Opinion: Sound business processes essential for “operational resilience”

Michael de Andrade of EnterpriseWorx gives us his views on why sound business processes are essential

October 4, 2011

By Michael de Andrade, CEO, EnterpriseWorx

Business processes are the backbone of any organisation, and business process integration is essential to connect disparate business processes and facilitate the transfer of information. This is the starting point of any enterprise-wide information technology (IT) project, be it business process management, enterprise resource planning or customer relationship management.

The organisation needs to have the right processes in place to support its operations and meet its strategic business objectives. Only in this way can it respond quickly to the changes demanded by today’s turbulent business environment. The effective implementation of these processes depends on the interplay between process, technology and people.

Process

Application integration can be used to support business processes and break down operational silos. Co-ordinating traditionally ‘silo-ed’ applications underpins the data relationships that support the modern supply chain and can lead to lower processing costs, greater data accuracy and improved operational efficiency. As pointed out by the Gartner Group, this allows the enterprise to move from “operational excellence” to “operational resilience”.

For example, application integration can enable the procurement system to communicate with the merchandising system and the in-store system to monitor stock flow. In this way managers can be alerted as to when to re-order stock for a certain outlet.

Organisations need to have the right IT systems to support that process flow and manage the process. Business process improvement is needed to optimise underlying processes and improve results.

Technology

It’s important to evaluate process requirements and decide whether point-to-point application integration will suffice or whether a services-oriented architecture (SOA) implementation is needed to enable information to flow freely across a range of complex applications and processes.

Business agility has been a major theme for the past decade, with service-oriented architecture (SOA) seen as the preferred technology for in-built flexibility. SOA supports continuous process improvement, with enhancements being delivered more easily and faster than was possible with earlier architectures.

Integration between different computer systems and new and legacy software applications delivers maximum return on existing systems and enables managers to access information in real time, without having to make sweeping changes to existing applications.

People

To implement sound integration architecture you need to get key people on different teams talking to each other. This team should include not only to IT specialists, but also business analysts and corporate leaders, all of whom need to decide which business services to implement, and what processes are needed to underpin them. That’s the only way to achieve the desired results in terms of streamlining business processes and increasing organisational efficiency.

In addition, to monitor effectiveness, executives are relying more and more on business intelligence (BI) systems to provide insight into what is happening within the organisation. This helps them to prescribe thresholds and set triggers for remedial action.

As BI has moved from the realm of transactional to operational decisions, so the delays between monitoring operations and taking corrective action has been reduced. By putting BI back into the process itself, executives can more quickly make decisions, for example, in regard to cost versus quality. Key performance indicators can improve business agility and effectiveness.

Gartner argues that processes – particularly customer-facing processes – need to be more flexible. It estimates that between now and 2014, “business process defects will bring down 10 global 2 000 companies”.

Dependable business processes are essential to deliver the benefits of flexibility and resilience at the outset, and to provide a strong foundation for any future BMP, ERP, CRM or similar IT initiative.

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