Internal processes perspective
In this perspective managers identify internal processes and activities which are key to implementation of objectives that are formulated in client and finance perspectives. Managers specify goals and indicators in this perspective after formulating them first in the other two perspectives. It is recommended to assess full internal value chain ranging from innovation processes through operational processes, up to the after-sales service processes.
Trends
Nowadays enterprises complement financial indicators with the measures relating to the quality, performance, and speed of sale and the duration of the operating cycle. The latest trends are encouraging for measuring the efficiency of processes such as drafting contracts, supplies, planning and control. Enterprise must be better than competitors for all key business processes.
In this perspective goal and measures are derived from a strategy focused on fulfilling the expectations of shareholders and customers. Every business has its own unique process chain of value creation for the customer which determine its financial results. However, there is a general value chain model, which companies can customize to suit own needs.
Elements of model
It includes 3 major groups of processes:
- innovative processes - managers examine the emerging and hidden customer needs, and then creates a product or service that cater to these needs
- operational processes - rely on the manufacture of the product (services) and providing it to the customer
- After-sales service processes
Innovative processes have two main stages. In the first stage market research is conducted in order to determine the size of the market, the needs of buyers and price ranges for products and services. The second stage is to create a product (service). Operational processes start with the order from the customer and ends with the delivery of the product or service.
After-sales service includes guarantees and warranty repair, repair of faults and receiving payment. After-sales processes let managers analyze opinions and needs of customer after delivery of the product or service.
Examples of Internal processes perspective
- Development of customer-centric services and products : In this perspective, managers focus on the development of services and products that meet customer needs and expectations. This includes understanding customer insights, developing customer feedback channels, and creating innovative products that meet customer needs.
- Optimizing operational processes : Managers focus on streamlining and improving operational processes to ensure that products and services are delivered efficiently and effectively. This includes identifying and analyzing bottlenecks, improving resource utilization, and developing automation solutions.
- Developing customer relationship management (CRM) system: Managers focus on developing and implementing a CRM system that allows for better customer engagement and retention. This includes identifying customer segments, creating customer profiles, and developing customer loyalty programs.
- Improving after-sales service: Managers focus on improving the after-sales service experience for customers. This includes developing customer service policies, providing customer service training, and developing customer satisfaction surveys.
- Developing customer feedback channels: Managers focus on developing customer feedback channels to better understand customer needs and expectations. This includes creating customer surveys, analyzing customer feedback, and identifying areas of improvement.
Advantages of Internal processes perspective
The advantages of the Internal processes perspective include:
- Identifying and understanding the internal processes and activities that are necessary to implement objectives and achieve desired outcomes. This allows managers to ensure that the necessary resources are allocated and that the necessary steps are taken to ensure success.
- Establishing goals and indicators that are tailored to the specific objectives and requirements of the organization. This allows managers to create a more effective plan for achieving desired outcomes and to track progress throughout the implementation process.
- Understanding the full internal value chain from innovation processes through operational processes and up to the after-sales service processes. This allows managers to have a better appreciation of all the elements involved in achieving desired outcomes and to ensure that all necessary steps are taken for success.
Limitations of Internal processes perspective
The Internal processes perspective contains several limitations:
- It does not consider external factors that can affect the success of the organization, such as competitors, the economic environment, or other environmental factors.
- It does not consider customer needs and preferences which can affect the success of the organization.
- It does not take into account the resources required to implement the strategies and objectives set in this perspective.
- It does not consider the potential risks associated with the implementation of strategies and objectives.
- It does not consider the interdependency between different processes and activities within the organization.
- It may not provide comprehensive and accurate information on the performance of different processes and activities within the organization.
In addition to strategically managing internal processes, there are several other approaches related to this perspective. These approaches include:
- Process reengineering: This involves the redesigning of existing processes to improve efficiency and effectiveness. It involves the identification of key processes, the redesign of these processes to make them more efficient, and the implementation of new processes to improve performance.
- Benchmarking: This involves comparing the efficiency and effectiveness of internal processes to that of other organizations. Benchmarking helps to identify areas for improvement and helps to identify best practices from other organizations.
- Quality management systems: This involves the implementation of standards, processes, and procedures to ensure the quality of products and services. Quality management systems help to ensure that products and services meet customer expectations and are of the highest quality.
- Data and analytics: This involves the collection, analysis, and use of data to improve performance. Data and analytics can be used to identify areas for improvement, and to measure and monitor the effectiveness of internal processes.
In summary, there are several approaches related to the Internal processes perspective, including process reengineering, benchmarking, quality management systems, and data and analytics. All of these approaches can help to improve performance, increase efficiency, and ensure the quality of products and services.
| Internal processes perspective — recommended articles |
| Competitive benchmarking — Operational control — Balanced scorecard perspectives — Fit gap analysis — Criteria of market strategy evaluation — Strategic management tools — Benchmarking - Sources of information — Activity-based management — Business needs |
References
- Jemison, D. B., & Sitkin, S. B. (1986). Corporate acquisitions: A process perspective. Academy of Management Review, 11(1), 145-163.
Author: Małgorzata Dróżdż
