Business process change presents opportunities and threats for CIOs and IT

Rushing your IT organization headlong into business process transformation is may sound appealing. It is a great opportunity for IT to demonstrate its true business value by making some lasting and far-reaching business change for the better. The problem is it is also an opportunity for IT to get it spectacularly wrong and destroy its credibility. Active involvement with business process change is both an opportunity and a challenge for most CIOs.

Business process change is not new. In various guises, business process change has been the foundation of most improvements in business efficiency and agility for years. What is new is that, after a few false dawns, IT is finally have a big role to play it making it work.

Business process change is not one-size-fits-all. Rather, depending on the scope of business process change needed, it is convenient to break business process change up into types that differ by the scope of change ranging from automating a manual process to reinventing the way you, your suppliers, your regulators, financiers and customers interact. The significant thing is that each type of process change requires different skills, governance and strength of will. There are four categories of business process change.

Process automation uses IT to automate manual tasks, including manual interfaces between systems or departments. While most back-office processes are automated, many front-office and field processes can benefit from process automation.

Business process re-engineering (BPR) improves productivity by connecting individual functions via processes, using business intelligence to make better decisions, and measurement to manage process performance. BPR commonly accompanies ERP implementation. This category can include initiatives such as continuous process improvement, total quality management and Six Sigma.

Even more far reaching is business process fusion, an extended type of business process re-engineering. The focus of business process fusion is to integrate previously autonomous processes into a managed end-to-end enterprise-wide whole. Because of its far-reaching impacts, business process fusion requires a high level of executive management support.

The last type of business process change is called process innovation. This seemingly harmless sounding management technique is in fact the most extreme form of change imaginable. It can result in a major shedding of parts of a business, creating a new government agency from scratch or integrating two equally sized merged businesses.

The broader the scope of business process change, the greater the choice of roles for IT. The four types of business process change translate into four possible roles for IT. Each builds on the previous one.

If your enterprise is really only interested in automation of tasks, then the only role for IT is implementer. The implementer delivers technology to automate manual processes. This role can include implementing package software, updating user interfaces and writing custom extensions to existing programs.

On the other hand, if the enterprise is ripe for re-engineering change, IT can still play implementer, or it can play engineer. The engineer works with the business to co-design new processes by understanding performance issues and proposing technology solutions. Enterprises with continuous process improvement programs, such as Six Sigma, often involve IT in this engineering role. The goal is to find new sources of productivity.

Setting aside bottom-up, incremental fixes, if the business is into large-scale internal change in a big way then they will be looking for help from the integrator. The integrator works with senior management to create end-to-end enterprise-wide business processes by bringing together disparate processes and technologies. If IT is to play a role, it needs deep process skills and credibility to spare. On the other hand, IT could choose to be an engineer or implementer.

Finally, where a radical rethink of the business model is called for and the business is recreating its business ecosystem, an innovator is called for. If IT is to play an upfront and centre role in this granddaddy of top-down change, deep business strategy and operations are skills needed, but so too is the credibility to work in (and comfort with) highly charged political environments. Few CIOs take their IT organizations to this extreme. Most are happy to work on fusion, re-engineering and implementation initiatives.