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Perspective   Olaf Acker
              Dr. Florian Gröne
              Adrian Blockus
              Keith Wheeler




Business Process
Empowerment
Powerful New Capabilities
for Front-Office Staff
Contact Information

Atlanta                           Delhi                            Milan
Ralph Alewine                     Suvojoy Sengupta                 Pietro Candela
Partner                           Partner                          Partner
+1-404-519-0184                   +91-124-499-8700                 +39-02-72-50-93-50
ralph.alewine@booz.com            suvojoy.sengupta@booz.com        pietro.candela@booz.com

Marjorie Taglieri                 Düsseldorf                       Munich
Principal                         Dietmar Ahlemann                 Dr. Johannes Bussmann
+1-412-956-4747                   Partner                          Partner
marjorie.taglieri@booz.com        +49-211-3890-287                 +49-89-54525-535
                                  dietmar.ahlemann@booz.com        johannes.bussmann@booz.com
Manoj Pillai
Principal                         Frankfurt                        New York
+1-305-393-5759                   Olaf Acker                       Jeffrey Tucker
manoj.pillai@booz.com             Partner                          Partner
                                  +49-69-97167-453                 +1-212-551-6653
Beirut                            olaf.acker@booz.com              jeffrey.tucker@booz.com
Ramez Shehadi
Partner                           Andreas Späne                    Sydney
+961-1-985-655                    Partner                          David Hovenden
ramez.shehadi@booz.com            +49-69-97167-408                 Partner
                                  andreas.spaene@booz.com          +61-2-9321-1966
Berlin                                                             david.hovenden@booz.com
Dr. Florian Gröne                 London
Principal                         Hugo Trépant                     Tokyo
+49-30-88705-844                  Partner                          Kazunori Hosoda
florian.groene@booz.com           +44-20-7393-3230                 Partner
                                  hugo.trepant@booz.com            +81-3-6757-8649
Chicago                                                            kazunori.hosoda@booz.com
Mike Connolly
Partner
+1-312-578-4580
mike.connolly@booz.com




Kenny Chan and Ronald Wade also contributed to this Perspective.




                                                                                                Booz & Company
EXECUTIVE        Often highly touted, business process management, or BPM,
                 has been a disappointment for many companies. In most cases,
SUMMARY
                 however, this situation is the organization’s fault. Unsure of
                 how to get the most out of BPM, which is supposed to improve
                 processes throughout an organization, or overwhelmed by the
                 complexity, too many companies merely put it to work in the
                 back office, optimizing already stable processes and routines. In
                 other words, they use it where it is needed least.

                 Indeed, for service industries, the real value of process excel-
                 lence and agility lies in the front office, where the company’s
                 sales or customer service representatives meet existing or
                 potential customers. This customer-focused, strategically driven
                 implementation, which we call business process empowerment
                 (BPE), is much more than merely an enhancement to BPM.
                 Instead, it is a strategy that combines process architecture and
                 governance (structure, accountability, and oversight for critical
                 customer-facing processes) with a continuous improvement cul-
                 ture to drive sales increases, aid in cross- and up-selling, manage
                 service inquiries, and encourage customer retention.

                 BPE can drive flexibility and innovation into front-office sys-
                 tems and activities and serve as a distinctive competitive advan-
                 tage. It simplifies the tools available to the company’s front-line
                 knowledge workers and improves their capabilities to in turn
                 enhance the organization’s performance. Some companies have
                 enjoyed return on investment (ROI) in BPE in the high double
                 digits per year primarily by simplifying the processes, systems,
                 and product offerings that directly affect customer transactions,
                 sales, and communications. This is a welcome development for
                 many service-centric companies, which spend more than half
                 their time managing customer variability, performance quality,
                 and workflow efficiency.




Booz & Company                                                                     1
Key Highlights
                                         WHY BUSINESS                              when these systems are dedicated
                                                                                   to nothing more than optimizing
                                         PROCESS                                   relatively stable back-office processes
    •	 Business process
       management has been a             EMPOWERMENT?                              and routines. The gains from these
                                                                                   implementations are minimal and not
       disappointment for many
                                                                                   particularly noteworthy anymore,
       companies because it is
                                                                                   since they are enjoyed by virtually
       usually a pure technology-
                                                                                   every company. By contrast, the front
       based solution without
                                                                                   office is where process management
       proper process architecture
                                         In both concept and application,          capabilities can make a significant
       governance structures, and
                                         business process management is            difference in day-to-day customer
       a continuous improvement
                                         perhaps one of the most misused           interaction—improving sales,
       culture. As a result, it tends
                                         (or little used) management tools.        facilitating cross- and up-selling,
       to be consigned to the back
                                         Although BPM has been around since        deftly handling service inquiries,
       office for stable processes
                                         the early 1990s, few people in major      and driving customer retention.
       and routines—precisely
                                         companies have known what to do           The dynamic nature of front-office
       where it is needed least.
                                         with it. Indeed, in most businesses,      processes offers a remarkable set of
    •	 The real potential of             BPM has become a back-office              opportunities for companies that are
       BPM is in the front office,       backwater, far from the strategic core    creative enough to implement BPM in
       under an approach that            of the organization.                      that aspect of the business; the added
       we call business process                                                    agility and flexibility in front-office
       empowerment, a way to arm         Ask top executives about their BPM        systems and activities can make a
       and mobilize knowledge            systems and you’re likely to hear         substantial competitive difference—
       workers with the structures,      responses like these: “I deal with        a new wrinkle on BPM that we
       incentives, skills, and tools     strategy, not with the depths of the      call business process empowerment
       that enable and encourage         engine room—I leave that to my            (BPM).
       them to do their jobs more        operations experts.” “We have a
       productively than before.         dedicated staff function looking          BPE is a resilient capabilities
                                         after that, so we’re all set.” “My CIO    system—an ongoing effort, not
    •	 Business process empower-         talked me into a BPM tool more than       a one-off process reengineering
       ment blends real gains in         a year ago; I’m not sure if and how it    approach—that combines process
       process architecture and          really works though.”                     architecture and governance with
       governance with a continu-                                                  a corporate culture that lives and
       ous improvement culture to        Unfortunately, in today’s business        breathes “continuous improvement”
       increase sales, aid in cross-     environment, those are costly and         and is focused on harnessing
       and up-selling, and encour-       myopic responses, especially for          the power of BPM technology
       age customer retention by         companies in highly developed,            architectures for the company’s
       driving flexibility and innova-   high-touch service industries, like       greatest gain. (For a close look at
       tion into front-office systems    telecommunications, health care,          how business process empowerment
       and serving as a distinctive      travel and leisure, financial services,   enhances recent improvements in
       competitive advantage.            or utilities. As these markets have       BPM, see “The Technology of BPE,”
                                         matured, demand has become more           on page 6). It’s a way to arm and
                                         and more dynamic, individualized,         mobilize knowledge workers with
                                         and constrained. Serving the              the structures, incentives, skills, and
                                         customer’s specific needs, which          tools to reconfigure processes on the
                                         can change radically over time, and       fly and draw on automated routines
                                         providing a satisfactory experience       as needed—for example, to address
                                         for customers are absolutely critical     new patterns in customer service
                                         for service-intensive companies           requests, to agilely promote a relevant
                                         to build loyalty and differentiate        new product or service offering, or to
                                         themselves from their many equally        combine sales and service processes
                                         hungry competitors.                       for maximum top- and bottom-line
                                                                                   impact.
                                         In such a diverse consumer landscape,
                                         the full potential of BPM is wasted




2                                                                                                         Booz & Company
COSTLY                                             intelligently, has had a taste of why      complexity of the service experience.
                                                   BPE is so important. Over the years,       Indeed, a Booz & Company analysis
COMPLEXITY                                         these knowledge workers have had to        of service-centric industries found that
                                                   compensate for the shortcomings of         the time spent managing customer
                                                   rigid standard procedures, inflexible IT   variability, performance quality, and
                                                   systems, and lack of automation with       workflow efficiency in these companies
                                                   individual resourcefulness to meet         has surpassed 50 percent, well above
                                                   customer expectations or deal with         the results in typical industrial firms,
Anybody who has witnessed a skilled                a burgeoning landscape of business         which deal directly with consumers
contact center agent juggling multiple             processes.                                 to a much lesser degree. This means
screens and data views in “frantic                                                            that service companies spend more
swivel chair mode,” leaning on                     But these jerry-rigged solutions are       time coping with internal complexity
makeshift tools and work-arounds                   not sufficient anymore. They’ve            than on productive activities at the
to answer a customer’s question                    been overwhelmed by the increasing         customer interface (see Exhibit 1).




Exhibit 1
For Many Service Companies, Complexity Management Trumps Productive Time



     COMPLEXITY MANAGEMENT VS. PRODUCTIVE TIME

                                                                                                                100%


         35%
                           41%          43%
                                                         49%
                                                                       55%           58%                   Time Managing Internal
                                                                                                   65%
                                                                                                           Process Complexity




         65%
                           59%          57%
                                                         51%
                                                                       45%           42%                   Productive Time
                                                                                                   35%
                                                                                                           Dealing with Customers


         Airline      Manufacturing   Automotive       Industrial    Telecom         Retail       Health
                                                      Maintenance                    Bank         Payor




Source: Booz & Company research




Booz & Company                                                                                                                      3
Business process empowerment              3.	Process technology enablement:          medical claims and improve policy
manages this complexity with new             This provides a flexible platform       utilization by leveraging BPE tools for
organizational capabilities targeted         to absorb and automate business         customer-focused disease management
at providing flexible and productive         processes and to systematically         and wellness programs.
structures and systems to deal with          build a repository of reusable
customer demands and elaborate,              services, procedures, and routines      Back-office processes directly
multitiered product and service              to meet modern service businesses’      associated with customer-driven
offerings. Essentially a transformation      needs.                                  transactions—for example, service
agenda, BPE comprises three                                                          and order fulfillment and billing
frequently neglected elements of          Business process empowerment can           and account management—are also
process management:                       have its biggest impact on processes       profitable candidates for BPE. By
                                          with high complexity and high              contrast, most foundational processes
1.	Process architecture and               business value (see Exhibit 2). They       are relatively static and of low
   governance: BPE sets up a clear        include those in the front office,         complexity and can be optimized
   pathway, decision-making rights,       product and service creation (pricing,     rather simply with traditional
   management hierarchy, strategic        promotion development, configuring         automation models and standard
   targets, and incentives to link        offerings), sales and marketing, and       lean tools.
   the front-line service delivery        customer services. For instance, in the
   organization with the development      financial services industry, competitive   When targeted at the appropriate
   of process systems to improve its      advantage opportunities exist in front-    processes, BPE can be a powerful
   performance.                           office BPE applications that integrate     transformational tool, providing
                                          treasury services and cash management      significant top- and bottom-line
2.	Process transformation culture:        portals to allow customers to manage       returns, which span everything from
   It monitors continuous process         their working capital and liquidity        improved customer service quality to
   transformation and improvement         without needing to sign into multiple,     product and service innovation gains
   and promotes and rewards process       non-linked product systems. And            to reduced process execution costs
   excellence.                            in healthcare, insurers could reduce       (see Exhibit 3).




4                                                                                                           Booz & Company
Exhibit 2
Business Process Empowerment Can Best Improve Processes with High Complexity and High Business Value



 SERVICE INDUSTRY PROCESS CLUSTERS

 High
                                                                                 Product/
                             Technology Delivery                                 Service
                                                                                 Creation                                   - Market- or customer-facing in nature, thus
                                  Supply Chain/Logistics                                                   Front-Office
                                                                                                                              complex and dynamic (changing according
                                                                                                            Processes
                                                                             Sales & Marketing                                to market conditions and customer needs)
                                                                                                          (empower for
                                                                                                                            - Less transactional, difficult to automate
                                                   Fulfillment            Customer Service                 competitive
                                                                                                                            - Benefit from flexible, adaptable process
                                                                                                           advantage)
                                                                                                                              architecture/technology enablement
                                         General Operations
                                                                              Billing &
  Capability Complexity




                                                                              Account
                                                                              Management
                                     Information                 Governance
                                     Management                                                                             - Stable with limited/predictable volatility,
                                                                           Human Resources                  Back-Office       but higher complexity
                               Finance & Accounting                                                         Processes       - More transactional and traditionally
                                                                  Legal                                   (build/maintain     technology-driven
                                                                                                            excellence)     - Benefit from standardization and
                          Facilities/Real Estate                                                                              automation for operational efficiency
                                                            Materials Management



                                                                                                                            - Low complexity and mostly static
                                                                                                           Foundational     - Can typically be optimized using lean,
                                                                                                             Processes        standard definitions and enabling
                                                                                                           (table stakes)     technologies if transaction at critical
                                                                                                                              scale levels
 Low                                                                                   High
                                                   Business Value



       Processing Volume                       Low                High




Source: Booz & Company




Exhibit 3
Enterprises That Adopt BPE and Embrace Continuous Process Improvement Achieve Results Through a Number of Drivers


  BPE VALUE DRIVERS


                                               - Increased product/service quality
                                                                                                  Customer
                                               - Improved level of service
                                                                                                 Satisfaction
                                               - Increased adherence to schedules
                                                                                                                               Revenue
                     Indirect Drivers                                                                                           Growth
                   (long-term impact)          - Reduced time-to-market for new
                                                 products or services
                                               - Reduced time to react to market                  Ability to
                                                 changes                                          Innovate
                                               - Higher level of information for                                                                              Company
                                                 proactive decisions                                                                                           Result


                                               - Reduced cycle times
                                               - Less production of waste
                   Direct Drivers                                                                Operational                  Decreased
                (short-term impact)            - More reliable business processes                                               Costs
                                                                                                  Efficiency
                                               - Reduced process execution cost
                                               - Reduced capital consumption




Source: Booz & Company




Booz & Company                                                                                                                                                              5
The Technology of BPE

    At the heart of business process empowerment is still BPM software;
    after all, BPE is also a way to enhance BPM relevance. Indeed, from a
    purely technical point of view, BPM has actually come a long way. The
    once cumbersome middleware tools that even IT departments struggled
    to completely grasp (or at least “sell” to their business counterparts)
    have evolved into user-friendly process modeling suites that quickly give
    business users the tools they need to optimize their processes without
    engaging in complex studies and arcane development efforts.

    But taking advantage of the improvements in BPM so that the software
    can be used to adapt quickly to new business conditions is where
    business process empowerment comes in. Applied correctly, BPE
    enables employees to self-configure processes in leading BPM suites
    and, more important, join in creating a business architecture framework
    as a counterpart to an IT platform. BPE establishes incentive structures
    that effectively drive business users to seek ownership of BPM—in other
    words, it implants continuous improvement into the organization.

    For this system to work, the company’s chief information officer (CIO)
    will need to be closely involved in the effort. He or she will have to lead
    the technology enablement facet of the transformation drive, providing
    the appropriate BPM architecture that allows the business side to, in
    essence, develop its own application solutions as new issues and
    problems arise. Among the challenges for CIOs is to implement best-
    in-class BPM software—not as a stand-alone, one-off effort, but as an
    integral element of the overall IT target architecture, and as an effective
    lever to drive architecture transformation toward greater process and
    service orientation. After all, BPM touches many areas of the functional
    architecture, including process analysis, modeling and design tools,
    new process deployment, and user interfaces.

    A significant plus, the BPM vendor landscape is rapidly maturing
    and consolidating, with household names such as IBM, Oracle, and
    SAP providing BPM capabilities as a core part of their portfolios, and
    established BPM champions like Pegasystems, Appian, and Software
    AG, to name a few, going head-to-head with these companies. This
    evolved market allows CIOs to make BPM purchasing decisions with
    confidence that their provider will be in business for the foreseeable
    future and that competition among the vendors is sufficiently intense to
    spur innovation and unlock new benefits and capabilities in the years to
    come. Also, the adoption of industry standards in BPM software, such
    as business process modeling notation (BPMN) and business process
    execution language (BPEL), is providing a solid and consistent platform
    for companies to efficiently, inexpensively, and reliably piggyback new
    internal applications onto BPM systems. This is critical to relatively easily
    embed BPE throughout the organization and approach continuous
    improvement in a collaborative, institutionalized way.




6                                                                                   Booz & Company
DESIGNING A      Business process empowerment is
                 not a single project or an initiative.
                                                          new process frameworks are not
                                                          developed in sync with the needs
BPE SYSTEM       Although each BPE implementation,        of the front-line workers and thus
                 if done correctly, will deliver          fall short of their ambitions, or the
                 palpable gains, true success comes       application is a pure technology
                 from a management philosophy             play, driven out of the IT group,
                 focused on sustainable process           and unable to generate traction or
                 excellence in a holistic fashion         buy-in on the business side of the
                 that can be felt throughout the          organization.
                 organization and its operations.
                                                          Business process reengineering
                 Historically, companies have often       and lean or Six Sigma initiatives,
                 addressed their process issues by        executed in isolation the way many
                 attacking only small portions of         companies do them, suffer from
                 the overall problem, or at least         the opposite condition. Although
                 giving lip service to doing so. Not      effective in instilling continuous
                 surprisingly, the results are almost     improvement practice and discipline,
                 always unsatisfactory. For example,      these programs are usually
                 enterprise architecture initiatives      business operations efficiency
                 that attempt to document and             exercises, which frequently lack
                 standardize business processes           sufficiently sophisticated technology
                 by applying a holistic framework         to produce sustainable high-level
                 structure are often big and              performance gains.
                 expensive undertakings that in many
                 organizations end up being little        In contrast to these somewhat
                 more than theoretical exercises that     incremental approaches (and
                 generate a lot of paper. Either the      minimal returns), BPE requires a




                 True success with BPE comes from
                 a management philosophy focused
                 on sustainable process excellence
                 in a holistic fashion.




Booz & Company                                                                                    7
comprehensive system built on an                 Process Architecture and Governance                   a clear set of rules for decision
organization’s interwoven capability             This facet of BPE is the overriding                   making, process management,
layers that in combination drive                 management and reference structure                    and accountability, along with
process transformation buoyed by                 for a successful business process                     ongoing support of the BPE system.
tangible and ongoing ROI. Through                empowerment implementation. It                        In addition, a measurable set of
three facets of BPE, these capability            creates the frame of reference for                    goals should be developed here
layers are meant to provide structure            the process landscape, defining                       to link process excellence to the
and direction; a continuous                      functional activities by their                        organization’s strategy and to
improvement culture, skills, and                 transaction inputs and outputs and                    institute incentives specifically tied to
capacity; and technology enablement              establishing process documentation                    achieving the overall objectives.
and agile automation (see Exhibit 4).            and modeling standards. It provides




Exhibit 4
Business Process Empowerment Framework



         Capability Layers                         Capability System Components                                          Objectives


                             Process Taxonomy
                             - End-to-end process map and domain logic
                             - Delineation of scope, inputs, and outputs

         Process             Roles & Decision Rights                                                                     Structure,
         Architecture &      - Process owners, managers, and champions                                                   Coherence &
         Governance          - Responsibilities, accountabilities, information flows                                     Direction

                             Targets & Incentives
                             - Process KPI framework and performance targets
                             - Process improvement incentive structures



                             Coaching & Oversight
                             - Six Sigma “black belt” methodology competence, guidance
                             - Process audits and transformation support

         Process             Community, Skills & Capacity                                                                Continuous
         Transformation      - Collaboration platforms, incentives, and champions                                        Improvement
         Culture             - Process skill and capacity planning/development                                           Execution

                             Continuous Reengineering
                             - Six Sigma “green belt” day-to-day process improvement
                             - Continuity through front-line empowerment


                             Modeling Workbench
                             - Business user tools for process design, simulation
                             - User-driven process deployment and review

                                                                                                                         Automation,
         Process             Orchestration Bus
                                                                                                                         Reuse &
         Technology          - Service-oriented architecture-based abstraction and integration layer
                             - Coherent service bus between back-end systems                                             Systemic
         Enablement
                                                                                                                         Learning
                             Rule Repository
                             - Common master data structure for process artifacts
                             - Reusable process objects, rules, and procedures




Source: Booz & Company




8                                                                                                                              Booz & Company
To implement this phase, a large
retail bank put in place a process       Case Example: A Retail Bank Cashes In
governance council that included
                                         A good example of success with BPE is the retail bank that faced a
representatives from all front- and
                                         stunning degree of inefficiency in its financial approval processes,
back-office business functions
                                         which encompassed a myriad of systems and more than 2,500 required
that would be affected by the BPE
                                         sign-offs across a broad portfolio of business processes and consumer
model, as well as IT and business
                                         transactions, from loan applications to mortgages to brokerage services.
architecture experts. In regular
                                         Such complexity led to frequent time delays and data inaccuracy.
review sessions, this council
approved a comprehensive target          Adopting a business process empowerment approach, the organization
process blueprint and ratified           established clear financial process accountability and improvement
updates and changes to this blueprint    responsibilities at the management and staff levels, offered
in the face of new business needs.       compensation and other incentives for gains in process simplicity and
This council also drove seamless,        performance, and deployed flexible workflow systems to automate
end-to-end maintenance and support       financial processes and give front-office workers appropriate analysis
for BPE processes by directing           and modeling tools to work with consumers more efficiently as well as to
specific functional managers to          identify and remove additional waste. Through this simplification effort,
be overseers or stewards of the          fewer customer service staffers were needed and data reentry to fix
processes; in so doing, the council      errors was virtually eliminated. Personnel costs were reduced, and cash
firmly embedded process excellence       flow improved. The bank’s cost per transaction fell by a remarkable
as an explicit personal business         80 percent, resulting in an ROI from the BPE effort of 300 percent over
objective and a critical variable in     two years.
annual compensation decisions.
This effectively eliminated the
“responsibility void” involving
business processes that is all too
common in many organizations.

Process Transformation Culture
This leverages Six Sigma and lean
principles to constantly monitor the
process landscape for improvement
opportunities. A team of so-called
black belts (in Six Sigma parlance,
people who devote all of their time
to implementing the lean process
approach) provides coaching support
and oversight and joins front-line
process experts to continuously
update the suite of business processes
and underlying technology, with the
goal of taking advantage of each




Booz & Company                                                                                                       9
opportunity for performance gains.      improvement champions across the        simulation, and deployment, as well
Ideally, in this facet of BPE, the      organization was established to build   as real-time workflow status displays
organization regularly revisits and     grassroots momentum for team- or        that identify process bottlenecks
reviews processes and performance       department-level initiatives. An        and inefficiencies. A repository of
metrics to seek improvements in         intranet-based online community for     reusable functions, process steps,
efficiency and effectiveness. Also,     sharing best practices, exchanging      and procedures should be created
departmental and business advocates     information, social networking, and     (in IT-speak, these process steps are
for BPE are identified to foster        storing and retrieving institutional    known as services and are a core
transformation culture adoption.        knowledge supported these               element of open, flexible service-
                                        cheerleaders. Each month, “process      oriented architectures). In turn, this
For example, one major global           heroes” were recognized for their       library of process building blocks
telecommunications provider tackled     high-impact ideas—for example,          should be made easily accessible
this facet with a team of black belts   ridding the organization of yet         through user-friendly design tools
with varied backgrounds (ranging        another unnecessary form or sign-       in order to give business users
from manufacturing to financial         off point or the development and        the ability to mesh these building
services) to coach the rest of the      implementation of a more effective      blocks into new process variants
organization on lean methods, lead      business rule to identify the best      that support, for example, a new
large BPE efforts, and manage the       cross-selling offer in a contract       customer service process for a new
development of a comprehensive          renewal situation.                      product offering.
set of how-to guides, reminders,
and frameworks to motivate              Process Technology Enablement           A good illustration of how this
the front-line staff in executing       This provides the flexible platform     can be applied in the real world is
process improvements day-by-day.        for BPE, including a user-friendly      the case of a healthcare insurance
In addition, a network of process       graphic interface for process design,   provider that addressed the




                                        BPE created real value for a health
                                        insurance provider and transformed its
                                        aging, inflexible technology landscape
                                        into a more sustainable model.




10                                                                                                     Booz & Company
technology side of business process
empowerment by deploying a BPM           Case Example: Untangling a Telecom Provider
system in just six months by stitching
                                         Before adopting BPE, a telecommunications operator was anything but
together a host of different legacy
                                         a streamlined model of efficiency. After extending its service portfolio
front ends that agents were using
                                         beyond classic telephony to include data services, TV, and cloud
in their day-to-day handling of
                                         services for business customers, just to name a few, the carrier was
customers. This new tool intuitively
                                         stymied by a costly array of pricing and order management procedures,
guided customer service agents
                                         customer activation requirements, and a vast range of customer service
from one step to the next and one
                                         procedures required to support the complex and growing product and
databank to the next, eliminating
                                         customer portfolio. Signing up customers and managing their accounts
the need to switch between systems
                                         in a timely fashion became virtually impossible, and the amount of
numerous times in dealing with
                                         personnel time devoted to explaining subscription plans to consumers
individual consumers or with one
                                         was exorbitant—and expensive.
customer after another. And no
longer did these agents have to          In choosing a BPE approach to solve these inefficiencies, the telecom
juggle multiple screens in parallel      company first developed a standard set of end-to-end processes for
on their own. In the second phase        dealing with customers from lead to order to purchase and payment,
of this implementation, IT worked        which included a clear set of metrics for tracking transaction inputs and
closely with business process experts    outputs and seamless policies for process ownership and management
to carve out reusable procedures         responsibilities. In addition, the telecom company deployed BPM
and routines from the legacy             software to wrap a wide range of legacy systems under an intuitive
systems and transition them into a       front-end layer for front-office employees to use in customer
service-oriented BPM architecture,       management activities.
giving more and more flexibility
and autonomy to agents dealing           There were almost immediate returns from process improvements
directly with customers to make          as the BPE model gained traction over the subsequent year: Overall,
improvements themselves. This not        customer activation times across all product and consumer segments
only created real additional value       were reduced from several days to an average of three hours, account
for the insurance company, but           processing costs fell by as much as 70 percent, and total operational
also smartly transformed an aging,       savings reached US$2.5 million per year.
inflexible technology landscape into
a more sustainable model. Over
time, the company was able to save
a substantial amount of money by
shutting down more than 40 percent
of its legacy systems and tools in the
transformed process domains.




Booz & Company                                                                                                       11
Conclusion   Getting started on a BPE path need
             not be a long, drawn-out process;
                                                       building challenge. Whether
                                                       involving people, processes, tools,
             instead, it should be a quick, targeted   or systems, business process
             audit-type exercise, lasting no longer    empowerment can raise the level of
             than six weeks or so. This involves       skills in the company while providing
             what we call a BPE pulse check,           a direct course for measurable
             encompassing senior management            performance improvement, greater
             and knowledge worker interviews,          efficiency, reduced waste, and
             analysis of the capabilities in the       elevated job satisfaction. Most
             organization in relation to the three     service companies have neglected
             facets of BPE, and an assessment          the importance of a holistic BPE
             of the potential highest-impact           system, preferring instead to dabble
             processes that could be transformed       in BPM or some lean techniques
             by business process empowerment.          or automation tools, with the
             The pulse check in turn generates a       outcome as attenuated as the effort
             map of process opportunities in the       and care put into these initiatives.
             organization, along with specific         Consequently, the opportunities are
             top-level performance goals and key       rife and lucrative for any service
             performance indicators.                   company willing to make the
                                                       effort to put real business process
             For service organizations, BPE is         improvement on the organization’s
             more than anything a capability-          front line.




12                                                                           Booz & Company
Resources

“Leaner and Keener Telecom Operators: Eliminating Waste Boosts       “The Next Wave of Digitization: Setting Your Direction, Building
the Bottom Line,” by Andreas Späne, Florian Gröne, Olaf Acker,       Your Capabilities,” by Roman Friedrich, Matthew Le Merle, Michael
and Roman Friedrich (Booz & Company, 2010). www.booz.com/            Peterson, and Alex Koster (Booz & Company, 2011). www.booz.
media/uploads/Leaner_and_Keener_Telecom_Operators.pdf                com/media/uploads/BoozCo-Next-Wave-of-Digitization.pdf

“Multi-Channel Customer Management: Delighting Consumers,            “Succeeding with SOA: A Business-Oriented Approach,” by Enrico
Driving Efficiency,” by Michael Peterson, Florian Gröne, Karsten     Strada and Tim Habermann (Booz & Company, 2009). www.booz.
Kammer, and Julius Kirscheneder (Booz & Company, 2010).              com/media/uploads/Succeeding_with_SOA.pdf
www.booz.com/media/uploads/Multi-Channel_Customer_
Management.pdf

“Next-Generation Customer Service: The New Strategic
Differentiator,” by Klaus Hölbling, Thomas Künstner, Christina
Marsch, and Niko Steinkrauss (Booz & Company, 2009).
www.booz.com/media/uploads/Next_Generation_Customer_
Service.pdf




About the Authors

Olaf Acker is a partner with       Adrian Blockus is an associate
Booz & Company based in            with Booz & Company based
the firm’s Frankfurt and Dubai     in Berlin. He specializes in
offices. He focuses on business    IT strategy, next-generation
technology strategy and            networks, process, and strategy
operating model transformation     transformation programs
programs for global companies      with an industry emphasis on
in the telecommunications,         telecommunications network
media, and high-tech industries.   operators.

Dr. Florian Gröne is a principal   Keith Wheeler is an associate
with Booz & Company based in       with Booz & Company based
Berlin and heads up the firm’s     in Atlanta. He works with
CRM Center of Excellence           healthcare companies and is
in Europe. He works with           focused on the assessment,
telecom, media, and consumer       design, development, and
players on building world-         implementation of customer-
class front-office processes       centric programs intended to
and information technology         reduce operational costs and
capabilities on their path to      improve customer service.
digitization.




Booz & Company                                                                                                                     13
The most recent             Worldwide Offices
list of our offices
and affiliates, with        Asia                                           Middle East
addresses and               Beijing             Brisbane       Helsinki    Abu Dhabi       Detroit
telephone numbers,          Delhi               Canberra       Istanbul    Beirut          Florham Park
can be found on             Hong Kong           Jakarta        London      Cairo           Houston
our website,                Mumbai              Kuala Lumpur   Madrid      Doha            Los Angeles
booz.com.                   Seoul               Melbourne      Milan       Dubai           Mexico City
                            Shanghai            Sydney         Moscow      Riyadh          New York City
                            Taipei                             Munich                      Parsippany
                            Tokyo               Europe         Paris       North America   San Francisco
                                                Amsterdam      Rome        Atlanta
                            Australia,          Berlin         Stockholm   Boston          South America
                            New Zealand &       Copenhagen     Stuttgart   Chicago         Buenos Aires
                            Southeast Asia      Dublin         Vienna      Cleveland       Rio de Janeiro
                            Auckland            Düsseldorf     Warsaw      Dallas          Santiago
                            Bangkok             Frankfurt      Zurich      DC              São Paulo




Booz & Company is a leading global management
consulting firm, helping the world’s top businesses,
governments, and organizations. Our founder,
Edwin Booz, defined the profession when he estab-
lished the first management consulting firm in 1914.

Today, with more than 3,300 people in 60 offices
around the world, we bring foresight and knowledge,
deep functional expertise, and a practical approach
to building capabilities and delivering real impact.
We work closely with our clients to create and deliver
essential advantage. The independent White Space
report ranked Booz & Company #1 among consulting
firms for “the best thought leadership” in 2010.

For our management magazine strategy+business, visit
strategy-business.com.

Visit booz.com to learn more about
Booz & Company.




©2011 Booz & Company Inc.

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Business Process Empowerment: Powerful New Capabilities for Front-Office Staff

  • 1. Perspective Olaf Acker Dr. Florian Gröne Adrian Blockus Keith Wheeler Business Process Empowerment Powerful New Capabilities for Front-Office Staff
  • 2. Contact Information Atlanta Delhi Milan Ralph Alewine Suvojoy Sengupta Pietro Candela Partner Partner Partner +1-404-519-0184 +91-124-499-8700 +39-02-72-50-93-50 ralph.alewine@booz.com suvojoy.sengupta@booz.com pietro.candela@booz.com Marjorie Taglieri Düsseldorf Munich Principal Dietmar Ahlemann Dr. Johannes Bussmann +1-412-956-4747 Partner Partner marjorie.taglieri@booz.com +49-211-3890-287 +49-89-54525-535 dietmar.ahlemann@booz.com johannes.bussmann@booz.com Manoj Pillai Principal Frankfurt New York +1-305-393-5759 Olaf Acker Jeffrey Tucker manoj.pillai@booz.com Partner Partner +49-69-97167-453 +1-212-551-6653 Beirut olaf.acker@booz.com jeffrey.tucker@booz.com Ramez Shehadi Partner Andreas Späne Sydney +961-1-985-655 Partner David Hovenden ramez.shehadi@booz.com +49-69-97167-408 Partner andreas.spaene@booz.com +61-2-9321-1966 Berlin david.hovenden@booz.com Dr. Florian Gröne London Principal Hugo Trépant Tokyo +49-30-88705-844 Partner Kazunori Hosoda florian.groene@booz.com +44-20-7393-3230 Partner hugo.trepant@booz.com +81-3-6757-8649 Chicago kazunori.hosoda@booz.com Mike Connolly Partner +1-312-578-4580 mike.connolly@booz.com Kenny Chan and Ronald Wade also contributed to this Perspective. Booz & Company
  • 3. EXECUTIVE Often highly touted, business process management, or BPM, has been a disappointment for many companies. In most cases, SUMMARY however, this situation is the organization’s fault. Unsure of how to get the most out of BPM, which is supposed to improve processes throughout an organization, or overwhelmed by the complexity, too many companies merely put it to work in the back office, optimizing already stable processes and routines. In other words, they use it where it is needed least. Indeed, for service industries, the real value of process excel- lence and agility lies in the front office, where the company’s sales or customer service representatives meet existing or potential customers. This customer-focused, strategically driven implementation, which we call business process empowerment (BPE), is much more than merely an enhancement to BPM. Instead, it is a strategy that combines process architecture and governance (structure, accountability, and oversight for critical customer-facing processes) with a continuous improvement cul- ture to drive sales increases, aid in cross- and up-selling, manage service inquiries, and encourage customer retention. BPE can drive flexibility and innovation into front-office sys- tems and activities and serve as a distinctive competitive advan- tage. It simplifies the tools available to the company’s front-line knowledge workers and improves their capabilities to in turn enhance the organization’s performance. Some companies have enjoyed return on investment (ROI) in BPE in the high double digits per year primarily by simplifying the processes, systems, and product offerings that directly affect customer transactions, sales, and communications. This is a welcome development for many service-centric companies, which spend more than half their time managing customer variability, performance quality, and workflow efficiency. Booz & Company 1
  • 4. Key Highlights WHY BUSINESS when these systems are dedicated to nothing more than optimizing PROCESS relatively stable back-office processes • Business process management has been a EMPOWERMENT? and routines. The gains from these implementations are minimal and not disappointment for many particularly noteworthy anymore, companies because it is since they are enjoyed by virtually usually a pure technology- every company. By contrast, the front based solution without office is where process management proper process architecture In both concept and application, capabilities can make a significant governance structures, and business process management is difference in day-to-day customer a continuous improvement perhaps one of the most misused interaction—improving sales, culture. As a result, it tends (or little used) management tools. facilitating cross- and up-selling, to be consigned to the back Although BPM has been around since deftly handling service inquiries, office for stable processes the early 1990s, few people in major and driving customer retention. and routines—precisely companies have known what to do The dynamic nature of front-office where it is needed least. with it. Indeed, in most businesses, processes offers a remarkable set of • The real potential of BPM has become a back-office opportunities for companies that are BPM is in the front office, backwater, far from the strategic core creative enough to implement BPM in under an approach that of the organization. that aspect of the business; the added we call business process agility and flexibility in front-office empowerment, a way to arm Ask top executives about their BPM systems and activities can make a and mobilize knowledge systems and you’re likely to hear substantial competitive difference— workers with the structures, responses like these: “I deal with a new wrinkle on BPM that we incentives, skills, and tools strategy, not with the depths of the call business process empowerment that enable and encourage engine room—I leave that to my (BPM). them to do their jobs more operations experts.” “We have a productively than before. dedicated staff function looking BPE is a resilient capabilities after that, so we’re all set.” “My CIO system—an ongoing effort, not • Business process empower- talked me into a BPM tool more than a one-off process reengineering ment blends real gains in a year ago; I’m not sure if and how it approach—that combines process process architecture and really works though.” architecture and governance with governance with a continu- a corporate culture that lives and ous improvement culture to Unfortunately, in today’s business breathes “continuous improvement” increase sales, aid in cross- environment, those are costly and and is focused on harnessing and up-selling, and encour- myopic responses, especially for the power of BPM technology age customer retention by companies in highly developed, architectures for the company’s driving flexibility and innova- high-touch service industries, like greatest gain. (For a close look at tion into front-office systems telecommunications, health care, how business process empowerment and serving as a distinctive travel and leisure, financial services, enhances recent improvements in competitive advantage. or utilities. As these markets have BPM, see “The Technology of BPE,” matured, demand has become more on page 6). It’s a way to arm and and more dynamic, individualized, mobilize knowledge workers with and constrained. Serving the the structures, incentives, skills, and customer’s specific needs, which tools to reconfigure processes on the can change radically over time, and fly and draw on automated routines providing a satisfactory experience as needed—for example, to address for customers are absolutely critical new patterns in customer service for service-intensive companies requests, to agilely promote a relevant to build loyalty and differentiate new product or service offering, or to themselves from their many equally combine sales and service processes hungry competitors. for maximum top- and bottom-line impact. In such a diverse consumer landscape, the full potential of BPM is wasted 2 Booz & Company
  • 5. COSTLY intelligently, has had a taste of why complexity of the service experience. BPE is so important. Over the years, Indeed, a Booz & Company analysis COMPLEXITY these knowledge workers have had to of service-centric industries found that compensate for the shortcomings of the time spent managing customer rigid standard procedures, inflexible IT variability, performance quality, and systems, and lack of automation with workflow efficiency in these companies individual resourcefulness to meet has surpassed 50 percent, well above customer expectations or deal with the results in typical industrial firms, Anybody who has witnessed a skilled a burgeoning landscape of business which deal directly with consumers contact center agent juggling multiple processes. to a much lesser degree. This means screens and data views in “frantic that service companies spend more swivel chair mode,” leaning on But these jerry-rigged solutions are time coping with internal complexity makeshift tools and work-arounds not sufficient anymore. They’ve than on productive activities at the to answer a customer’s question been overwhelmed by the increasing customer interface (see Exhibit 1). Exhibit 1 For Many Service Companies, Complexity Management Trumps Productive Time COMPLEXITY MANAGEMENT VS. PRODUCTIVE TIME 100% 35% 41% 43% 49% 55% 58% Time Managing Internal 65% Process Complexity 65% 59% 57% 51% 45% 42% Productive Time 35% Dealing with Customers Airline Manufacturing Automotive Industrial Telecom Retail Health Maintenance Bank Payor Source: Booz & Company research Booz & Company 3
  • 6. Business process empowerment 3. Process technology enablement: medical claims and improve policy manages this complexity with new This provides a flexible platform utilization by leveraging BPE tools for organizational capabilities targeted to absorb and automate business customer-focused disease management at providing flexible and productive processes and to systematically and wellness programs. structures and systems to deal with build a repository of reusable customer demands and elaborate, services, procedures, and routines Back-office processes directly multitiered product and service to meet modern service businesses’ associated with customer-driven offerings. Essentially a transformation needs. transactions—for example, service agenda, BPE comprises three and order fulfillment and billing frequently neglected elements of Business process empowerment can and account management—are also process management: have its biggest impact on processes profitable candidates for BPE. By with high complexity and high contrast, most foundational processes 1. Process architecture and business value (see Exhibit 2). They are relatively static and of low governance: BPE sets up a clear include those in the front office, complexity and can be optimized pathway, decision-making rights, product and service creation (pricing, rather simply with traditional management hierarchy, strategic promotion development, configuring automation models and standard targets, and incentives to link offerings), sales and marketing, and lean tools. the front-line service delivery customer services. For instance, in the organization with the development financial services industry, competitive When targeted at the appropriate of process systems to improve its advantage opportunities exist in front- processes, BPE can be a powerful performance. office BPE applications that integrate transformational tool, providing treasury services and cash management significant top- and bottom-line 2. Process transformation culture: portals to allow customers to manage returns, which span everything from It monitors continuous process their working capital and liquidity improved customer service quality to transformation and improvement without needing to sign into multiple, product and service innovation gains and promotes and rewards process non-linked product systems. And to reduced process execution costs excellence. in healthcare, insurers could reduce (see Exhibit 3). 4 Booz & Company
  • 7. Exhibit 2 Business Process Empowerment Can Best Improve Processes with High Complexity and High Business Value SERVICE INDUSTRY PROCESS CLUSTERS High Product/ Technology Delivery Service Creation - Market- or customer-facing in nature, thus Supply Chain/Logistics Front-Office complex and dynamic (changing according Processes Sales & Marketing to market conditions and customer needs) (empower for - Less transactional, difficult to automate Fulfillment Customer Service competitive - Benefit from flexible, adaptable process advantage) architecture/technology enablement General Operations Billing & Capability Complexity Account Management Information Governance Management - Stable with limited/predictable volatility, Human Resources Back-Office but higher complexity Finance & Accounting Processes - More transactional and traditionally Legal (build/maintain technology-driven excellence) - Benefit from standardization and Facilities/Real Estate automation for operational efficiency Materials Management - Low complexity and mostly static Foundational - Can typically be optimized using lean, Processes standard definitions and enabling (table stakes) technologies if transaction at critical scale levels Low High Business Value Processing Volume Low High Source: Booz & Company Exhibit 3 Enterprises That Adopt BPE and Embrace Continuous Process Improvement Achieve Results Through a Number of Drivers BPE VALUE DRIVERS - Increased product/service quality Customer - Improved level of service Satisfaction - Increased adherence to schedules Revenue Indirect Drivers Growth (long-term impact) - Reduced time-to-market for new products or services - Reduced time to react to market Ability to changes Innovate - Higher level of information for Company proactive decisions Result - Reduced cycle times - Less production of waste Direct Drivers Operational Decreased (short-term impact) - More reliable business processes Costs Efficiency - Reduced process execution cost - Reduced capital consumption Source: Booz & Company Booz & Company 5
  • 8. The Technology of BPE At the heart of business process empowerment is still BPM software; after all, BPE is also a way to enhance BPM relevance. Indeed, from a purely technical point of view, BPM has actually come a long way. The once cumbersome middleware tools that even IT departments struggled to completely grasp (or at least “sell” to their business counterparts) have evolved into user-friendly process modeling suites that quickly give business users the tools they need to optimize their processes without engaging in complex studies and arcane development efforts. But taking advantage of the improvements in BPM so that the software can be used to adapt quickly to new business conditions is where business process empowerment comes in. Applied correctly, BPE enables employees to self-configure processes in leading BPM suites and, more important, join in creating a business architecture framework as a counterpart to an IT platform. BPE establishes incentive structures that effectively drive business users to seek ownership of BPM—in other words, it implants continuous improvement into the organization. For this system to work, the company’s chief information officer (CIO) will need to be closely involved in the effort. He or she will have to lead the technology enablement facet of the transformation drive, providing the appropriate BPM architecture that allows the business side to, in essence, develop its own application solutions as new issues and problems arise. Among the challenges for CIOs is to implement best- in-class BPM software—not as a stand-alone, one-off effort, but as an integral element of the overall IT target architecture, and as an effective lever to drive architecture transformation toward greater process and service orientation. After all, BPM touches many areas of the functional architecture, including process analysis, modeling and design tools, new process deployment, and user interfaces. A significant plus, the BPM vendor landscape is rapidly maturing and consolidating, with household names such as IBM, Oracle, and SAP providing BPM capabilities as a core part of their portfolios, and established BPM champions like Pegasystems, Appian, and Software AG, to name a few, going head-to-head with these companies. This evolved market allows CIOs to make BPM purchasing decisions with confidence that their provider will be in business for the foreseeable future and that competition among the vendors is sufficiently intense to spur innovation and unlock new benefits and capabilities in the years to come. Also, the adoption of industry standards in BPM software, such as business process modeling notation (BPMN) and business process execution language (BPEL), is providing a solid and consistent platform for companies to efficiently, inexpensively, and reliably piggyback new internal applications onto BPM systems. This is critical to relatively easily embed BPE throughout the organization and approach continuous improvement in a collaborative, institutionalized way. 6 Booz & Company
  • 9. DESIGNING A Business process empowerment is not a single project or an initiative. new process frameworks are not developed in sync with the needs BPE SYSTEM Although each BPE implementation, of the front-line workers and thus if done correctly, will deliver fall short of their ambitions, or the palpable gains, true success comes application is a pure technology from a management philosophy play, driven out of the IT group, focused on sustainable process and unable to generate traction or excellence in a holistic fashion buy-in on the business side of the that can be felt throughout the organization. organization and its operations. Business process reengineering Historically, companies have often and lean or Six Sigma initiatives, addressed their process issues by executed in isolation the way many attacking only small portions of companies do them, suffer from the overall problem, or at least the opposite condition. Although giving lip service to doing so. Not effective in instilling continuous surprisingly, the results are almost improvement practice and discipline, always unsatisfactory. For example, these programs are usually enterprise architecture initiatives business operations efficiency that attempt to document and exercises, which frequently lack standardize business processes sufficiently sophisticated technology by applying a holistic framework to produce sustainable high-level structure are often big and performance gains. expensive undertakings that in many organizations end up being little In contrast to these somewhat more than theoretical exercises that incremental approaches (and generate a lot of paper. Either the minimal returns), BPE requires a True success with BPE comes from a management philosophy focused on sustainable process excellence in a holistic fashion. Booz & Company 7
  • 10. comprehensive system built on an Process Architecture and Governance a clear set of rules for decision organization’s interwoven capability This facet of BPE is the overriding making, process management, layers that in combination drive management and reference structure and accountability, along with process transformation buoyed by for a successful business process ongoing support of the BPE system. tangible and ongoing ROI. Through empowerment implementation. It In addition, a measurable set of three facets of BPE, these capability creates the frame of reference for goals should be developed here layers are meant to provide structure the process landscape, defining to link process excellence to the and direction; a continuous functional activities by their organization’s strategy and to improvement culture, skills, and transaction inputs and outputs and institute incentives specifically tied to capacity; and technology enablement establishing process documentation achieving the overall objectives. and agile automation (see Exhibit 4). and modeling standards. It provides Exhibit 4 Business Process Empowerment Framework Capability Layers Capability System Components Objectives Process Taxonomy - End-to-end process map and domain logic - Delineation of scope, inputs, and outputs Process Roles & Decision Rights Structure, Architecture & - Process owners, managers, and champions Coherence & Governance - Responsibilities, accountabilities, information flows Direction Targets & Incentives - Process KPI framework and performance targets - Process improvement incentive structures Coaching & Oversight - Six Sigma “black belt” methodology competence, guidance - Process audits and transformation support Process Community, Skills & Capacity Continuous Transformation - Collaboration platforms, incentives, and champions Improvement Culture - Process skill and capacity planning/development Execution Continuous Reengineering - Six Sigma “green belt” day-to-day process improvement - Continuity through front-line empowerment Modeling Workbench - Business user tools for process design, simulation - User-driven process deployment and review Automation, Process Orchestration Bus Reuse & Technology - Service-oriented architecture-based abstraction and integration layer - Coherent service bus between back-end systems Systemic Enablement Learning Rule Repository - Common master data structure for process artifacts - Reusable process objects, rules, and procedures Source: Booz & Company 8 Booz & Company
  • 11. To implement this phase, a large retail bank put in place a process Case Example: A Retail Bank Cashes In governance council that included A good example of success with BPE is the retail bank that faced a representatives from all front- and stunning degree of inefficiency in its financial approval processes, back-office business functions which encompassed a myriad of systems and more than 2,500 required that would be affected by the BPE sign-offs across a broad portfolio of business processes and consumer model, as well as IT and business transactions, from loan applications to mortgages to brokerage services. architecture experts. In regular Such complexity led to frequent time delays and data inaccuracy. review sessions, this council approved a comprehensive target Adopting a business process empowerment approach, the organization process blueprint and ratified established clear financial process accountability and improvement updates and changes to this blueprint responsibilities at the management and staff levels, offered in the face of new business needs. compensation and other incentives for gains in process simplicity and This council also drove seamless, performance, and deployed flexible workflow systems to automate end-to-end maintenance and support financial processes and give front-office workers appropriate analysis for BPE processes by directing and modeling tools to work with consumers more efficiently as well as to specific functional managers to identify and remove additional waste. Through this simplification effort, be overseers or stewards of the fewer customer service staffers were needed and data reentry to fix processes; in so doing, the council errors was virtually eliminated. Personnel costs were reduced, and cash firmly embedded process excellence flow improved. The bank’s cost per transaction fell by a remarkable as an explicit personal business 80 percent, resulting in an ROI from the BPE effort of 300 percent over objective and a critical variable in two years. annual compensation decisions. This effectively eliminated the “responsibility void” involving business processes that is all too common in many organizations. Process Transformation Culture This leverages Six Sigma and lean principles to constantly monitor the process landscape for improvement opportunities. A team of so-called black belts (in Six Sigma parlance, people who devote all of their time to implementing the lean process approach) provides coaching support and oversight and joins front-line process experts to continuously update the suite of business processes and underlying technology, with the goal of taking advantage of each Booz & Company 9
  • 12. opportunity for performance gains. improvement champions across the simulation, and deployment, as well Ideally, in this facet of BPE, the organization was established to build as real-time workflow status displays organization regularly revisits and grassroots momentum for team- or that identify process bottlenecks reviews processes and performance department-level initiatives. An and inefficiencies. A repository of metrics to seek improvements in intranet-based online community for reusable functions, process steps, efficiency and effectiveness. Also, sharing best practices, exchanging and procedures should be created departmental and business advocates information, social networking, and (in IT-speak, these process steps are for BPE are identified to foster storing and retrieving institutional known as services and are a core transformation culture adoption. knowledge supported these element of open, flexible service- cheerleaders. Each month, “process oriented architectures). In turn, this For example, one major global heroes” were recognized for their library of process building blocks telecommunications provider tackled high-impact ideas—for example, should be made easily accessible this facet with a team of black belts ridding the organization of yet through user-friendly design tools with varied backgrounds (ranging another unnecessary form or sign- in order to give business users from manufacturing to financial off point or the development and the ability to mesh these building services) to coach the rest of the implementation of a more effective blocks into new process variants organization on lean methods, lead business rule to identify the best that support, for example, a new large BPE efforts, and manage the cross-selling offer in a contract customer service process for a new development of a comprehensive renewal situation. product offering. set of how-to guides, reminders, and frameworks to motivate Process Technology Enablement A good illustration of how this the front-line staff in executing This provides the flexible platform can be applied in the real world is process improvements day-by-day. for BPE, including a user-friendly the case of a healthcare insurance In addition, a network of process graphic interface for process design, provider that addressed the BPE created real value for a health insurance provider and transformed its aging, inflexible technology landscape into a more sustainable model. 10 Booz & Company
  • 13. technology side of business process empowerment by deploying a BPM Case Example: Untangling a Telecom Provider system in just six months by stitching Before adopting BPE, a telecommunications operator was anything but together a host of different legacy a streamlined model of efficiency. After extending its service portfolio front ends that agents were using beyond classic telephony to include data services, TV, and cloud in their day-to-day handling of services for business customers, just to name a few, the carrier was customers. This new tool intuitively stymied by a costly array of pricing and order management procedures, guided customer service agents customer activation requirements, and a vast range of customer service from one step to the next and one procedures required to support the complex and growing product and databank to the next, eliminating customer portfolio. Signing up customers and managing their accounts the need to switch between systems in a timely fashion became virtually impossible, and the amount of numerous times in dealing with personnel time devoted to explaining subscription plans to consumers individual consumers or with one was exorbitant—and expensive. customer after another. And no longer did these agents have to In choosing a BPE approach to solve these inefficiencies, the telecom juggle multiple screens in parallel company first developed a standard set of end-to-end processes for on their own. In the second phase dealing with customers from lead to order to purchase and payment, of this implementation, IT worked which included a clear set of metrics for tracking transaction inputs and closely with business process experts outputs and seamless policies for process ownership and management to carve out reusable procedures responsibilities. In addition, the telecom company deployed BPM and routines from the legacy software to wrap a wide range of legacy systems under an intuitive systems and transition them into a front-end layer for front-office employees to use in customer service-oriented BPM architecture, management activities. giving more and more flexibility and autonomy to agents dealing There were almost immediate returns from process improvements directly with customers to make as the BPE model gained traction over the subsequent year: Overall, improvements themselves. This not customer activation times across all product and consumer segments only created real additional value were reduced from several days to an average of three hours, account for the insurance company, but processing costs fell by as much as 70 percent, and total operational also smartly transformed an aging, savings reached US$2.5 million per year. inflexible technology landscape into a more sustainable model. Over time, the company was able to save a substantial amount of money by shutting down more than 40 percent of its legacy systems and tools in the transformed process domains. Booz & Company 11
  • 14. Conclusion Getting started on a BPE path need not be a long, drawn-out process; building challenge. Whether involving people, processes, tools, instead, it should be a quick, targeted or systems, business process audit-type exercise, lasting no longer empowerment can raise the level of than six weeks or so. This involves skills in the company while providing what we call a BPE pulse check, a direct course for measurable encompassing senior management performance improvement, greater and knowledge worker interviews, efficiency, reduced waste, and analysis of the capabilities in the elevated job satisfaction. Most organization in relation to the three service companies have neglected facets of BPE, and an assessment the importance of a holistic BPE of the potential highest-impact system, preferring instead to dabble processes that could be transformed in BPM or some lean techniques by business process empowerment. or automation tools, with the The pulse check in turn generates a outcome as attenuated as the effort map of process opportunities in the and care put into these initiatives. organization, along with specific Consequently, the opportunities are top-level performance goals and key rife and lucrative for any service performance indicators. company willing to make the effort to put real business process For service organizations, BPE is improvement on the organization’s more than anything a capability- front line. 12 Booz & Company
  • 15. Resources “Leaner and Keener Telecom Operators: Eliminating Waste Boosts “The Next Wave of Digitization: Setting Your Direction, Building the Bottom Line,” by Andreas Späne, Florian Gröne, Olaf Acker, Your Capabilities,” by Roman Friedrich, Matthew Le Merle, Michael and Roman Friedrich (Booz & Company, 2010). www.booz.com/ Peterson, and Alex Koster (Booz & Company, 2011). www.booz. media/uploads/Leaner_and_Keener_Telecom_Operators.pdf com/media/uploads/BoozCo-Next-Wave-of-Digitization.pdf “Multi-Channel Customer Management: Delighting Consumers, “Succeeding with SOA: A Business-Oriented Approach,” by Enrico Driving Efficiency,” by Michael Peterson, Florian Gröne, Karsten Strada and Tim Habermann (Booz & Company, 2009). www.booz. Kammer, and Julius Kirscheneder (Booz & Company, 2010). com/media/uploads/Succeeding_with_SOA.pdf www.booz.com/media/uploads/Multi-Channel_Customer_ Management.pdf “Next-Generation Customer Service: The New Strategic Differentiator,” by Klaus Hölbling, Thomas Künstner, Christina Marsch, and Niko Steinkrauss (Booz & Company, 2009). www.booz.com/media/uploads/Next_Generation_Customer_ Service.pdf About the Authors Olaf Acker is a partner with Adrian Blockus is an associate Booz & Company based in with Booz & Company based the firm’s Frankfurt and Dubai in Berlin. He specializes in offices. He focuses on business IT strategy, next-generation technology strategy and networks, process, and strategy operating model transformation transformation programs programs for global companies with an industry emphasis on in the telecommunications, telecommunications network media, and high-tech industries. operators. Dr. Florian Gröne is a principal Keith Wheeler is an associate with Booz & Company based in with Booz & Company based Berlin and heads up the firm’s in Atlanta. He works with CRM Center of Excellence healthcare companies and is in Europe. He works with focused on the assessment, telecom, media, and consumer design, development, and players on building world- implementation of customer- class front-office processes centric programs intended to and information technology reduce operational costs and capabilities on their path to improve customer service. digitization. Booz & Company 13
  • 16. The most recent Worldwide Offices list of our offices and affiliates, with Asia Middle East addresses and Beijing Brisbane Helsinki Abu Dhabi Detroit telephone numbers, Delhi Canberra Istanbul Beirut Florham Park can be found on Hong Kong Jakarta London Cairo Houston our website, Mumbai Kuala Lumpur Madrid Doha Los Angeles booz.com. Seoul Melbourne Milan Dubai Mexico City Shanghai Sydney Moscow Riyadh New York City Taipei Munich Parsippany Tokyo Europe Paris North America San Francisco Amsterdam Rome Atlanta Australia, Berlin Stockholm Boston South America New Zealand & Copenhagen Stuttgart Chicago Buenos Aires Southeast Asia Dublin Vienna Cleveland Rio de Janeiro Auckland Düsseldorf Warsaw Dallas Santiago Bangkok Frankfurt Zurich DC São Paulo Booz & Company is a leading global management consulting firm, helping the world’s top businesses, governments, and organizations. Our founder, Edwin Booz, defined the profession when he estab- lished the first management consulting firm in 1914. Today, with more than 3,300 people in 60 offices around the world, we bring foresight and knowledge, deep functional expertise, and a practical approach to building capabilities and delivering real impact. We work closely with our clients to create and deliver essential advantage. The independent White Space report ranked Booz & Company #1 among consulting firms for “the best thought leadership” in 2010. For our management magazine strategy+business, visit strategy-business.com. Visit booz.com to learn more about Booz & Company. ©2011 Booz & Company Inc.