Ekaterina: Business processes optimization is suitable for any company. It can be a company of 10 or 10 thousand people improving business processes. It is important what goals the company sets, and what is meant by optimization. There should be no situation where we optimize just to optimize. Or when it has been decided to improve something, but no one understands what exactly. For example, when a director said so or it seems like there is a need because competitors are optimizing. Generally, optimization is related to the need for changes in internal processes. It can be as a result of new management, expansion and rapid growth, new projects or a need for process automatization. It is possible for external environment to change significantly. Accordingly, we need to change the model of the company or individual business processes/functional blocks. It also happens that there is a need to optimize something in terms of business processes with a specific task to reduce the number of personnel or monetary costs.

Ekaterina: Indeed, it’s the matter of terminology. Usually, reengineering refers to larger-scale changes. Reengineering involves quite serious changes in business processes that allow for effective actions, which may lead to significant increases in profits, reduction of costs by 20-30% or serious dismissal. Or initially the processes in the company were built centrally, and later on a decentralized model will be employed or there is a need for processes automatization. As for optimization, these are usually changes that do not concern a radical restructuring of the entire process, but are aimed at improving individual elements or steps. Such changes lead to a less significant effect in terms of results compared to reengineering. Our Сlients take these terms differently. For example, in one case, reengineering meant any changes in business processes. Other Сlients clearly distinguished reengineering and optimization, where reengineering for them was the same as a revolution, which happens either for the whole business or for particular functions.

Ekaterina: There are two options — intensive and organic. Organic is when it does not matter whether optimization or reengineering of business processes is done using internal resources or an external consultant. It involves training employees and preparing them for business process reengineering. What should the preparation consist of? First, the company should set a target: we are launching a new program, an optimization or reengineering project. The procedure involves certain steps. This is necessary so that employees are ready for changes and their potential job on additional tasks. Often there is a big problem when employees are not ready to devote their time to additional tasks related to business processes optimization. Staff at different levels need to be brought up to date with the company's plans. It often happens that employees at different levels are unaware of what is happening in the company, which slows down a process or a project. Plus, there may be training on process management as such. What is the concept of a process? How to move from conventional functional management to process management? What terms can be used? There are approaches to describing these processes, determining inefficiency points, setting key performance indicators (KPIs). It helps to improve communication and speak the same "project" language. Additionally, intensive courses with case studies can be conducted and potential innovation leaders can be identified. It is absolutely necessary that the initiative for optimization or reengineering comes from the company's management and is supported by them in every possible way, especially if it’s large-scale. It is also advisable to introduce financial incentives for employees involved in the project, as they are involved in work in addition to their main.

Ekaterina: It would be reasonable to start off with setting goals. It may be cost reduction, efficiency maximization, workforce optimization, increasing motivation or change work principles. There can be quite a lot of goals, both financial and non-financial. Therefore, it is worth determining what we are striving for. After we have defined the goals we can move on to setting targets. Then a period of time is determined to implement a project and which operating and managerial limitations there are. For a large company an example could be a decision whether they implement a project for a corporate center or for selected subsidiaries with subsequent replication to the rest. Plus functional limitations — whether all the processes are being renovated or only selected ones. This may involve financial function, procurement function, main production or one of the listed processes. Accordingly, we determine the deadlines and the possible amount of work at each stage thoroughly. That is, first comes the organizational and preparatory stages, then the diagnosis of existing processes takes place, the identification of points of inefficiency, the development of targeted business processes with the participation of the Client's team or consultants involved. From the planning point of view, it is important to determine Client's resources that will participate in the project — how many people participate, what are their responsibilities and positions. To do this, a Project Charter can be formed. Klim: The teams that will be involved in the business process reengineering project need to focus on a small number of processes (three to five) in agreement with a Customer. These can be not only the main business processes that have the highest optimization potential, but also intermediary. For example, if a quick effect is needed, processes such as optimized mailing can give a very good result in the short term. For example, for the State Corporation "Deposit Insurance Agency" within three months, the savings amounted to 60 million rubles. by switching to an alternative service for sending letters and correspondence, funded by the State. For example, for the government corporation "Deposit Insurance Agency" within three months, the savings amounted to 60 million rubles by switching to an alternative service for sending letters and correspondence, funded by the government. On one hand, focusing on a small number of understandable business processes will allow management to make sure that reengineering brings results. Process management allows to clearly see problem areas and quickly move to the target business process, eliminating inefficiencies. On the other hand, the methodology of process management can be tested on more understandable business processes. After all, the transition to process management completely changes the management style.

Klim: Interesting question. Business process reengineering projects are somewhat specific in terms of the organization of consultant’s time. Such a project involves the constant presence of a consultant in the Client’s business. This may include continuous interaction with all levels of the Client's management, i.e. interviews, meetings and workshops. Consultants should also have access to business’s infrastructure to possess the necessary data. So for the first three to six months of a project a consultant spends most of his working day conducting three or four interviews. They communicate with Client’s top manager, middle manager and line staff to form a map of all the company’s business processes and figure the main issues, as well as to determine the current prioritized processes to be reengineered. In the remaining time, a consultant records the main results after the interviews and works on analytics and the development of hypotheses and recommendations.

Ekaterina: Problems are quite often to arise. They can vary depending on the project. Ideally, problems can be described in the Project Charter as potential risks. Clearly, this does not prevent the emergence of a problem in any way, but at least you and your Client will have an understanding of what can and should be done with this risk. The most frequent and regular problem is the long time for approval of certain materials or the divergence of the positions of the employees among themselves or with a consultant. In this case, it is advisable to use an escalation mechanism. It means gradually raising the level of resolving the issue up to the general director of the company. Another common problem is the failure of the deadlines for the provision of materials from the Client. For example, it might take a month to provide materials instead of a week. It can also be the insufficiency of the materials provided, which are needed for subsequent analysis or the formation of hypotheses. In this case, it is envisaged to extend the project duration, or to continue work taking into account the absence of these materials. It has a significant negative impact on the project, when one of the stages takes longer than expected. As a result, the rest of the stages have to be rushed. There can also be problems associated with organizational changes on the Client’s side. For example, changes in management of the company or heads of structural divisions. This is not a rare occasion, especially when it is a long project. One of the main threats to any project is when the Client changes to someone who is not willing to continue the project. Then the situation may even turn to early completion. In general, it is necessary to keep the Client's management informed about the progress of the project and interest should be maintained, so that in the event of a change of one manager, someone could become his successor to lead this project. Also, a change in the amount of work may be a problem. Initially, it can be agreed with the Client that the functional and organizational changes include certain things and then a decision is made to increase the amount of work.

Ekaterina: I cannot say there is a clear specificity of optimizing the business processes of manufacturing companies and financial structures. They are just completely different business processes, especially the “basic processes”. That is, in financial structures these will be processes related to the provision of financing, lending, payables, etc. In manufacturing companies the main processes are the actual production processes, sales, logistics, delivery and so on. All the intermediary processes of production and financial companies remain the same. Often the same performance indicators are used for them. For example, for an HR function, criteria such as the number of employees per HR unit specialist are used. This is a fairly universal parameter that is looked at regardless of the industry. In terms of principles and approaches to optimization, there is no significant difference. The same change tools and methods of work organization are used. There is a bigger difference between projects that are implemented for private and public sectors. The main difference is that in private companies people are more enthusiastic about changes and they have more opportunities to make them happen. In the public sector (Ministries, Departments and State Corporations) the structures are rather strictly regulated, they operate within the framework of a large number of legislative acts. Thus, the possibly necessary changes are impossible to implement due to the fact that it would require adjustments in legislative regulations. Often companies do not have the authority and the legislative initiative to carry out these changes, so they are forced to lobby for changes in other structures. This might slow down the process up to several years. And after years the suggested initiatives appear to be irrelevant.

Ekaterina: It is important to take into account the market dynamics in the industry in which the company operates. Otherwise issues with the market and the wants of the Client may arise when implementing changes. The main expected tendencies for business optimization are maximizing automatization, application of software for modeling business processes, including simulation modeling for calculating labor costs and the cost of business processes. We cannot just describe some task by a flowchart, we also have to imagine how much it costs and what it consists of. It is useful to justify changes in terms of finances — what is the monetary benefit of the change? Various conferences related to the optimization of business processes can be called a trend. There are conferences determining the best companies providing such services — who best describes the processes, who was best at managing their project or achieved the best result.

Klim: The main result is the transition of the organization from a functional management style to a process or project management style. To be precise, all the projects for the implementation of targeted business processes that were defended at the Committee are launched; the work in project teams is organized; the key milestones that were outlined by the consultants are achieved; the roadmap activities are carried out on time; the Client’s team is motivated to work. A consultant can be said to complete their task when the management style permanently changes from functional to process and the work is organized according to the regulatory documents developed by consultants. Consultants present the results achieved by reengineering to the Management Committee. This includes the money saved, improvements in quality, workload reduction and others.