Addressing the Complexities of Global Process Harmonization

Addressing the Complexities of Global Process Harmonization

Jude Fernandez, Jyoti Bhat
DOI: 10.4018/978-1-60566-669-3.ch015
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Process harmonization is a complex initiative carried out by large companies seeking to standardize the process variants being executed by different business units across several countries or regions. Motivations for this exercise include cost pressures, mergers and acquisitions, customer satisfaction, need for agile and flexible processes, risk reduction in outsourcing processes etc. The complexity of this exercise is inherent as it involves multiple regions with special needs and characteristics, existing process and IT systems evolved over time, organizational dynamics around different business groups, etc. While a literature survey reveals quite a few cases of process harmonization, there are not many descriptions or research on the best approaches or methodologies to be used. In this chapter, we first define and examine the drivers of process harmonization. Subsequently, the challenges and constraints associated with such initiatives are identified, followed by some example cases. Further, we analyze a case study in detail to understand the practices followed. Based on these analyses, we propose a methodology to execute process harmonization initiatives.
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Large global corporations composed of different business groups across multiple countries and regions have grown over a period of time, either organically or inorganically. It is common to find that different business units have evolved their own business processes, policies and practices with IT systems supporting them. Such heterogeneous, complex, non-standard business processes make it difficult for the organization to meet the flexibility and agility required to remain competitive in the global economy. Multiple business challenges and constraints compel enterprises to harmonize their process across different regions and business groups. The drivers for process harmonization are varied and include scenarios like mergers and acquisitions, providing uniform customer experience, developing agile and flexible processes, reducing risks in outsourcing of processes, organization restructuring, optimizing cost of IT operations etc.

While an increasing need for process harmonization is felt by enterprises, the focus on developing relevant approaches and methods is at a nascent stage. It is still in the domain of management consultants with the individual consultant approaching the problem based on previous experience and expertise. The term ‘Process Harmonization’ itself, is not clearly defined or understood by all. Terms like process improvement and process standardization are so closely related to process harmonization that there is a need to clarify these terminologies to ensure a uniform understanding.

Key Terms in this Chapter

Business Process Management: A continuous approach to design, improve and deploy processes that are aligned to organizational objectives using appropriate IT systems that can quickly adapt to process changes.

Process Variants: Different shades of the same process that are being executed in an organization by different business units / regions.

Process Harmonization: Process of designing and implementing business process standardization across different regions / units so as to facilitate achievement of the targeted business benefits arising out of standardization whilst ensuring a harmonious acceptance of the new processes by the different stakeholders.

As-Is Process: A definition (model) of the process (including the sub-processes, workflows and activities) as it happens currently in the organization.

Process Standardization: Used interchangeably with the term Process Harmonization.

To-Be Process: The definition (model) of the future state process which has been designed to achieve the targeted process performance and requirements (current and future) of the organization, thereby also addressing the issues faced with the current process.

Process Analysis: The systematic examination of the As-Is process focused on identifying and developing ideas for improvement of the process.

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