Nine Worst Business Processes Revealed; Business Process Management Leader Pegasystems Provides Basics to Avoiding Pitfalls
CAMBRIDGE, Mass., Apr 12, 2005 — Pegasystems Inc. (Nasdaq: PEGA), the leading provider of smart, rules-based business process management (BPM) software, revealed the nine worst processes carried out by organizations when they are limited by practices that do not take into account customer or organizational needs. Paradoxically, in some cases, the worst processes then become fixed through inflexible, hard-coded programming in technology that was originally designed to enhance their operations.
This top-nine list of failing processes was derived from Pegasystems' observations of a range of organizations around the world. They are, in no particular order:
- Compliance: With increasing regulation around issues such as fraud, terrorism, Sarbanes-Oxley, data protection, and quality-management systems, processes must be more consistent and traceable than ever before. With ad hoc processes managed in various locations, unintended non-compliance can occur as efforts to keep employees up to date lag ever-changing regulations.
- Opening accounts: Even within the same organization, the processes for opening a new account or service can vary significantly for different types of accounts, even though the same information will form the basis of each application. With too much time spent duplicating efforts, not only is there a potential for inaccuracy, but also this can cause a customer relationship to get started on the wrong foot.
- Event-driven marketing: Organizations have huge amounts of relevant information, yet can fail to offer customers services when opportunities arise. A classic example of this is the way financial institutions handle account closings, allowing customers to simply churn between institutions. This is particularly pertinent when organizations have set business objectives to cross-sell more products to their customers or increase customer retention.
- Sorting out the front office: Many customer interactions are dictated by the processes that sit behind the front office, rather than being dictated by the customers' needs. This could mean wading through forms or not being able to get basic account information via Websites. Customers are increasingly looking for easy-to-use "24/7 access" with processes that can cope with multiple points of access seamlessly — through a local branch, via a call center, and/or over the Web.
- Getting real benefits out of business-process outsourcing: Business-process outsourcing is becoming increasingly common for large companies and the government sector. The existing solution of exporting jobs and processes lock, stock, and barrel isn't working as promised. Bottlenecks and pitfalls in processes have simply been exported to countries with cheaper manpower, which means that companies struggle to realize anticipated savings.
- Enabling contingency processes: Most systems and processes are designed to function in a certain way, which is great when the system is dealing with standard situations. However, what happens when things go outside the process scope — like misdirected baggage on a flight, or online hotel systems that do not allow for non-standard reservation requests? In order to provide truly excellent customer service, a system needs to be flexible.
- Product configuration: Sectors such as financial services have a lot to learn from the manufacturing sector. For example, some cars can be made in any number of combinations. What if other sectors' products and services could be customized to fit each individual client? It would allow the customer to build products online and reduce front-office resources.
- Complaints tracking: Complaints are often the most useful source of feedback for a company; in addition, they are also an opportunity to cement the client relationship by providing a successful resolution to problems. However there is a small minority of "professional complainers," and it may be that the cost of servicing these individuals is greater than their value as customers. Retailers have already started to look to exchange information about complaints; there is a wealth of information that business units within financial institutions could exchange internally, which is not being done at the present time.
- Competitive response: Financial institutions are constantly competing on interest rates and other terms. For instance, credit-card competitor actions can often be quickly uncovered when customers pay off card balances with a rival's check. Having systems in place that identify and then respond using business intelligence is a simple way to further ensure customer retention.
Laurent Lachal, senior analyst at Ovum, the analyst and consulting company, said, "Business process management (BPM) is a state of mind; a process-oriented way of thinking about existing IT systems; and of procuring, designing, building and integrating new systems. Implementing BPM requires addressing methodology, or the business approach, first; architecture, the mixing of business and technology issues, second; and finally, if and when required, to start thinking about BPM in terms of actual products and technology standards.
"Many of the processes listed here demonstrate that there is some very basic work to be done before implementing BPM. Companies need to think outside their usual box, be systematic in their approach, and look at processes from internal and external customers' points of view."
David Wells, Vice President Europe at Pegasystems, added, "Over the past 20 years working with many of the world's leading organizations, we have witnessed both best and worst practice, and seen the tremendous benefit organizations unlock when they create a cohesive approach both at a technological and cultural level towards Business Process Management.
"Delivering efficient and effective services to customers is a key concern for all major companies, and in most cases it really is not that difficult. However, organizations have a long way to go in order to reach that goal. Getting the systems and processes right is critical, but not that hard to do with the right technology."
Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at www.pega.com.
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