When performing this exercise, it is important to look forward as the processes that defined success in the past may not be the same processes that will ensure your business’s future. They are essential to achieving your organization’s strategic objectives. Critical processes are those that will make or break your business in the foreseeable future. A business transaction traveling such a route loses momentum and impact before it finally reaches its destination: a paying customer.įortunately, there are steps you can take to prevent the fragmentation of your business. As the degree of misalignment increases, so too does the “leakage” of value. Items that are high priority in one workgroup’s queue are shuffled to the bottom of the pile as organizational barriers are crossed. It breeds from a lack of alignment on priorities and is aggravated by functionally-focused metrics. This type of fragmentation is less obvious than physical fragmentation but is often far more damaging. Finally, in addition to being delayed or misunderstood, there is also the possibility that the transaction will simply be lost. Such delays result in time in which no value is being added. Potentially more serious, however, is the degradation of information associated with transactions as they travel between functions. One consequence of separation is the time it takes a transaction to move from one group to the next. This is the unavoidable result of actual separation of functions. Without process metrics and management systems, your silos will obscure this essential connection and fragmentation will increase. In the long run, all other considerations are subordinate. Customers, in turn, are your direct connection to revenue. Processes are your direct connection to customers. While there are valid reasons to structure reporting relationships on principles other than workflows, process should definitely be the underlying organizing principle for the operations for any business. These silos are reinforced by functionally-oriented metrics that have no discernable connection to the performance of the organization’s processes. Today, most organizations still concentrate their power in vertical units. There are a number of variables that contribute to this problem of fragmentation. Core business transactions are disintegrated and re-integrated numerous times on their way to the customer. Processes in a fragmented organization are like a convoluted system of poorly-joined plumbing, with pipes that leak time, money and customer value. The potential for resistance increases and the speed of implementing improvements declines. Devoid of an integrated process management framework, workflow value deteriorates. Each handoff represents an opportunity to introduce error, delay and added cost. Workflows become a complex series of handoffs between functions, jobs and information systems. Each handoff represents an opportunity to introduce error, delay and added cost.īusiness fragmentation occurs when critical processes aren’t managed as an integrated system. What causes businesses to become fragmented?īusiness fragmentation occurs when critical processes aren’t managed as an integrated system. In extreme cases, the loss of value is deadly and businesses go extinct. When organizations become fragmented, it requires more work to deliver value to the customer and the ability of the organization to adapt to environmental changes is diminished.
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