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that such enterprises will be able to respond with an effective solution.
This is customer-responsive management, which we will discuss in the sec-
tion that follows.
BPM is the process that manages and optimizes the inextricable linkage
between the positioning and the capability/capacity of an enterprise. A com-
pany cannot position the organization to meet a customer need that it cannot
fulfill without an unprofitable level of resources nor can it allocate enhanced
resources to provide a cost-effective service that no customer wants!
Positioning leads to higher levels of revenue through increasing the size of
the market, retaining the first-time customers, increasing the size of the wal-
let share, and so on. Positioning has to do with factors such as
• Understanding customer needs
• Understanding competitor initiatives
• Determining the businesses' financial needs
• Conforming with legal and regulatory requirements
• Conforming with environmental constraints
The capability/capacity has to be aligned with the positioning or else it has
to be changed to deliver the positioning. Capability/capacity has to do with
internal factors such as
• Key business processes
• Procedures and systems
• Competencies, skills, training, and education
The key is to have a perceived differentiation of being better than the compe-
tition in whatever terms the customers choose to evaluate or measure and to
deliver this at the lowest unit cost.
In practice, BPM has developed a focus on changing capability/capac-
ity in the short term to address current issues. This short-term change in
capability/capacity is usually driven by the need to
• Reduce the cycle time to process customer orders
• Improve quotation times
• Lower variable overhead costs
• Increase product range to meet an immediate competitor threat
• Rebalance resources to meet current market needs
• Reduce work-in-progress stocks
• Meet changed legislation requirements
• Introduce short-term measures to increase market share (e.g.,
increased credit limit from customers hit by recessionary trends)
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