Process engineering is a term many people associate with process industries - such as chemicals, petroleum or pharmaceuticals - in which recipes and formulas are designed and mixed to deliver products. Akin to this thinking, business process engineering seeks to examine and optimize operational processes, which in their base state are no more than reflections of the legacy, culture and organizational structure of an enterprise. Whether it produces hard goods or services, every large organization is a huge conglomeration of semi-connected processes, a primary vexation for executives seeking to leverage strategies at the enterprise level.
At Pitney Bowes, the well-known business communication product and services provider, Rungson Samroengraja holds the title of VP of Business Process Engineering. His is not a mainstream title, but it is one that is spreading among corporations trying to gather siloed organization and information resources to better execute end-to-end business strategies. From his early days as a consultant at Booz Allen Hamilton, Samroengraja was drawn to operations, which led naturally to his process bent. An articulate and thoughtful man with a doctorate in management science, Samroengraja has also taught at NYU Stern and will present a course at Columbia University this summer.
"Business process and technology are now at the point where they are almost inseparable, the reason being that 21st century business organizations are much more complex than early modern corporations," Samroengraja says. "The business organization hasn't really changed that much, it's very silo-oriented for the most part. The challenge today lies in the buzzwords, time to market, rapid growth, and the need to execute all that with less every year."
Many executives believe that technology can enable such buzzwords; others insist that underlying processes are the problem. Samroengraja says it really takes a combination that begins by establishing the right process and then marrying the process to a technology that enables it. What constitutes the "right" process is best understood by observing how enterprises typically operate. "As companies grow we are all challenged with finding new markets. In the Fortune 500 they usually do that through acquisition or by developing something adjacent to what they do today." Thus, a steady mentality of balancing off and quickly developing a product or service leads to ad-hoc processes that grow and become more complex. "What ends up happening is you lose the economies of scale which you'd think are predicated for any large company to survive."
This leads to a painful process of backtracking - rationalizing what has been done and where the company stands - with technology sitting somewhere between panacea and scapegoat. Samroengraja felt this within Pitney Bowes when the company decided to enhance its enterprise infrastructure. "It's the same old story that so many other companies have lived through. We said we could design a solution to automate all the different things we do. What you end up with is this complex solution that can take so long to implement that the businesses have naturally evolved their business model, making the original design process less relevant. You don't get the synergies that you expected, and it's all because the process itself was clunky to begin with."
Just as manufacturing faced a revolution with the advent of the assembly line, managing processes at the enterprise level comes with a proposal that will flat-out frighten many executives. "What if, instead of having a head of supply chain and a head of finance, you make someone an end-to-end process owner?" Samroengraja says. "Maybe it's the order-to-cash process. You decide who has the visibility and the incentive to make that whole process work most efficiently and then define the right technology to support it." Such a conversation is a political bombshell in most organizations, for it involves serious reckoning with compensation, turf and ownership.
But this kind of makeover cannot be achieved with tactical Six Sigma deployments. It is an exercise that requires extensive internal study and competitive examples in order to obtain endorsement at the very highest level. The pitch Samroengraja took to his CEO was about taking out cost. "At Pitney Bowes we spend about $2.2 billion on people involved in our processes, the technology to support that, and some non-inventory materials. That's our opportunity." Based on documented observations of many other companies - Cisco Systems, HP and Ford to name a few - Samroengraja came to his own conservative conclusion. "How much money does it take to get a CEO's attention? In my case, I believed the opportunity might be as high as 10 percent off the top if we organized the company according to a set of end-to-end processes such as order to cash, req to pay, or hire to retire. It's the old manufacturing mentality, but if you think about it, it's like a factory. There's a lot of knowledge around how you make a known process optimized, especially when you understand it from the start to the end."
The technology side of this kind of process exercise is distinctly different from what many companies still choose to do, which is to buy into the latest three-letter acronym and pursue it with a major expenditure. Aligning process and technology requires business to also consider IT in a different light. Even in the purely business and process world, data is necessary to both dictate strategy and measure its results. "IT is now very tightly woven with the process and data is an integral part of that," says Samroengraja. "These days, when we look at our transactional processes, a lot of what stops or hinders improvement or visibility is simply access to data or the quality of the data." A challenge that has been set at Pitney Bowes is to make sure enough time is spent making sure that data sources are clean and processes are in place to make sure they remain clean. "Even as you refine processes you have to remember that data integrity and processes to retain that are a high priority, even if they are not generally sexy topics."
As process and technology intertwine over time, they will begin to run more in parallel and bring a more rational engagement between business and IT. The greater problem remains developing a system for moving any large corporation from its old habits. "Because of the speed at which we are required to innovate, it's very difficult to have a meta-process that says, 'here's how we will go about designing and deploying processes, how we will improve them over time and how we will maintain them.' "
A bright light though, dispels many uncertainties. A major focus at Pitney Bowes this year is to continue transforming the company from its mail-metering product dominance to more of a service organization focused on the information flow of its customers. Internally, the process emphasis is being put to work to give business owners a better way to discuss the business model to which they want to transition. This includes capabilities, processes, people and technology needed to drive it down through the company. "From requirements you get down to functional specifications, down to use cases in a very clear and consistent manner that you can then hand off," Samroengraja says. "This is something that so many companies struggle with, getting the clarity of what it is the business is trying to do."
Across all industries, very few corporations have actually executed a broad process strategy. Having measured the examples of Cisco, HP and a few other large organizations against his own company's unique requirements, Samroengraja feels Pitney Bowes can now address an exciting opportunity. It is a story that will be worth catching up on in the future.
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