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Focus on short term cost cutting sets process improvement up for failure, finds global survey

Process Excellence Network
Posted: 11/27/2011

FOR IMMEDIATE RELEASE

28 NOVEMBER 2011 - LONDON: Process improvement programs are most likely to fail if the key focus is on cutting costs, according to a global PEX Network benchmarking survey.

The October 2011 PEX Network survey, in which over 650 process improvement practitioners participated, found that a customer-focused approach to identifying and improving operational processes is what sets a company up for long term success.

Over 40% of process improvement programs that practitioners considered "unsuccessful" or "highly unsuccessful" were driven by cost cutting; only 20% of "highly successful" programs focused on this metric. Meanwhile, 32.5% of "highly successful" companies focused on the customer with just over 10% of unsuccessful programs considered customer-centric.

"A focus on cost savings, while clearly important to businesses during a time of economic uncertainty, can translate into a demoralized workforce and ultimately lead to what is perceived as the failure of an operational excellence initiative," said Diana Davis, Editor of PEXNetwork.com and author of the report. "The trouble is that sometimes these initiatives become associated with job losses, budget cuts, and increased workloads – and how can you get enterprise-wide buy-in if that’s the perception of process improvement at your company?"

"The report highlights the fact that customer-centric process improvement – something both PEX Network and many of our global partners have been advocating for several years now – is the key to ensuring that process improvement activities deliver value to both the business and its customers," added Vanessa Lovatt, Director of PEX Network.

Other highlights of the report include:

  • Companies are relying on shorter cycle times for process improvement projects with a significant increase since 2005 of respondents reporting average project length of 90 days or less
  • Lean and Six Sigma methodologies remain prevalent although nearly 50% fewer respondents report the use of Six Sigma methodology than in a similar 2005 PEX Network survey
  • The greatest danger period for companies operational programs is after 2-3 years of process improvement activity when respondents were most likely to rate their programs as unsuccessful

The report findings will be discussed in further details at PEX network’s flagship event for Lean Six Sigma and BPM practitioners, PEX Week. The event takes place 16-19 January 2012 in Orlando, Florida. Further details can be found at www.pexweek.com.

A full copy of the report can be downloaded at: Trends and Success Factors in Business Process Excellence 2012

[ENDS]

About Process Excellence Network

Process Excellence Network (PEX Network), a division of IQPC, is an integrated media company that provides access to online resources, holds regular industry forums and conferences on Business Process Management (BPM), Lean, Change Management, Operational Excellence, Six Sigma, Risk Management, Customer Experience and more

The Process Excellence Network is enhanced by an active online community of your professional peers, as well and face-to-face Summits and events that take place across the globe. We help you discover what the best are doing to generate measurable results through Process Excellence.

In short, Process Excellence Network, (PEX Network) enables you to advance your own process excellence journey by increasing your idea sources, widening your contacts and friendships and participating in ongoing formal and informal learning opportunities.

For further information, please contact:

Emma Cobbledick

PEX Network Community Engagement

Email: emma.cobbledick@iqpc.co.uk

Telephone: +44 (0)208 874 2359

Process Excellence Network
Posted: 11/27/2011