Flexibility has always been perceived as a positive thing for a company to manage its business. While this might be the case, it is not always the best. Consider the consequences when each team, department, or business unit has full autonomy in setting its operating rules, designing the job descriptions, selecting the vendors, and determining its choices for systems and tools. These situations might result:
1. Customers are confused by the different policies
2. Data are entered multiples times into different systems used by various teams
3. Data integrity is questionable as each tool defines the data fields differently
4. Data reconciliation consumes strenuous manual effort in producing the monthly reports
5. Debates over performance deviations become a battle ground to validate operating processes and policies
6. Work is duplicated due to siloed departmental processes
7. Employees are frustrated as each area does the same thing differently
8. Conflicting priorities result when there is a lack of overarching guidelines
9. The wheel is reinvented every time a recurring situation happens because there is no formal process to handle it
10. Personal preferences create more work than necessary
11. Pondering over options causes delay when people feel obligated to do their due diligence
12. A new product launch requires changes to too many processes and systems
13. Unable to leverage the benefits of economies of scale
14. Vendor management is a challenge as there are way too many vendors to deal with
15. Slow to implement change for it takes too long to identify all the impacted areas
Each of the above situations leads to unnecessary cost and wasted time. It is a big issue in a fast-changing and competitive business environment. Standardization brings consistency. It helps to streamline and simplify operations.
There are three key areas to identify standardization opportunities.
1. Customer-facing activities. This is the best place to start because customers are quick to note any idiosyncrasies. It doesn’t bold well for the company’s image when the varying practices deliver inconsistent service or contradictory policies that inconvenience the customers. Identify all the customer touch points and review them for consistency.
2. Cross-departmental activities. This covers workflows that cross departmental and business unit boundaries. When work is done in silos, duplication, errors, and lack of ownership breed havoc. Identify areas that cause the most pain. Avoid jumping to the conclusion that a new system would solve the problem. Take a process-centric approach to streamline and standardize the work involved. Bear in mind that it is not helpful to systemize or automate chaos. Assess from the point-of-view of those who do the work.
3. Business rules. This includes rules for internal operations, dealing with customers and vendors. There are two aspects to consider. First, consistent rules streamline operations. Second, rules need to be applied consistently. Both help to establish standards. In reviewing the business rules, standardize them across operating areas where applicable. Then, police their deployment to ensure compliance.
Despite the need for autonomy, standardization simplifies the management effort, making it less taxing. As more technology will be harnessed to optimize business outcomes going forward, consistent processes and systems will help future transitions.
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