How Operational, Capability and Process Assessments Can Fix Your Vexing Business Problems

Explore how operational and capability assessments, along with process assessments, can identify and resolve your complex business challenges.

Here’s a hypothetical scenario for you, one that we often see, in real life, at Centric Consulting.

I’m a C-level executive with a large company, in an industry with global competitors — and I’ve got issues. We have too many unstandardized, manual processes that can’t handle variable workloads. That’s led to a lack of visibility in our operations, which resulted in crucial steps and data getting lost. All this has caused key department bottlenecks that severely affect throughput, and our customer satisfaction scores are dropping like a rock.

So, where do you start? All your operations involve business processes, and they’ve all got to work reliably and efficiently for the business to succeed.

But your operations are more than just your processes. All of those processes must work together, like a smoothly running machine, in support of your business model and goals. That way, you’re profitable, your customers are satisfied, your staffers are happy and motivated to do their best work, and you’re coming up with the innovations that will keep you ahead of the competitive curve.

Ensuring that the entire organization — including its processes — is running smoothly is the purpose of an operational and capability assessment.

A process assessment makes sure any individual process is working the way it should.

While the two are separate, they’re also related — actually, they complement each other. In this article, we’ll define both types of assessments, why you need them, and how to get them started.

Let’s take a big-picture view of both assessment types and why they work together. Then, we’ll look at each assessment closer so you can know when either of them is right for you.

Operational Assessment vs. Process Assessment: What’s the Difference?

The operational and capability assessment evaluates your entire organization’s skills, resources and processes to see if they’re meeting your basic business goals. It looks at all those factors to see how they’re helping or hurting the way your technology and your workforce are performing.

Then it recommends how you can be more efficient, how you can better deploy your resources, and if you should take on new capabilities or functions. The assessment’s goal is making the whole business work in sync to meet its strategic goals instead of having your departments or programs working at cross-purposes. For example, the assessment could determine how well the organization manages supply chains or develops new products.

On the other hand, a process assessment tells you how effective and efficient your specific processes or workflows are, how well or poorly they work, and how they can be improved through approaches such as automation or redesign. A good example is assessing how efficient your customer order fulfillment process is.

Despite their differences, these two assessments are synergistic. Frequently, one assessment will point the way to the other. Here’s what we mean.

Frequently, we’ll get a client at Centric that comes to us with across-the-enterprise problems. They need our help to figure out how to tackle them.

While they won’t want to shoulder the expense of doing process assessments for the whole business, they will want an operational and capability assessment that can help them prioritize the processes that need attention first. Then, they might pick out one of those areas to do a process assessment on a pilot basis, so they can see how it’s done.

Often, we’ll train people to become a business transformation or continuous improvement team so they can handle the process assessments across the board over time. Usually, it’s this same group of people that would do both types of assessments — operational, capability and process.

The two assessments do share certain characteristics.

What Do Operational Assessment and Process Assessment Have in Common?

Operational and capability assessments and process assessments have three parts:

• Defining the assessment parameters and the appropriate level of the current state
• Assessing the process or enterprise (using benchmark data where possible) to define a future state
• Delivering the roadmap, business case, and implementation plan to achieve the desired future state

Inevitably, you will identify “fast path” (or “quick hit”) improvements that you can immediately address to begin delivering incremental business value.

In each case, you can measure the assessment’s value through key performance indicators (KPI) that evaluate the efficiency and effectiveness of operations or processes. The most critical KPI categories are:

• Production efficiency. These values include:
  • Cycle time: Time to complete one unit of production
  • Throughput: Total output over a specific period
  • Overall equipment effectiveness (OEE): The percentage of time a machine is used productively
  • Capability use: How much potential capacity in a production facility actually is being used
• Quality control. Two things apply here:
  • Defect rate: The percentage of defective products
  • First pass yield (FPY): The percentage of products passing quality checks without rework
• Delivery performance. This includes:
  • On-time delivery rate: Percentage of orders delivered on time
  • Lead time: Total time it takes to fulfill a customer’s order
• Inventory management. This involves the inventory turnover rate (how quickly inventory is sold and replaced).
• Customer satisfaction. The two scores that count here are:
  • Customer satisfaction score (CSAT): A measure of how happy a customer is with a product or services
  • Net promoter score (NPS): An indicator of customer loyalty and willingness to recommend your company

Indeed, you can tell that your assessment has improved operations if you can see a quantifiable positive shift in these KPIs after you install changes inspired by the assessment findings.

Among other things, you can determine if you have eliminated or mitigated delays, inefficiencies, or quality issues from any bottlenecks your assessment identified. If you established baseline measurement and tracking before making any changes, you can compare the baseline against post-implementation data to measure the impact of improvements.

If you involved employees in the assessment process, you can see if their understanding of assessment-related issues has grown and how much they have bought in to the proposed changes. Since the assessment should deliver clear, specific recommendations for process improvement, you can track the extent to which those recommended actions have been implemented and how beneficial they have been.

If the assessment determines that corrective actions are necessary, it follows that your business must be able to put them into place. That’s where operational readiness comes in.

Can You Implement Any Recommended Changes?

Basically, operational readiness is a process that positions you to spot and confront any issues that might cause problems with your intended improvements, such as failure to provide adequate staff, training, and resources to achieve your goals.

The benefits of operational readiness are considerable:

• It helps you avoid disruptions and costly delays and keeps your plan within budget.
• It deploys all the necessary elements to increase efficiency and productivity and reduce downtime.
• It lets you optimize resources for proper allocation and use.
• The process creates a culture of continuous improvement through ongoing assessments, data analysis, and feedback channels.

On a grand scale, an operational and capability assessment can help an organization realize its immediate and downstream objectives and meet the needs of all its stakeholders — customers, employees, investors, and associated contractors and vendors.

The Case for an Operational and Capability Assessment

Ensuring optimal performance across the enterprise is a constant challenge that requires you to continuously improve your operational efficiency. The way to do that is to perform operational and capability assessments and implement the resulting improvement opportunities.

If you can answer the following questions up front, that’ll go a long way toward helping you realize the full potential of an operational and capability assessment.

How Will This Affect Employee Engagement and Satisfaction?

Two of the typical triggers for an assessment are low employee morale and internal dysfunction. By doing a comprehensive evaluation of all the people, processes and systems in the organization, you can improve employees’ engagement and experience by addressing issues that affect their productivity, morale, and job satisfaction.

This also makes it possible to put effective change management strategies in place for easier transitions. And, down the line, bettering your processes — including more efficient workflows — will deliver greater employee adoption.

What Are the Toughest Challenges to Overcome?

A few big potential obstacles come to mind.

• Unrealistic stakeholder expectations. What you expect the assessment to deliver may be different from what your stakeholders expect. For one thing, you have to determine who the relevant stakeholders are. Then, to align stakeholder expectations with reality, you should establish clear lines of communication, hold regular meetings, and deliver honest, transparent updates on progress. Workshops, brainstorming sessions, and relationship-building activities all can drive stakeholder involvement, alignment, and buy-in.
• Defining and clarifying requirements. It’s a lot of work to figure out all the requirements for an assessment and make them clear to everyone. Using interviews, surveys, and prototypes can help identify and elicit all the necessary requirements. Here, too, stakeholder involvement is key, because it can build consensus and minimize confusion. Visual modeling tools, such as process maps, can make things clearer and easier to understand.
• Ambiguity and uncertainty. Looking at the entire operation in this way — however broad or granular — creates the potential for complexity, and with it only a vague or murky understanding of a seemingly complicated project. You can get around this with agile methodologies and iterative analysis. Take big, complex problems and divide them into smaller, manageable tasks that make it easier to learn. Bringing in data visualization and analysis tools can help stakeholders make sense of complex information.
• Making change management happen. Enterprise-wide change management can be a daunting prospect, but it can be accomplished by developing comprehensive change management strategies that require careful implementation, tracking, and evaluation of the changes — and consideration of the human, cultural, and technical impacts. (This can be extended to process assessment, too.) Address stakeholder concerns upfront, make sure these folks know the tangible benefits of the transformation, and keep them informed and involved at every stage. Training programs and ongoing support can make the transition seamless. Enlisting change champions and project managers makes adoption successful.

Operational Assessment Tools: Process Mapping, SIPOC and More

Four building blocks are integral to a successful operational and capability assessment strategy — risk mitigation, process mapping, collaboration tools, and process documentation.

Risk Mitigation Through Comprehensive Process Evaluation

Performing an operational risk assessment reduces the potential for operational damage. This is a rigorous and systematic process your risk management teams can perform to find, measure, and manage potential threats before they can wreak havoc.

This process helps you develop preventive measures that make it less likely that a risk emerges and corrective steps that can lessen the damage a materialized risk can create.

The chronology of an operational risk assessment is:

• Identify potential operational risks by thoroughly reviewing organization policies, processes, practices, and documents.
• Determine how likely it is that the identified potential threats will happen and hurt the business.
• Set up an operational risk control mechanism to manage and dampen the impact of the identified risks.
• Regularly monitor and review the remedies you have developed to ensure they remain effective and pertinent over time.

It’s a fact of business life: However profitable, visionary, and efficient a business is, no business is immune from process breakdowns. An exhaustive process assessment — which, in a sense, is a microcosm or the larger-scale operational and capability assessment — can help you find and eliminate those failures.

Process Mapping

While most people who do process mapping are used to the typical swimlane process diagrams, these often are overkill in assessments, especially when capturing current state process details.

A popular alternative to swimlane process diagrams is SIPOC, or suppliers, inputs, process, outputs, and customers. This tool gives you a high-level understanding of — what else — the suppliers, inputs, process steps, outputs, and customers involved in a particular process without requiring an extensive step-by-step mapping effort.

The SIPOC reveals how the project goals will be realized. It focuses on the inputs and outputs of the process instead of the individual steps that compose the process.

While you might ultimately decide to dive deeper in certain areas, starting with a SIPOC will show you, early on, where your pain points and opportunities exist. Then you can focus on them in greater detail later.

Identifying your process mapping needs will then help you determine the type of tools you need to collaborate.

Collaboration Tools

For collaboration, you need one or more tools that not only let you chat and edit documents in real-time but also let you conduct virtual meetings and presentations you can record.

At Centric, we generally use Microsoft Teams because it has these capabilities, but companies often choose hybrid options that involve multiple tools, such as Canva, Figma, or Mural. Whatever tool you use must be able to collect and organize existing documentation while letting you share the data with all project team members.

Process Documentation

You can begin preparing to assess your actual process by conducting meetings with all your key stakeholders (for about 30 to 60 minutes) to reach a clearly understood agreement on the scope of the effort, both included and excluded.

You can accomplish this by developing either a process inventory and hierarchy, using a SIPOC diagram, or a combination of the two. A process inventory simply lists all the processes involved. You can manipulate this into a hierarchy to ensure you’re looking at everything at the same level of detail. For example, “Conduct Accounts Payable” and “Enter the Invoice Amount into the Amount field on the Payables screen” are not equals.

Understand Process Assessment: The Key to Business Improvement

Once you discover a broken process, you need a detailed roadmap for fixing it. That roadmap must be custom-fitted to your own circumstances, because improving a process isn’t a one-size-fits-all approach. You develop that blueprint by asking and answering some basic questions.

Evaluating Process Effectiveness: An Introduction to the Process Maturity Model

Process maturity boosts an organization’s teamwork, customer relations outreach, and efficiency to help people and teams be more accountable. For our purposes, process maturity covers all processes within a company, and it is a critical measure of enterprisewide health.

Companies possess significant process maturity when they standardize processes across teams, apply consistent metrics, regularly assess the efficiency and effectiveness of processes, and implant a culture of continuous improvement that adapts processes to company growth and change and always seeks and achieves better outcomes.

Another way to think about process maturity at the operational level — that is, business processes as a whole — is that high-level maturity happens when:

• All processes are mapped, approved and documented.
• Teams consistently apply documented procedures.
• All process steps that can be automated are automated.
• Processes are innovated and regularly updated.
• Employees anticipate and effectively respond to problems and changing market conditions.
• Management wholeheartedly and officially supports process maturity.

In this context, an operational risk assessment is no less important than an operational and capability assessment. That’s because any number of factors can interfere with and harm an organization’s operations, processes, and internal systems — and, consequently, its bottom line and reputation.

Everybody on your team should determine how well-established and effective — or ineffective — the process is. In that way, you can find the path to follow for process improvement.

Centric has a great process maturity model that you can use for this purpose. It ranks maturity level from Level 1 (low) to Level 5 (high).

Many companies that use it rate their current maturity at Level 1, but they want to get to a Level 5 immediately. While that big jump sometimes is possible, it often needs to happen more slowly, in incremental steps, by undertaking interim measures to deliver modest business value at first (and avoid bogging down a project by not delivering any value for an extended period).

What Is Your Process Assessment Goal?

If you want to improve a process, what does that look like? Centric has a chart that shows six possible answers — we call them value drivers — that a company can choose from.

The six value drivers of process excellence: visibility and transparency, financial performance, business agility, scalability, reliability and predictability, customer experience and quality.

Companies typically say, “I want all of those.” But it’s much better, and more realistic, to select one, two, or a combination of these.

Why? Well, if you go after all of these value drivers, how would you resolve a dispute between sales (customer experience), operations (scalability), finance (financial performance), and audit (reliability)? You need to make this choice upfront, one time, so that you don’t have to make it over and over again throughout the project lifecycle.

How Do You Define the Scope and Parameters of Success?

How Will This Improve Your Business?

Perhaps the major improvement is performance. Process assessments show you where your bottlenecks and inefficiencies are, so you can get rid of them and streamline workflows, cut down on errors, and enhance your overall performance. By checking how well your processes are running, a process assessment can reveal how to make them better and faster.

Another big benefit of a process assessment is better decision-making. By having a clearer understanding of their processes, businesses can make enlightened, data-driven decisions and use resources more effectively.

Since process assessments also help businesses fine-tune their processes, they make it easier to satisfy customer needs and expectations, which translates into greater satisfaction and loyalty.

Common Challenges When Evaluating a Process (And How to Overcome Them)

There are several common challenges to doing a process assessment.

• You don’t have sufficient and reliable data and evidence to accurately measure the process. Having enough — and the right kind of — data and evidence is the basis for identifying, evaluating, and measuring the performance, flaws, and potentials of a business process. Without this, you undermine the credibility and validity of the assessment and produce obsolete, erroneous and biased perspectives. You can avoid this if you collect and analyze the relevant and dependable data from multiple sources such as records, documents, surveys, interviews, and benchmarks.
• The necessary tools and methods are missing. Without the right techniques and instruments for documenting, modeling, visualizing, and simulating a business process, the process assessment can fall victim to confusion, needless complexity, and inefficiency. And it might interfere with other business processes. Instead, make sure you choose and implement appropriate and standardized tools and methods for the assessment, including software, frameworks, diagrams, flowcharts, and matrixes.
• The process isn’t aligned or integrated with the overarching business strategy, vision and goals. Absent such alignment and integration, the process assessment’s output may be a process that’s in conflict with, or irrelevant to, your organizational direction. It might also create silos, gaps, or duplications among various business functions or processes. It’s essential, therefore, to sync up the business process with the organizational strategy, vision and objectives, as well as with other processes or systems that interact with or support it.

Just as a process assessment is as distinctive as the business whose process is being evaluated, the duration of the process assessment isn’t a fixed period. It can vary widely from business to business.

Process Mapping: The Foundation of Successful Process Assessment

Some process assessments can be done in a few days. You can accomplish this if you’re assessing a single, low-complexity process without spending much time on the current state and all participants are available to participate in a single design session over one or two days.

But some take months because they go into greater depth on the current state. A process assessment might take this long if it’s examining an entire division or company with many complex processes and the participating individuals are spread across multiple geographic locations.

The path to developing the solution must be customized to your specific needs.

When You Know You Have Issues, It’s Time to Assess

Centric has the expertise to help businesses do a global analysis of all aspects of their operations that can uncover problem areas — the operational and capability assessment — and develop a detailed plan of recommendations for how to optimize a particular function or set of related functions — the process assessment.

You don’t have to know exactly what’s going wrong to take action. It’s enough if you realize you have problems. When you do, that’s the time to consider an assessment. This approach can help your company operate more efficiently, communicate better, and improve the customer experience. It’s the way to improve your processes so that they are unfailing reliable and effective in the short and long term.

Our Operational Modernization team works to create scalable, flexible solutions centered on your business needs. Interested in working together to improve your processes? Let’s Talk