Business Process Audit & (Re-)Design

People are creatures of habit, and habits are more often shaped by the path of least resistance than by an explicit desire to maximise profits...

Pieter Dorhout Consulting can help you assess whether your RM & pricing processes are logical, whether their execution is consistent with your company's (profit) objectives and whether they reflect industry best practice. In our business process audit, we pay particular attention to the following aspects:

  1. Consistency across processes: the inter-dependencies between business processes is often overlooked. For example, in the face of excess demand, it makes perfect sense to increase prices, to add capacity or to do both. However, it is not possible to decide on these two decision variable in isolation, and in our audit, we will assess whether the alignment between such interdependent processes can be improved. After all, the co-ordination between supply-side and market-facing decision processes is the very essence of RM and price optimisation.
  2. Interaction and distinction between decision horizons: Many companies fail to distinguish clearly between factors that are relevant for planning decisions and those that affect tactical decisions. The classical example is the treatment of fixed costs: if you plan not to cover fixed costs, then you plan to make a loss, which is very sub-optimal. However, if you occasionally accept transactions that do not contribute (much) to coverage of fixed costs, then this can increase your ultimate total profits and therefore be optimal.
  3. Use of information: This is especially relevant in cases where some of the commercial decision-making is automated by an RM or pricing application. In this case, it is very likely that the algorithms inside this system produce all kinds of information that - if interpreted correctly - could be used to improve other, non-automated processes. For example, the marginal values from a price optimisation could very well be useful information for the department that negotiates rates with capacity providers.

This is just a small sample of the possible scope of a business process audit. We hope it makes clear that we will not spend lots of time drawing diagrams that describe your current processes, but that we focus mostly on options to make your processes more consistent with each other and your company's ultimate profit objective.

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