Our recent BusinessOptix blogs have unpacked a number of pertinent topics related to business change and transformation from a strategic perspective. We have looked at:
- What business transformation is and why 21st century organizations need to engage with its concepts and models;
- How businesses can use Transformation Maps in their strategic business planning and implementation processes;
- The need to intentionally connect business process improvement strategies to execution activities;
- How to harness the opportunities that digital transformation provides for improved business performance; and
- The use of Target Operating Models and how they assist with driving successful business transformation.
We now turn our attention to business process improvement and how you can use it to improve your business performance.
Why Business Process Improvement?
Business process improvement is about helping you improve your business performance and customer experiences by identifying, analyzing and improving business processes. Much of its focus is on removing non-value adding activities and costs and improving the efficiency and effectiveness of processes.
Traditionally, business process improvement (BPI) has been about making radical changes to the business. However, the principles and approaches can be used to make incremental and continuous improvements, and, in doing so, create a more responsive organization.
BPI can be used to improve a range of processes, including order-to-cash, case management, production line, supply chain and logistics management, customer support, account opening, applications, risk, governance and compliance, sales and customer acquisition, product development, procurement – the list goes on and can comprise processes that are static and linear, follow multiple paths or are dynamic.
As a flow of inter-related activities, effective BPI works by following a number of activities:
- Understanding the organisation or function’s objectives so all activities are aligned and in support of these;
- Setting the objectives and expected outcomes e.g. reduction in customer wait times, improvement in customer service levels, shorter time to market, reduction in production times and/or delivery timelines;
- Identifying and selecting the processes that need to change or be optimised. To help prioritize your starting point, processes can be scored based on the metrics that are important in reaching the desired outcomes;
- Understanding the current process flow, evaluating it to identify any gaps or bottlenecks and using these findings to derive recommendations for improvements. Specifically, this may include conducting process studies or observations, and drawing process maps with data (such as timings, steps, costs, quality etc.) to create a clear view of where you are today.
- Designing and implementing the new or altered process, including controls and metrics that will help to monitor performance. Rollout should be de-risked by completing it in phases. Start with a small group so you can see the impact and make any adjustments before making it available to a wider group.
- Measuring the outcomes against your previous state to ensure you are realizing the benefits you set out to achieve;
- Iterating the process to continuously enhance and improve it.
Example approaches and methodologies that can support BPI include Six Sigma, Lean Management, Lean Six Sigma, Agile Management, Re-engineering, Total Quality Management, Just-In-Time, Kaizen, Hoshin Planning, Poka-Yoka, Design of Experiments, and Process Excellence. Which you select will depend on your circumstance and the expertize you have available to you. For example, some of the above are best placed in specific environments, while others focus on principles that provide guidance whatever the initiative.
Key success factors to effectively implement BPI
- Outcomes – at the outset you must be clear about what you are aiming to achieve and how you will measure the outcomes from your efforts.
- Leadership – ensure that the initiative has the support of the organization or business area head. Typically, process improvement will involve and impact different people across the organisation and teams, so having a clear mandate that is aligned to your objectives and supported by the leader will ensure a smoother transition.
- Engage and involve stakeholders – employees will either be impacted and/or have valuable insights to offer, therefore they should be brought along with you from initial conception to ongoing optimization.
- Innovation – the opportunity to innovate on any initiative, small or large, should not be lost and you should be thinking about how you can use new technology and methods to improve your business performance.
- Prepare for the change – from announcements to training material, you should ensure that everyone who needs to be, is aware of the change and provided with the information and support they need to continue working.
There will always be process improvement opportunities, whether this be through big changes or in increments. Business process improvement should not be a one-off exercise – it should be part of how you work every day. You should constantly be asking the question “how can we improve?” and using this to identify and test new ways of working.
Some of the things you try will deliver resounding benefits, while others will deliver little, if any, results. Or they may even take you a step backwards. However, it is only by making ‘continuous improvement’ your mantra that you will be able to identify the good changes and eliminate the bad ones.