It's About Adding Value
If you’re in business, you’ve probably heard the phrase “LifeCycle Management” used to describe different types of process management. There’s Information LifeCycle Management, Product LifeCycle Management, Incident LifeCycle Management, and on and on and on. What makes Process LifeCycle Management so important?
All too often when working with our clients, we’ve identified a lack of management perspective over the organization’s collective set of business processes. In general, we’ve noticed a lack of awareness of the relationship different processes have with one another, and how a change in one process may impact another. As a result, changes that occur from process to process are unorganized, uncoordinated, and mismanaged– causing a handful of issues from employee morale problems to opportunity costs/missed revenues.
Process LifeCycle Management provides a coordinated, controlled method for managing processes– a process, if you will, for managing processes. It encompasses process management from the process’ inception to its design, acceptance, implementation, and retirement.
At a rudimentary level, businesses are in the business of executing process for the purpose of adding value. Take a head of lettuce, for example– one you’d buy in bulk at the grocery store. Let’s say the head of lettuce costs 75 cents (its value). How is this value figured? What attributes of the lettuce make it worth 75 cents to me?
The answers are in its process lifecycle:
- The lettuce probably began as a seed that was sold to a farmer for 1 cent.
- The farmer then added water, soil, and other overhead to grow the lettuce– raising its value to, let’s say, 20 cents.
- The lettuce might then have been sold to a packaging company, which used their resources and energy to package the lettuce, raising its value to 30 cents.
- The packaged lettuce might then have been sold to a distributor for 40 cents, who might have sold and transported the lettuce to the grocery store for 60 cents.
- The grocery store then raised the price by another 15 cents to ensure its profit at the point of sale.
Each step of this process lifecycle added value to the service– in this case, the lettuce. Similarly, each step in any business cycle should add value to its final product, whether the product is an internal report, a type of customer service, or a head of lettuce. The more efficient and effective each process step is, the more value is added to the end product and when executed efficiently, the more profit.
Processes are how businesses operate; a business’ efficiency is determined by the efficiency of its processes. The more coordinated process management is, the better the business runs, and the more value is added to the end product. Money is made and lost at the process level. A primary focus of the enterprise, therefore, should be on process management to ensure the efficiency and profitability of the business.
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Image courtesy of Patrick Lane Photography.