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Business Process Redesign Strategy: The People Impact

By  David Meehan David Meehan  on 2016-02-02 16:18:26  |  Featured in  Insurance
David Meehan
Posted By David Meehan
in Insurance
on 2016-02-02 16:18:26

business.process.redesign.strategy.jpgTo successfully launch a business process redesign strategy, there is a lot of work that must be completed before the actual process is engaged. 

  • First, problems of the existing business environment must be defined to set the course for optimal solutions. Once the problem or problems are fully understood, the current state must be assessed taking into account the three key business components - people, process, and tools.
  • After establishing a baseline, comparing the current state to peers will help benchmark your position, and may provide insight to revolutionary improvements. This holistic approach at analyzing the current state will help ensure all variables of the business are taken into account minimizing the likelihood of failure.
  • When the problem and current business environment are understood, outlining the goals and scope of the initiative, ensuring the project’s ambitions align with the corporate vision, will provide the initial boundaries for the project. 
  • Once the project is scoped, an execution plan should be constructed to get an understanding of the proposed timeline and it’s relation with cost and extent of the initiative.  After the scope and execution plan are completed, the work should be sequenced according to the business vision, culminating in a strategic roadmap. 

Even with all of this, a successful outcome is not guaranteed. 

If management support is not strong, or the project is mismanaged the likelihood of success is severely diminished. Similarly, if the redesign is thrust upon staff or their management without their support, gaining adoption will not only be difficult, but it could cause failure.  A business process redesign project must have strong champions - management and staff - in order to be successful. 

business.process.redesign.strategy.people.jpgThe People Impact

When understanding the ‘people’ impact of any re-engineering effort, you should focus on the structural, functional, and cultural aspects of the organization. 

From a structural standpoint you should ask yourself: 'Will this re-engineering effort allow me to streamline or consolidate the structure of an organization?'  An example of this type of restructuring is consolidating once disparate groups of resources performing the same function into a single, shared services organizational structure.  These types of transformations not only have a sizeable impact of benefit to an organization but also require an equally sizable change program to ensure success. Things to keep in mind include:

  • When reengineering business processes, generally the goal is to decrease operational costs and/or improve customer service. 
  • Many firms take a reactive approach to decreasing operational costs by reducing headcount without improved processes or technology. This creates a one time, unsustainable savings that leads to employees working as efficiently as possible, but unable to improve productivity. In fact, unless there is a corresponding reduction in workload, this can sometimes leads to further deterioration of performance due to the enormous burden left to a smaller pool of remaining employees. 
  • All of the employees’ effort is consumed by executing inefficient processes with bare bones staff and inadequate tools which has a significant negative impact on customer service and employee welfare. The stress on employees, often high performing employees striving to maintain quality levels, may cause increased incidents of burnout, which may lead to abnormally high attrition rates. 
  • Although reducing headcount is never easy, the tangible savings are immediately realized, so it is often a go to method to reduce operating costs. 
  • On the surface, if an area can operate with the decreased headcount, the workforce is more optimal than it was before the staff reduction.  The problem is there are overt and hidden risks and opportunity costs associated with reducing headcount without improving processes and tools.
  • In the end, taking stock in the value of the people involved in any effort and the impact initiatives have on the lives of those in the organization is the key. Conducting a deliberate approach to evaluating the impact a re-engineering effort has on its people through understanding the organizational structure roles, responsibilities, and attitude toward change will go a long way to ensuring the creation of a future-proof transformation. 
A Strategic Approach to Business Process Redesign
David Meehan

David Meehan

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David Meehan is an Associate Director with Paragon’s Advisory Services team where he leads high profile management consulting engagements with a concentration on customer experience. Prior to joining Paragon in 2010, David was a management consultant for CSC where he was an instrumental in leading several large-scale, multi-year engagements, including a legacy modernization effort for the Federal Reserve Bank of New York, and the Morgan Stanley Smith Barney joint venture. David received a Bachelor’s degree in Economics from Rutgers University, NJ. He is a United States Air Force veteran having served in Oman for Operation Enduring Freedom.

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