowledgeandtalentthatmaynot beavailableinhouse Organizationalmembersmaytreatrestructuringexercisesaspartoftheirdailyroutine, somethingthatcaneasilybreedcomplacency Changeisnaturallyresistedandorganizationalmembersmaydisplaythesamesentiments duringrestructuringexercises Membersoftheseniorandtopmanagementmembersmaynotbeabletoprovidequalitytime asisneededforplanningandactualizingrestructuringexercises Involvingorganizationalmembersinrestructuringmayresultinlossofessentialresources suchasmanhours,whichcanadverselyaffectproductivityandprofitability Theprevailingcommandandcontrollinesmaygetaffected,resultinginhaphazarddistribution ofdutiesandresponsibilities Businessesmaynothavetherequireddomainexperienceininitiatingandsuccessfully completingrestructuringexercises Outsourcingispreferredbecause... Itallowsbusinessestoreduceoperationalcosts,apartfrommakingprocessesmoreefficient andproductive Itreducesthetotalnumberofsubprocesses,somethingthatallowsbusinessestomake optimalutilizationofessentialresourcessuchasmanhours Thirdpartyoutsourcingfirmsrelyontrainedandskilledprofessionalswhoarewellawareof thespecificneedsandrequirementsofrestructuringexercises Withmostprofessionalshavingyearsofdomainexperience,itbecomeseasierforthemto achievetargetedrestructuringgoalsandobjectivessuchasincreasedcustomersatisfaction Statisticallyalso,ithasagreatersuccessrateascomparedtorestructuringprojectsthatwere insourced Risingcompetitionisforcingbusinessestoconcentratemoreontheircorecompetencies, somethingthatcanbeachievedonlywhennoncoreprocessesareoutsourced Technologicaladvancementshaveblurredgeographicalboundaries,allowingbusinessesto seekthemostcosteffectiveservicesirrespectiveoftheactuallocation

Applied Processes and Methodologies

Listentospecificneedsandrequirements: Everybusinesshasspecificneedsandrequirementsanditisalwaysbeneficialtoinclude thesewhilefinalizingrestructuringplansandstrategies Promotinginterpersonalcommunicationsistheeasiestandthemostcosteffectivemeansto understandspecificbusinessneedsandrequirements Itisnecessarybecausecustomerprofilesareusuallydifferentforeachindividualbusiness entity,somethingthatrequiresincreasedcustomization Needsandrequirementsconstantlykeepchangingandithelpstohaveaproactiveplanready fromtheverybeginning Achievingdesiredgoalsandobjectivesbecomeseasier,somethingthatallowsboththeclient andtheserviceprovidertoimprovefutureprospects

Forgesustainablebusinessrelations: Whileacontractualagreementisalwaysnecessaryforavoidingassociatedrisks,ithelpsto viewthewholeaffairasmoreofapartnershipratherthanalimitedperiod,businesscontract Abusinessrelationshipthatbordersaroundapartnershiphelpsserviceprovidersunderstand thefinerdetailssuchasworkculture,customerneedsandexpectationsetc,whichare prerequisitesforprovidingoptimizedoutsourcingservices Buildingtrustandafeelingofsharedbusinessintereststhatarevitalforsustaininglongterm businessrelationscanbemadeeasierbyfollowingbasictheprinciplesofapartnership

Start with pilot projects: Everyprojecthascertainhiddendependenciesthatneedtobeidentifiedpriortotheactual initializationoftheproject.Sincestakesareoftenhigh,itisalwaysbettertostartwithsmall pilotprojects Thesizeofpilotprojectscanvary,butwhatisnecessaryisthatthebasicgoalsandobjectives shouldbemoreorlessthesameasthemainproject Pilotprojectscanprovidecriticalinsightsandvaluableprocessdata,allowingboththeclient andtheserviceprovidertoconfidentlycarryonwiththemainproject Thesizeandotherdetailsofthepilotprojectshouldbefinalizedinthepresenceofasenior memberfromtheclientside

Evaluate results and get feedback: Dependingonresourceavailability,bothmanualandautomatedsystemsneedtobeinstalled formonitoringresultsachievedthroughthepilotproject Discrepancies,ifany,needtobeanalyzedinordertoassesstheirdamagepotentialand deviseappropriatesolutionsforthem Pilotprojectsmaybecontrolledexperiments,buttheystillneedtobegiventherequired attention,becausethesuccessofthemainrestructuringprojectdependsonit Whileinitialfailuresmaydentmotivationlevels,theyshouldnotbeusedasareasonfor cancelingtheentiremainproject,althoughitisnecessarythatreasonsforfailuresbeidentified andbetakencareof

Install intelligent systems for fullscale implementations: ThepaceofadvancementsinInformationTechnologyandTelecommunicationssectorshas increaseddramaticallyoverthepastdecades,resultinginthedevelopmentofmanyuseful productsandservices.Theseneedtobeinstalledandputtogooduseforensuringthe successoftherestructuringproject Howeversincereducingoperationalcostsisoneoftheprimaryobjectivesofrestructuring exercises,itwouldbebetterifonlythosesystemsareinstalledthatarebothaffordableand effective.Maintenancecostsalsoneedtoassessedbeforeactuallyinvestinginanintelligent servicedeliverysystem Customerneedsandrequirementsshouldbegivenprioritywhilechoosinganappropriate servicedeliverysystem

Monitor progress made and identify discrepancies: Sincearestructuringexercisecanneverbecalledsuccessfuluntilandunlessthedesired goalsandobjectivesareachieved,itisalwayswisetoconstantlymonitorprogressmade Chancesofdiscrepanciesarelowiftheprescribedguidelinesarefollowed,butsincethereis alwaysaslightchance,itwouldbebetterifeffortsaremadetoidentifycurrentandpotential discrepancies Evenmoreeffortneedstobeappliedforevolvinginnovativesolutionsthatcanworkaround potentialproblemsandissueswithoutincreasingtheoverallcostofoperations Timeispreciousanditwouldhelpifdiscrepanciesarecorrectedassoonaspossibleafter identification

Assess scope for process value additions: Abusinessprocessrestructuringprojectmayalreadybedoingquitewell,butsinceit's sustainabilitydependsontheavailablepotentialtointroducemorevalueadditions,itmakes sensetobeproactiveandmakeregularassessmentsofapplicablevalueadditions Oncethepotentialforvalueadditionshavebeenidentified,itneedstobecommunicatedtothe clientassoonaspossibleforgettingthegreensignal.Identifiedvalueadditionsoftenhavea limitedshelflifeandithelpsiftheirpotentialisrealizedbeforetheirexpirationdate Onlywhentheclientseesmorebenefitscominghisway,willhegivehisapprovalfor expandingthescopeofongoingrestructuringprojects

Make way for improved integration with other processes: Inthelargerinterestofthebusiness,itisalwaysbettertoputinextraeffortsforintegrating restructuringexerciseswithothercriticalprocessesofthebusiness Restructuringexercisesshouldbeviewedasapartofacomplexsetupandasacritical functioncomplementingthecoreprocessesratherthanastandaloneevent Forimprovedintegration,boththeclientandtheserviceproviderneedtoworktogetherby sharingvitaldataandinformationandvaluableinputs,suggestionsandfeedbacks Improvedintegrationwillmakeiteasiertoachievetargetedorganizationalgoalsandobjectives andmayevenhelptolookbeyondthem

Benefits of Business Process Restructuring

Business process restructuring offers wideranging benefits, some of which are described below Costsavingsistheprimarybenefit,somethingthatbooststhecompetitivenessofoffered productsandservices Processimprovementsincreaseefficiency,whichresultsinoptimalutilizationofcritical resourcessuchasmanhours Qualitygetsaboostaswell,whichinturnincreasescustomersatisfaction,aprerequisitefor ensuringbothshorttermandlongtermbusinesssuccess Itallowsbusinessestofocusontheircoreprocesses,therebymakingiteasierforthemto realizethefullpotentialofavailablebusinessopportunities Overall,itprovidesadefinitiveedgeovercompetitors,somethingthatispricelessintoday's Globalizedworld

Conclusion
Businessprocessrestructuringhasbeenusedsuccessfullybymanybusinesses,bothlargeand small,forachievingtargetedgoalsandobjectives.Whiletheactualblueprintofarestructuring exercisemayvarydependingonthetypeofbusinessprocess,thetechniquesandmethodologies describedabovearecommoninmostcases.Everybusinesscertainlyhastherighttomake appropriatechanges,butitwouldhelpiftherestructuringplandoesnotdeviatetoomuchfromthe guidelinesdiscussedabove.Thisisapplicableevenmoreinthecaseofbusinessesthatare restructuringforthefirsttime.Restructuringexercisesdirectlyaffectpresentandfuturebusiness prospectsanditisalwayswisetoavoidunnecessaryrisks.Achievingplannedobjectivesshouldbe theonlyaim,ataskthatbecomeseasieriftheprescribedguidelinesarefollowed.

Telegenisys

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June,2008