Exercise – Use the pie chart that shows the percentage of consultancy spend in various functional areas and shown below, to prompt a discussion. For example, ‘Operations and process management is the biggest single sector of spend in the consultancy market. Why do you think this is so?’ Try to guide the discussion to the idea that excellence in operations management both reduces the cost base of the operation and helps bring in more revenue. We call this the double whammy effect of operations. No wonder it is important when it can do both these things. ‘Remember the old adage; profit is a very small number, made up of the difference between two very big numbers. It only takes a bit to be taken off costs and bit to be added on to revenue to make a big difference to profit’.

It may be a good idea to relate this discussion, not only to the influence that operations has on cost and revenue, but also to the other contributions of effective operations and process management as described in Chapter 1. These are the effects that operations can have on the asset base or investment in the organization and the effect that operations and processes management has on building the capability that will allow the company to develop new products, services and processes in the future.
We find the Brussels Airport Case Example (included in the additional case examples section)
useful for identifying different types of process. In class, get someone to read out the case example (or read it out yourself), then, whenever a process is mentioned, write it on the board as being either a material, information or customer transforming process. A suitable blank slide is included in the PowerPoint files.

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The consultancy services market % of world revenues of 40 largest firms Financial 6 Marketing/sales 2 Organizational design 11 Benefits/Actuarial- 16 IT strategy 17 Operations and process management 31 Corporate strategy 17