Business Process Improvement – an invisible opportunity to reduce costs

13 March

They are lurking within the walls of all organizations, functioning everyday with no one managing them. No one is looking to see if there are better ways of performing them to reduce costs and become more efficient. No one manages them because no one sees them, but they are there, eating away at profits. The ‘they’ I am referring to are your business processes.

This includes, to name a few, processes related to strategic plan execution, project management, and vendor management as well as day to day operational processes in functional areas such as finance, human resources, operations and information technology.

At home most of us have an attic or garage that is cluttered with old lawn chairs, window screens and sporting equipment. These items have piled up over the years and cause you to waste time finding things you are looking for. The difference between the overfilled attic and business processes is that you can see the clutter in your attic or garage and can put time aside to clean it up. Although processes are out there organizations can’t see the clutter in their business processes and few companies are putting time aside to clean up their processes to make them more efficient and are missing an opportunity to reduce costs and work smarter, not harder.

As a project manager I see the following in the marketplace as it relates to an organization’s processes:

No process owners with an eye toward process improvement.

Cumbersome manual paper based processes.

Islands of unconnected information.

Little, if any, metrics to monitor performance.

Added costs to the bottom line.

What is interesting is that most companies know they have inefficient processes but don’t know how to go about addressing the problem. Undertaking a business process improvement initiative is no different than any other project. It needs to be funded and sanctioned by senior management, requires a willingness to change the way work is performed and addresses the following questions about the culture of the organization:

Do you really want to operate in an environment where there is little or no accountability for how work is performed?

Do you really want to continue with manual paper based processes?

Do you really want to be keying the same information to different databases?

Do you really want to operate without metrics?

Do you really want to continue to waste money?

The activities to conduct a process improvement initiative are:

Identify the processes that must be analyzed.

Create a process map or ‘snap shot’ of the current process in its ‘as is’ state by reviewing the following work system (process) components:

Customers – the internal and/or external people who use the product or service produced by the work system.

Products or services – the products (physical items as well as information) and services the work system produces for its customers.

Business process – The set of steps or activities performed within the work system.

Participants – The people who perform the work within the business process.

Information – The data used by the people who perform their work.

Metrics – the measurement to monitor productivity.

Technology – The hardware, software and other tools used by the participants to perform their work.

Explore problems in the work system and find opportunities to improve it.

Map the ‘desired state’ process.

Develop a plan to implement the proposed changes.

Monitor and fine-tune the new process.

Manage the change to ensure adoption.

The benefits to the organization are reduced costs via streamlined processes that leverage available business process management workflow technology, improved productivity via metrics that monitor performance and ownership and accountability for continuous process improvement. Bottom line you get business processes that can be monitored, managed, and modified as business conditions change because it’s now someone’s job.

A word of caution; start slowly. Pick a process for improvement. Implement the changes then move on. I’ve seen many process improvement efforts fail because an organization initiates a company-wide process improvement effort. These projects typically don’t get sufficient resources to do the work or sponsorship to lead and manage the change. Another word of caution; don’t expect changes overnight. Your processes didn’t get clogged overnight.

Establish a plan that is manageable, yet still challenges the team. As you work your plan allow new processes to evolve and be refined instead of trying to come up with the 100% perfect solution.

The end result is that a business process improvement initiative lowers the organization’s costs and frees up hours to reallocate to revenue generating and/or customer servicing activities. Having accountability for business process improvement allows you to manage change at the process level on a proactive basis instead of waiting for complaints that trigger reactive ‘fix-it’ mode activity.  Isn’t it about time you see what’s lurking in your organization?

 

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