The primary goal of a business enterprise after its inception, be it in the service or manufacturing industry, is survival. Once the enterprise is confident that they are past the first milestone, the management accelerates the pedal and strives in numerous aspects to attain what can be summarized as ‘increase in profitability’. These aspects may be in the form of setting up of robust risk management systems, implementation of best practices in the industry, formulation of processes in a manner so as to minimize costs, designing of an exhaustive MIS that can aid to garner information at the click of a button, etc. These are just bits of the tremendous unharnessed opportunities that aid the organization in becoming a truly sustainable enterprise. Establishing of these pillars is essential if an entity visualizes of being “the whale in the pond”. Although the management might be privy these opportunities and have a clear intent of using them, given their scope of work, it would be unjust to say that they literally implement the changes all by themselves. The management’s scope of work brings a whole set of problem statements along with it.
Also, the MSME sector in India is seeing exponential growth in recent times. Some of these enterprises are either led by professional individuals or are traditional family run businesses. Those who belong to the former category, have a clear vision of where they are and where they want to be. These individuals, who are sitting on the helm of their business, clearly understand that they have to regularly upgrade their arsenal in order to be in the race. They are constantly on the lookout for increasing their operational functionality. The latter ones, the family run businesses, are slowly coming to terms with the fact that with the increased scale of operations, it is empirical that they adopt the professional modus operandi. It is no longer possible to continue running their business in a traditional manner.
It is then, that the concept of Business Process Improvements [BPI] and Management Consultants come into play.
BPI can range from either undertaking full scale projects, wherein all major facets of the enterprise get a facelift in the manner they perform their tasks, resources they deploy, the infrastructure they use or a targeted approach towards a particular problem child of the organization.
The biggest room in the world is the room for improvement – Helmut Schmidt
The benefit derived from establishing SOPs, adopting scientific planning processes, etc are unimaginable in magnitude. While undertaking a BPI assignment critical evaluation of the various resources of a client is important. Resources of any organization can be broadly classified into the following heads :
People – Considered as drivers of all the other resources of the firm, People are incredibly important for the smallest of the organization. It is only when the company adopts a stakeholder management approach , that you can get the workforce of the company on-board for adding value to the Company. Critical analysis of this resource might shed light on opportunities for training the employees to improvise their skillset, centralizing / decentralizing critical operations, etc.
Data – The data that has been fed in a system at the very ground level ultimately gets transformed into that “one piece of paper” on the basis of which the management takes business decisions. It thus becomes imperative to validate whether the master data is accurate and reliable. For instance, improper tagging of data is more risky then no tagging of data. It is important to filter the data and vet the modes through which it is posted into systems.
Technology – Timely upgradation of ERP softwares, the production machines that are used, degree of integration among different systems, eliminating the use of manual processes are among the checkboxes that one needs to tick for making improvements in the organization.
The first rule of technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency – Bill Gates
Well defined and detailed processes, duplication free work, low turnover cycles, setting up of measuring rods, review mechanisms are all checkboxes that need to be ticked for increasing the operational efficiency and effectiveness
With a team of dedicated professionals, the first thing for improvising the functioning capabilities of a client , is to grasp an in-depth knowledge of current mode of operations of the client. The aim is to identify the problem statement and then target it. This is followed by preparing milestones in consultation with the management and all the stakeholders. Post that the “To-Be” phase is initiated wherein the Consultant recommends the changes that are required to be implemented. This is in consultation with the operational and managerial level of the organization. Further, a team of dedicated personnel will be on field, carrying out the execution of the recommended solutions to completely eliminate the problem statement. As they say, easier said than done, identifying what is wrong and correcting it are two different aspects. Management consultants provide their services on the lines of the latter. At times it may so happen that some of the recommendations that the he / she suggest, might have even crossed the minds of the Management itself. The value addition that a Consultant intends to provide should not be in the form of mere recommendations, but rather actually implementing them.
They should navigate through the waters of change resistance in the organization, analysing in detail, the risk exposure of the firm, mitigation of these risks, ensuring that the internal team of the client is trained whenever new systems are implemented. Making sure that the change has a positive impact on the firm and delivers exactly what the management requires. After a period of hand holding, the consultant shall slowly withdraw from the field and allow the internal teams to function alongside the new system on their own.
With the level of expertise that a Chartered Accountant has, and the ability to comprehend with figures and quickly analyse where things are not in order, a Chartered Accountant is much better placed to help the client make a positive difference in the company. The field of BPI had rather been an unchartered territory until recently. More and more Chartered Accountants are evaluating the option of providing value driven services to their clients through the advisory role of a consultant, rather than just being number crunchers.