As businesses grow and evolve, so do their business processes. Depending on the size of a company, there are dozens, if not hundreds, of business processes that stakeholders inside and outside an organization participate in daily.
A business process comprises a sequence of steps that flow in a specific order to achieve a desired outcome. The process can be dedicated to an activity such as new client onboarding, sales and marketing, customer support requests, order fulfillment, human resources and accounting.
These processes continuously evolve and therefore need constant evaluation, improvement and optimization. Outdated processes can create customer and employee dissatisfaction, costly operational inefficiencies and loss of market share.
What is business process improvement and optimization?
Effective business process management (BPM) requires a well-thought-out plan that addresses the continuous needs for process definition, execution, evaluation and iteration. At the core is business process improvement and optimization -- an operational practice that identifies, evaluates and resolves business process problems and concerns.
Business process improvement and optimization aim to redesign an existing process to make it more efficient, streamline operations, upgrade communications, reduce errors and costs, and enhance workloads. These improvements should be continuous as businesses change, evolve, expand and implement new technologies.
There are several time-tested methodologies to improve and optimize business processes. The following techniques and tools place the customer at the center of a company's entire operation:
- Six Sigma has been around since the mid-1980s as a general approach to process improvement and total quality management. It uses the DMAIC (define, measure, analyze, improve, control) concept as a framework to make continuous process improvements.
- Lean thinking is a modified version of Six Sigma. It focuses on specific tasks that deliver more value to customers and identifies areas of potential process inefficiencies.
- Total quality management, or TQM, was popularized in the 1980s by manufacturers and government agencies. It focuses on eliminating process defects and improving the overall quality of the final product or service.
Why are efficient business processes important?
All companies recognize the value of efficient processes, but reality is many businesses encounter workflow inefficiencies that need to be corrected. As enterprises digitally transform in today's highly competitive business landscape, inefficient processes can negatively impact a company's entire business operations. Just one inefficient process can affect resources, manpower, profits, and the quality and reliability of products and services. Inefficient processes can create bottlenecks that hinder operations, increase costs, force missed deadlines and uncompleted tasks, and slow an organization's reaction to market swings.
Creating effective and efficient business processes can be complex and time-consuming. But keeping these processes up to date, improving them as needed and continually optimizing them can be even more difficult. People are often resistant to change, especially when processes have been in place for a long time. Yet making a process more efficient can help streamline procedures, eliminate unnecessary tasks and duplication, automate certain tasks, increase ROI, and improve employee and customer satisfaction.
What are the benefits of optimizing business processes?
A process that's well managed and continuously improved can reduce errors, shorten process completion times, enhance workloads, identify waste, eliminate duplication and increase overall business performance. Optimizing a business process can also increase consistency, quality and compliance, reduce risks, and provide greater visibility for customers and executives.
Steps to improve and optimize a business process
When planning a business process improvement and optimization initiative, determine the business goals, where improvements are needed and what needs to be optimized. A goal-centric vision sets the foundation for measuring and evaluating progress.
1. Identify a single process that needs improvement no matter how small
Focus on one process that needs immediate improvement, reach out to stakeholders and team members to determine which tasks and activities take the most time and resources, and gather recommendations on how the process can be improved. Within that process, choose a task that's the least complex and time-consuming to optimize but will show immediate ROI, regardless how small it is. Small optimization projects can still show significant results, provide easy wins for stakeholders and gain companywide buy-in for more complex process optimization activities.
2. Set business goals for process improvement and optimization
Once a process has been identified for improvement, define the purpose of optimizing the process, set the overall goals as well as smaller immediately measurable goals, and devise a plan to achieve those goals. Have a clear understanding of what optimization will achieve -- for example, financial savings, resource savings or time savings. Clearly communicate these goals to executives and stakeholders so everyone is on the same page and in agreement.
3. Create a map of the existing process
Visually map the business process using BPM and business process modeling methods that have been popularized over the last few decades. These tools can provide an easily understood, standardized way of defining how a current process flows through different departments, the various steps within the process, and the components within processes that run sequentially or in parallel.
4. Analyze the current process to isolate weaknesses
Process mapping helps analyze the current process and locate areas of inefficiency or ineffectiveness that can be improved and optimized. Also use the feedback provided by stakeholders to analyze which steps in the process take the most time, create bottlenecks, cause communication breakdowns, fail to provide value and can be reworked or eliminated, for example, by making some tasks conditional, integrating certain tasks, adapting data permissions or automating manual tasks.
5. Target specific tasks for automation
Automation provides opportunities to quickly improve and optimize a business process by eliminating manually caused bottlenecks, addressing repeatability and quality issues, and removing inefficiencies. Determine what monetary and time resources are available to invest in business process automation software and whether the necessary tools already exist in the organization.
6. Verify the initial goals of the process redesign plan
Be sure the process redesign will meet the established business goals and significantly impact process efficiency, resource savings and ROI. Business process modeling software can help measure the impact and provide recommendations on where the process can be improved while still in the pilot stage.
7. Test the new process before fully implemented
Testing and quality assurance are equally important steps to ensure the new process will work before it's implemented at scale. Optimized business processes can often be hindered by unforeseen circumstances. Testing the entire process before full implementation helps avoid reexamination and iterative redesign after deployment.
8. Continuously improve and monitor the process after deployment
Once fully implemented, measure the new process for efficiency and effectiveness. As market conditions and business operations change, so do business processes. Therefore, a business process requires continuous evaluation and monitoring to ensure it's delivering more value compared to the old process. Gather feedback from stakeholders and monitor the process for any new pain points that need to be addressed.
The ripple effect
Used effectively, improved and optimized business processes will inevitably have a positive impact on most every aspect of business operations. Improving and optimizing just one inefficient business process can have significant business returns.
Focus on quality, measure the new process against clear, realistic and measurable goals, and communicate progress regularly with stakeholders, executives and customers. These fundamental business process improvement and optimization steps will yield a more efficient, agile and smarter organization.