BPM Success: How a Travel Giant Turned Its Ship Around
Declining sales. Cost pressure. Customers who wanted change, fast. Maritz Travel's COO tells how a group travel giant facing all of these pressures revamped its business processes, and how business and IT came together to make the effort pay off.
To date, the process revamp has helped reduce Maritz’s SG&A (selling, general and administrative expenses, better known as overhead) by more than 10 percent. “This has allowed us to improve profitability while simultaneously increasing client-facing resources as a percent of our total expenses,” Phillips says. Maritz has also used these productivity gains to accelerate investment in product innovation around areas important to clients, including data management and compliance.
His keys to BPM success? For starters, ensure a tight IT and business relationship. And think big.
“I’ve observed many BPM projects that dealt with a subprocess, like recruiting candidates or billing,” he says. “We went wide. For example, we looked at how our organization delivers to clients. Then we went deep.”
If you get bogged down in subprocesses too quickly, he warns, you’ll miss your overall goals.
Maritz Travel COO Rich Philips shares keys for BPM makeovers:
1. Think big. “It’s critical that people think about the big picture,” says Phillips. Don’t start with a narrow problem like ‘Our contracts need to be written faster.’ Start with ‘How do we sell?’
2. Get business sponsorship. And get it at a high level. “It’s just imperative,” Phillips says. “You will run into bumps along the way.”
3. Don’t forget the change factor. That’s especially true if your company has a culture that praises people for solving problems in idiosyncratic ways. “Shifting to process management as a methodology for defining how a business operates involves subtle but important business shifts,” says Phillips. “People doing things uniquely may not be better. We’re now taking capacity that used to be consumed fighting fires and focusing on customer issues.”
4. Plan to communicate and communicate the plan. Stress what the process changes will mean to customers. “I really encourage business leaders to talk about how they are going to communicate the new culture…and how it’s beneficial to clients,” Phillips says.
5. Focus on the end user. IT should pay more attention to customer services than the systems involved in the BPM revamp. “Once we had a common purpose, a common strategy, we had a sense of team and kinship,” Phillips says. He advises IT execs to think through the challenges and applications for the business and align the BPM effort with that.
BPM in an ERP Environment
If Maritz’s need to change business process quickly strikes a resonant chord with you, you’re not alone. BPM has become one of the most important decisions for CIOs and their C-level peers right now, says Sharyn Leaver, VP and Research Director at Forrester Research. Now that companies have invested millions in ERP implementations, upgrades and overhauls with software vendors such as Oracle and SAP—and in many cases have built their core business processes around those products—they’ve learned that this kind of software cannot be customized easily or quickly.
