Business Process Improvement

Regardless of the age or size of your organization, it is likely you have one too many business processes that need to be improved. Identifying these areas of your business that need to be improved can prove to be difficult. Though in some cases it might be very apparent what needs to be changed. Finding and fixing business processes that are not as efficient and effective as they could be will prove to be a key component of the success of your company.

The goal of this article is to discuss Business Process Improvement: Identifying What Needs to be Fixed. The following insights will help companies who are committed to rooting out inefficient and ineffective processes within their organization.

Business Process Improvement (BPI) Defined

Business processes exist in every company and are either internal in nature, externally focused on customers, or a hybrid impacting internal personnel and external customers in the same process.

Thus business process improvement (BPI) is the exercise that a management team undertakes to improve the efficiency, effectiveness, accuracy, or satisfaction of a process that impacts employees or customers and when adjusted improves the KPIs identified for the process. Various tools and techniques are used to analyze the business process and identify areas of opportunity.

Since business processes develop and change over time it is worth assessing the departments within an organization to identify the key business processes that impact employees and customers.

When identifying business processes it is helpful to notate the time and costs that are involved in fulfilling the business process. This will help to prioritize which business processes can yield the greatest savings if improved.

Getting started on identifying a business process that needs to be improved

The following are some general considerations that should be given when beginning to identify business processes that may need improvement:

  • Senior Leadership Commitment: Senior leaders need to set the tone and culture for identifying business process improvements. Often the people being asked to analyze and dissect a business process are the same people who were involved in developing the process. It takes great leadership and management capabilities to avoid offending these individuals for work invested in developing processes that they may be asked to change?
  • Employee Surveys: In an anonymous survey your employees will be very candid with you about the business processes (either internally facing or externally focused) that cause them concern. A well-designed survey will result in the specific identification of concerns and can elicit ideas for resolution. It is important that the results of a survey like this are summarized and communicated to the employees. Identifying the action that is planned to be taken against each issue will help to build confidence and trust within your organization
  • Customer Surveys: A company can use information from an existing customer survey program or conduct an independent survey with customers to elicit feedback on areas of improvement needed from the customer’s perspective. Customers tend to be willing to invest a small amount of time in helping to improve the products or services they buy. A properly designed survey that is quick and easy to complete by the customer can supply a great amount of insight into the areas of opportunity that you have. These surveys can be categorized and issues prioritized. It is recommended that communication continues with your customer base on what has been identified for improvement and what the company is doing to address the concerns.
  • Employee Roundtables: Deeper insights can be acquired on business processes needing to be improved by conducting round tables with employees involved or impacted by specific business processes. Having a group discussion/brainstorm can result in understanding nuances that will not come out in a survey. In addition, individuals will build off of each other’s insights and experiences with the business process and this typically leads to better solutions.
  • Customer Focus Groups: Pulling customers together for focused discussions by a qualified individual facilitator can lead to unexpected insights that otherwise would not be evident from a survey along. Like an employee roundtable, the customers will engage in discussions/brainstorming that will identify nuances that if addressed can greatly improve the process and lead to improved customer satisfaction. In some cases your companies cost may go up, however, your revenue may go up due to increased purchases or reduced customer churn.
  • Senior Leadership Communication: It is helpful to have regular discussions amongst the leadership team of the current business process that is being evaluated for improvement. This can occur at weekly staff meetings in the form of brief updates. This regular communication will foster idea-sharing and further develop the culture as it relates to the willingness to improve processes and eliminate any sacred cows.
  • The BPI Champion: Who will be your champion for business process improvement (BPI) across the organization? This person is often the most senior leader or the Chief Operating Officer (COO). It may also be specific individuals in departments. Depending on your organization you may want a centralized BPI effort versus departmental efforts. Regardless of your approach, it is important that the organization as a whole understands who the key people responsible for leading business process improvements (BPI) are and what their level of authority for making change is.
  • How big is the BPI: Some business processes improvements (BPIs) are small and relatively self-contained in a department, while others are complex, far-reaching, and expensive to implement. Depending on the size of the BPI you may need dedicated resources to implement the necessary changes to the process

Models to Assist:

There are many ways to analyze your business and processes when conducting a business process improvement. The following are some brief descriptions of techniques you may consider using once you have identified potential processes needing improvement.

  • Six Sigma. The gold standard of process improvement, Six Sigma methodologies are immersive, highly structured, very analytic, and consistently successful in improving processes. It is recommended that companies wishing to implement full six sigma approaches to their BPI efforts hire individuals with six sigma experience and accreditation.
  • DMAIC Methodology. Many companies will use DMAIC which is a core tool used in Six Sigma projects. DMAIC stands for:
    • Define: Define the process and improvement opportunity from a business and customer perspective
    • Measure: Identify critical measures, baseline process and operational performance to quantify the opportunity
    • Analyze: Analyze process performance to understand pain-points and determine/validate root causes
    • Improve: Develop improvement solutions to address issues/opportunities and implement verify the solution(s)
    • Measure: Measure the solution with an associate control plan to achieve targeted outcomes and benefits
  • ACTTIVE™ Business Process Improvement. This is a model used by Twelve Oaks Advisors and stands for
    • Articulate: Make it simple
    • Communicate: Make it clear
    • Timebound: Make it Quick
    • Test/Trial: Make it Real
    • Implement: Make it happen
    • Validate: Make it stick
    • Enhance: Make it better
  • Process Mapping: Any processes can be broken into its individual steps. By doing this it often becomes evident steps that are either miss-aligned in sequence or which are taking too long
  • Fishbone Diagrams: Applying this technique (which is a cause and effect analysis) will lead to a clearer understanding of the flow of your process and areas needing improvement.

Business Process Improvement: Eliminating Waste to Add Value

The goal of your analysis should be to identify any was factors that do not add any value to your employees or customers. Examples to think about are:

Waste: Wasteful activities are found throughout systems and some examples are (but not limited to):

  • Refresh times of web pages: A website that takes an extra 1 second to load on a site that receives 1 million visits a year results in a collective 277 hours of lost productivity to those visiting your site.
  • Defects in products: Defects can either those that are identified at a quality assurance (QA) step or defects that end up being identified by a customer. Those identified by a customer and requiring a resolution are costly in nature. Additionally, quality defects may not be identified at QA or may not be discovered by the customer. Ultimately these defects can impact the performance of the product and the customers’ expectations, which can lead to long-term impacts on the customer relationship. Unnecessary steps: Consider the frustration and time lost to the steps you must often take to resolving a product or service issue with a company
  • Waiting for something: Amazon has forever adjusted our expectations of how long we are will to wait for something. Finding ways to improve your speed to market with any product or service has become essential to the survival of companies
  • Inefficient use of peoples time: Downtime is costly, mapping processes and fine-tuning steps ensures that time-waste is minimized
  • Inefficient use of peoples talents: It is also important to ensure that the right people are working on the right efforts
  • Unnecessary components or features: This can be difficult to identify and where fully understanding your customers’ needs and how they use your product or service will help lead to the removal of anything that is not necessary.
  • Layout: If you are a store is the layout of your store conducive to how people shop for the items they purchase, for internal functions are your warehouses organized in a logical manner that reduces wasteful movements and travel, if you are a manufacturer are the steps to your process designed in an efficient manner, if you are an office environment is the environment conducive to the type of work being performed. If it is a web-page does the customer experience reflect mindful attention to making it easy and efficient for them to find, research, evaluate, and purchase what they are seeking?

Value: Value is often measured in the eyes of the beholder. Thus, a business process may work for some customers and not for others. A key consideration is in determining what is most needed/desired by the targeted customer base, is it:

  • Lower price
  • Higher quality
  • More pleasant experience
  • A greater sense of safety

Implementation:

The success of your BPI efforts is contingent on how well you communicate your effort and training in the requirements you have for the system. Outlined below are some typical features you may wish to assess vendors against.

  • Communication: It is critical to communicate any changes you are making to processes clearly to those impacted by any changes (internally or externally). Leverage those experts within your company who are proficient in change management to ensure that the right information is being communicated to the right stakeholders at the right time.
  • Training: Depending on the complexity of the changes you are making to an existing process you will want to consider the appropriate level of training that will be necessary to ensure that employees and customers fully understand the new process. People inherently become accustomed to following a process even if it inefficient and getting them used to a new process will take some time.
  • Educating: Business Process Improvement (BPI) can become quite elaborate and it is important that your leaders have a common base of understanding of approaches to making BPI changes. The following resources are beneficial to review before undertaking critical BPI efforts:
    • The Power of Business Process Improvement by Susan Page
    • BPM CBOK® Version 4.0: Guide to the Business Process Management Common Body of Knowledge
    • Fundamentals of Business Process Management by Marlon Dumas, Marcello La Rosa, Jan Mendling, and Hajo A. Reijers
    • Improving Business Processes: Expert Solutions to Everyday Challenges by Harvard Business Review
    • The Ultimate Guide to Business Process Management: Everything You Need to Know and How to Apply it to Your Organization by Theodore Panagacos
    •  Friction: The untapped Force That Can be Your Most Powerful Advantage by Roger Dooley

Implementing business process improvements (BPIs) can lead to some of your greatest cost-saving or revenue-generating improvements. Applying a disciplined approach that includes assessing your areas of opportunity, analyzing your processes, and developing an implementation plan will lead to the successful implementation of transformational changes that will impact your organization in positive ways for years to come.

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