Business Process Reengineering
You’ve mastered your business over the years and have enjoyed tremendous success. However, over time you realize that economic challenges are not as easily overcome as was the case before. Increased competition, the pricing of cheaper alternatives and improvements in the technical abilities and know-how erodes your business’s competitive advantage. To compound this matter, you’re now in the midst of succession planning or generational handover and the cultural differences are glaring. What do you do?
Don’t worry, we can help! Contact us today.
With the ripples in the current economy, many businesses find themselves in an untenable situation. Whether it be poor cash liquidity, revenue decline or simply poor operational efficiencies that have been overlooked in the past but can no longer be ignored. This situation if handled improperly has the potential to accelerate business decline. To ensure a sustainable revenue and profit base, businesses must innovate to overcome the several economic and other challenges that they face.
Our specialized seven (7) step approach covering the following areas will assist in overcoming these challenges. Our process is outlined below and may either apply in whole or in part depending on your business needs.
Step 1 - Defining the business processes
We gain an understanding of the business, its structure and operating environment. Map workflows, document existing processes and control systems, technology and reporting relationships. This is designed to establish the operational framework of the business and its current standing relative to the industry.
Step 2 - Review of financial and accounting systems
We also undertake a comprehensive review of the accounting systems, data source and compliance criteria of the underlying supporting documentation and systems used to give rise to the management prepared financial reports. These are then assessed for accuracy, reasonableness and representation as to the underlying financial standing and affairs of the business.
Step 3 - Assessing cost and process relationships
A comprehensive cost and process relationship exercise is undertaken to determine whether the business is operating at its optimal capacity and maximising competitive advantages whilst maintaining sufficient flexibility to adapt to changing market conditions. This usually involves an assessment of costing methodologies that impact on the bottom-line growth. For manufacturing entities, this incorporates an evaluation of manufacturing infrastructure and the competitive advantage that may be forgone as a result of improvements in technology.
Step 4 - Evaluation of operating systems and finance integration
A critical examination, review and cost-benefit analysis of the business’s accounting, administrative and enterprise resource planning system including the operational organisational structure to complement, replace or amend in whole or part those key systems relating to the administration, finance/ and execution functions of the company, i.e., the three main arms.
Quality of data, data resources and flows, automation, accessibility and security and usefulness (of people and resources) are evaluated and a milestone approach with parallel controls is developed for strategic oversight. This serves as a forward-looking investment and can be introduced over time should there be a true advantage for savings, aiding management’s decision-making process or other visible qualitative benefits including the enhancement and/or improving of capabilities and operational efficiencies.
Step 5 - Strategy planning
We assist management in the implementation of budgetary controls and conduct analyses for major departments of the business-sensitive to cost overruns/variances or significant impact on the business’s cash flows and formulate consolidated annual budgets. This usually forms part of a broader 3–5-year strategic plan that outlines the future direction of the business, its anticipated measurable goals, marketing and/or branding initiatives and other operational considerations and sensitivities.
Step 6 - Ongoing continuous improvement monitoring
Monitoring mechanisms are designed to ensure that there exist opportunities for ongoing continuous improvement and that the business and its process for the achievement of goals remain flexible to these changing dynamics. While automation, process controls and other systems implemented will ensure that goals are achieved to some extent, businesses must be cognizant of the need for quality management initiatives supplemented by the capturing of appropriate data and access to appropriate individuals.
Step 7 - Succession planning and implementation
The transitioning of management approach and techniques in light of generational handover must be carefully planned and executed. At least 60% of second-generation businesses fail while third-generation businesses fail at the rate of 90%. A lack of diversity in skills leads to silos, there exist cultural gaps between generations, the business is unable to grow fast enough to support everyone and the recognition of the need for external (non-familial) expert input is usually at the late stage.
We assist businesses to plan for generational handover and ensure that sufficient training, process integration and structure remains in place to support continuance and that an equal platform exists for the sharing of ideas that fosters collaboration, collective decision making and improved communication.