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All around the world, more businesses are becoming interested in improving efficiency. One common solution is to outsource business processes to service-based economies with lower wages.
While this may improve cost-effectiveness, it does not necessarily tackle the issue of business process improvement. Successful business improvement requires much more involved efforts that call for critical thinking, creative design, and attention to detail.
What is Business Process Improvement?
It involves the practice of reviewing, identifying, assessing, and optimizing business processes. When optimizing business processes, there are three main goals companies tend to have in mind.
The first is reducing the time spent on specific tasks. Another important goal is improving the product or service offered without changing the inputs. Finally, companies focus on eliminating or reducing wasteful steps in the process. Some businesses invest in one-off optimization projects, but proactive companies make this an ongoing part of business operations.
What are Some Process Improvement Methodologies?
There are several ways to tackle business improvement. Over the past few years, three process improvement examples have emerged as the most popular strategies:
Total Quality Management
TQM is one of the oldest methods for process improvement, becoming especially popular in the 1980s onward. It focuses primarily on the goal of improving the final product or service delivery. This requires a company-wide assessment and improvement effort from the top down. TQM efforts tend to tackle process improvement by looking at the bigger picture instead of the finer details of individual processes.
Lean
Toyota makes some of the most reliable vehicles in the American market and commands a cult following for its trucks and SUVs. So, the fact that it created the Lean method adds some credibility to it.
This process operates similar to TQM, but managers focus more on optimizing the business by tackling individual tasks. These are the four recommended steps:
- Determine what the end customer may identify as high value.
- Find out what processes or steps do not add value to the product or service.
- Modify or eliminate the steps that do not add value.
- Repeat the steps above until the business reaches the desired levels of optimization.
Six Sigma
This method gained popularity among project managers as the profession grew — after Motorola originally developed it. Professionals use it to identify problems in the production line and then work backward to fix them. Companies should aim for 3.4 defects or less out of one million outputs when using this method.
DMAIC summarises its five core parts:
- Define what needs to be improved.
- Use metrics to measure future progress against current performance.
- Analyze inconsistencies or other defects in the selected process(es).
- Eliminate or reduce the uncovered problems to improve the process.
- Maintain control of the ongoing process by continuing to review it and make adjustments.
What are the General Business Process Improvement Steps?
Though there are different types of methodologies companies rely on to improve business processes, all of them typically follow standard steps. These steps help companies streamline a very labor-intensive process.
Step 1: Mapping
Some managers make the mistake of assuming they know what the issues are based on personal familiarity with business processes. Such guesses are sometimes right. However, true improvement begins with a thorough assessment.
The mapping process kicks this off by compelling managers to illustrate business processes in a pictograph. Some professionals still do this by hand, but most managers now rely on software. You may use graphing software or workflow applications. The latter have a number of benefits:
- Automation: When not automated, identifying and mapping each task can take time and become a lengthy process, even with the help of software. Automation software also continually updates with accurate and real-time information, so you can make improvements for years to come.
- Accountability: Workflow software quantifies tasks in a way that makes it easier to assign them to specific persons. This increased layer of accountability forces workers to take personal responsibility for the roles they play in identifying problems, drafting solutions, and implementing solutions.
- Process Tracking: Tracking the full process provides workers with additional information they need to improve processes. It also makes it easier for you to determine how well each individual accomplishes tasks.
Step 2: Assessment
After using software to gather all the necessary data, great managers move on to analysis next. You may ask yourself if there are processes workers spend more time on than they should.
If you identify missed deadlines, do you also know what factors tend to contribute to this and how you can fix them? What are the processes that add the most value to the final product and what can you do to improve their efficiency and effectiveness?
One method professionals use to tackle this step is the five whys. As you find causes for problems, continue to ask yourself “why” until you arrive at the root cause. You may not literally need to ask yourself “why” five times to find the answer, or sometimes it may take more times than this. Even so, five is a good number to aim for.
Step 3: Redesign
How well your optimization efforts work depends heavily on the foundation work of finding out what is wrong and why. After that, determining if you can resolve those problems and how to do so can take time. The most important skill to employ here is creativity.
Cooperating with the workers who actually complete the tasks identified as problematic can save you time and money. No one knows the job better than the people actually doing it. These employees are also in the best position to tell you upfront if any proposed redesigns are impractical or may negatively affect other aspects of the system.
As with any job that calls for creativity, there is no one approach that fits all situations. We recommend the following steps as a base model:
- Choose the most appropriate metrics to use as benchmarks for your problem and its resolution.
- Reach out to the workers and coordinate how you plan to receive feedback and when.
- Determine the scope of the changes you plan to make to address problems.
- Address short-term problems, but plan for the long-term.
- Conduct risk analyses to find weak points in proposals.
Step 4: Execution
This is one of the most critical steps in the process. It is not enough to merely tell people what to do or automate implementation. Take a more measured and hands-on approach to ensure things go as planned.
Begin by ensuring you have all the necessary resources before starting, including people to oversee the changes and provide guidance. Next, begin testing your proposed changes on a smaller scale. If the execution process does not go according to plan, you can tweak it before applying changes across the company.
Step 5: Review
Unfortunately, managers often feel so confident in the improvement process that they stop at execution. Even if small scale tests returned no errors and workers expressed confidence in the way forward, as the project expands, more variables are added. The more variables in a process, the more can go wrong.
If something does go wrong, you want to know as soon as possible so you can correct it before it gets out of hand. This can help minimize any associated costs. Maintaining an open line of communication with field workers and completing routine inspections helps you stay on top of this.
What are Common Reasons for Business Improvement?
The reason behind improvement efforts plays a crucial role in the process. The motivation may determine how much time or money the company has to allocate and what methodologies its managers end up using.
Compliance
Virtually all products, services and marketing efforts must meet specific compliance guidelines. This is especially true of highly regulated industries, such as car manufacturing or pharmaceuticals. Even business areas facing few regulations may need to improve payroll or accounting methods to comply with new rulings from the IRS.
Competition
When companies operate as monopolies, managers face less pressure to optimize and improve product offerings. However, when markets open or alternatives gain traction, companies may have no choice but to re-examine old ways of operating to see how they can improve. They can then use this information to improve business processes and the final product.
Economic Performance
The strength of a company depends on both its internal performance and the performance of the external economy. When an economy booms, companies may face higher levels of competition from smaller companies. During an economic decline, companies may need to optimize operations to save money and stay afloat.
Industry Changes
Changes in the way a whole industry or sector does business can force companies to take a good look at processes. These changes may result from upgrades in technology or a gradual shift in business trends and consumer demands.
New Management
Before a company changes hands, its owners may go above and beyond to improve business processes before the sale. This helps to maximize the attractiveness of the business by boosting the accounting figures and key metrics. After a company changes hands, the new managers may also feel compelled to optimize the business so it can hit the ground running.
How Software Can Help
Automating tedious tasks provides companies with the opportunity to retrain employees for more important roles. It also offers workers the opportunity to take on more exciting and fulfilling careers.
To make this possible, software such as Fluix helps companies automate some of their most monotonous tasks. Using automation tools can help companies streamline business processes, reduce paperwork, and improve the quality of service delivery. We believe in the power of human creativity, the rest should be done by machines.
