Business Process Improvement Guide
The term “business process improvement” sounds straightforward enough: Making changes (improvements) to the way you work (your process) in order to see better results for your business.
While that definition is technically correct, in practice, business process improvement is a bit more complex. Business process improvement (also referred to as business process management (BPM), continuous improvement (CI), business process re-engineering, and others) is the practice of habitually identifying, analyzing, and improving business processes to optimize performance, improve quality, reduce waste, and create more value for customers.
Business process improvement isn’t a standalone activity: When organizations commit to practicing process improvement, they identify, evaluate, and improve their existing processes on a continuous, proactive basis.
Process improvement isn’t just about fixing existing problems – it’s also about getting ahead of the competition.
“If an organization is not continuously improving the way it performs processes, it will likely fall behind in the market.”
That’s because at least some, if not all, of its competitors will be making such improvements. Succeeding in today’s business environment means constantly looking for ways to do things better.
Why Business Process Improvement Matters
Inefficient, poorly defined, or otherwise ineffective processes can lead to numerous problems:
- Customers might complain about poor product quality or bad service
- Team members get frustrated
- Work might be duplicated or not completed at all
- Costs can increase
- Resources might be wasted
- Bottlenecks can develop, causing teams to miss deadlines
“Unhappy customers, stressed colleagues, missed deadlines, and increased costs are just some of the problems that dysfunctional processes can create,” according to Mind Tools, a provider of on-demand career and management learning solutions.
On the other hand, business process improvement can lead to many benefits that can have a direct impact on business performance. Here are just a few of these benefits.
Increased productivity and efficiency
Effective practices that support business process improvement can help remove inefficiencies and ultimately improve the productivity of team members. With tools for enhancing processes, organizations can evaluate performance metrics and evolve processes without restricting the way teams work. Reporting and analytics provide insights into delivery trends to remove bottlenecks, predict future issues, and adapt workflow processes for improved productivity.
Improving processes by adopting tools such as Kanban boards and Gantt Charts can help companies deliver software applications and other products into production more quickly. Scrum teams, Kanban teams, and operations teams can achieve a continuous flow of value by identifying hurdles sooner and resolving them more quickly.
Improved product quality
In addition to accelerating development, business process improvement can lead to higher product quality. For example, by deploying the proper testing methods, companies can be more assured that products will advance to production only when performance, security, integration, and other issues have been resolved.
Increased customer satisfaction and loyalty
Producing higher-quality products and delivering them in a timely manner can lead to more satisfied customers. Happy customers are often return customers, and that loyalty leads to increased revenue for businesses.
Improved employee morale
Inefficient processes can be highly discouraging for workers. Who wants to be part of a system that’s broken and leads to frustration? “Weak business processes can cause the morale of even the most hard-working employees to decline if they start to feel that all their efforts are being overwhelmed by the flaws of a system,” notes online job site Cleverism.
Continuous business process improvements can help set companies apart from their competition. As noted in an IndustryWeek article, “the key to differentiating your company is that your competitors do not design products, process orders through customer service, manufacture them in your plants or even sell and distribute them exactly like you do, and that’s where you can create a uniqueness that could yield a competitive advantage. It also is where your continuous improvement projects are concentrated.”
Types of Processes to Improve
Any type of business process can be improved, from the most strategically important to the most mundane. Processes can be formal or informal.
Formal processes are typically documented and have well-established steps. These are sometimes referred to as procedures. For instance, a company might have procedures in place for receiving and submitting invoices, or for establishing relationships with new clients.
Formal processes are especially important when they involve anything having to do with employee or customer safety, legal issues, financial considerations, and other critical or sensitive functions. In these cases, having defined procedures helps to ensure that all steps in the process are completed to a satisfactory standard.
Informal processes, on the other hand, are those more likely to be created by individuals or groups within organizations to complete certain tasks. They might not involve written instructions, but they are nevertheless important for achieving goals.
The different kinds of processes have one thing in common: They are all designed to streamline the way individuals and teams work. “When everyone follows a well-tested set of steps, there are fewer errors and delays, there is less duplicated effort, and staff and customers feel more satisfied,” MindTools says.
Business Process Improvement Techniques
While the term “business process improvement” can be used to describe any type of process improvement activity in a business, there are some specific techniques that can be used to formally practice process improvement in a business context.
Some of the more prominent business process improvement techniques used in the Lean and Agile space include:
Kanban is a visual workflow management tool that is frequently used by Lean/Agile teams to visualize and manage their work. Kanban is immensely useful for process improvement, because it allows teams to visualize each step in their process (on a Kanban board) and see how work items (visualized as Kanban cards) move through the process.
As teams use their Kanban boards to manage their work, they can more easily identify impediments to the flow of work – such as bottlenecks and blockers – and use this information to guide their efforts in business process improvement.
Kanban boards can also be used to facilitate process improvement activities. For example, teams can use a Kanban board to document ideas for improvement, and then regularly review this board as a team to decide which ideas to implement.
Kaizen (continuous improvement)
Kaizen is a Lean term used to describe the practice of continuous improvement. In fact, in its original Japanese, Kaizen translates to “change for better.”
Kaizen, or continuous improvement, is both a mentality and a practice. The Kaizen mentality encourages people to:
- Identify sources of waste
- Improve process flow
- Increase value creation in their everyday work
There are two types of Kaizen to practice: process Kaizen and flow Kaizen. Process Kaizen refers to small improvements to specific processes, usually at the team level.
Flow Kaizen refers to the flow of information and materials through the entire value stream. Both process Kaizen and flow Kaizen are essential for real continuous improvement.
5S is a concept from Lean manufacturing that provides a framework for how to maintain an orderly and clean workspace. This framework is called 5S because it has five components, each of which start with the letter S in their original Japanese. Conveniently, when translated to English, the terms also start with the letter S:
- Seiri > Sort
- Seiton > Set in Order
- Seiso > Shine
- Seiketsu > Standardize
- Shitsuke > Sustain
Each of these steps helps to create an organized, orderly, and efficient workspace to help teams operate efficiently and productively.
Although originally designed as a way to maintain a clean physical workspace, this technique for business process improvement can also be used to maintain an organized and orderly virtual workspace
The PDCA cycle is a framework that can be used to execute your efforts in business process improvement. PDCA stands for:
- Plan: Create a plan to achieve a goal. Include success criteria and anticipated results.
- Do: Implement the plan.
- Check: Measure and analyze the results. Compare them to your anticipated results and reflect on discrepancies between the two.
- Act: Implement necessary adjustments to achieve the intended goal.
The PDCA cycle provides a helpful structure for implementing improvement activities.
Value Stream Mapping
Value stream mapping is a technique for business process improvement that helps companies define and visualize how value is created and delivered typically at the organizational level. When performed effectively, value stream mapping can help organizations optimize the flow of value, creating a more efficient, predictable, and agile system.
Best Practices for Process Improvement
Although there are some variations between these techniques, they all prescribe some version of the following best practices.
Identify processes to improve
The first step toward improving processes in your organization is selecting specific processes to improve. It can be helpful to start small, such as at the team level, so that you are able to dive deeply into the process and address it completely. Trying to conduct process improvement at the organizational level is a worthy endeavor, but it is also inherently complex.
Starting with an improvement exercise at the team level can help you strengthen your process improvement skills so that you are better equipped to tackle larger, more complex processes.
Brainstorm the processes that your team follows, both formal and informal. It can be helpful to list both processes that work well, as well as processes that you know are in need of improvement.
For the processes that work well, discuss what makes them successful. Do you have clearly defined steps, effective communication practices, or good systems in place that make the process easy to follow? Shining a light on what makes for a good process can help guide you in your efforts related to business process improvement down the road.
For the processes in need of improvement, what is not working about them? What negative consequences are happening as a result of this process being ineffective? What do you hope to achieve by improving the process?
During this discussion, be sure to maintain focus on the process and how it can be improved, instead of trying to assign blame to specific people. Once you’ve brainstormed a list of processes that are in need of improvement, select one to focus on for your first improvement project.
Map the process
Once you’ve selected a process to improve, it’s time to identify each of the steps in your current process. When and how does the process begin, and when does it end? Document each step using a flowchart or other diagram.
Involve those people who use the process regularly to make sure nothing important is overlooked. Make sure to document the existing process, no matter how ineffective it is, before you start trying to implement changes.
It’s important to understand the existing process and where it breaks down, so that you can implement changes that will actually make an impact. Although it can be tempting to start “solutionizing” as soon as you begin mapping your process, make it your goal to first get an accurate picture of your process as it is.
Analyze the process
Use your flowchart to investigate the problems within the process. Again, make sure to include everyone who follows the process in the discussion, because they will be able to provide firsthand perspectives that can guide your activities related to business process improvement.
As a group, talk through the process. Feel free to use these questions to guide your discussion:
- What is working about this process? What is not working?
- Where does work get stuck? Are there any recurring bottlenecks or blockers in this process?
- What issues are getting team members or customers frustrated?
- What is causing costs to rise or quality to decline?
- What do the issues with this process prevent us from accomplishing?
- What do we need to do in order to make this process work for us?
There are many ways to hold this conversation as a team. A group discussion (in person or virtual, as it may be) is certainly one way to go about it – but you might get more thoughtful responses if you send out some of these questions in advance. Encourage team members to spend some time reflecting on the process and jotting down their thoughts before the meeting, so that you can have a more productive conversation.
Redesign the process
After thoroughly analyzing the process, it’s time to redesign it or make changes to eliminate the problems you’ve identified. Work closely with the people who are directly involved in the process, who might suggest new approaches. Also, they will be more likely to accept changes if they’ve been included in the discussion about business process improvement at an early stage.
Make sure everyone understands what the process is meant to do and then explore how the team can address the problems identified. Depending on how complex the process is, it might make sense to conduct an impact analysis to understand the full effects of the process changes.
The next step is to acquire the resources needed to implement the new process. Make a list of everything needed, including guidance from senior managers or colleagues in departments such as IT, finance, or human resources. Communicate with each of these groups to make sure they understand how the new process will benefit the organization, and what will be required of them in order to make the planned improvements.
Implement and communicate change
Your activities related to business process improvement might involve changing existing systems, teams, or processes. Consider running a pilot first, to check for potential problems before a wider rollout.
Keep in mind that change is not always easy for individuals or teams, and sometimes is resisted. Involving people who might be affected by the changes early, and seeking their input, can help to encourage buy-in.
Before you implement changes, discuss some key indicators you will use to assess whether your improvements are having their intended effect.
Then, after rolling out the new process, closely track how things are working in the weeks that follow to make sure the enhanced process is performing as expected. Monitoring also enables you to fix any problems that might occur. Check in with the people involved in the new process to see how it’s working and if any additional changes are needed.
Continuous Process Improvement Matters
Business process improvement is a muscle that organizations, and the individuals within them, can work to strengthen over time. The more comfortable your organization becomes with process improvement, the easier it will be – and the results will speak for themselves.
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