By Rebecca Langdon
There is a good reason why a high proportion of CEO’s and board members are accountants. Accountancy equips individuals with the skills to deliver results within a business, primarily because attention to the finances is always a strategic priority. Business process management (BPM) is a technique used to increase operational efficiency and performance by optimizing business process.
Within organizations processes develop over time and very often they may become overly cumbersome, inefficient, and costly. BPM seeks to review those processes and make them more efficient where possible. There is a fairly simple model which is used which is depicted as a continuous loop:
The contribution of a CPA
CPAs contribute to business process management in a number of ways:
Within the design stage the current business processes are reviewed. The analysis requires financial acumen to understand the cost of undertaking the current process. In all likelihood this will be very complex and may involve many different types of cost such as resource, cost of stock, overheads, etc. There will also be a requirement to understand the costs in the short, medium and long term. For some assets which are depreciated, a CPA will understand the basis of the depreciation and be able to model the costs appropriately. This skill set will also be required as new processes are being designed, so that the costs can be articulated.
The proposed designs will be modelled at this point so understand the potential efficiencies and effectiveness. It may also include techniques such as what-if analysis. It is likely that some of the computations will be complex, and therefore a CPA has the right competencies to assist that this stage.
Whilst the changes are implemented, it may be that the CPA takes an oversight or management role.
The way in which the new processes will be monitored will need to be designed with agreed metrics, and analytical techniques. Again a CPA would be able to take a leading role in designing the methods and parameters for monitoring.
At this stage the output and learning from the monitoring phase will be used to optimize and improve the recently implemented new business process. Once again an accountant would be well positioned to use the quantitative and qualitative output to design optimizations.
Business process management is quite a hot topic and has been hailed by some as a technique to drive widespread operational efficiencies. The basis of these efficiencies is rooted in financial terms and therefore an accountant or financial professional is a key part of any BPM team. If you are interested in pursuing a CPA qualification, take a moment to explore the course information here.