Business process re-engineering (BPR) has had a bad reputation ever since I can remember. Maybe it's the "Stuckey" character in Pretty Woman who we most think typifies the type of Wall Street numpty who specialised in asset stripping and ladies of the night. However, BPR can be something other than heartless, and by not engaging in the latest tech, automation, and user experience, you are missing out on having tricks up your sleeve.
Good BPR from a team of experienced practitioners is very expensive. Most things that are worthwhile in life are expensive, but life would just not be the same without them. As with any piece of the plant (like a fork truck), which is how I reckon you should think when buying BPM, the question should not be "how much does it cost?" but "how much does it save?" So long as the savings are more significant than the cost, it's not expensive. We call things like that "Good value", especially in the long run.
I will anonymise these few anecdotes, but they are well worth your time in what I mean by good value.
This company had an issue with a business process they struggled to operate. It took 6 people to complete this task, and 6 good people were hard to find as the work was stressful and burned through people at an alarming rate. In addition, this poor business process was causing poor customer experience as costly mistakes were often made that seriously inhibited company growth (a common theme). Not to mention the cost of working hours. Our client's initial statement was that one part of the process could not be systematised; it was too complex.
Granted, it was difficult, but we got there with determination and cooperation. A significant amount of effort was spent systematising the whole process. It was around low 6 figures, so you get an idea of scale. However, let's jump into some math for context.
Cost of Dev: ~£150,000
Cost of staff for job: ~£150,000 min per annum
Cost of staff after software engineering: ~£50,000 per annum (£100,000 per annum saving)
Payback period: 1 – 1.5 Years. Conservative estimate.
Not to mention the savings in HR from the massively reduced staff turnover.
The following year, an acquisition was made that doubled throughput. No additional staff were required to complete that part of the process, such as the headroom in the software process.
Finance is my original background, and I am telling these stories because they are the rule, not the exception.
This customer had a process that took a lot of work to plan. They lost jobs because they needed help to plan the work and couldn't guarantee delivery dates. A significant amount of dev was undertaken to systematise the work. While doing it, we also set in motion some very accurate material costing, so we knew exactly what it cost to do particular pieces. Costing aided in predicting work completion and being more aggressive in some quotes where we had been losing out to make sure they were still profitable.
Due to our efforts in BRP, the project was a huge success. It was delivered on every aspect of the brief, such as accurate delivery schedules, increased throughput, significant turnover increases, better quoting and job wins due to better pricing info, and the ability to take on the odd contribution style pricing job. It was worth every penny of the low 6–figure asking price.
However, 3 months into the project, we received a complaint. The pricing system was throwing some anomalies which "could not be correct". Long story short, they were correct. Around 30% of turnover was sold at 0 margins. Due to the complexity of the calculation, it was difficult to ascertain manually. Math, being a computer's strong suit, made those numbers fall out quickly, and at the first opportunity, the client increased prices with the customers in question and managed to keep them.
Cost of Dev: ~£150,000
Payback Period: < 6 months, mainly due to fixing the pricing errors of the past.
I could go on, and in another blog, I will. However, Nitec has had at least 2 internally facing developers for as long as I can remember because we believe in the power of software to improve and revolutionise companies and systems. I know that the software development-related content is usually Mark's department, but I thought this topic was worth writing about.
Nitec sells dev resources for £3,300 + vat a week. This may sound expensive, but when broken down, it really is a bargain. Moreover, what it brings in terms of organisation, source control and a complete approach to IT across many disciplines, not to mention decades of experience in reorganising other businesses and dealing with boards of directors across the whole economy, is hard to overvalue.
Some, if not many, will think, "I could hire a software developer myself for that money, and they would work for the whole month."
First of all, you probably can't. For example, a developer won't want to work for you in a department of 1. Some large customers can do this well, but it's rare.
Second, you can't for that price. When you add in all the taxes, national insurance and pension, it will cost more. I could write another 5 blogs on the dangers of hiring internal developers. Actually, I am gagging to write 5 blogs of stories that would make your teeth curl, but I'll save you the boredom for now and say, for most, it will cost more – way more.
Third, yes, they'll be working for you every day, but who knows what they are doing? They would need effective line management from a software dev perspective.
Consider how a team like Nitec can help you. That £3,300 a month can drop as low as ~£2,000 in monthly maintenance fees. With this pricing, you get 3 days a month to tweak, improve and maintain your new system, and you have a team of folk on staff to direct and optimise your business every month for the price of probably one machine operative.
Finally, we have been doing this long enough that many of the original businesses we worked for have been sold. In every case I can recall, the IP developed through this method has either been a deal breaker if not included or the very reason they have been sought out for purchase in the first place. That is the power of software.
The question isn't, "can you afford it?". Instead, it's, "can you afford not to engage?".