The term “process improvement” sounds straightforward enough: Make processes better through some form of change.
But the effort involved in enhancing business processes can be complex, depending on the processes that need to be improved. With process improvement, organizations identify, evaluate and improve their existing processes on a proactive basis.
Sometimes these efforts consist of approaches that follow a specific methodology, such as lean manufacturing for the enhancement of production processes. In some cases, improvements are a matter of tweaking existing processes. In others, it involves adding sub-processes to improve results. In still others, it might mean a drastic revision in the way processes are handled.
Why is process improvement important?
"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 its competitors will be making such improvements. Succeeding in today’s business environment means constantly looking for ways to do things better.
“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. That's why it is so important to improve processes when they are not working well.
Reaping the Benefits
Processes that do not work 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
On the other hand, 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: Continuous improvements in processes 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.
- Faster time to market: 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, process improvements 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.
- Competitive advantage: Continuous 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.
Those processes considered formal, which are also known as procedures, are documented and have well-established steps. 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, it’s important to follow particular steps.
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 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.
Best Practices for Process Improvement
The intent to improve processes is not enough; companies need to execute the right way. Here are some best practices for incremental process change aimed at improving existing processes.
Map the process
Once you have identified which process needs to be improved, document each step using a flowchart or other diagram. These illustrate the key steps in the process, so they can be easily grasped by stakeholders. Explore each phase in detail, because some processes might include unexpected sub-steps. Involve those people who use the process regularly to make sure nothing important is overlooked.
Analyze the process
Use the flowchart to investigate the problems within the process. As part of the evaluations, look at factors such as:
- What issues are getting team members or customers frustrated?
- Which steps are creating bottlenecks?
- What is causing costs to rise or quality to decline?
- Which steps require the most time to complete or cause the most delays?
Again, speak to the people who are most affected by the process and ask them what they think is wrong with it and what improvements they’d suggest.
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 improvement process 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, 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.
Implement and communicate change
Improving business process 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.
Review the process
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.
It’s important to remember that process improvement is an ongoing endeavor. As Cleverism says, “ideal process improvement skills require acknowledging the improvement efforts as ongoing instead of a one-time task, as well as being able to follow up with the analysis of all areas of improvement.”