Continuous improvement methodologies identify opportunities to streamline work and reduce waste, advancing process maturity in organizations.
In this episode of Cherry Bekaert’s Digital Journeys podcast, Jim Holman, Director of Strategy & Operations, welcomes Steve Holliday, Director in our Digital Advisory practice. Together, they unlock how digitalization and continuous improvement can help organizations achieve the highest levels of process maturity.
Listen to this episode to learn more about:
- The role of continuous improvement
- The importance of identifying key requirements, outputs and metrics
- The implementation of digitalization to improve business performance
If you have any questions specific to your situation, Cherry Bekaert provides a host of Digital Advisory services.
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HOST: Hello everyone and thank you for joining us today for a new episode of Digital Journeys. Today, we are going to learn about continuous improvement and how digitalization plays a role in helping companies maximize their business.
Joining us today are Jim Holman and Steve Holiday, who are both experts in Digital Advisory services for Cherry Bekaert. With that, I will turn it over to Jim.
JIM HOLMAN: Thanks, Jerry, for the intro. Now let's get started with Steve. Steve, why does process maturity matter?
STEVE HOLIDAY: Jim, when we think about business, we often measure growth or improvement by rising revenues or bottom-line income. However, when we think about business processes, we need a gauge to understand the improvement or the maturing of those processes.
We use the Process Maturity Model, or PMM, as that framework. The needs of a startup company versus an organization reaching the $20 to $50 million mark are very different.
No organization is perfectly resourced to tackle everything at once, so prioritization must happen. Generally speaking, we ask which processes are customer-facing and which processes help manage risk.
JIM HOLMAN: You have talked about the different needs of organizations based on scale. What do these process attributes look like at different levels of maturity?
STEVE HOLIDAY: There are different models out there, but we like the PMM, which is typically on a five-point scale. At level one, it is an initial process that is often ad hoc and not well-documented.
As we move to level two, we start to see more documentation and management around the process. It is not until level three that an organization has truly defined its processes with clear maps, delegations of responsibility, and clear requirements.
Level four is quantitatively managed. This means you have metrics and understand the effectiveness and efficiency targets for that process, with feedback to management on performance versus objectives.
Level five is the optimizing level. At this stage, you are using feedback on an ongoing basis to make continuous improvements to your process.
JIM HOLMAN: As organizations move from level one to level five, how do you see continuous improvement helping to support this process maturity?
STEVE HOLIDAY: I am a big believer that all work is a process and all processes can be improved. I also believe that what gets measured gets done.
When you apply a continuous improvement capability, you look for people who want to dive into the process and map it to understand how it is performing. We often use a SIPOC framework, which stands for Supplier, Input, Process, Output, and Customer.
You need to understand that entire picture, including the requirements for inputs from suppliers and what will generate the outputs the customer needs.
JIM HOLMAN: You have explained how continuous improvement supports process maturity, but how can digitalization help achieve the highest levels of maturity?
STEVE HOLIDAY: In the continuous improvement space, you can often implement low-cost or no-cost improvements, such as basic controls or reminders for those performing the process. Eventually, in the lifespan of almost any process, you will reach a point where you need to invest in digitalization.
Digitalization is a key tool in the set of the continuous improvement practitioner. In the analog era, data was expensive, so we only put measurements around the most critical variables.
Now, digitalization provides ready access to data in near real-time. This allows organizations to control processes through dashboards and alerts, which significantly helps their ability to manage mature processes.
JIM HOLMAN: When an organization reaches level five where they are in an optimization platform, they still cannot rest on their laurels. Continuous improvement does not stop at level five.
STEVE HOLIDAY: That is absolutely right. Level five is called "optimizing," which means you are never truly done.
There is a distinct difference between "continual" improvement and "continuous" improvement. Continual improvement happens in bits and pieces, while continuous improvement is an ongoing focus on how the process is performing.
Organizations that embed continuous improvement have a different DNA and mindset. Level five optimization is an ongoing attribute of those organizations.
JIM HOLMAN: Well put. If you would like to learn more about how Cherry Bekaert can help you with improving your business processes, please contact us.
HOST: Thank you for the great discussion today, Jim and Steve. As always, we would appreciate it if you would like or share this podcast. Stay tuned for more Digital Journeys.
