Every organization is comprised of business systems containing individual processes, while every process is comprised of a series of tasks or activities. For businesses to deliver a quality product or provide a wanted service, they must utilize effective business processes. When a company’s processes are effective and efficient, numerous good things happen. First, the company operates through lower costs. Second, the company performs at a higher competitive level. Finally, the company improves its bottom line. Business Process Analysis can drive these better results.
In cases where business processes are deficient, the company usually suffers from high overhead costs and lower revenues. To avoid financial setbacks and losses from these deficiencies, the company should systematically analyze its business processes and implement performance improvements.
Business Process Analysis is built on a foundation of process mapping. Once a process is mapped, improvement professionals have a visual diagram of how work gets done and the problems and opportunities preventing good execution. The Seven Steps of Business Process Analysis outlined below provide a time-tested methodology for improving any business process.
The Seven Steps of Business Process Analysis
Step 1 - Define the Process
While there are a variety of process mapping methods available, the fundamentals remain the same. Every process map should define the suppliers, inputs, activities necessary to fulfill the process, outputs, and customers. The definition of process boundaries is a particularly important characteristic of process mapping.
Step 2 - Uncover Opportunities
While mapping a business process, the analyst will typically find somewhere between 50 to 75 improvement opportunities. These are problems that are easily communicated by process users. It is important not to underestimate the value of a good problem statement and the cost impact of unresolved problems.
Step 3 - Measure for Success
Business processes can be measured in several ways. The key to process measurement is designing good measures that evaluate the extent to which the process purpose is being met both effectively and efficiently, who is responsible, and how the process obtains feedback.
Step 4 - Analyze the Process
Successful process analysis does not have to be complex to be valuable. Basic Business Process Analysis involves assessing the value and time of process tasks and the waste created by process production. In addition, a Customer Value Analysis yields insights into customer relationships.
Step 5 - Take Effective Action
Business Process Analysis without corrective action is a waste of time and money. We have found that about 50% of all business process problems and opportunities can be solved within 90 days. These problems typically revolve around a lack of process definition and customer understanding.
Step 6 - Establish a State of Control
The large majority of business processes today are not operated in a state of control. Basic control elements include a defined process and value proposition, a performance measure, feedback from the customer, and corrective action. Process control is an essential first step to process improvement.
Step 7 - Monitor for Effectiveness
A Business Process Analysis effort executed well should quickly morph into process monitoring. Process performance improvement should be monitored no less than monthly and problems and opportunities that have been resolved should be replaced by new problems and opportunities that are more challenging and deliver greater benefit when solved.
The Seven Steps of Business Process Analysis provides a methodology for defining a process, understanding how to identify improvement opportunities, how to design meaningful performance measures, how to analyze problems in a systematic way, the different tools used for problem-solving, how to implement process improvements, and ongoing monitoring of business process performance.
Further Reading: THE PERIGON METHOD