NECESSITY, THE MOTHER OF EFFICIENCY

We have all seen or heard of how necessity can be the mother of invention. Simplistic, but true. Now, in an age when the United States has reached the lowest workforce percentage since 1983, there is more awareness of the fact that the downsizing of human resources doesn’t necessarily mean output has to be sacrificed. Of course, the drop in the workforce percentage to only 45% (2010 vs. high of 49% in 2000) is partially attributable to the aging population, in particular the retiring “Baby Boomers”, but the bigger culprit is the economic downturn; namely layoffs, and early retirement packages. Business Process managers are being asked to deliver more productivity with less human capital.

Process Redesign

A byproduct of these downsizing measures is that finance managers are discovering they can survive longer than originally believed on what was termed a skeleton group. Maintaining, or even improving, operational efficiency is no longer a business option, which can be temporarily sacrificed. It is now a long term competitive mandate of “Best in Class” finances organizations. With less manpower, financial managers must develop extended plans to increase worker bandwidth; in essence eliminate or reallocate the workload of one FTE (Full-Time Equivalent) across the workload of ten FTE’s (in some cases the ratio is more 1:8). Consequently, to avoid the burnout of human assets, fundamental changes in the business process have to take place. The questions then become………

What changes can be made that have minimal disruption to business continuity?
How is transformation executed?
What does the output of successful transformation look like?

The answers are found in a business process transformation plan. Experts in this area develop comprehensive strategies of tactical and/or strategic changes that produce sustained cost reductions, stronger process controls, and improved accountability.
Tactical vs. Strategic
Business transformation can be characterized by two approaches; tactical and strategic. Tactical process improvements are less formal reactive business process transformations. Strategic redesign is more methodical and generally results in higher benefits and returns to investment.
Tactical process improvements, also referred to as “Quick Wins”, are predominantly changes to organizational motis operandi. These are basic operational changes, largely to behavior, and are representative of accountability and process ownership. Tactical Process Improvements must be:

Immediately implementable
Require little inter-departmental support
Require little financial or technological investment
Involve little change management

Conversely, Strategic Redesign will require a more comprehensive approach that specifies the business and technology requirements of a transformation to a future goal state operation with industry leading market practices. More sustentative and broader benefits are achieved from these types of process transformation projects. Execution entails, but is not limited to, the following elements:

Current State Assessment
Future State Goal Design
Gap Analysis
Transformation/Transition Plan
Change Management

In and of itself, neither tactical process improvements nor strategic redesign is definitively suitable or unsuitable for client organizations. However, more and more organizations will tend to be more hybrid in their thinking and will roll out tactical process improvements as a front-runner to the strategic process redesigns. This will require keen insight and forethought so as to avoid or minimize the potential for implementing tactical process improvements that could become antiquated with the initiation of strategic redesigns.
In the end, forward thinking enterprises are acknowledging that these tough economic conditions can have the silver lining of making operations permanently lean; if “Reductions in Force” are coupled with a thoughtful business transformation plan.
For more information or a consultation on this topic please contact blog@altusvirtus.com .

Thank you for your interest,

Sincerely,

Michael Fullwood
Managing Partner