According to surveys conducted, as of 2016, 66% of enterprises run a business process improvement program occasionally or never.
Of the 20% that undertake process improvements, 5% record little to no success, 28% experience success limited to individual departments but do not record enterprise-level success, and 19% experience success after significant difficulties.
With these staggeringly low numbers, especially when you consider the importance of efficient business processes for success for any organization, we have put together our knowledge in this article to inform you of everything you need to know about business process improvement.
So, without further ado, let’s get to it!
What is Business Process Improvement?
Before you can work towards improving your company’s business processes, it is imperative to understand what a business process is.
Simply put, a business process is a series of tasks that you or your team members perform repeatedly to create a product or service. This product or service can be for your stakeholder, customer, or sponsor.
A business process aims to provide value to a customer, starting with an objective to the achievement of a goal.
Generally, business processes can be divided into three key types. These types are:
- Managing Business Processes: these processes manage the functioning of a system.
- Operating Business Processes: provide the main business of a company and make up the central income stream.
- Supporting Business Processes: serve the basic business. These include for example human resource management, accounting, and technical support to name a few.
Therefore, you can understand Business Process Improvement as the exercise of identifying, analyzing, improving, and then reviewing existing business processes.
This is accomplished by mapping out business processes, identifying any inefficiencies, redesigning the process, and then measuring it against the initial design.
Looking for the best business process management software? Read this:
What is the Purpose Behind Conducting Business Process Improvement?
There are many reasons behind the need to improve your company’s business processes.
These reasons can be differentiated as falling into one or more of three categories.
These categories are:
Purpose 1: Reducing Process Time
You may wish to improve your business processes so that you can find ways to carry out steps more efficiently and faster.
Analyzing your processes can help you eliminate unnecessary steps or invest in technology that can make your processes faster.
Purpose 2: Improving the Quality of your Output
You may want to improve your business processes to be able to identify those processes that harm the output you and your team deliver.
Such steps may cause defects and errors.
Therefore, improving your processes can help you deliver a better output while using the same input of resources.
Purpose 3: Avoiding Waste
Improving your business processes can help you discover wasteful steps letting you cut them out of your workflow.
This can help you with the first two goals mentioned above, but can also help you increase your overall productivity.
Cutting out unnecessary steps can free up your team’s time to focus on value-increasing work.
Which Business Process Improvement Methodology Should You Use?
There are different types of methodologies you can adopt when looking to improve your processes.
Deciding which process improvement methodology to choose can be a whole other ball game, so here are some of the different methodologies available to choose from.
1. Six Sigma
This business process improvement methodology allows companies to measure inconsistencies or defects in a process so that they can deliver better products and services.
This methodology has further two sub-methodologies. Namely, DMADV for creating new processes, and DMAIC for improving your existing processes.
DMADV follows these steps:
- Define: you need to define the process goal, while also keeping in line with the company’s overall strategy and your customer’s needs.
- Measure: you need to measure which factors are critical to the quality of your product or service.
- Analyze: once you have defined and measured, you need to analyze various options regarding design and development.
- Design: you now need to design your process
- Verify: lastly, verify that the design meets your process goals while also meeting customer needs. You need to then implement the process if the pilot is successful.
The sister methodology, DMAIC requires you to:
- Define: identify and define the opportunity for improvement.
- Measure: measure the performance of your existing processes.
- Analyze: analyze your processes so you can highlight any defects, as well as their root causes.
- Improve: address the root causes and improve the process.
- Control: you now need to control the improved process as well as future process performance so that you can avoid any defects should deviation occur.
DMADV uses a cause and effect analysis and should be conducted is your processes do not meet the required standards even after improvement.
2. Total Quality Management
Total quality management is a business process improvement methodology.
This methodology is best for those environments that are constantly changing. The methodology incorporates a system of practices, tools, and training techniques that will adapt along with customer needs.
This methodology encourages:
- Obligation-based continuous improvement
- Improvement ownership is driven by a need to keep up with customer demands.
If you want to use total quality management there are certain general principles you should follow. These include:
- Your organization should follow a systematic and strategic approach to achieve your goals
- All employees of your company should work towards the same goals. Everyone can understand what classifies as quality through effective communication and training.
- Quality levels are determined by customers
- Your organization will define what steps are required for any process and then monitor performance accordingly.
- Your company should continually be looking for means to be more effective and more competitive in the market.
3. Lean Manufacturing and Lean Thinking
This process improvement methodology aims to reduce waste from processes.
With Lean Thinking your company aims to:
- Mend imbalanced production quantities
- Reduce production bottlenecks
- Avoid inventory errors
- Fix product defects
- Reduce wastage
- Better transport inefficiencies
Lean Manufacturing tries to maximize all your business processes that add value. You also want to reduce or preferably remove steps that do not add value.
4. The Infamous Kaizen Methodology
Kaizen is a Japanese term that means “to take part” and “to make good”.
With the Kaizen methodology, your company will make small incremental changes. These changes should be routinely applied over a significant period to allow improved performance.
The Kaizen methodology aims to improve productivity while also eliminating wasteful activities that occur in business processes.
5. PDCA (Plan-Do-Check-Act)
The PDCA cycle comes from the Kaizen philosophy. This methodology addresses the entire range from the beginning to the end.
By following the steps, plan-do-check-act, when performing projects your team can maximize effectiveness as well as long-term success.
This type of methodology is suitable to be adopted by any business as well as any department in an organization.
Steps to Business Process Improvement
Once you have decided on the methodology to adopt to improve your business processes, you have an idea of the approach you and your team will be taking.
However, the question is, how and where do you start?
Here are some basic steps you can follow to get the ball rolling on your process improvements.
Step 1: Identify your Processes
Without knowing what your processes are, you cannot analyze where changes need to be made, or how to improve their efficiency.
Business process mapping is a great way of getting an overview of your processes but also highlighting any inefficient process.
The use of software technology is the best way to map out your business processes.
Workflow management applications give you the ability to track your business processes in real-time.
By doing this you can:
- Benefit from complete process tracking, thus allowing you to see which team member is working on which task.
- Through process tracking your team members become accountable for their work thus leading to higher productivity and product output.
- Workflow management software also usually allows workflow automation. Through automation, your employees no longer need to perform menial processes and can focus on the work that adds value to the customer and your organization.
Step 2: Analyze
Once you identify your business processes you can pinpoint steps in your processes that are not working well. It is now time to analyze what the issue is and what you can do to fix it.
One way to do this is through the 5 Whys method. This method starts by asking a question and aims to get to the root cause of the problem by asking ‘why?’ 5 times. This way you can answer why something is done, and thus why the process breaks.
Other than the 5 whys method to find the root cause you can also use root cause analysis. To conduct root cause analysis, you need to:
- Define the problem
- Collect data
- Identify possible causal factors
- Identify the root cause/causes
- Recommend and implement solutions
Moreover, you could also conduct cause and effect analysis. To conduct a cause and effect analysis you need to:
- Identify the problem
- Work out the major factors involved
- Identify possible causes
- Analyze the diagram you have created in the steps before
Therefore, in the analysis of your processes you need to:
- Understand your business needs
- Recognize the main metrics
- Take stock of the steps in your processes with the most friction
This is because, if you simply solve the effects of an issue, your issue will persist. It is imperative to identify and analyze the cause of the problem so you can solve the issue from its origin.
Step 3: Redesign
Now that you have identified your process’ inefficiencies and determined the root cause of the problem, it is time to find a solution.
This is a step that is easier said than done. Especially considering there is no blueprint for the right way to do this.
However, here are some good practices to follow when redesigning your business processes.
- It is important to compare your redesigned process to the old one to determine if it is more efficient. Therefore, having suitable metrics for comparison is essential to determine empirically whether the new process is better.
- Make sure you are not limited by short-term solutions that could be costly or inefficient in the long run. Think long-term and leave margins for error.
- Involve people directly involved in the process. They will be able to provide a different knowledge base and may be able to offer input on how you can improve and what you can improve on. Furthermore, such individuals will be more likely to accept the change if they were part of making it and were informed from the early stages.
- Be aware of the impact of the solution you are proposing. You should define the precise scope of your change to avoid any potential risks from coming up that could otherwise have been avoided.
- Although you should predict the impact of your solution, your prediction may not always be entirely correct. There is always a chance of error. Therefore, it is always a smart idea to perform a risk analysis with risk management software.
Consider conducting a brainstorming session to come up with ideas to improve your current processes to be more efficient. Once you come up with possible solutions, analyze these ideas. Such an analysis will highlight the impact of such a proposed change, as well as any potential risks and issues that may arise.
Step 4: Implement the Change
It is now time to implement the changes to your business processes.
Before you can do this, however, you need to get buy-in, in the form of support from senior management and stakeholders. Changes can take time and resources and without this support, you will be unable to implement the changes.
Following on from buy-in, as we mentioned, such changes often require time and resources. Therefore, you need to acquire the resources you’ll need to implement the new processes.
To make sure that there is no pushback from those that will be affected by the change, and also that the implementation is a success, make sure that you implement the change at a small scale, to begin with. Testing the change on a small scale and benchmarking it to the original process will allow you to mitigate any potential risk.
Step 5: Refine and Review
Similar to how you reviewed your organization’s existing processes to determine where you required improvements, you need to review the improvements.
Monitor the progress of improvements you made to your business processes and ensure that they are meeting the milestones and goals you set.
There is always a chance that the improved process does not yield better output, or maybe even still the output is better but the defect rate isn’t.
Moreover, Business Process improvement is not a one-time action but in fact, is a continuous process.
Not only are there always new changes for your company to test and implement, but you also need to monitor and make sure that the processes are providing the most efficient workflow possible.
Tools to Aid Your BPI
With the amount of preparation and management involved in any improvement to your processes, help from tools can make the process easier.
Here are some tools that can help you in your improvement journey.
1. Kanban Boards
Kanban boards give you a visual overview of your entire process and workflow.
Kanban provides flexibility and you can divide your board as you wish, thus giving you as detailed a view of your processes as you like.
With this visibility, you can gain clarity as to where you can make adjustments for more efficient processes.
Moreover, since the board is available for your whole team, every member can see the processes at a glance and this in turn allows you to take a more collaborative approach to improve your business processes.
Flowcharting, much like Kanban boards, provides a detailed breakdown of processes into individual steps.
With flowcharting, you and your team can better understand the processes and the efforts behind every step of the process.
A good flowchart can help your team communicate and clarify what is happening or what processes in your organization need to improve.
3. Mind Mapping
Mind mapping is a great way to gather information related to your processes.
With mind mapping, you can link important pieces of information, manage interconnections, and link to documents, and other summaries for each piece of data.
You can also use mind mapping to create a work breakdown structure that will give you an overview of your process.
By using a mind map you can organize the findings of your new processes. This can make the process of relaying new process improvements to your team or stakeholders easier.
1. What are some examples of business process improvement?
Here are some examples of how different business processes can be improved:
- Improving product quality
- Making production more cost-efficient
- Reducing risks
- Better forecasting
- Improving time-efficiency
2. What are the benefits of Business Process Improvement?
Following is a list of benefits you can get by improving business processes:
- Higher productivity
- Increased employee and customer satisfaction
- Increased efficiency
- Better decision making
- Continuous improvement
3. Why is business process improvement important?
Business process improvement helps companies upgrade and evolve with emerging technology and changing market trends. Constant improvement leads to better results and consistent growth.
We hope this guide will help you to carry out your business process improvement rather than just theorizing about it.
To get started, why not try nTask, it’s super effective for streamlining simultaneous business improvement processes.
So, what are you waiting for? Go at it and get to process improving!