Business Process Optimization: The 3 steps you must take to bring real value to your organization
Process optimization is a key step to bringing value to your BPM initiative and your organization. It will help you achieve the goals set out at the beginning of the BPM programme allowing your organization to constantly improve.
For any business, the status-quo is rarely a desirable state. In today’s competitive business landscape, organizations must ensure that they not only document their processes adequately but dedicate time and resources to analyzing and improving their processes. Using both qualitative and quantitative analyses, process optimization is a key step to bringing value to your BPM initiative and your organization.
Business process optimization can be broken down into three major phases:
1) Analysing and Optimizing
2) Implementing and Changing
3) Evaluating and Controlling
Analysing and Optimizing
Once your processes are mapped, you are now ready to identify which processes are the best targets for optimization. Using a tool that supports various analyses will help you more easily determine which of your processes should be focused on in the upcoming optimization effort.
Process analyses can be either qualitative or quantitative. A qualitative analysis will give you a deeper insight into your process’ attributes while a quantitative analysis will allow you to test hypotheses and predict how processes will behave in the future (see Simulation below).
Qualitative Analysis — Examples
1. Process Classification — How are your processes classified in terms of predictability, complexity, frequency, and business value?
A well thought-out and meaningful classification approach can help you focus on the most relevant processes for optimization. Classifying your processes based on the three criteria above can help you, for example, determine which processes are good candidates for optimization.
A process that is highly predictable, simple, and frequent is a great candidate for optimization; specifically, through robotic process automation (RPA) — the practice of automating high-volume, repeatable tasks — to reduce costs, improve operational performance, and streamline customer service.
To get started, information regarding these criteria needs to be first collected then documented, ideally in a dedicated BPM tool. This data can be collected in different ways. For example, by creating surveys and handing them out to the various process responsible so they can subjectively score their processes on a defined scale for each of the three criteria.
Once this data is collected for the remaining processes and documented in your tool, a portfolio view (like the one below) can be generated. This view will plot all your classification criteria and scores on a single graph, allowing you to spot the best processes to automate and, therefore, optimize.
Other examples of qualitative analyses are listed below.
2. Risks Heatmap — Which processes are associates with the highest levels of risk? What controls are in place to mitigate those risks?
A risks heatmap analysis can help you determine which processes may need to be improved from a risk management perspective. Ideally, the risk manager in your organization will have this information and be able to document this in your dedicated BPM tool.
3. Compliance — Which processes are currently not compliant with your organization’s control objectives?
This view illustrates each process’ maturity level in relation to control objectives. It can assist you in establishing which processes require additional effort to achieve desired compliance levels. Once again, your organization’s compliance manager should have this information and document it within the tool in order to allow for such analysis.
While qualitative analyses can provide useful insight, they can be subjective. Therefore, qualitative analysis should always be performed along side the more objective quantitative analysis.
Quantitative Analysis — Example
Simulations can help you analyse one or several alternative paths in a given process using data such as time and cost.
Moreover, using simulation as a method, you can analyse the effect of hypothetical process adaptions by performing test run simulations and comparing their performance against the original ones.
Simulation allows you to perform a quantifiable comparison of AS-IS and TO-BE processes, measuring key criteria such as the cycle time of a process, the cost of a process, and the employee capacity required to complete a process. In addition, each of these can be broken down to the specific activity level, allowing you to identify bottlenecks and improve inefficiencies.
In addition, simulation offers the obvious advantage of providing concrete, quantifiable figures to support your case that a business process can be improved and optimized. It allows you to present the value of optimizing a process in terms of time and money; two criteria that all business people and managers can relate to and understand. Providing decision makers with clear, understandable arguments is a critical part of any business transformation effort.
Implementing and Changing
Once an ideal process design is defined, an process change project can be carried out. The scope of such a project can span across several layers such as:
- Technical changes to applications that support the new process
- Organizational changes to the roles and responsibilities in the new process
- Knowledge and training of existing roles regarding the new process
- Change management activities to ensure smooth transition to new process
Given the amount of impact process change can have, having an agreed and approved process design ensures alignment along the whole process change project. This ensures all teams involved in the change project (i.e.: IT, HR, Operations) reach a cohesive and common goal that supports the process design target.
Evaluating and Controlling
This stage involves checking (a) whether the process is being adhered to and (b) whether the updated process meets the desired outcomes by once gain performing some of the analyses listed above.
To assess whether the implemented changes are continuously executed by the employees on the one hand, and to ensure that the changes deliver the targeted results, a proper governance and review model is required. In the book titled “The Ultimate Guide to Process Management Organizations”, Theodore Panagacos mentions that organizations should set up a BPM governance body that prioritizes effective monitoring. This monitoring process involves a continuous effort of periodic review to evaluate and implement both new and well established processes.
Conclusion
Given the importance of optimizing processes, and the fact that continuous improvement is a fact of life today, organizations must strive to professionalize the way they approach such process optimization efforts with a robust BPM practice. The steps discussed above provide a holistic picture of the challenges and key aspects to consider when embarking such a project. BPM as a practice can be the incubator and success driver that ensures an organization has the right skills, methods and best-practices to enable process optimization to happen throughout the enterprise. Organizations should therefore look to empower a core BPM team to ensure these critical projects are brought to successful outcomes.
