Process controlling as a basis for lasting process excellence

We held a mini-interview with Mr. Markus Brenner, Principal and Head of Process and Enterprise Automation, who will give a lecture on "Process controlling as a basis for lasting process excellence" at:

14. KONTROLING KONFERENCIJA: Procesni kontroling, 26.05.2023.

Process controlling as a basis for lasting process excellence

1. What do you mean by process excellence?

The great earnings potential of a company lies in its ability to manage processes. The winner is not whoever has the best products and most attractive customers today, but the company whose processes are best suited to developing the right products for tomorrow, producing them or having them produced efficiently in line with customer requirements, and optimally addressing and supporting its target customers. Companies should therefore focus on excellence in processes.

2. Why process excellence is considered as a strategic success factor?

Process-related approaches in various forms have a long tradition in companies. Many companies have modeled process representations, which were created during the introduction of ERP systems, which are used for quality management, or which are provided as a communication tool for employees. Process-related approaches are generally chosen as part of optimization and efficiency enhancement programs. Some companies have also extended the organizational structure to include a process view and appointed process owners. The use cases for process approaches in practice are very diverse. However, it can also be seen that in most companies a permanent focus on processes and continuous process controlling have not yet been on the agenda of top management.

In practice, however, a trend can be observed. For an increasing number of companies, the process focus is becoming a strategic success factor and is accordingly the focus of decision-makers. In most cases, this is triggered by the automation and digitization of the corporate world. The implementation of automation and digitization initiatives usually requires a consideration of (End-to-End) processes and their standardization. Both in the case of smaller automations using Robotics Process Automation (RPA), the automation of service units, and in the case of comprehensive digitization programs at the customer interface, processes are the starting point and focus of activities. Process orientation is also regarded as a partial aspect of modern digitization approaches for the manufacturing industry, such as Industry 4.0. A focused consideration of processes is recommended for the introduction of SAP S/4 HANA, too.

3. How does process controlling work in the practice?

In many modern controlling methods - such as target costing, balanced scorecard and, in particular, activity-based costing - the process view is an essential component. Despite this high significance, the process focus has so far played a rather subordinate role in controlling activities in many companies.

There are several reasons for this. On the one hand, for many controlling units, the focus is on financially oriented planning and control, which primarily relate to organizational units (business units, cost centers) or sales structures (product, product group, customer, customer group). There is often little room for dealing with processes that run horizontally to the organizational units.  On the other hand, the application of methods with a process focus is often not satisfactory. Without established process controlling, companies face fundamental difficulties in implementing effective process orientation and effective process management. While in the past the process view had rather a "nice-to-have" status, the new requirements of digitization described above require the realization of comprehensive process controlling for all companies. At the same time, digitization opens up new possibilities, such as the systemic provision of process-related information by means of process mining.

Process controlling should comprehensively cover the process view. The starting point for an appropriate consideration of processes in companies is their representation in strategic planning. One focus is then performance measurement. In the sense of the classic controlling control loop "Plan-Do-Check-Act", information about the execution of the process is determined and countermeasures are initiated. In addition to planning and control as the core tasks of process controlling, the mapping of process goals in the incentive system is of great importance. In addition to reporting ("transparency of process performance"), the aim is to ensure that the high importance of processes is also reflected in the actions of individual employees. Another supporting role is the mapping of the process view in the organization and the design of administrative controls like governance structures and policies. Finally, the creation of a process culture is an essential task in establishing process controlling. 

4. Who according to your opinion should be in charge of process controlling in the company?

Despite its great importance, controlling units in many companies have not yet focused on processes. Process controlling is carried out only marginally, if at all. Instead, process-related controlling approaches are performed by other organizational units. These are often organizational departments or specialized process management departments that implement at least some elements of process controlling.

However, this is no longer sufficient for a "strategic" design of process controlling. For processes to come into the focus of controlling and onto the agenda of top management, it is imperative that controlling units are involved. In this context, the controlling unit will specify the appropriate approaches together with other units for which processes are partly the core of their activities (e.g., a process management or operations unit). In particular, the "supporting elements of process controlling" are usually the core expertise of units specializing in processes. In this case, controlling will perform a "brace function".

If you want to learn more about the "Process controlling as a basis for lasting process excellence", join us at: 

14. KONTROLING KONFERENCIJA: Procesni kontroling, 26.05.2023.