Running your organization smoothly primarily depends on the business processes you have implemented. You’ll agree that if there is an issue with any of these processes, it can cause losses in time, finances, and your entire operations.
To avoid these problems, you must make your processes fail-safe by adopting business process improvement methodologies.
In this blog, we discuss the concept of business process improvement, how you can implement it in your business, and how it helps to modify your organization's processes and operations. We'll start with a proper explanation of what it entails.
What is Business Process Improvement?
Business process improvement (BPI) is a strategic approach that assesses and redesigns the existing processes in an organization. BPI helps to identify inefficiencies and errors in a system and creates a roadmap that will streamline workflows and boost performance.
Every activity, department, team, or individual within an organization has its own set of processes. Many of these processes, such as marketing campaigns and sales activities, are repeatable, and their effectiveness determines the performance of a business.
However, it is easy to overlook how well the processes for these teams work, which can cause performance and growth challenges.
Through business process improvement, you can identify which operations, employee skills, or technologies need improvement. Then you can implement measures to improve accuracy, effectiveness, and efficiency.
What are the Benefits of Business Process Improvement?
1. Better Time Management
Business process improvement helps to identify time-consuming tasks and eliminate or address them.
For instance, as part of your process improvement strategies, you can use automation tools to reduce the time spent on manual and repetitive tasks, like data entry, and free up employee time. According to Workmarket’s statistics, 54% of employees believe they can save 240 hours of work time annually through automation.
With BPI, you can eliminate unnecessary steps in your processes, improve your turnaround time, and give employees more time to focus on other value-added activities.
2. Cost Reduction
Business process improvement techniques help you identify the processes that involve unnecessary resource spending to cut down costs. It helps you reduce waste, streamline processes, and optimize resource allocation.
With BPI, you can maximize resources such as time, labor, and materials. For instance, implementing an ERP system can eliminate errors related to paperwork, enhance the accuracy of processes, and reduce operational costs by up to 23% (Aberdeen Group).
You’ll also see an increase in revenue after improving processes like customer communication, inventory management(If you work in retail), quality control, and more. According to a Gartner survey, 55% of 20 companies that implemented process improvements had a significant return on investment.
3. Improved Output Quality
Business process improvement enhances the quality of your outputs and deliverables. Whether you sell products or provide services, BPI helps to eliminate workflow errors, reduce defects, and improve quality control measures that lead to consistent and high-quality results.
You can complete tasks quickly, provide high-quality service, improve your business’ reputation, build customer trust, and increase the chances of turning new clients into repeat customers.
4. Increased Employee Satisfaction
Business process improvement creates clear, streamlined, and efficient processes that make work productive and easy to understand for employees. When you provide better visible, accountable, and well-documented processes, you set your team up for success and improve employee happiness.
In addition, involving employees in process improvement initiatives fosters a sense of ownership and makes them feel valued. This, in turn, leads to increased job satisfaction, higher morale, and improved overall employee engagement.
5. Improved Customer Satisfaction
Business process improvement directly impacts customer satisfaction. It helps you identify bottlenecks and guides you in creating solutions to streamline the customer journey.
BPI solutions reduce response times, enhance the quality of products or services, and help you deliver better outcomes that add value to your customers. Satisfied customers are more likely to become loyal, recommend your business to others, and contribute to your long-term success.
6. Enhanced Business Performance
Business process improvement drives overall business performance. It optimizes processes, improves efficiency, maximizes resources, increases productivity, boosts revenue, and makes your operations run more smoothly.
By continuously assessing and improving your processes, you will create a more efficient organization that will adapt to changing market conditions, be ahead of the competition, and achieve sustainable growth.
When Do You Need Business Process Improvement?
There are several indicators that suggest a need for business process improvement. You can hire a BPM consultant to be completely sure that your business system needs improvement. Nonetheless, here are some common signs you may need to implement business process improvement:
- Inefficiency: If you notice that your operations are slow, time-consuming, or prone to errors, it may be a sign that your processes are not optimized. Business process improvement can help identify and address these inefficiencies, making your operations smoother and more effective.
- Customer Complaints: When you receive consistent complaints or negative feedback from customers regarding delays, errors, or poor service quality, it indicates a need for business process improvement. Analyze and enhance your processes, to meet customer expectations and improve satisfaction levels.
- Low Productivity: If your employees are struggling to meet deadlines, experiencing high workloads, or lacking clarity in their tasks, it may indicate the need for business process improvement.
- Rising Costs: An increase in operational costs without a proportional increase in output or revenue is a red flag. Business process improvement can help identify areas of unnecessary spending, eliminate wasteful activities, and reduce costs while maintaining or improving the quality of your service.
- Changing Business Environment: When your business undergoes significant changes such as expansion, mergers, or the adoption of new technologies, it may require process improvement to align with the new requirements. BPI can ensure smooth transitions and effective utilization of resources.
- Lack of Process Knowledge: When there is no documentation or clarity on how to execute processes and what outcomes to expect, it results in inefficiencies. Processes may deviate from their intended course and cause revenue leaks and operational gaps. Implementing BPI will help identify, document, and disseminate process knowledge throughout your organization. It ensures that everyone knows what to do.
- Non-Standardized Processes: Processes are standard sets of activities, tasks, and actions geared toward achieving consistent and effective outcomes. If your organization lacks standardized processes and each team or individual perform tasks differently, it can cause inconsistencies, inefficiencies, and confusion. Business process improvement can help establish standard procedures and guidelines, bringing consistency and clarity to your operations.
Steps to Implement Business Process Improvement
1. Map Your Business Processes
To implement business process improvement, you first need to identify the specific process that needs improvement. Business process mapping is an excellent way to understand how your organization works and find inefficient activities.
Create a process map that visualizes all the operations within your organization and pinpoints the areas for optimization. To create a process map, you can draw a flowchart manually with a pen and paper or use workflow automation software like Kissflow. Alternatively, hire one of our business process improvement consultants to help you with this stage.
With the process map, you will see who is responsible for each activity within your organization and get actionable insights to optimize them.
Once you have your processes mapped, you can analyze the pain points within your current workflows. At this point, you should involve your entire team to provide feedback and innovative solutions. You can ask yourself the following questions:
- Are there any steps within the processes that are taking longer than expected?
- What are the main steps and activities that cause inefficiencies within the system?
- What are the factors responsible for delays and missed deadlines?
- Which activities cause financial strain in the organization?
You can also use other process improvement techniques like the 5 Whys of root cause analysis to ask questions and discover the cause of the inefficiencies within the system.
Now that you know the inefficiencies in your process, you need to redesign it. Here are some best practices you can follow:
- Pick a process improvement solution that is effective in the short-term and sustainable and cost-effective in the long term.
- Determine the exact scope of change and what impact the new process will have on your business.
- Decide what metrics will be appropriate to measure and compare the new process with the old one.
- Perform a risk analysis to take note of anything that might go wrong.
Once you have an action plan, it’s time to implement. Effective implementation is crucial for the success of a BPI initiative, as any mistakes or failures may cause more losses than the inefficiencies of the original process.
If you want to succeed at this step, here are some best practices that you can follow:
- Implement the changes first at a small scale before carrying out the change company-wide to reduce risks.
- Invest in the right technologies and tools.
- Inform every team member about the process change and what they should expect.
- Test in real-time and make corrections.
- Get additional resources where necessary.
5. Review and Refine
Once you implement the change, it’s time to review and determine if the new process works well. You should monitor and assess its impact on your organization. Sometimes it might take days,r weeks, or months to determine the overall impact of the new process.
Business process improvement is not a one-off activity. It is vital to monitor and evaluate your processes continuously to ensure they function as you intend.
Business Process Improvement Methodologies
There are different methodologies you can use to implement business process improvement. Here are some common BPI methodologies that have been very effective across several industries.
1. Six Sigma and Lean Thinking
Six Sigma measures the inconsistencies in a process to reduce variation and defects. It uses a principle called DMAIC, which consists of the following steps:
- Define the problem
- Measure the current metrics as well as the metrics after the improvement
- Analyze any defects or inconsistencies
- Improve the problems
- Control to ensure that the new process works perfectly.
Lean thinking is a modification to Six Sigma. While six sigma identifies defects to fix them, Lean eliminates waste. It aims to eliminate tasks that do not add value to your business. Thus, all tasks left become valuable, and this results in improved productivity and increased customer satisfaction.
2. Agile Methodology
Agile methods were initially for software development but now extend into business process improvement as well. It emphasizes iterative and collaborative approaches, quick adaptations, and responsiveness to changing requirements.
Agile’s focus is to quickly test and experiment with new ideas or processes. Rather than investing time and resources into something that may not work, the idea is to first try it out, learn from any failures or shortcomings, and iterate or move on to another approach.
3. Total Quality Method (TQM)
The Total Quality Method is similar to Lean, but it focuses on delivering value to the entire organization rather than individual processes. It aims to enhance quality across all aspects of the organization, including processes, products, and services.
With Total Quality Management, each department within the organization, including top management, must contribute to customer value.
4. Theory of Constraints (TOC)
TOC identifies the most significant constraint or bottleneck in a process and focuses on optimizing that constraint. The Theory of Constraints uses Five Focus Steps, which include the following:
- Identify the bottleneck
- Remove the constraint
- Align the correction of the constraint across with other activities
- Identify other possible actions to remove the constraint
- Move to a new era of inefficiency
The Theory of Constraints (TOC) is an ongoing process. As you resolve one constraint, it shifts attention to the next bottleneck within the TOC's scope.
Kaizen is a Japanese term that means "continuous improvement." It focuses on making small and consistent changes to processes on an ongoing basis. It involves the active participation of employees at all levels to identify and implement improvements.
The efficiency of every business process determines its success. Implementing business process improvement with continuous monitoring and evaluation can enhance efficiency and productivity and help you drive sustainable growth.
With this understanding of business process improvement that you now have, it's time to analyze and fix any flawed processes within your system before they escalate into major issues.
Begin your journey towards enhancing process efficiency with our industry-standard BPM consulting service and achieve significant improvements in your processes.
Schedule a free consultation with an expert business process consultant today.