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Business process breakdown stalls customer service

One in two UK companies admitted they have problems with the majority of their critical business processes, according to research from Software AG, Europe’s largest business infrastructure software company.

52 per cent of the 160 IT directors surveyed from a range of industries admitted that more than half of their current strategic business processes could not be easily shared across the organisation. A further 27 per cent said that between 25 and 50 per cent of their critical business processes suffered in this way.

Customer service was found to be most affected by this lack of transparency, as 47 per cent of those surveyed identified problems with processes specifically related to customers. Other respondents said that processes relating to day-to-day operations, such as cash-to-order activity and the supply chain, were not working effectively.

“As industries become increasingly competitive, the most successful companies don’t just compete on the products they sell, but on how effectively they can run their business operations,” said Jim Close, Senior VP and Country Manager (UK) of Software AG. “For example, poor customer service is all too often the result of out-of-date business rules and systems that support the customer processes.”

In other words, identifying where and when processes stall or fail.

He continued: “For me, this is a major indicator of a company’s long-term viability, to the extent that it should be considered a significant indicator for investors. If a company can’t measure its business operations and adapt as the market changes, then will it survive? Investors should be asking their operational executives about the adaptability of their operations.”

Many of the IT directors surveyed confessed that previous business process improvement initiatives had been frustrated by the inability to access data relating to where the problems lay. Examples of information gaps include the impact of changes to processes, changes in business conditions and the cost of individual process steps. Meanwhile, over 70 per cent of respondents said that critical processes could be improved by modernising their existing IT infrastructure.

“Organisations that measure first and then use the information to improve their strategic processes are much more likely to improve their effectiveness than those who jump into blue-sky business process modelling and re-engineering initiatives, which are based on gut feel,” Close continued.

“Effective business processes are the engine for any organisation to reach its performance goals. Getting this right will be critical for strong performance in 2008,” Close concluded.

Désiré Athow
Contributor

Désiré has been musing and writing about technology during a career spanning four decades. He dabbled in website building and web hosting when DHTML and frames were en vogue and started writing about the impact of technology on society just before the start of the Y2K hysteria at the turn of the last millennium. Following an eight-year stint at ITProPortal.com where he discovered the joys of global tech-fests, Désiré now heads up TechRadar Pro. Previously he was a freelance technology journalist at Incisive Media, Breakthrough Publishing and Vnunet, and Business Magazine. He also launched and hosted the first Tech Radio Show on Radio Plus.