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Business InsightsFundamentals of operations, change and governance
Experience has shown that the fundamentals of process optimization varies little from industry to industry. Industry details often differ widely, but lasting business performance requires the application of common process disciplines.
A typical process structure can be segmented into six functional process elements, each serving a specific purpose in adding value to the product or service. This process segmentation is equally applicable for a manufactured mass produced widget, a complex infrastructure based project or a bank produced financial services risk product.
The six functional process elements drivers are (starting from the client end and working backwards):
| Process Segment | Focus |
|---|---|
| Strategy and development | What does the client need:
Focusing on product and service developments and competitive advantage. |
| Distribution and marketing | Getting the product or service to the customer:
Ensuring the product/service is known and available. |
| Client communication | Engaging the client:
Interfacing the client in the most effective and satisfying manner. |
| Data repository | Maintaining customer information:
Including customer intermediaries/agents and product/service information. |
| Production and creation | Creating value from raw resources:
Manipulating data, concepts or materials to generate product or service. |
| Resourcing and outsourcing | Sourcing the raw materials:
Including outsourced services or support services. |
The above representation is more easily understood in a manufacturing or distribution organization, but less easily recognized in other business environments. In financial services, the following representation would be more easily recognized:
Assuming a viable strategic direction, successful operators understand the process structure underlying their product or service. This knowledge is used to differentiated management styles and incentives to maximize the performance of each element and coordinate this to optimize the service as a whole.