What’s the Difference between PEX, OpEX, and Business Excellence?
Ask 100 people what the difference between Process, Operational, and Business Excellence is, and you’re guaranteed to get 100 different answers.
Although these three terms are not the same, they are frequently misused, one for any other.
The reality, however, is that Process, Operational and Business Excellence form a hierarchy, starting with Process Excellence as a subset of Operational Excellence, and itself as a subset of Business Excellence.
Process Excellence (PEX)
Process Excellence is concerned with the process itself – making processes more efficient and effective through design and testing. The main goal is to deliver consistent, positive outcomes with minimal variation (which Six Sigma tackles) and waste (which Lean deals with).
Process and Operational Excellence are frequently used interchangeably, but this is not wholly accurate.
Operational Excellence (OpEX)
Operational Excellence is a broader concept than Process Excellence. The latter is concerned with process, but operational and transactional environments have more going on within them than simply processes.
Operational Excellence encompasses not simply processes throughout the organization, but also brings within it several other ingredients, notably culture and how the organization is viewed from a value creation perspective. How people, technology, tools and other resources combine and interact with each other and with your processes to form key components of the Operational Excellence mix.
[Note: OPEX is accounting for Operational Expense, OpEX denotes Operational Excellence]
Moving to a more macro view, Business Excellence encompasses both PEX and OPEX with the perspective of achievement of results.
Business Excellence also includes overall business strategy, investor, customer, partner and stakeholder communication and overall development of the organization into the future.
Process by itself is no guarantee of success, as you may have excellent processes in situ, however they may be taking you in completely the wrong direction. Further, if business strategy is weak or wrong, then efficient and effective processes may take you over the cliff that much faster. Business Excellence requires an holistic outlook of the whole organization, all set within the overriding context of delivering results.
- Process Excellence (PEX) – creating effective, efficient processes delivering consistent output with minimal variation and waste.
- Operational Excellence (OPEX) – PEX plus culture, people, resources, systems, and how they can optimally work together.
- Business Excellence – focused upon delivering overall results in a pragmatic, consistently successful fashion.