Intelligent Enterprise

Homeowners know that installing energy-efficient windows helps save money in the long run, yet many are reluctant to make the investment in these challenging times. Businesses are no different, but even in this difficult economy, companies looking to optimize business processes have a very useful yet inexpensive tool at hand. It's called the Hawthorne Effect...

It's not easy to commiserate with corporations, but there's no denying that US businesses are in a truly tight spot. On the one hand, the cost of materials is rising at an unprecedented pace (Dow Chemical had to increase prices by 45 percent across the board in a matter of weeks). On the other, many companies are unable to pass on higher costs to consumers already teetering on the brink of insolvency. This leads to a true Catch-22 situation: even as businesses look to reduce costs, they are shying away from the very investments that lead to cost reduction. Case in point: even as there is widespread agreement on the benefits of business intelligence on operations as well as strategy (but note: benefits, not ROI), Gartner is finding that that the growth of BI software in the US has dropped dramatically of late.

The Hawthorne Effect tells us that if we observe someone at work, that person seems to work better (big deal — parents know that already). For businesses, the corollary is as follows: Analyzing a business process leads to implicit process improvements. Here's why: there are two fundamental ways to improve business processes — human adjustments and technology enablement. An example of the former is when two groups of users that follow slightly different variations of the same process begin to follow a single process (if one of them used a manual spreadsheet to keep track of things, both of them start using the same spreadsheet). An example of the latter is workflow automation through systems integration, so that users no longer need to read data from one system and manually enter it into another — the second system directly reads the data from the first, without human intervention.

When an experienced business analyst meets with users and work groups to understand and document a business process, this action invariably leads to much better collective insight on the business process, and suggestions to improve the process are quick to tumble out during discussions. While many of these suggestions will have to do with automation, there will always be a few suggestions that have nothing to do with automation, but instead address more human aspects such as user training, process conformance and employee turnover. For the price of the business analysis efforts (significantly low relative to implementing process automation), there can be noticeable improvements. As a valuable side-benefit, the process analysis sets the stage for future investments in process optimization (as the current state is already documented).

Try it, and let me know if it worked for you.