The primary purpose and motive of any commercial organization is to capture and grow revenues and generate as high profit margins as possible by reducing the cost of doing business. It is a fact that every dollar spent reduces the revenue and ultimately the profit margin, so it follows from there that dollars need to be spent to generate additional revenues.
In this context, what should be the characteristics of a highly mature organization? Such an organization should be able to demonstrate business value through:
Also. these frameworks do not assume a linear view of the world that customers know what they want very precisely and want it with best quality, at the cheapest cost and delivered fast. Remember your customer is a supplier to its customer and knows these are conflicting objectives and the best solution is necessarily not the best but the optimal – which is dynamic and changes as per the situation.
What this means is that process should adapt to business requirements and dynamically scale up and scale down as the need be. Of course, there will be some holy cows – processes that can never be challenged no matter what (these are the one which are directly derived from and related to the organization’s core values).
In this context, what should be the characteristics of a highly mature organization? Such an organization should be able to demonstrate business value through:
- Sustained and ever-increasing revenues from continuous product/service innovations driven on the strength of solid business processes for engineering products/services and management of engineering activities
- Optimized cost of business operations from ongoing improvements to business processes for higher effective efficiency
So do frameworks such as MBNQA, EFQM, CMMI, ISO, et al have any business value? Yes and no.
Yes, if the practices offered by the frameworks are adopted to bring in real improvements, resources are committed and utilized with complete seriousness and management is involved throughout and allows sufficient time for the returns to materialize. This can benefit in both ways – external recognition will improve chances to earn increased revenue from new customers, internal improvements will improve chances of retaining existing customers.
No, if the organization wants external recognition only for being able to attract new customers. In this case revenue growth may be experienced by adding new customers whereas at the same time revenues from existing customers may decline. Remember, existing customers will continue and give more business depending on their satisfaction with products/services actually delivered. It is also to be assumed that there is no strategic shift in their business approach such as change in business priorities where further investments on the products/services being procured is stopped or there are operational issues such as budgetary constraints.
The moot point still remains – do frameworks such as MBNQA, EFQM, CMMI, ISO, et al add business value? The answer is indeed an emphatic yes and since that is so, it means the frameworks offer practices which can make business processes both effective and efficient. There is enough empirical evidence in support of the above conclusion.
Yes, if the practices offered by the frameworks are adopted to bring in real improvements, resources are committed and utilized with complete seriousness and management is involved throughout and allows sufficient time for the returns to materialize. This can benefit in both ways – external recognition will improve chances to earn increased revenue from new customers, internal improvements will improve chances of retaining existing customers.
No, if the organization wants external recognition only for being able to attract new customers. In this case revenue growth may be experienced by adding new customers whereas at the same time revenues from existing customers may decline. Remember, existing customers will continue and give more business depending on their satisfaction with products/services actually delivered. It is also to be assumed that there is no strategic shift in their business approach such as change in business priorities where further investments on the products/services being procured is stopped or there are operational issues such as budgetary constraints.
The moot point still remains – do frameworks such as MBNQA, EFQM, CMMI, ISO, et al add business value? The answer is indeed an emphatic yes and since that is so, it means the frameworks offer practices which can make business processes both effective and efficient. There is enough empirical evidence in support of the above conclusion.
Also. these frameworks do not assume a linear view of the world that customers know what they want very precisely and want it with best quality, at the cheapest cost and delivered fast. Remember your customer is a supplier to its customer and knows these are conflicting objectives and the best solution is necessarily not the best but the optimal – which is dynamic and changes as per the situation.
What this means is that process should adapt to business requirements and dynamically scale up and scale down as the need be. Of course, there will be some holy cows – processes that can never be challenged no matter what (these are the one which are directly derived from and related to the organization’s core values).
Adopted withe above dynamism in mind, MBNQA, EFQM, CMMI, ISO, et al bring immense business value. As someone said, Judo techniques are always good but the way they get used may differ and so will the outcome. One person can use them to kill another person and end up getting imprisoned whereas another person can use them to beat another person and end up becoming the World Judo Champion!
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