Database Reference
In-Depth Information
functional boundaries, they have starting and ending points, and they exist at all levels within the
organization, including section, department, division, and enterprise levels. In fact, processes exist
across enterprise boundaries as well. Processes evolve and degrade in terms of their efficiency and
effectiveness.
A process itself can consist of various substeps. The substeps in a process could be
◾
Value-added steps
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Non-value-added steps
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Legal and regulatory steps (which are treated as value-added steps)
7.2.2 Selecting Business Processes for BPR
Selecting the right processes for an innovative process re-engineering effort is critical. The pro-
cesses should be selected for their high visibility, relative ease of accomplishing goals, and, at the
same time, their potential for great impact on the value determinants.
Customers will take their business to the company that can deliver the most value for their
money. Hence, the MAVs have to be charted in detail. MAV is dependent upon several factors,
such as
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The customer's prior general and particular experience base with an industry, product, and/
or service
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What competition is doing in the concerned industry, product, or service
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What effect technological limitations have on setting the upper limit
As mentioned earlier, MAVs can be characterized in terms of the CVDs; only four to six value
determinants may be necessary to profile a market segment. CVDs can be defined by obtaining
data through
1. The customer value survey
2. Leaders in noncompeting areas
3. The best-in-class performance levels
4. Internal customers
A detailed Customer Value Analysis analyzes the value gaps and helps in further refining the goals
of the process re-engineering exercise. The value gaps are as follows:
◾
Gaps that result from different value perceptions in different customer groups
◾
Gaps between what the company provides and what the customer has established as the
minimum performance level
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Gaps between what the company provides and what the competition provides
◾
Gaps between what the organization perceives as the MAV for the identified customer
groups and what the customer says are the corresponding MAVs
It must be noted that analyzing the value gaps is not a one-time exercise; neither is it confined to
the duration of a cycle of the breakthrough improvement exercise. Like the BPM exercise itself, it
is an activity that must be done on an ongoing basis.
