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14 April 2016

The story of the business processes

Meet Peter, he is the head of Alpha Inc. Peter loves to sell. Moreover, he knows how to sell anything to anybody. He’s a natural.

Peter is a natural

You would think that Alpha would have plenty of money and a steady growth of 100% per year, yet it doesn’t! The company could sell more and achieve better results, but …

At staff meetings, Peter is constantly informed about the production problems. However, he refuses to deal with the issue. “Handle it yourself” – exclaims Peter. “You get paid for this, don’t you?”

This situation repeats regularly and as a result, the staff costs rise faster than the sales grow.

Month after month Peter has been losing his company money, but he hasn’t been able to figure out the reason.

Time and money graph

 
 

One day John drops by. He is an old friend of Peter, and he runs a company of his own.

 

  • Listen, Peter
  • We have bought business process management software. Do you know what it is?
  • No idea, man
  • And, to tell the truth, I don’t really care. To install something like that in Alpha I’ll have to convince my staff, train them ...
  • For me it is easier to sell more tomorrow and earn as much as you do.
  • Well, it’s up to you, of course
  • But if one day you change your mind, call me, I’ll explain the details.

Peter nodded and said he’d think about it, but he decided to buy more advertising to end up with a gain.

Peter accompanied John out of the room to the door.

Expensive car vs. cheap car

They opened the door and Peter was taken aback for a moment. He saw John’s brand new posh car parked at the curb. But how was that possible? Peter was a better seller and customers preferred to work with him.

Peter was up all night. He was surfing the Internet, trying to understand what the business processes were. He found a lot of information but he was unsure of how to use it.

In the morning, Peter called John and asked him to explain what “implement business processes” meant.
John was a good man, so he kindly agreed to help his friend.

As promised, later the same day John came to see Peter and they began to speak.

 

Theory and practice

  • A bit of theory.
  • Here is the definition based on ISO 9001: 2001

 
 

Any activity or set of activities that uses resources to transform raw materials, supplies, or simply labor (inputs) into products or services (outputs) can be considered a process. For an organization to function effectively, it must determine and manage various interconnected activities and processes. Often, the output of one process is the input of another one. A process can also be a set of interrelated subprocesses. This concept can be applied to all segments, such as administrative, medical, and manufacturing.
  • Well, I´ve already read it, but how can it help?
  • Look here
  • Today the shift supervisor comes and says, "We have received an order, but the equipment is broken and hasn't been working for 2 months.
  • Now we have to fix it and we can't meet the deadlines our client needs. We have looked into the matter and it turned out that a sales rep did not know about the problem with the equipment because he had been recently hired.
  • That’s why they signed the contract and set such a deadline. I asked him why he hadn’t checked and coordinated everything?
  • He told me that he wanted to do so, but he wasn’t able to find the commercial director, as he was on a business trip" Every day the same story.
  • As a result, we have endless net losses and waste time at meetings. It’s driving me mad.

Fruitless meeting

  • Wait a minute.
  • Why was the new sales rep unaware of the order processing procedures?
  • Well, he should have read them.
  • We described all procedures 3 years ago, but of course, things have changed.
  • Here is the answer. You let him make a mistake, and he took advantage of it!
  • Yes, you're right, man.
  • But tell me, how does it work in your company?
  • Okay, I'll tell you everything.
  • Make yourself comfortable, my friend, it´s a long story.
  • When we started 5 years ago, we did everything ourselves. Well, you remember.
  • We worked 12 hours a day, increasing our income. Then one day, we realized that we weren’t able to take it anymore.
  • We were too exhausted to continue in the same pace. We started to recruit salespeople and managers to work with clients. And then all hell broke loose.

Working overtime

  • As we were founders, we knew everything: how to communicate with customers, sell the product properly, cut deals.
  • However, our sales reps, when working unsupervised, made unrealistic promises to our customers.
  • Revenue grew slightly, but our expenses increased significantly.
  • At that time, I decided to change something.

Time and money graph

  • I began to search for information and consulted with experts.
  • Then I came to the conclusion that we needed to describe the business processes.
  • And that's exactly what we did: we just sat down and began to describe the processes.
  • That simple. We wrote down all the procedures and specified what and when each employee was supposed to do.
  • We used a very simple language - BPMN.
  • Then we printed the processes and made all the newcomers learn them.
  • Once a week we met to improve the processes, because the real experience accumulated and it was necessary to make adjustments.
  • We loved it!
  • As time passed, more and more new processes appeared.

Business processes

  • That simple? I cannot believe it. What were the results? Good?
  • Excellent!
  • After a year, at meetings we started to discuss how to improve our processes instead of wasting time on analyzing mistakes made by employees.
  • Clearly, one cannot fix all the problems in this way, but most of them we definitely eliminated.
  • And that's a lot.
  • That's right!
  • Thank you John!
  • Now I know what to do.
  • I will hire a person who will describe the business processes in Alpha and everything will change.
  • No, it does not work that way!
  • If you're not going to participate, it will be no use.
  • Hmm ...
  • Well, after describing the processes what happens? Will it all run like clockwork?
  • Tell me how it was in your company.
  • Well, you know, it had some positive effect.
  • But the number of procedures grew with the company.
  • The procedures were accurate, but people sometimes forgot to fulfill certain instructions. They forgot to fill in order forms or send messages on time.
  • The errors accumulated.
  • We tried to fine those employees who did not comply with the procedures but we simply frightened people.

Paperwork

  • There now! I thought as much!
  • Wait, I haven´t finished.
  • One day I attended a conference where they told us about the business process management software. We decided to give it a try ...

 
 

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Alex
Budin
Marketing Director