Business Process Development

Operational Awakening

I love Six Sigma and I love finance. It is my belief that the best odds for a business to exist in perpetuity is to structure the company around a central macro-process with many micro-processes within the macro-process. Companies that are process-centric are inherently mission focused. The main business process connects inputs with outputs. All micro-processes within the main macro-process support the central macro-process and again the company mission. Companies that are task-centric (as are the vast majority job small businesses) are overly reliant on a central figure, such as the owner or other critical team members.

I am an entrepreneur so I've had my share of successes and failures. I am convinced that the businesses I've owned that I structured around processes out performed the companies that were a team of individuals waiting for their next assignment. I'm not suggesting that people are sitting around waiting to be told what to do, but instead they have a job description that includes "and whatever else needs to be accomplished." Process driven companies value the process and the positions within the process. Former legendary CEO of GE Jack Welch knew every product GE manufactured and every service it provided, but he didn't know every employee. I haven't had the opportunity to speak directly with Mr. Welch, but I think he could recite the processes that make up GE, but not the people that staff every step in the process and subprocesses.

The Approach

My last company doubled its revenue year/year five years in a row. The first doubling wasn't a problem, the second doubling was painful; billing systems couldn't keep up with production, collections slipped, purchasing was unchecked, product quality suffered, less innovation, etc. I realized I was fixing problems as they arose. I knew I had to do something that would help alleviate the operational pains of growth.

I sat down with a friend of mine and discussed the operations of the company. I could tell my friend what the company manufactured and I could tell him the names of its employees and their titles, but the details of their daily work was murky. I didn't come across as confident as I should have.

I studied ISO 9000 and Six Sigma methodologies to see how they could be employed to improve business. Both methodologies are focused on developing repeatable processes with predictable outcomes. Ultimately, the goal is to do the same thing the same way every time to achieve the same result. Hopefully the process results in a high quality product and by continuing to do the same thing the same way the result is consistent high quality product.

Genesis

I set out to find out exactly what was going on in the company by interviewing every associate in the company. I also observed the team at work. Next I sat down in front of my laptop and began diagramming the work flow by following the money; the company diagram, or macro-process, began with sales and ended with collecting payment (I decided to follow the money, because that is what is important). Next step was to make sense of what everyone was doing in terms of the greater goal of the company: make money.

I began by creating a flowchart of the business beginning with a sales call and ending with collection payment for the product deliverable. Next I identified areas of multiplicity within the macro-process. Additionally, I put staff names next to each step of the process. What an eye opener.

Admitting the Problem

Some of the ah-ha moments included the times a single document was photocopied, five times for five different files. I was also able to identify my technology needs, such as what are the customer technology touch-points and how do we use technology within daily operations.

The next step in the analysis was to compare my actual financials and budget financials to the company process. The budget changed based on what the company was actually doing. Now I could make much better operational decisions because I truly knew the sensitivities of the company.

Outcomes

The result of this process was I was able to improve the processes within the company. This did not result in a reduction in workforce, but instead it resulted in increased output and improved quality. Additionally, my IT strategy became cogent. Having an IT strategy, even for a small business, reduced my IT costs and took that expensive, confusing and critical part of my company off my plate of concerns. Finally and most importantly the net revenue and net margin increased dramatically.

The company continued to grow and it grew within the parameters of the macro-process. In other words, the company grew but processes and job functions stayed the same. Everyone knew their job and they performed the same job no matter what the work load or revenue volume.

Business Process Outsourcing Solution for Small and Medium Businesses

Business process outsourcing (BPO) was once the domain of big businesses with big budgets and big needs. It usually referred to "big" processes, too, like manufacturing on a grand scale. And it was also commonly associated with the controversial practice of "offshoring" - where a business would engage in the process of outsourcing its needs to BPO solution providers in developing nations.

Today - due to the convergence of the Internet, new technology, and a global talent pool - business process outsourcing is no longer just for big businesses. Small and medium businesses have become a rapidly growing part of the business process outsourcing space (even home-based businesses are waking up to - and taking advantage of - the benefits of business process outsourcing).

And, unlike in the past, big budgets and big needs are not required for entry into the business process outsourcing space. The BPO solution of today is now so scalable that a huge number of BPO projects are really nothing more than basic tasks that commonly consist of only a few hours of work. And with contractor charge-out rates that start at less than $1.00 per hour (the old adage that "you get what you pay for" should not be ignored), it's not uncommon for many business process outsourcing projects to cost less than $50 or $100.

Finally, while offshore options continue to be alive and well in the business process outsourcing space, there are a growing number of BPO solution provider contractors that can be found within the US, Canada, and the rest of the Western World, necessitating a reconsideration of the meaning of the term "offshore."

Clearly, while the fundamental underpinnings of business process outsourcing remain the same, who uses BPO - and how they access a BPO solution - has undergone a dramatic transformation.

And it's a transformation that's worth taking note of.

Business Process Outsourcing is a Simple and Straightforward Process

Although there are differences between what every "new breed" BPO solution provider offers and also differences in how client companies work with the various BPO solution providers, the process for outsourcing a project is pretty similar for all BPO solution providers and generally involves - to one degree or another - the following steps:

• Signing up for a free account
• Finding a contractor or contractors for a project or ongoing work, which consists of either:
• Posting a scope document, specifying project/work details, rate of pay or project value, and contractor requirements; or
• Searching for a contractor by specifying parameters in the contractor search facility such as pay rate, experience, number of hours logged, feedback rating, and so forth
• Choosing contractor or awarding a project or work assignment
• Handing over project or work assignment details and any "raw" materials
• Inviting coworkers into a virtual "work room" if desired or necessary
• Monitoring work in progress
• Reviewing and signing off on completed projected or work assignment and virtual "timesheets"

As you can see, the process is pretty painless. And, more importantly, it's also very effective at delivering on desired outcomes - due, in no small part, to unprecedented levels of transparency into work-in-progress that allow for course-correction throughout the process and that also ensures that companies pay only for work that gets done.

Business Process Outsourcing Offers a Wide Range of Outsourcing Opportunities

While an exhaustive list of tasks, projects, and processes that can be outsourced to the "new breed" of BPO solution providers is beyond the scope of this article, the following list provides a high-level overview of the many opportunities for business process outsourcing:

• Web Development
• Software Development
• Networking and Information Systems
• Writing and Translation
• Business Services
• Graphic Design
• Customer Service
• Sales and Marketing
• Administrative Support

Make sure that you give careful consideration to the types of tasks and processes that are listed above, especially those that are alive and well in your business but that are not core to what you do.

They are prime candidates for the kind of business process outsourcing solution that the new breed of providers offers (even if you're currently outsourcing to a local business).

Best Way for Newcomers to Get Started with Business Process Outsourcing

The best way for any business (or individual entrepreneur) to get started with the new breed of business process outsourcing providers is to run several small-scale tests with different contractors on low-risk projects.

Choose some time-intensive, everyday tasks that don't require a high level of skill but that drag on your productive time (or on the productive time of someone else in your business) and that, if you were able to spin them off to someone else at a low cost, would free you up to focus more of your time on revenue-generating activities.

This way, you're free of the burden of risk - which should help you get past the "should we or shouldn't we" question - and you'll get to experience the process of working with a BPO solution provider - and the many benefits of business process outsourcing - first-hand.