Managed growth: how the process approach contributes to sales, profits, NPS (on the example of STD Petrovich)

Andrei Krasnobaev, Quality Director, Petrovich Building Trading Company

- Please tell us how the use of business modeling helps you in managing business processes in your company?
First you need to tell a little about the story, how we came to the need to apply business modeling. In short: our company has a quality management system, we started developing it in 2005. And in 2006, for the first time, we received a certificate of compliance with ISO 9001. We have a network of building and trading bases. In the early 2000s, STD Petrovich - it was 2 bases with a small set of goods and services; there was no need for regulation, as such. Well, nevertheless, the company developed, the range increased, new services appeared. As the number of bases increased, it became necessary to standardize the work of the emerging network.

- Andrei, tell me, how many employees did you have in the company when the need arose? Or how many bases?

- Approximately 3-4 bases, it was in 2003-4. The heads of the divisions came to understand that it was necessary to live according to the same rules, otherwise it would be impossible to develop further. And in those years, the very first documents began to appear - how to sell, how to store goods, how to deliver, that is, some very basic things. At some point, it was decided to follow the path of implementing a quality management system, the first work procedures appeared, the company gradually took the path of standardization. Time passed, and around 2011, the company had accumulated a huge documentation base. It was such a huge pool of textual information, where the procedures were mixed with the rules, that is, everything was completely in one “pot”. And, of course, at some point it became very difficult for this system - more than 500 documents to support! And, it is necessary to understand, the change of one process always influences other processes, removed one participant in one process - you need to change his job description. That is, our job descriptions were, in principle, absent, as a fact, because they could not be kept up-to-date.

- Until 2011?
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- Well, I mean the terms. In principle, normal job descriptions appeared with us only when we implemented Business Studio. There was an elementary problem: the number of posts is increasing, the number of processes is increasing, the number of documents is increasing - and how to manage this pool of information ?! And at that time we began to think about applying an architectural approach to building a business, that is, we came to understand that processes should be described, they should be related to organizational structure, etc. And our first experience of modeling, process description was associated with the Org-master program. It was a small project, it lasted 2 years (2011-2012). In the course of this project, we got a great experience in designing corporate architecture in general, but the company's requirements for the modeling product were slightly higher than the Org-master could provide us. But the problem and the need to build a complete business architecture has not gone anywhere.
And in 2013, we started a project to introduce Business Studio. It was already obvious to me at that moment that the Business Studio program, even in the old version 3.6, is exactly what we needed at that moment in time, since it covered all our needs in terms of software for modeling business processes.

- Did you immediately choose Business Studio? Or compared this system and choose?

- At one time, I used both ARIS and BPwin, then the Org-master. But again, there are other different programs ... We watched all these programs, tried to work in them, but at BS we have all the advantages, including the price, Russian support, and constant updates, that is, we understood through expert methods that need exactly BS.
BS implemented, we are not from scratch. And we already took our documents, the described processes and transferred them to the system, creating regulations. In this sense, it was somewhat easier for us than creating regulations from scratch. The implementation project took about 1.5 years. Again, I repeat - we described both the main and supporting processes, we described absolutely all the processes! What was it for? If we did not describe all the processes, but some of them, then the same job descriptions would be incomplete. The secret of the project’s success lies precisely in the holistic approach to model building, and not fragmentary.
As a result, we have the rules of all processes, normal organizational structure, normal job descriptions, a complete reference book of documents. The HTML publication that we derive from the BS, we place on our internal website and all employees have access to it. Of course, it took time and effort to still teach people how to use the portal, because the interface is, let's say, quite new and unusual for ordinary employees.

- How long was the process of training people in the company?

- Well, look, when we described the processes, we organized the training of employees in our outlets, gathered groups and trained. In total, it lasted several months.

- How do you implement the tasks you are assessing?

- We have dealt with our processes, with the organizational structure, with job descriptions, with the QMS documentation. Last year we formed a directory of goals and indicators. For the convenience of working with indicators at the request of the management, the company had to make additional reports in MS Excel format - this is our KNOW-HOW, so to speak, since we no longer saw this report from anyone.
This year, a full-fledged interactive Strategic Map of the company was made, and it is also available on our portal and is available to all employees. Also this year we have fully formed the directory of the company's projects. They are also displayed in the publication, as well as in the Regulations on the units. In the near future, we fully integrate the QMS audit system into the BS, link it with posts, be able to track deadlines for the implementation of the CA and PD, generate the necessary reports.
That is, almost everything we are doing now, we are closing in one tool. In this sense, BS satisfies us 100%. And as top management says, this is the basis of quality, and now we can no longer imagine - how can this change processes and not reflect this in the model ?! How can you “kill” the process - and not reflect it in the business model? How can you introduce a new position - and not add it to the business model, and not figure out what people will do? That is, this process is ongoing with us on an ongoing basis, we keep the business model up to date. This is the second key success factor for implementation.

- It's great! If all managers thought so, worked through all the changes first in the model, there would have been fewer errors in the activities of subordinates.

- Of course! Well, how could it be otherwise? If the model is not supported, it will quickly become irrelevant. This is a key management task.

- Let's now talk directly about the effects. What are the performance indicators of the most noticeable improvement, in your opinion, thanks to the use of process management?

- It is very difficult to compare what was with what has become. It is almost impossible to assess the effect of the introduction by sales divisions, because the company has doubled. Accordingly, the sales volume increased by more than 2 times. To say that this is precisely the effect of the implementation of the process approach or the BS itself - it's hard to say ... According to our strategic map, standardization of work is one of the company's goals at the potential level, and besides this there are also many other goals that add up to give what is called the synergy effect.

- Well, and the growth of the company? ... You do not associate with the fact that optimized activities, and, accordingly, received new opportunities for development?

- Yes, the process approach is the foundation for growth. Now we can not even imagine a company without this tool. If you turn it off now, in a few months the company will be just chaos! Of course, the main effect is that process managers manage them much more efficiently!

In general, the company is continuously growing. And even now, in a crisis, we have growth, and our business model is showing its effectiveness. And our electronic model is a kind of basis, providing a tool for managing a company.

- And in terms of customer service, can you evaluate? Do you track their satisfaction?

- Yes of course! We constantly track customer satisfaction. And according to our internal indicators, it is now 82% (this is the NPS index). There is also a Yandex-market statistics, the NPS index is there - 74% is a very high indicator.

- How long have you been monitoring these indicators? Is it possible at least to give an approximate assessment of how much improvement has occurred in recent years?

- This indicator, of course, has always been high with us, and it is steadily increasing moderately, we maintain standards at high levels.

In addition, we have another indicator - the timeliness of the level of delivery to the client, this is one of our main advantages. This indicator is at the level of 99%. And this is also an indicator that is always at a high level. We do everything to keep it at this level, we change, we introduce new tools and automated systems. Of course, if we managed delivery by the same means as 3 years ago, of course, losses would be inevitable and we would not be able to manage this process so effectively!

- What about reclamations? Are customer complaints and complaints monitored?

- The level of claims in our country changes in proportion to the change in revenue, but it does not grow from year to year, this is also a good signal that the company's growth has a qualitative character, and we manage to manage this process while maintaining the level of service for customers.
Of course, it is impossible to have 0% of claims, suppliers are changing, goods are changing, employees are changing, customer needs and expectations are changing, new regions are emerging, yes, whatever! And, of course, all this affects us, nobody has canceled variations in the processes.

- Tell me, how much has your company grown since 2013?

- 2 times. In 2013 there were about 1,800 people, now about 3,000 people. And approximately in the same proportions, the number of customers and the level of sales increased.

- As for the losses of the company, thanks to the standardization and regulation of activities, how much did you manage to reduce losses? What problems did you encounter and how did you eliminate them?

- The process of improving processes in our company is ongoing. Each head of the company thinks about how to make the processes in his unit more optimal. In addition, we have the so-called Quality Circles, which includes completely different employees of the company, ranging from the lower level to the General Director, and they constantly consider some improvements / changes in the activities of our company, and most of them relate to operational processes . Monthly meetings are held, decisions are made. In the year we consider more than 300 proposals for improvement.

- To what extent are company owners involved in this modeling process?

- Owners do not participate directly in the operational management of the company. That is, this local business model created by us is used by local managers. It is needed for process owners. And we already have a culture when they undertake some activity, consult with us, and as a result of some activity a new process appears. And we immediately implement it in our business model in order to improve its quality.

- And personally, you and other top managers ... how much time do you spend on managing your business processes? Does the model help you save time?

- Increases time to work out business processes, but automatically reduces the time to correct errors and failures. Yes, one has to spend time on describing, keeping business processes up to date, but this is the most important work of the owners of the processes. In addition, we have a procedure for updating business processes, the procedure for updating the organizational structure, the introduction or removal of indicators, setting goals, planning projects. But it brings great benefits! Saving much more time than that which is spent on this activity.

- Thank. And then the last question - do you agree with the fact that without the use of business modeling it is impossible to effectively develop a company for many years?

- We are sure of it! It is the business model that is the foundation, the basis of the activities of any civilized company. The basis of the work of STD Petrovich is operational excellence - in the framework of any processes, and indeed, effective management of the entire company is simply impossible without building and having an integrated business model.

Information about the company:

Petrovich Building Trading House was founded in 1995 and specializes in the sale of building materials. The company owns a network of 15 sales offices in St. Petersburg, the North-West Federal District and the Central Federal District, as well as production sites. The range of the company has more than 15 thousand SKU. The bulk of sales are general construction materials.

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