| Business process re-engineering |
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| Re-shaping an organisation into one that is focussed towards processes not soley business results can lead to excellence says Craig Steven |
At Nortel Networks, we have completed a Business Process Re-engineering project to re-shape our organisation into one that is focussed towards processes. We have extensively utilised a business excellence model as shown, which, in essence, says:
• The resources of the organisation (leadership, people, policy & strategy and other resources) shape the organisation's processes.
• The quality of the organisation's processes drives its business results.
This represents quite a radical shift in organisation focus. Prior to this change, Nortel Networks' primary agent of management focus was its business results (what we call "driving by looking in the rear view mirror"). This new model suggests that by focussing management attention on to the enablers, drivers and inputs on the left, this will drive positive business results.
People
Development of the Receivables Professional
The staff now working in the Receivables group in Galway are recruited from professional accounting backgrounds. Language skills are a key element of our recruitment policy. Staff receive extensive training in interpersonal, negotiating and telephone skills.
This background and skills profile drives benefits into the receivables process:
• An enhanced ability to appreciate and respond to customers' cultural differences and the environments in which individual customers operate.
• Better appreciation and desire to improve interfaces between the receivables process and other business processes.
* Increased staff turnover through the Receivables Group (whilst this causes difficulties it also brings a flow of new ideas and approaches).
Policy & Strategy
Development Of Policies and Using Policies to Drive Process Change
Company policies are developed at the top of the house. We have taken those policies and "translated" them for use in our own Business Unit. One of these is "We will make it easy for our customers to do business with Nortel Networks ".
If policy statements are meaningful and relevant they will drive process change. Here are some examples of how we have used this policy to identify and address customer difficulties:
* Building relationships with customers/putting faces to names
- promote customer visits to/from Nortel Networks.
* Making payments
- tailoring documentation
- providing assistance through bank relationships.
* Customs clearances, etc
- providing assistance through Nortel Networks internal and external advisors.
Resources
Information - A Key Resource
In our re-engineered business model we have recognised that information is one of the organisation's key resources.
We have made significant efforts to improve the quality of information provided by the Receivables group. The format and frequency of the information that is produced is tailored to suit different target audiences. We have also maintained a constant focus on opportunities for automation of information production and communication in order to avoid build-up of costs associated with these activities.
Process
Broadening The Receivables Process
In our re-engineered model the Receivables Process is an integral part of a suite of customer interaction processes and, as such, impacts and is impacted by the effectiveness of other parts of the entire process.
We actively encourage the involvement of the Receivables group in those processes, where applicable:
* Include Receivables staff in reviews of sales proposals to new customers to provide the earliest possible opportunity to gain familiarity with new customers and provide input into proposed contract terms & conditions.
• Receivables staff work with our Treasury group, our customers and financial institutions to streamline and automate payment processes.
* The Receivables group is a common first point of contact for customers with queries and complaints. The Receivables Group therefore has very strong links into the Customer Service Desk to monitor resolution of issues and provide input on the impact that customer issues are having on Receivables.
Process Improvements
Our business model suggests that by concentrating on the business enablers or inputs, we will drive process improvements and, in turn, improved business results. Here are some examples of changes that have resulted from our new approach:
* People focus - professional, multi-lingual Receivables staff, trained in interpersonal/negotiating skills
- improved customer relationship-building
- increased likelihood of process challenge/change
* Policy focus - customer difficulties addressed
- improved customer relationship-building
- streamlined/integrated customer interaction processes
* Resources focus - tailored management information
- better utilisation of company resources to address customer issues/avoid issues arising.
Conclusions/Results
Our re-engineering process has focussed on the drivers of results, not just on the results themselves, as we would have tended to do in the past. Focus on the drivers of the results induces process challenge, change and improvement, which, in turn, produces positive business results. We have focussed on the people, policy & strategy and resources associated with the Receivables Process.
So, to the results themselves - re-engineering may be academically stimulating, but does it generate results?
* Average receivables performance trend over time has improved
* Number of outstanding customer issues significantly reduced
* Incidence of new customer issues significantly reduced
* Resolution time for customer issues significantly reduced.
These results have not only driven improved cashflow and customer satisfaction. By improving overall receivables performance we have been able to selectively extend credit terms to high-performing customers, which has led to growth in sales.
Re-engineering works! |
Craig Steven is financial controller with Nortel Ireland.
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| Article appeared in the May 1999 issue.
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