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Business Process Harmonization Definition

Process Harmonization is defined as the process of designing and executing business process commonality across different business units or locations in order to facilitate achievement of the targeted business objectives and benefits. Harmonization ensures a common and harmonious adoption of new processes by the different stakeholders of the business.

Though some scholars use the term process harmonization interchangeably with the term Process Standardization, some scholars specify a difference between the two terms lying in the degree of strictness of the accounting standards. Process Harmonization is said to involve a reduction in accounting variations between the different regions or business units, while Process Standardization is said to entail moving towards the eradication of any variation between different regions or business units.

The need for Process Harmonization is experienced corporations, especially large global ones composed of multiple business groups across a number of different countries and regions. These corporations develop gradually over a period of time, through organic and/or inorganic growth. When different business units evolve their own business processes, policies and practices with supporting IT systems, their business processes can turn out to be heterogeneous, complex, and non-standard. This makes it difficult for the organization to be flexible and agile to remain competitive in the global economy. This way, enterprises need to harmonize their processes across different regions and business units, due to the various constraints and business challenges faced by them.

There are multiple drivers for process harmonization and include varied scenarios like:

  • mergers and acquisitions

  • providing a uniform customer experience

  • developing agile and flexible processes

  • reducing risks in outsourcing of processes

  • organization restructuring

  • optimizing cost of IT operations, and more

While an increasing need for process harmonization is felt by enterprises, the focus on developing relevant approaches and methods is at a nascent stage. It is still in the domain of management consultants with the individual consultant approaching the problem based on previous experience and expertise. The term ‘Process Harmonization’ itself, is not clearly defined or understood by all due to its close relation to improvement and standardization processes. Clarification of these terminologies is a requirement to ensure uniform understanding and facilitate the development of solutions that are of high quality, with shorter time-to-benefit and reduced Total Cost of Operation.


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