“Change the changeable, accept the unchangeable, and remove yourself from the unacceptable“. By Denis Waitley. Applying the same thought on the businesses today, I have classified the processes or more precisely Business processes into three categories:
- Unchangeable and
For an organizational perspective, the changeable entity could always be their business process There could be a set of business processes that a company sticks to which constitutes the unchangeable part of the business. Usually the changeable business processes when no longer serves the business could turn out to be unacceptable and should be removed from the mainstream business.
An analogy could be noticed in Geoffery Moore model mentioned in my wiki about the Core and Context Processes. A core process for an organization could stay at its core (unchangeable) or evolve (changeable) slowly to become a context process. The context processes at times could be very profitable to an organization or otherwise could be the ones that an organization should get rid of. In the later case, it falls into the categorization of unacceptable.
Area of Concern: How an organization could identify which processes falls into which category?
A possible solution could be the BCG Matrix (by Boston Consulting Group) which could help in analyzing the business and prioritizing the product line. Considering a Product to be set of ordered Business Processes, prioritization of products could be assumed as prioritization of the Business processes.
The matrix is based on two dimensions – Market Share (which is the revenue of a particular product as a percentage of overall revenue) and Market Growth (which would mean the changes in the current market segment and investments required to cope up with the changes). The thumb rule is “Higher the market share or faster the market grows, the more it is beneficial for an organization”. Now the task is to simply place all the products in one of the four quadrants of the matrix. Each quadrant of BCG Matrix illustrates the capabilities of the product as following:
BCG Portfolio Matrix from the Product Portfolio Matrix, (c) 1970, The Boston Consulting Group
Cash Cows: The set of business processes in this category are occasionally fluctuating thereby making it very near to Unchangeable. Even with minimal feeding (in terms of investment), they milk (in terms of revenues) a lot. They usually constitute the core business processes of a company.
Stars: These would be the set of business processes that requires a large investment due to market growth and they provide higher revenues too. They are usually business leaders. Once the stars are mature enough in the business, with slight maintenance of market growth, they could be turned into Cash cows. They depend heavily on the changing market trends and are therefore Changeable
Question Marks: This is where the life of a business process actually starts. Initially the processes require heavy investment to be setup in the ever-changing market. They could not generate high revenues although. At this moment, organization has three options. First, to invest more on it and try to pull them into Stars category which makes them Changeable. Secondly, outsource it to some third party. Thirdly, stop investing in them and get rid of it due to which they fall into Unacceptable category.
Dogs: They are part of slow-growing industry with low market share. Organizations must have as fewer dogs as possible. They should be treated as Unacceptable. They do not generate any substantial revenues and pulling them to any other category would require a lot of investment and effort. Therefore usually they are better to be sold off. The third option mentioned for Question Mark makes it fall under Dogs category.
Conclusion: BCG Matrix could prove out to be a handy way for Business Process Experts to broadly prioritize their business processes. Once the business processes are categorized as Changeable, Unchangeable and Unacceptable, the organizations could proceed on taking crucial decision about dealing with individual categories. Although BCG Matrix does not guarantee covering all market possibilities, it could provide a practical advantage in terms of focus on the organizational key area of interest – the Revenues.