Consulting Approaches to Process Improvement

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Consulting approaches to process improvement Bain & Co.

Kai A. Simon
Viktoria Institute
Author’s Note: This is a part of an early draft of my doctoral dissertation that was shortened considerably for the final version. Nevertheless, it might be a useful collection of insight for organizations that face a need for redesigning their business processes and wish to learn more about the basic concept and how some major consulting firms approach it methodologically. The series consists of 7 parts – Introduction, descriptions of the methodologies of Andersen Consulting, Bain, BCG and McKinsey, a high level comparison, and some guidelines or selecting consultants.

Bain & Co.
Bain uses five key success imperatives for BPR projects. The approach used by Bain & Co. also differs from the definition outlined by the early advocates Hammer & Champy. Hammer & Champy’s definition The radical redesign of business processes to achieve dramatic improvements in critical measures of performance, such as cost, quality, capital, service, and speed. Bain’s definition The holistic redesign and optimization of a business to achieve full potential and build strategic competitive advantage. This includes the radical redesign of core processes as well as the application of the entire Bain tool kit of performance enhancing techniques.

The definition of Hammer & Champy is focusing the aspect of business process performance improvement in quantitative terms. Conducting a BPR-project with this definition as startingpoint, the targeted improvements would primarily be defined in terms of quality, cycle-time and cost efficiency. The Bain definition, on the other hand, takes a wider perspective and includes the aspect of strategic competitive advantage in an explicit way. 1

Reengineering principles
• Top management sponsorship. Senior management is obliged to provide an inspirational vision of the ultimate goal to be achieved. This includes the slaughter of ”sacred cows”, allowing the reengineering team to explore all opportunities, even those that might imply a re-consideration of the company's business scope and strategy. Also, there must be a clear and early commitment to the results that are developed during the initiative in order to give the necessary creditability to the effort. • Strategic foundation. The business of the company must be clearly defined. Consequently, any business improvement effort must depart from a re-consideration of the organization's business scope, vision statement and overall strategy. The result of this initial phase must inform the identification of business processes and customer requirements. • Comprehensive change management. The goals of the change initiative must be communicated extensively throughout the entire organization. The change effort, lead by the project team, has to show early achievements, that provide momentum to the overall effort. • Right and left-brained thinking. Breakthrough ideas, and radical and creative design must be combined with a systematic, deliberate and conservative implementation of the designed processes, organizational structures and technological components. • Aligning organizational components through investments. Information technology that supports the new processes is a necessary investment. The compensation and reward structure must be aligned with the new organizational form, while training and education must be provided to enhance individual and organizational skills.

The role of IT
Even though Bain is not directly involved in systems development for clients, recent developments in e-business have not passed unnoticed. As a consequence, Bain has developed a model for evaluating start-up companies in the e-business sector and taken on the role of business incubator. In its client projects, Bain considers technology as a medium that offers significant opportunities to enhance service, reduce costs, and achieve a differentiated breakthrough in the way a company...
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