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Conducting a B-to-B Process Audit

October 01, 2014

Focus on the needs of the internal customers of each process to identify performance gaps and drive improvement

Internal audit...has got to be the coolest profession in the world,” said management guru Tom Peters in a keynote address last summer to a conference of internal financial auditors. While Peters might have been speaking in hyperbolic terms to engage his audience, it’s nonetheless true that internal auditors play an indispensable role. A corporate audit department should serve as a catalyst for driving improvements throughout the company with regard to governance, control and risk management.

In the world of b-to-b marketing, product and sales, self-imposed process audits are rare, even though the benefits of conducting such an exercise are tremendous. In this issue of SiriusPerspectives, we explain a three-step process for performing an audit of a b-to-b organization’s processes and activities in order to identify the areas with the greatest opportunity for improvement.

process audit

Map the Current State

Start by documenting the organization’s current workflow, beginning at a high level and drilling down into more detailed activities. Don’t assume existing process documentation is accurate. Interview the people who perform the tasks or, better yet, sit with them and record how they do their work. Use the following guidelines to create a clear map of the organization’s activities:

  • Capture processes and sub-processes. Begin with product management, sales and marketing as the highest, or Level 0 (L0), processes. Then map out the Level 1 (L1) activities that comprise each of the L0 processes, and the Level 2 (L2) activities that make up the L1’s. For example, common L1 activities that comprise marketing include demand creation, portfolio marketing, strategic communications and marketing operations. Further deconstruction of demand creation into L2 activities could yield tasks such as lead qualification and pipeline acceleration. Mapping more granular Level 3 tasks (and beyond) is not necessary for the audit itself, but will be useful when optimizing or redesigning a specific L2 process.
  • Identify processes, not functions. Processes are comprised of actions, whereas functions are comprised of individual roles. When mapping processes, don’t simply redraw the org chart; look at the various activities the organization performs – which may cut across functions – and record those instead. Then rename the processes using active verbs. This may seem like a matter of semantics, but it’s an important step in distinguishing processes from functions. For example, lead qualification could be restated as “qualify leads.” Choose verbs that correspond to specific outcomes rather than vague terms like “manage” and “administer.”
  • Draw the map. Classify each of the processes as core, supporting or management. A core process is a primary operational activity (e.g. qualify leads). Supporting processes facilitate core processes (e.g. analyze performance). Management processes (e.g. create marketing strategy) govern core processes. Depict core processes as a hierarchy (L0, L1, L2 etc.) while supporting and management processes can be shown as horizontal or vertical bars spanning the core processes.
  • Identify inputs and outputs. Any process represents the transformation of inputs into outputs – hopefully of higher value – that are delivered to the (internal or external) customer of the process. For example, in the telequalification process, automation qualified leads (AQLs) are an input, and the outputs include telequalified leads (TQLs) that are sent to sales reps. In a separate matrix, capture the inputs and outputs for each process, as well the persons or entity performing the process and its recipients.

Two: Talk to the Customers of Each Process

The next step is to get feedback from the internal customers (output recipients) of each process. Their perception of the purposes and characteristics of a successful process should determine what improvements are required. Capture the following information about each process:

  • Voice of the customer. Have an open-ended conversation about each process and its current state. How do customers define a successful outcome? What’s important to them? If there are multiple people who serve as customers for a process, speak to as many as possible to get a diverse sample and analyze their feedback to determine common themes. The voice of the customer can be summarized in the matrix with key quotes (e.g. “I need leads sent to me at an even cadence, not in big waves and then long droughts”).
  • Key issues. Translate each common theme identified in the customer feedback into a key issue, revealing the impact of the customers’ concern. For the example of inconsistent lead flow, the key issue would be “Erratic lead cadence makes it difficult for reps to manage their time and balance lead followup with their other responsibilities.”
  • Critical requirements. Define the changes that are required to resolve the key issues raised by customers. This step should also determine the metrics that will be used to track and evaluate the results of process improvements. If possible, define the target value for these metrics. For example, to improve the qualifying leads process, the critical requirement might be “Sustain a steady flow of leads to teleprospecting reps (20 leads per day per rep, plus or minus five leads).”

Three: Measure Activity and Performance Gaps

Based on the hierarchical process map as well as the definition and metrics for high-quality processes, it’s possible to assess the current state and identify process and performance gaps. There are two types of disconnects to evaluate, both of which are important for driving process excellence:

  • Activity disconnect. Examine the current process hierarchy and flag any orphan activities that either don’t add value or are not aligned to organizational goals. Every core process should be aligned with relevant processes in adjacent levels of the hierarchy, and any supporting or management process should facilitate or govern relevant core adjacent process. Orphan processes that don’t ladder up to higher objectives (e.g. reports being generated that aren’t used in decisionmaking) should be improved or discontinued.
  • Performance disconnect. Compare the metrics and targets identified in critical requirements to the current performance of each process. Is the process being measured using metrics that customers care about? If so, how close is the actual performance to what the customer needs? When measuring, be wary of pitfalls like using averages to track performance, as this could shield troublesome variance in the process. In the lead flow example, an average over a six-month period might show that marketing delivered 18 leads per day per rep, but a day-by-day analysis could show frequent swings between too many and too few leads.

The Sirius Decision

A process-based view of an organization provides deeper insight into performance than a functional view, which can help maximize value both for external and internal customers served by the organization. While the process audit is a valuable first step to improve operational efficiency, the work doesn’t end there. Critical next steps include project prioritization, implementing process improvements and putting controls in place to ensure that gains are sustained over time.