• SME Process management

    Posted on February 6, 2012 by in Business process improvement

    What is Process Management?

    Business process management (BPM), process excellence and process improvement programmes have been undertaken for many years – with increasing success as a result of improved methods, better goals and maturing technology.  The place of BPM in large organizations is well established, but is there a place for process thinking in small and medium-sized enterprises (SME) or even sole practitioner businesses?

    Maybe a starting point for the owners or directors of SMEs is to consider whether it is a consistent, smooth-running operation characterised by order, discipline and continuous growth?  If not, improving internal processes might be a worthwhile investment of time.  In order to survive and thrive in a service economy, you need to understand and fulfil your customers needs better than your competition and thinking about your business in process terms helps you do that.

    One of the challenges for entrepreneurs is that they typically have specific interests and ability and, therefore, there are tasks they try to avoid or minimise.  For example, a marketing specialist who enjoys sales might hate bookkeeping, finance and administration and vice versa.  Unfortunately businesses need attention to every aspect of their strategy and operation, so our blind spots have a tendency of creating problems for us.

    This problem was addressed bluntly by Michael Gerber addressed this bluntly in his book “The E-Myth revisited”, where he describes the “fatal assumption that an individual who understands the technical work of a business can successfully run a business “ and urges small businesses to pretend that the business will be franchised one day and document all the work in Operations Manuals to give a uniformly predictable service to the customer.

    Gerber’s program has seven steps that develop your strategy that can then be used to develop operations systems:

    1. Your Primary Aim
    2. Your Strategic Objective
    3. Your Organisational Strategy
    4. Your Management Strategy
    5. Your People Strategy
    6. Your Marketing Strategy
    7. Your Systems Strategy

    This approach is good, and has proven highly successful over many years.  However, as the book expands on how to do each step, it builds out a functional organization. about functions (Marketing, Operations, Finance etc.).

    Extending the idea to think about your internal processes from the customer perspective makes it even more powerful.

    How do I improve my internal processes?

    A proven way to improve your internal processes, that we use in our practice, is to think about a product or service that you offer from the perspective of a customer.  Imagine that they are standing outside your organisation looking in at the various steps required to deliver the product or service to them.

    The aim is to answer these three questions:

    –      What roles are involved in delivering your product or service?

    –      What do you do at each step?

    –      What changes as a result of your actions?

    You have to decide what roles are involved in your business, here is a list to use as a prompt: Marketing, Sales, Service delivery, Customer Support, Research & Development, Sales & Marketing Support, HR, Finance, Legal, Administration, IT, Purchasing, Business Strategy, General Management, etc.  This diagram illustrates how this might look by building on the concept of Prof. Michael Porter’s Value Chain.

    SME Process Model

    SME Process Model

    This model may not fit your business; it describes a generic service organisation.  However, it is intended to illustrate that many of the roles that are in a large business are required by small business as well, so an individual in an SME will have to wear a number of hats.  Even if you are a sole trader, the key is to think about what you do as if you had to document each step to create an operating manual for when your business expands for other people to follow so they can reproduce what you do and how you do it.

    Documenting your processes doesn’t have to be time-consuming or difficult.  A simple diagram with a series of connected boxes, or even just a list of bullet points is good enough; the real value comes from thinking through the steps and recognising that you can take on many different roles during a working week.  Documenting your processes saves you the effort of thinking it through again in future.  Also, you might start to spot areas where you can improve by streamlining the process.

    Here is a simple example of what part of a process in a small business might look like after you have written it down.

    Activity Role Who? Improvement ideas
    Receive client call Receptionist Me Use answering service
    Discuss enquiry Sales Me Use CRM system
    Send service details Sales support Me Create folder of promotional material

    A little time spent on a small business not in the business can pay dividends and move it closer towards a consistent, smooth-running operation characterised by order, discipline and continuous growth that we all aspire to.

    This is an extract from an article published on inspiresme.co.uk, a new web site with a wealth of resources for entrepreneurs, start-ups and SMEs

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