Business Processes and the Weather!

June 26, 2009 from Business Finance – “Will Rogers once said, “Everyone talks about the weather, but nobody ever does anything about it.” Sometimes I feel like that about business processes. I like to complain about them but don’t do enough to change them.

Think about some of your own experiences. Have you ever wondered who came up with the process being used to “service” you? I have had some recent experiences with major retail and service companies that were mind boggling at best – complicated package deals, pricing terms, and rebate requirements. Not only was I confused, but the customer service employees were struggling, too! It always makes me wonder how organizations establish and maintain effective internal controls around all this complication…

In a recent conversation with an assurance partner at a national CPA firm, he told me he sees lots of situations where an organization’s ERP system isn’t implemented in its entirety or management doesn’t seem to trust it. Instead, they use procedures outside the system (i.e., spreadsheets) to verify what’s going on inside the system or to “do the consolidation.” He surmised that this may be caused by people at the functional level not wanting to be overly reliant on the ERP system or on IT people. Sounds like a matter of trust to me.”

180 View - This short article raises 2 big problems although it does not get into any detail or solutions. The first big problem is complexity of business process. When the complex process was introduced, it likely made sense. The question is whether it still does. A design principle in improving business process is to reduce complexity. So challenge the reason for the complex business process and try to keep it simple.

The second is reliance on spreadsheets. The article points out two reasons – lack of trust in the system and not wanting to rely on IT people. Lack of trust in the system is a huge problem and the answer is not more spreadsheets but the implementation of strong internal controls. Not wanting to rely on IT people is understandable as it may require a long wait time, but the solution should not be more spreadsheets. The solution should be using reporting tools that leverage the data in the system. The reporting tools likely exist, they just need to be implemented, which requires an investment in training and support.