Introduction
Business Process Improvement (BPI) is widely recognised as being one of the best ways of reducing operational costs and/or increasing profits. However, the vast majority of Business Process Improvement projects end in failure – they fail to deliver the expected savings or profit increase; they cost far more to implement than originally estimated; in the worst cases, they fail on both counts.
I have worked as a freelance BPI consultant for more than ten years now, and the brief report below is based on my experience of the main reasons why BPI projects fail. I am sure you will find this report to be valuable if you can answer yes to one or more of the following questions:
- Have you been involved in a business process improvement project that failed to meet expectations?
- Are you a business owner or CEO who realises that your business needs to have more efficient business processes in order to remain competitive in your particular market?
- Are you a manager, team leader, or supervisor who is having budget reductions imposed on you from above, and you realise becoming more efficient and streamlined is the only chance you have of staying within these budgets?
- Are you just about to start your first business process improvement project, and you would welcome some advice from an ‘old hand’ at BPI.
Mistake Number 10: Handing over total responsibility for the project to expensive BPI consultants
Don’t get me wrong, I have nothing against BPI consultants – I am one myself after all! However, it is important to realise that their number one objective is different to yours – yours is to reduce your operational costs and/or increase your profits; theirs is to make as much money as possible for their company. I have worked on lots of projects where consultants have been given a completely free rein, and the results have always been the same – escalating project costs.
Used correctly, BPI consultants are a valuable addition to any business process improvement project – the secret is to give them a tight framework to operate within, and to keep the responsibility for the project in your hands, rather than in theirs. By doing this, you will benefit from their knowledge and experience, whilst at the same time keeping a firm control on project costs.
Mistake Number 9: Choosing the wrong business area to improve
Although every part of your business will probably benefit from a business process improvement project, some areas will return much bigger benefits than others. Therefore, it is important that the first area you choose has the potential to return big benefits. I have seen many successful BPI projects being viewed as failures, simply because the return on investment wasn’t that impressive.
If you choose your first BPI project wisely, and you realise big benefits quickly, the kudos and attention this attracts will create momentum to tackle further BPI projects. Also, the savings realised from this first project can be used to finance the second project; the savings realised from the second project can be used to finance the third project; and so on. There is very little that is more pleasing to a business owner, than self-funded business process improvement projects!
Mistake Number 8: Only doing BPI once
Most clients I have worked with have the mindset that you do BPI once, and that’s it – job done! What they fail to realise is that business processes constantly evolve, in order to survive in the face of an ever-changing business environment. If this ‘business process evolution’ isn’t designed, which is usually the case, inefficiencies will start to creep back into your processes.
One of the big keys to successful BPI is to continue to do it forever. You need to treat your business processes like a big steel bridge – by the time you have painted it once, it is time to start painting it all over again, in order to avoid any corrosion from setting in.
Mistake Number 7: Treating BPI as a ‘business as usual’ activity, instead of a project
A lot of clients I have worked with treat BPI as something that their already over-stretched staff should simply fit in around their normal daily activities. This is absolute madness, because it just makes the staff involved pay lip service to BPI, and nothing worthwhile actually happens.
BPI needs to be set up as a project with the following attributes:
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A clearly defined scope.
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A clear, measurable set of objectives – e.g. reduce customer complaints by 10%; increase profits on product XYZ by 7%; reduce operational costs associated with processing application form ABC by 12% etc…
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A clear plan of who is responsible for delivering what, by when.
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Properly allocated resources – i.e. people and money.
Mistake Number 6: Failing to get staff buy-in
Without staff buy-in, business process improvement projects are nearly always doomed to failure. I have worked with a lot of senior managers whose initial plan was to run a two hour workshop with a couple of managers to re-design a process, and to then simply impose this new way of working onto the appropriate business area.
On the rare occasions where I have been unable to convince these senior managers that this isn’t the best approach, the end result has always been the same – extreme resistance from staff, which makes it very difficult for the project team to implement the new process, which in turn results in people pretending that things have changed, when, in actual fact, the staff continue to work in the same old way.
Proper staff involvement is one of the big keys to successful business process improvement. Doing the following will significantly increase your chances of success:
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Explaining to staff why things need to change.
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Canvassing staff for their opinions, and for their ideas for improvement.
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Being very open, and responding honestly to their questions and concerns.
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Continuing to keep staff informed throughout the project.
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Having staff representation on the BPI project team.
Mistake Number 5: Believing that a new IT system will solve all of your problems
It never ceases to amaze me that so many senior managers still believe that buying the latest ‘all singing, all dancing’ IT system, is the ‘magic bullet’ that will instantly solve all of their problems. When, in fact, the reality is that a cheap and simple IT system, that supports a well designed business process, is much more effective than an expensive IT system, that is struggling to support a business process that has evolved, rather than been designed.
It is true, however, that an IT system can often help to shape the design of a business process – i.e. it is often more cost-effective to tweak a business process to utilise an ‘out of the box’ IT function, than it is to have a bespoke IT function built to support the perfect business process. However, my preference is to always start by designing the perfect business process, and to then, if necessary, agree to change it to fit in with an existing IT function – I don’t recommend starting by designing the process around an IT function, because that is a definite case of the ‘tail wagging the dog’.
The other thing to bear in mind is that successful BPI can be accomplished without any IT at all – I have been involved in many successful ‘non-IT’ BPI projects. These projects focus on things such as:
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Reducing the number of hand-offs between people or teams.
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Removing non-value adding activities.
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Using a less expensive resource to undertake an activity.
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Tackling the root cause of errors (e.g. providing forms that are easier for customers to complete, which cuts down on the number of incorrectly completed forms being received).
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Creating procedures to ensure that all staff do things consistently.
Mistake Number 4: Consulting with the wrong people
When I start working with a new client, they normally expect me to just consult with their management team – I don’t! Managers obviously have a role to play in a business process improvement project, but the really key people are the ‘coal face’ workers. This is because they actually carry out the existing business processes on a day-to-day basis, whereas the managers often have a view of the business processes that don’t actually reflect reality. This also means that ‘coal face’ workers often have good ideas for improving the existing processes.
A lot of BPI projects I have witnessed seem to involve getting a lot of managers into a room; drawing a lot of process maps on whiteboards; and miraculously coming up with the new process. This just doesn’t work in practice. Workshops do have their place, but I believe it is at the start of a BPI project, in order to get a feel for the existing business processes, and to scope out the project, and then much later in the project to work through a detailed model of the existing processes, to identify and agree on improvements. In between these two points in the project, I believe the key is to actually observe ‘coal face’ workers going about their normal activities. Relying on people simply telling you what they do, often results in big chunks of a process being missed, because people typically only tell you about the ‘sunny day scenario’ (i.e. when everything goes right), and the biggest improvements are often associated with removing or reducing error handling activities.
Once you have got a detailed model of the existing process, it is time to review it to identify improvements. Be sure to involve ‘coal face’ workers in this review, because they are the people who normally come up with the best improvements.
Mistake Number 3: Not using a proven BPI Method
There are lots of BPI tools and techniques that are available to use, but so much choice can often be overwhelming to people who are fairly new to BPI. I have often been brought into BPI projects that have been up and running for a while, where the project team has been very busy producing lots of BPI products (e.g. process maps, process descriptions, organisation charts etc…), but nobody seems to have a clear idea of how all of these products fit together, or what to do next to move the project forward.
In order to run a successful business process improvement project, what you actually require is a small set of simple to produce products, together with a methodology that details how to produce each of the products, and in what sequence.
Mistake Number 2: Tackling too much in one go
If you pick too big a chunk of your business to improve in one project, you will be in grave danger of running out of steam, or money, before you reach the end of the project. My biggest BPI successes have been where I have broken a large project down into a number of much smaller projects – i.e. no more than 3 to 6 months from the start of the project, to improvements being implemented, and benefits being realised.
These smaller projects still need to be run properly, with a clearly defined scope, a set of objectives, and a project plan. As I said in point 9 above, do this right, and you can run one small BPI project after another, with each one being self-financing.
Mistake Number 1: Having no mechanism to measure if a BPI project has been successful
“If it can’t be measured, it can’t be improved.” This is a well known saying, which, in the context of a business process improvement project, simply means that if you don’t have an accurate model of how your business currently operates, and what it costs to operate it, then you have no way of determining if the improvements you plan to make to it are worthwhile.
Not so long ago, it was all the vogue to simply start with a clean slate, and design a brand new process, without taking any notice whatsoever of the existing business process. The result of this was that lots of new business processes were very quickly implemented, with no way of knowing if they were better or worse than the processes they replaced. Don’t make this mistake yourself – taking the time to properly model your existing processes will pay dividends, and it doesn’t really take any longer than the ‘clean slate’ method.
And finally …
So there you have it – my take on the main reasons why so many BPI projects fail to meet expectations. This isn’t something I have gotten from reading a ‘How to do BPI’ book, it has come from real world experience of working on lots of business process improvement projects, so I hope you will take advantage of my experience, and ensure that your BPI projects don’t make the mistakes I have outlined above.
I would be very interested to know whether or not you agree with my ‘Top Ten’ above. Feel free to leave a comment below, and let me know what you think.
{ 3 comments… read them below or add one }
Hi,
Interesting list.
I have one comment / opinion to the Mistake Number 10 in your list. If I understand correctly, you say that the responsibility for the project should be kept in the hands of the organisation, rather than in the hands of the consultant. And I think that is a dangerous thing to say.
Yeaa… I work as a consultant myself… Specifically improving project management processes. These organisations are not capable of managing projects or even aware of the project managent best (or even good) practices – that is why this process needs improvement. Here, handing the project responsibility over to the organisation is the biggest disservice you could do. Instead, if the overall project responsibility is on the consultant to manage this improvement project according to best practices, the whole project team -if not the whole organisation- will benefit from the consultant’s knowledge and experience by having this project managed and executed in a systematical and structured way – something they should learn when trying to improve their (project management) processes.
Greetings from Finland.
K-M
Hi K-M,
Many thanks for your comment.
You are right that a lot of organisations do not have the necessary project management skills in-house, and that is why they use consultants. This is obviously a good thing for the likes of you and me!
However, the target audience for this blog is the client, rather than the consultant. Therefore, any advice I have given, is written mainly from the perspective of the client.
In my experience, clients often view the appointment of a consultant as the end of their responsibility for a project. They expect to return in X month’s time, and find a project that has been fully implemented on time and within budget. Without proper project controls in place, this never happens!
Allowing a consultant to just ‘get on with it’, is also dangerous for the consultant. If the client hasn’t been properly involved in a project, it is only when the first major project milestone is missed that the client realises there might be a problem. This can often lead to a knee jerk reaction by the client, which could include canning the project, and unfairly tarnishing the reputation of the consultant.
All I am suggesting is that the client should put some simple project controls in place. This doesn’t require the client to have any specialist project management experience – a simple review/agreement of the consultant’s project plan at the start of the project, and regular progress reviews throughout the life of the project, is sufficient. This kind of relationship also helps the consultant, because it avoids any ‘nasty surprises’ for the client, which means the consultant can have sensible discussions about things like increasing the budget, or extending the timescale.
Hi,
I found your list really useful in particular mistake numbers1 & 2.
I work for a local authority where projects often over run or fail because project managers are in such a rush just to get on with things (sometimes due to pressure from above) that not enough time is spent getting to ‘know’ the business area and documenting the current ‘as-is’ situation at start-up. Cutting corners here and with no proper plans in place have meant that the projects I’ve worked on have often over run because objectives were not made clear at the start of the project and fell victim to scope creep.
I agree that if you don’t know how a current process works or how much it is costing you in the first place then how can you justify that changing this process is worthwhile.
It’s not that local authorities are not capable of delivering projects and don’t have the right people to do so, it’s often because they don’t have the right tools or support to help them start.