People Asset Management
Why KM and CRM are direct results of CPR

Written: February 2000, in Cape Town, South Africa.

Core Process Redesign (CPR) is a methodology where the processes throughout an organisation are looked at so that processes that cross functional boundaries can be handled by a single person or team of people rather than being transferred from one functional area (department) of an organisation to another. Transferring work between departments typically leads to work being redone due to different documentation formats being used or even different languages being used.

In terms of this definition CPR leads to the terms downsizing or the more politically correct, rightsizing and also to Activity Based Costing. In an effort to minimise processing time in an organisation, organisations tried to re-adjust the way they worked and concentrated their efforts on the what and how of how things are done. Some examples are: 1) Virgin Atlantic's staff who take you from check in, through customs, right up to boarding the aircraft. In this case the same staff work with you from the time you arrive at the terminal until you check onto the plane. This means that all your problems and needs are catered for by a team who know your problems and needs. 2) Volvo which was the first car manufacturer to create a team that built the whole car. Parts are brought to the car by conveyor belts in a 3 dimensional arrangement. Rather than mass production of the same part over and over or a person only involved in screwing a nut into a wheel, Volvo decided to change this approach so that a particular team build a car and are responsible for it in its entirity.

However there were massive side effects to CPR especially in service based industries or in the service and supply sides of the supply chain in all industries and organisations. By downsizing the organisation, knowledge of suppliers and their people and processes was lost. Similarly knowledge of clients and their people and processes was lost as organisations retrenched on a massive scale. Of-course, in the short term profits went sky high. Why? Because getting rid of costs increases profits in the short to medium term. Knowledge of the internal processes and perhaps machinery was also lost as companies embarked on ISO 9000 processes and tried to document everything they do. As this happened more and more people left organisations and the organisational wealth or organisational knowledge slowly got depleted from our organisations.

In order to get this knowledge back, CRM or Customer Relationship Management was invented. CRM's aim is not only to manage customers, but also to manage suppliers. True CRM leads one into the internal workings of the organisation looking at the internal customers and suppliers of people and groups within our organisations as we try to recapture the knowledge that we have lost. CRM however has one benefit that CPR systems didn't have before and that is that it is focussed on client retention and on increasing revenues. CPR on the other hand tended to focus on costs and on reducing costs.

Knowledge Management (KM) is another result of CPR as organisations try to retain staff who are now not loyal to them anymore and where the 'best staff' are those who act as consultants and contractors, only working for an organisation for the short term and potentially job-hopping between employers.

David's Thoughts

David Lipschitz is the owner and managing director of Orbital Decisions®, an IT and IS consultancy in Cape Town, South Africa. He holds a Computer Science degree from the University of Cape Town (South Africa), a Computer Science Honours degree from Rhodes University in Grahamstown (South Africa), an MBA from Cranfield University (UK) and a Textile Diploma from the Cape Town Technicon (South Africa).

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