Carolina
Melecardi Zani
Universidade
Federal do Rio Grande do Sul, Brazil
E-mail: zani.carol@gmail.com
Mirele Marques
Borges
Universidade
Federal do Rio Grande do Sul, Brazil
E-mail: mirelem.borges@gmail.com
Ana Júlia Brum
Severo
Universidade
Federal do Rio Grande do Sul, Brazil
E-mail: anajuliabrumsevero@gmail.com
Eduardo Rocha
Garcia
Universidade
Federal do Rio Grande do Sul, Brazil
E-mail: erg.engst@gmail.com
Cláudio José
Miller
Universidade
Federal do Rio Grande do Sul, Brazil
E-mail: cmuller@producao.ufrgs.br
Submission: 4/6/2020
Revision: 4/21/2020
Accept: 6/10/2020
ABSTRACT
Business Process Management (BPM) is an approach to analyze and improve main activities of a company continuously. It seeks consistent results aligned with the strategic objectives. There are several approaches to the application of BPM, which focus on specific aspects of the company, not meeting all their needs. The Strategy, Indicators and Operations Model (MEIO), developed by Müller (2003), compiles the fundamental points of each isolated approach, creating a single model. The objective of this work is to provide a step-by-step application of the BPM aspects of MEIO in a practical case: a reference company that provides health services. Also, it provides a framework for organizing and connecting the various components of a product or service to its value chain. Through MEIO, a general analyze of the Company under study was made and the process “payment of invoices from providers” was detailed. Improvements were suggested based on a deeper investigation of the activities involved. The results include: (i) creation of rules engine to validate the procedures to be launched according to coverage, shortage, and contract; (ii) receiving procedure and cost audits separately and; (iii) digitalization and automatization of repetitive and manual activities.
Keywords: Business Process Management; BPM; Strategy, Indicators and Operations Model; MEIO
1.
INTRODUCTION
The current market is increasingly
competitive, forcing companies to adapt to a globalized environment, with
significant changes in business paradigms, such as uncertainty and
changeability (Cho, 2014). This economic environment has led to a growing
interest by companies in improving organizational business processes and
performance, and, consequently, enhance their operational efficiency and reduce
costs (Mccormack et al., In Press, Ranganathan &
Dhaliwal, 2001). Business Process Management (BPM) has over the last years
appeared as a process-oriented solution that work well both towards human
understanding and execution (Trætteberg & Krogstie, 2008).
BPM is an approach to management
process with focus on modeling, documenting, simulating, automating, measuring,
monitoring, and improving processes to achieve consistent results in line with
strategic objectives aspects of the organization (Murlick,
2014). In other words, BPM is the effort in an organization to continuously
analyze and improve fundamental activities such as manufacturing, marketing,
communications, and other essential elements of the company's operations (Zairi, 1997).
Also, BPM considers the organization
as a complete and dynamically coordinated set of logically related activities or
tasks that must be performed to add value to people (customers, employees,
shareholders, and society), justifying the existence and survival of an
organization (Guha & Kettinger,
1993; Burlton, 2001; Strnadl,
2006; De Sordi, 2012). Once well-executed, BPM
guarantees continuous improvement of operational performance, transforming
strategies into actions, which result in products or services capable of
meeting the needs of the main stakeholders (Burlton,
2001; De Sordi, 2012). In addition to being a technique
to achieve improvement, BPM is a means to spread awareness throughout the
organization focusing on processes improvement (Lee & Dale, 1998).
In this context, the adequacy
between an organization and its strategy, structure, processes, technology, and
environment has been a basis for the construction and research of theories
approaching BPM (Kanellis et al., 1999). As an
example, two of those theories are the Intellectual Capital (Stewart, 1998; Edvinsson
& Malone, 1998) and the Net Promoter Score (Reichheld, 2003).
The first is a label to
identify intangible
assets within an organization and to break them down into
meaningful sections (Young, 2012), while the latter is a way to measure
customer satisfaction and loyalty, meaning better finances (Markey et al.,
2007). These theories attend part of the company's
needs, as financial and economic aspects, and neglect others, as customer
retention and employee engagement (Porter, 1996). To deal with this
challenge, executives often go through a period of recycling their main
business processes, commonly based on departmentalization, operationalization,
and management of a specific area, or of each area separately, not attending
the whole and not having a systemic view of business (Torres, 2015).
Since
existing isolated models do not seem to cover all BPM aspects of companies, one
method to perform it is through the Strategy, Indicators and Operations Model
(MEIO), developed by Müller (2003). This method was built based on several
authors (Harrington, 1993; Rummler
& Brache, 1994; Simpson et al. 1999; Lee &
Dale, 1998), and compiles the fundamental aspects of these studies. MEIO
advantages, when compared to conventional models, is that it complements the
weaknesses of one approach with the strengths of another.
Yet,
it offers different points of view and ideas to everyday issues of BPM. Thus, MEIO comprises five steps: (i) overview; (ii) processes hierarchy; (iii) team
definition; (iv) processes prioritization and; (v) details. This view is in
agreement with Albuquerque and Rocha (2006), who report that the implementation
of BPM methodology must be carried out in phases. To this end, Müller (2003)
establishes the process mapping as the primary tool to understand the processes
and visualize the activities in various functions of the organization, allowing
opportunities for simplification and improvement.
Several empirical studies indicate
that there is a positive correlation between process management and business
success (Mccormack & Johnson, 2001; Mccormack et al., In Press & Skerlavaj
et al., 2007). While BPM focus on improving fundamental activities of a
company, MEIO appears as an alternative to consolidate it, mainly by joining
different performance analysis. This work applies the BPM aspects of MEIO to a
significant health service company.
The study follows all five stages
proposed by Müller (2003), improved by the processes map and the appropriate
flowcharts. It provides a step-by-step application of MEIO
to a health service company and a framework for organizing and connecting the various
components of a product or service to its value chain. Additionally, this work guides future managers in the process analysis
and suggestions for improvements. It shows ways to redesign the processes,
making it agile and synchronized with corporate strategies, generating
sustainable competitive advantages.
2.
HISTORICAL BACKGROUND OF BPM AND
APPLICATIONS OF MEIO
The theme of Process Management has
been approached over the last decades from a perspective of linear and isolated
to a more integrated and systemic view, assisting in the documentation, analysis,
and improvement of business processes (Schmiedel et
al., 2020). The concepts of "process" started to be part of the daily
life of organizations, more specifically in the production sector, with the
approaches of Manufacturing Resources Planning (MRP II) and factory layout (Aghabaghery et al., 2020). In this context, structures of
organizations based on limited processes (i.e., departmentalization) were
common, originally coming from Taylorism (1911), which introduced several
concepts, such as efficiency, specialization, and process measurement (De Sordi, 2012).
In Taylorism, the processes were
rigid and well detailed, leaving employees little freedom. With the development
of a more competitive market, companies were forced to take initiatives that
highlight them through improvements in productivity and quality of the product
or service. Thus, measurements and indicators became part of everyday life, and
practices called "quality" were disseminated (De Sordi,
2012; Brocke et al., 2014; Vom
Brock & Rosemann, 2013). Some of them are: Total
Quality Management (TQM), Total Quality Control (TQC), Continuous Quality
Improvement (CQI) (Elzinga et al., 1995).
In the late 1980s, two main authors
disseminated the concepts of process management: Thomas Davenport and Michael
Hammer. They focus on improving the processes that generate these products and
services, and not just on the products themselves (Elzinga
et al., 1995). Since then, there has been a contrast between traditional
companies, focused on what happens within the company itself and those
organized by business processes, which prioritize the end customer, cooperation
between teams, and individual responsibility (Dumas et al., 2013).
In this way, the orientation by
processes was disseminated in opposition to the functional vision of the
organizations. This new vision was present in several popular models in the
1990s: European Foundation for Quality Management (EFQM), Malcolm Baldrige
National Quality Award (MBNQA), ISO 9000, and Reengineering, in addition to TQM
itself (Lee & Dale, 1998).
Over the past 20 years, interest in
the Process Management area has grown and consolidated the concept of BPM.
Initially defined as a technology-oriented system, it became a management
practice and, currently, a discipline that deals with both organizational and
technological aspects. Due to the importance of process management for
organizations, BPM has been the subject of several studies involving managers,
users, analysts, consultants, service providers/suppliers, and academics (Vom Brocke & Rosemann, 2013). Therefore, BPM derives from practices of
the division of labor and Reengineering, incorporating aspects of Total Quality
(Antonucci & Goeke,
2011).
Iritani et
al. (2015) raise the relevance of the subject when studying growing
publications in the academic field. Other authors point out the advantages of
implementing BPM, among them: focus on the customer, shorter response time,
increased satisfaction of customers and employees, combating the departmental
view, improving internal communication, standardizing activities, reducing
bureaucracy, increasing the reliability of operations, improvement in people's
morale, focus on results, alignment of strategic objectives with the objectives
of processes and increased profits (Zairi, 1997; Detoro & Mccabe, 1997; Harrington,
1993).
In this context, MEIO appears as a
mean to active the benefits of BPM. MEIO is divided into three modules, namely:
strategic planning, process management and performance evaluation. Therefore,
it offers a complete solution for companies. In each of the studies where MEIO is
applied, one of the modules predominates. This is a feature of MEIO: it is
possible to implement only the modules needed by the company.
For example, Rafaeli
and Müller (2007) point out the relationship between BPM and MEIO to establish
a set of indicators to instantly alerts those responsible about events that are
not expected, thereby emphasizing process management and performance
evaluation. Sellitto and Walter (2006) presents a
case in which the performance of an electronic equipment manufacturer was
evaluated according to competition criteria, using MEIO to classify the
evaluation systems and define competition criteria relevant to the case.
Other examples of application of
MEIO involve operationalization of strategies, definition of strategic planning
and search for a means to consolidate improvements in processes (Muller, 2003).
The applications show the effectiveness of MEIO, mainly because the partial
implementation of the model induces improvements in other areas. MEIO comprises
five stages, which can be analyzed from the BPM point of view:
a) Overview: it is the beginning of the
process, involves the creation of macro-processes, through the design of a
business map, which makes possible to identify resources, inputs, outputs,
influencing factors and subsystems;
b) Processes hierarchy: consists of
unfolding the overview into parts, forcing managers to analyze the processes,
sub-processes, and macro-process activities;
c) Team definition: clarifies the
driving elements of the project, meaning, general issues and tools to be used,
process owners/leaders and improvement teams;
d) Process's prioritization: it
provides a broad vision to act local,
involving the selection of critical processes, the establishment of
preliminary objectives to guide the teams and the characterization, understood
as the processes limits (where it begins, where it ends and what it includes)
and;
e) details: general definitions,
understanding, analysis, and improvement.
Thus, this work seeks to achieve
some of the advantages provided by BPM, mentioned by Iritani
et al. (2015), as shorter response time, improve internal communication, reduce
bureaucracy, increase the reliability of operations and align strategic
objectives with the objectives of processes. For this, the MEIO "process
management" module was used as a methodology and tool.
3.
METHODOLOGY
The research method adopted is
qualitative with a case study, since it aimed at solving specific problems with
deepening the understanding of an organization (Gerhardt & Silveira, 2009).
Regarding the objectives, this study is classified as an exploratory research,
as it will be necessary to understand the company's daily life to achieve the
improvement of ideas and discoveries (Gil, 2008). As for the procedures, the
present work is characterized as action research, which presupposes the
participation of the researchers in the problematic situation to be
investigated (Gil, 2008).
To carry out this work, a Brazilian
cooperative was chosen (Company U), located in the south of Brazil, which
offers supplementary health services. The company has existed for 48 years and
operates in the Metropolitan Region, Center-South and North Coast of the state.
It has more than 2000 employees and 6500 cooperative doctors. The company was
chosen due to (i) the fact that it is a reference
organization at regional level and; (ii) authors previous contact with the
management team, facilitating access to meetings and documents.
Company U sells family and business
health plans, as well as complementary products and services. Its target market
focuses on the corporate collective health insurance segment. This target
audience comprises 87.6%, formed by micro and small companies and medium and
large companies (from medical offices with two doctors to large hospital
centers).
The methodological procedure applied
was based on the process management method developed by Müller (2003), MEIO. It
was followed the five steps presented in literature review (section 2). Since
MEIO implies in a global intervention, from strategy to operations, in this
study, the application of MEIO is partial, focused on the BPM aspects, tangent to
the other approaches.
This is a characteristic of the
model: flexibility to start with one module and later add to the others. The
proposed steps were applied by the authors after meetings with the management
team of the company. The meetings intend to give a better understanding of the
company’s situation. Also, one of the authors had previously worked for that company,
facilitating access. After each step, another meeting was taken to validate the
developed data.
For the first step (overview) the
Business Map was created, which consists of mapping, in a systematic way, the
leading suppliers of the organization, the inputs, the processes developed
(major company procedures, such as purchases, business execution, charges), the
primary products/services delivered, and identify the buyer market. In
addition, this stage also seeks to understand the general panorama of external
influences, which are uncontrollable factors of the organization, such as
government policies, legislation, society, culture, etc. and the company's
competitions (Figure 1).
Figure 1: Business Map Model, adapted from
Müller (2003)
After understanding the
environment that surrounds the company, MEIO suggests the creation of the
processes general architecture of the organization (step 2, process hierarchy).
This stage consists of the identification of all macro-processes (primary,
support and management). The main processes are classified, detailed with the
information of their limits (where it starts and where it ends), what are the
resources involved, what is developed in this macro-process, what is delivered
(Table 1).
In addition, the owner
of the process is defined (i.e. sector with sufficient hierarchical level to
understand which direction the business will take and how it will affect the
process and the participants) (BPM CBOK®, 2013), the participants, the
legislation relevant to the process, the necessary skills, the process
indicators, and software systems used. The purpose of this comprehensive
analysis, besides providing a global understanding of the company's current process
management, is to help in prioritizing a sub-process to focus on more immediate
interventions. In accordance with Jesus and Macieira
(2014), the essential parts must be done first.
For Company U, the
macro-process “payment of invoices from the provider” was chosen to be
detailed. The choice was made based on: (i) the
company's preference to focus on this macro-process, due to its importance to
the cooperative and; (ii) because it is a macro-process that involves many
members and areas, thus denoting more robust opportunities for intervention.
Table 1:
Characterization of main processes,
Macro-process |
|||
Processes |
Process
name |
Process
name |
[…] |
Where
it starts |
Entity/location
where it starts |
|
|
Entries |
Documentation,
information, materials |
|
|
What
is developed |
Action |
|
|
What
is the exit |
Product/Service |
|
|
Where
it ends |
Entity/location
where it ends |
|
|
Owner |
Sector
with authority to make decisions |
|
|
Participants |
Other
sectors involved |
|
|
Legislation |
Law,
rules, standard procedures |
|
|
Skills |
Necessary
capacity |
|
|
Indicators |
Visualization/direction
of the process |
|
|
Systems |
Resources,
software |
|
|
Source: adapted from Müller (2003)
For step 3, team definition, the
relationship between the processes and the sectors was identified (Table 2).
Each sector received a score between 9-3-1-0 according to their degree of
involvement with the project. This score followed Müller (2003) instructions,
additionally, the authors validate the punctuation during the meetings with the
management team. Maximum rating (9) was attributed to the sectors responsible
for the process in question, those with knowledge on the subject and with
decision-making power to direct the project. Note 3 was given for the sectors
classified as co-responsible, which assists in the coordination of the project
secondarily. Note 1 was for sectors that only participate in the process
without managerial power over it and note 0 for sectors that were not involved.
For some BPM authors (Harrington,
1993; Baldam, 2009; Oliveira, 2013), this initial
mapping is the primary tool for understanding processes. Müller (2003) argues
that a form of visual representation of activities, such as flowcharts and
organization charts, allows the identification of opportunities for
simplification. Thus, the flowchart was performed by the Bizagi Process Modeler
software, which allows the modeling and documentation of processes using the
Business Process Model and Notation (BPMN) and assisted in the visualization
and interpretation of the processes (see section 4).
Table 2: Processes vs. Sectors
Source: adapted from Müller (2003)
Harrington (1993) proposes an
understanding of the process importance, unfolding the macro-process in
processes, subprocesses and activities. The subprocess's analyses correspond to
step 4, process prioritization. This visualization and knowledge can be
achieved by the organizational chart and the subprocess analyses table (Figure
4). Thus, an examination of the sub-processes is carried out according to MEIO
guidelines. For each sub-process/activity, the added value, its relationship
with quality and costs and required resources (people, equipment, etc.) was
established (Table 3).
Added value corresponds to
subjective issues related to value (utility, aesthetic, prestige, brand) that
is often as important as economic value (Hansen, 1995). There are three types
of “added value” activities in a company: (i) added
real value activities (ARV), adds to the customer; (ii) added business value
activities (ABV), necessary for the process and; (iii) no added value (NAV),
unnecessary for the process, resulting in useless disposal of resources with
unnecessary costs to the product/service (these must be eliminated) (Müller,
2003). This step aims to improve the understanding of the characteristics of
the process for further improvement and standardization through analyzes of
quality, time, costs, and added value.
Table 3: Subprocess analysis
Source: adapted from Müller (2003)
Finally, with the sub-process’s
analysis and the understanding of how each process interacts between the areas,
the step 5, details, is reached. It is possible to have a discussion and find a
critical process to propose improvements for the company. The critical process is
chosen according to the definition of Rummler and Brache (1994). For them, a critical process is one that
influences a competitive factor that the company wants to reinforce or expand. Still
according to these authors, managers do not need sophisticated tools to
identify critical processes, they just need a clear strategy.
Having as a strategy the use of
MEIO, the prioritization criteria to find critical process was based on Müller
(2003) work and validated with the management team of the company. To some
items it was attribute a punctuation (e.g. impact on strategic objective, see
section 4.3) and for other it was not necessary, since the processes involved
were in very distinguished phases and the presence or absence of the criteria were
very clear. The prioritization criteria were:
(a) Impact on Strategic Objectives;
(b) Potential results tangible in a
short and medium term;
(c) Interactions with other Processes or
Projects;
(d) Current Status of the Process
(degree of problems/inoperability);
(e) Human and budgetary resources
involved;
(f) Availability of the areas
participating in the process
Since the application of some
improvements are not immediate and require more execution time, it was the
company's responsibility to continue with the process management vision and
implement the proposed improvements.
4.
RESULTS
4.1.
Overview
With the application of
the proposed methodology to the BPM aspects of Company U, it was possible to
create the business map, as shown in Figure 2, identifying the supplier market,
inputs, company structure, outputs, buyer market, in addition to environmental
influences, competitors, and regulatory bodies. The studied company receives
services from more than eight types of companies, with "medical offices"
as the largest supplier, comprising 29% of this scenario.
Given that Company U
offers services and products, its inputs are based on technical capacity,
social and environmental responsibilities, and medical and hospital materials
and medicines. The company is composed of six macro-processes, which are: (i) sale of products and services to consumers; (ii)
receiving money from consumers and products and services from suppliers; (iii)
making available the products and services received to consumers; (iv) receipt
of accounts from consumers who have acquired the products/services; (v)
auditing and verifying the accounts received and; (v) payment to service
providers. The macro-processes were better described in the organization chart
(Figure 3), leaving space to explain the structure of the company on the
business map.
The main outputs are the
health services needed by customers, exams, and medications. The buying market
is puzzled with the supplying market because most service providers are also
clients. As in the case of the hospital, it provides health services
(supplier), and it is also a client that associates with Company U to have a
broader range of treatments to offer people.
As for external
influences, in addition to the regulatory bodies, such as the National Health
Agency (ANS), which determines the laws and rules for the company to exist and
operate, there are also environmental influences, as epidemics. One example is
the outbreak of the virus COVID-19 in 2020 that significantly increased the
demand for company services. The study company's competitors are other agencies
that offer health insurance in the same region. The entire Business Map is
detailed in Figure 2 and 3.
Figure 2:Company U Business Map
Source: Elaborated by the authors
The macro-processes
flowchart was designed to complement the Business Map and to simplify the
understanding of the company's configuration (Figure 6). Since Company U is a
cooperative, physicians
perform the role of suppliers and internal customers. Then, it was necessary to
study all processes and actors to define the company's macro-processes due to
the complexity of defining customers and providers.
This definition was done
through the analysis of documents made available by the company. After they
were analyzed, the macro-process that integrates all processes and actors were
defined. In Figure 6, the mainline is the macro-processes and the secondary
lines (lines above and below the mainline) are the agents (sectors) involved in
each corresponding stage.
Source: Elaborated by the authors
According to Müller's
(2003) recommendations, the organization's structure was graphically
represented through the organization chart (Figure 4). It was assembled from
the analysis of documents made available by the company and informal
conversations with the strategic action team, which revealed that the company
has a vertical strategic vision. Vertical structures mean predominance of
hierarchy, in which the sectors with the most authority make the main decisions
in view of the processes and subprocesses that are part of the organizational (Garcia
& Rufino, 2018).
In Company U, the
General Meeting Board fulfills this role, passing the management decisions to
the Administrative and Fiscal Councils and later to the Executive Board, Legal
Counsel and Ombudsman, so on, until reaching the Super intendancies, as shown
in Figure 4.
Source: Elaborated by the
authors
4.2.
Process Hierarchy
For the characterization
of the main processes, the macro-process “payment of invoices from the
provider” was chosen to be detailed, as explicated in section 3. This
macro-process was divided into three key processes: (i)
receiving accounts, (ii) auditing accounts and, (iii) paying audited accounts.
These processes are related to the Health Supply Super intendancies (Costs
Assistance management), Marketing and Sales (Marketing management),
Controllership (Clinical Audit and Cost Audit management) and Financial
Administrative (Finance management), being the last two more related to the
processes under analysis.
At this step, the
characterization of each key process that composes this macro-process was made
(Table 4). For each one was identified where it starts, what are the entries,
what is developed, what are the exits, where it ends, who is the owner, who are
the participants, what is the legislation relevant, what are the necessary
skills, what are the process indicators, and software systems used. For
example, the “auditing accounts” process begins in Cost Audit sector, with the receivement of invoice from providers.
There, they separate the
invoices to be audited and deliver them to the responsible Auditors. Therefore,
the “owner of the process” is the audit sector, but the financial sector also
participates in the process. At this stage, the legislation followed is from
the National Health Agency (ANS) and the necessary competency is knowledge to
separate which invoices must be audited as procedural, which ones must be audit
as cost and which ones should not proceed. The indicator used is the number of
invoices received in the month. This entire process is carried out at Company U
through the TOTVS® software system (Table 4).
Table 4: Characterization of the main
processes of “payment of invoices from the provider” macro-process in Company
U.
Macro-process:
payment of provider invoices |
|||
Processes |
Receive
accounts |
Audit
accounts |
Pay
Accounts |
Where
it starts |
Costs
Audit |
Costs
Audit and Clinical Audit |
Financial |
Entries |
Providers
invoice |
Providers
invoice |
Providers
invoice |
What
is developed |
Auditing
costs |
Auditing
both procedure (clinical audit) and cost (inputs and procedures) |
Providers
payment |
What
is the exit |
Invoices
to be audited |
Audited
invoices with and without gloss |
Paid
account |
Where
it ends |
Responsible
Audit |
Financial |
Financial |
Owner |
Audit
sector |
Audit
sector |
Audit
sector |
Participants |
Audit
and finance |
Audit
and finance |
Audit
and finance |
Legislation |
National
Health Agency |
National
Health Agency |
National
Health Agency |
Skills |
Knowledge |
Medical
knowledge and analysis |
Knowledge |
Indicators |
Number
of invoices received in the month |
Number
of glosses |
Number
of accounts payed |
Systems |
TOTVS® |
TOTVS® |
TOTVS® |
Source: Elaborated by the
authors.
4.3.
Team Definition
After identifying the
processes of the macro-process “payment of invoices from the provider,” the Process
vs. Sectors Matrix was develop with 9-3-1-0 scale to find the level of relation
between process and sectors, with 9 being strong relation, 3 medium relation, 1
weak relation and 0 not related (Figure 5). Besides, the Process vs. Sectors
Matrix also presents the relationship with the strategic objectives of the
company, which are (1) managing the client’s health through integrated
assistance practices, (2) simplifying operations and driving continuous
improvements and (3) managing risks and promoting patient safety, also
following the 9-3-1-0 scale. For each punctuation of the strategic objectives,
a weight was assigned according to the emphasis given by the strategic planning
team. For objective (1) the weight assigned was 4. For objectives (2) and (3)
the weight was 1. This means that the process “receiving accounts” has little
influence for objective 1 (1 multiplied by 4), much influence for objective 2
(9 multiplied by 1) and little influence for objective 3 (1 multiplied by 1).
Adding the points, the total is 14 for this process, in relation to the
strategic objectives (Table 4). Thus, it can be noted that the macro-process
“payment of invoices from the provider” are directly related to the objective
of simplifying operations and driving continuous improvement.
Figure 5: Process vs.
Sectors Matrix for “payment of invoices from the provider” macro-process in
Company U.
Source: Elaborated by the
authors
4.4.
Process Prioritization
To the Process
Prioritization step, before going to Value-Added analysis, it was decided to do
the process mapping (Figure 6), prepared by BizAgi®
tool. The main contribution of this visualization is to highlight which are the
decision points and where they are in the process. Decision points reflect
interactions between sectors and are critical moments in the process. This
knowledge allows for more assertive actions, making it possible to reduce
unnecessary steps in the process (why does the information pass through various
sectors if the decision power is in sector X?) and add value to the process.
Figure 6: Flowchart
of the macro-process “payment of invoices from the provider” in Company U.
Source:
Elaborated by the authors
Thus, the Value-Added
analysis was carried out, identifying which activities added real value (ARV),
added business value (ABV), or did not add value (NAV). It was also determined
the relationship between the process quality and cost using the 9-3-1-0 scale
and the necessary resources. A large number of NAV activities have been
identified. Of the nine sub-processes, seven have no added value, all with
high-cost and low-quality ratio. When looking at resources, all sub-processes
require personal effort, that is, they are little (if anything) automated
activities (Figure 7). These are the main activities to invest in
interventions.
Figure 7: Subprocess
analysis
Source:
Elaborated by the authors
4.5.
Details
At this step, based on the analyses
done so far, it was possible to have a discussion with the management team of
the company and propose improvements for the critical process (see Table 5,
section 5). As mentioned, from the nine processes, seven was indicated for
enhance its performance, or even eliminated. Thus, besides prioritization
criteria to find critical process presented in section 3, it was decided to
work with all NAV processes of “payment of invoices from providers”, due to the
Company’s capacity to absolve this challenge. Some questions raised for the
detailed analyses involved the capacity of the company to support automation
(are there enough rules in the software to stop non-compliance? Is the
processes mature for automation? What are the process errors that need to be
eliminated before being automated?). It is a starting point to have a BPM
approach consolidated.
5.
DISCUSSION
Based
on extensive analysis and understanding of the organization's structure and
subprocesses, it was possible to identify some points for improvement. First,
there is a large number of activities with no added value, associated with high
costs, low quality, and excessive personal demand. These are the leading
candidates to be eliminated. They were separated into two groups: activities
that take place before “audit invoices” (receive invoices, separation of
invoices to audit, sending invoices for auditing, receive invoices by the
audit) and activities that happen after the audit of invoices (return invoice
with disallowance to the provider, forward invoice without disallowance for
payment, receive audited accounts for payment).
The
activity "invoice audit" was chosen as a divisor because it is the
first activity in the process that has added value. Another issue about the NAV
activities is that there is excessive manual control. In discussion with the
management team, it was understood that this occurs mainly due to the lack of a
system with more efficient rules and lack of standardization information. Hence
the flow is slow, with waiting in the procedures and rework, making the process
costly and painful. Thus, information and knowledge end up more centered on
people than on processes. Schmidt and Nurcan (2008)
reported that is possible to enhances business processes by improving the
exchange of knowledge and information. The elimination of NAV activities helps
to speed up decisions and better integrates the needs of all stakeholders in a
more complete way.
Literature
approaching BPM usually brings as a solution innovation in technology such as
XML, Web services, component-based development, and message-oriented middleware
(Verner, 2004). Paschek et al. (2016) combines
methods and tools of BPM to contribute positively to the Enterprise Information
System. This allows companies to act flexible to adapt or implement enterprise
processes, which makes the added value evident.
Also, softwares that supports interactions of
people can be used to overcome deficiencies of classic BPM approaches, which
seen to be the case in Company U (Schmidt & Nurcan,
2008). For that reason, most suggestions for improvements includes a
technology-oriented approach.
The
first topic focus on eliminate NAV activities. All NAV activities that happen
before “audit invoices” should become part of that activity, while all that
happen after “audit invoices” should become part of the “pay audit
accounts." However, the mere transfer of these activities is not enough,
they need to be reduced. Suggestions for improvements include creating rules
engine to validate the procedures to be launched according to coverage and
shortage of the beneficiary's plan and also according to the provider contract.
This
measure eliminates the need for activity number 2 (separation of invoices to
audit). To remove activities 1 and 3, the authors of the present research
suggested to digitize and automate the processes of receiving and sending
invoices. Considering they would be selected earlier, audits would go directly
to the responsible audit sector, this means cost audit or clinical audit. In
this way, the employee is released to do activities that have added value,
making Company U more productive.
The
second group of NAV activities, which comes after the “audit invoices,”
comprises invoices with disallowance that must be returned to the provider.
This happens when there is an unknown procedure or a combination of unusual
procedures (or medication) used. The audit is then sent to the clinical
examination, formed by nurses and doctors who can decide if the account is
correct. The invoice with disallowance returns to the audit to pay the account
(or is sent to the provider, if not approved).
Thus,
for this group of activities, the suggestion for improvement is to receive
separately what is procedural and what is cost. Then, follow the idea to
digitalize and automate the sending and receiving processes. Finally, this
process would be reduced to just two activities: “audit invoices” and “pay
audit accounts.” Improvement proposals for each activity are presented in Table
5.
Table 5: Proposal for improvements by activity
of the analyzed process
No. |
Activities |
Sector |
Improvement Proposal |
1 |
Receive invoices [1] |
Cost Audit |
Create rules engine to validate the procedures to be launched
according to coverage and shortage of the beneficiary's plan. Also, according
to the contract with the provider; Digitalization and automatization |
2 |
Separate invoices to audit |
Cost Audit |
Receive separately what is procedural and what is cost |
3 |
Send invoices to audit |
Cost Audit |
Digitalization
and automatization |
4 |
Receive invoices [2] |
Cost Audit |
Digitalization
and automatization |
5 |
Audit invoices |
Cost and Clinical
Audit |
- |
6 |
Return invoice with disallowance to the provider |
Cost Audit |
Receive separately what is procedural and what is cost Digitalization and automatization |
7 |
Forward invoice without disallowance for payment |
Cost Audit |
Digitalization
and automatization |
8 |
Receive audits accounts to payment |
Financial |
Digitalization
and automatization |
9 |
Pay audit accounts |
Financial |
- |
Source: Elaborated
by the authors.
Ultimately, the improvements
proposed seeks to achieve some advantages mentioned in the literature review: shorter response time, improve internal
communication, reduce bureaucracy, increase reliability of operations, increase
employees satisfaction and align strategic objectives with the objectives of
processes (Zairi, 1997; Detoro
& Mccabe, 1997; Harrington, 1993). This agrees
with Company U need to streamline business operations, consolidate a clear and well-defined strategy to
management processes, and save costs. Thereby reflecting the fact that
the process is the basic unit of business value within an organization (Li
& Sum; 2006).
6.
CONCLUSION
BPM is a systemic method
of managing a company's processes. There are several approaches to applying
BPM, however, they seem to focus on only some aspects of the company (such as
financial and economic) while neglecting others (such as customer retention and
employee engagement). These isolated models make significant contributions but
fail to provide a model that covers all needs of the company.
Thus, the Strategy,
Indicators and Operations Model (MEIO), developed by Müller (2003), compiles
the advantages of each of the isolated models, creating a way to complement the
weaknesses of one approach with the strengths of another. The objective of this
work is to provide a step-by-step BPM aspects of MEIO in a practical case.
Thus, managers can count on a process analysis guide and suggestions for
improvements, as well to redesign their processes.
BPM aspects of MEIO was applied to a reference health service company.
After understanding the
company's structural architecture and general issues, the critical processes
“payment of invoices to providers” was chosen to identify its processes and
activities, and then to propose improvements. This process was chosen because
it fulfilled the prioritization criteria proposed by the authors and due to its
importance for the company under study. However, this is a limitation of this
study.
It would be adequate to
implement MEIO in all processes. Yet, this decision was made because in large
companies the large number of processes makes it impossible to study all of
them in a plausible period. In addition, it is recommended that interventions
are carried out in parts, so the improvements achieved are more easily
monitored and maintained.
To futurity continuous the application of MEIO, from a mapped and analyzed process, a next step would
be the revision of the indicators associated with this process, as well as the
eventual reassessment of the contribution of the process to the strategic
objectives of the organization.
This study provided a
perception of the importance of a clear and well-defined strategy that allows
the management of processes in companies. The lack of visualization of the
relations between the sectors and the high demand for manual activities without
added value, did not allow the process to be efficient. The most relevant
results are summarized in eliminating activities that do not add value,
coupling those necessary to other activities that add value.
In order to do that, the
suggestions for improvements are: (i) create rules
engine to validate the procedures to be launched according to coverage,
shortage, and contract; (ii) receive separately procedural and cost audits and;
(iii) digitalize and automatize repetitive and manual activities (as receiving
and sending audits). The aim is to stimulate the culture of process management
within the company, taking as an opportunity for future studies the analysis of
other key processes, as well as the application of the steps of MEIO in
different sectors and processes.
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