Optimize and improve business processes
Business process improvement, process optimization, and striving for better operational processes are usually not topics on the agenda of every multinational boardroom, family company meeting, city council meeting, or congressional debates. Processes are not critically examined until the processes start to glitch, deliver unexpected results, or go off the rails completely. Then, business process improvement becomes the magic phrase. A special task force and massive process optimization models have to improve the processes ad-hoc. Structural solutions are always preferable, but without context you won’t have the opportunity to implement them. You can’t improve a process in a vacuum. It requires a delicate interplay between people, processes, and systems.
Achieve savings by improving internal and logistical processes
There is a growing understanding that structurally improving internal and logistical processes can save you enormous amounts of (tax) money, manpower, and materials. It can also lead to a more positive public image, both in the private and public sector. But how do you improve processes not ad-hoc, but structurally? How do you make projects for process optimization and process improvement concrete? And are there certain steps you can follow to improve processes?
What is business process improvement?
Ideally, processes should be improved in low-stress situations, or when there is no direct, urgent need to do so (yet). It’s best to nip problems in the bud, after all, or prevent them entirely. But what is business process improvement? Is there such a thing as a universal process optimization theory? And which process improvement approach should you choose? First, we’ll provide our definition of process improvement:
Business process improvement is the process of mobilizing and activating all available human creativity and intelligence combined with artificial intelligence (algorithms) with the goal of streamlining business processes by eliminating bottlenecks and inefficiencies in the process.
In everyday activities, processes are improved through effective, efficient, sustainable, and data-driven use of your precious resources and production factors.
4 arguments for business process improvement
Process improvement and optimization in businesses, especially large organizations, can affect many countries, divisions, and departments. It directly affects people in their everyday activities. This can lead to resistance to (process) changes and continuous improvement (culture). But there are four general reasons to start improving business processes now. You can find a short summary below.
- Your back is against the wall. Sometimes you’re forced to improve processes due to a global crisis, new legislation, or a downwards trend that necessitates tightening the belt or reconsidering your business model. Your KPIs are all in the red – the perfect early warning system. Small, incremental improvements will no longer suffice. You’ll have to deploy heavier artillery in order to achieve the required efficiency advantages and process improvements.
- You’re living beyond your means. Every (production) organization deals with different forms and degrees of waste, such as slack and rework. Slack (not to be confused with the popular communication tool) is mainly found in bureaucratic organizations and oligopolies. Organizational slack or managerial slack is a form of inefficiency. A sub-department or manager is left with more (financial) resources than they need to perform the operational processes or a specific task. In a fully competitive market, slack should trend towards zero in order to remain competitive and not lose market share.
- The market demands change. New competitors with a new, competitively priced proposition or a disruptive business model could more or less force you to implement business process improvements and process optimization models. When a company like Picnic claims to be able to deliver your groceries to your door in a timely fashion without charging delivery costs, it may be time to focus on improving logistical processes.
- New technology presents new savings opportunities. New IT technology can also present a legitimate and logical reason to take process improvement seriously. New technology is often more energy-efficient and thus cheaper. Consider new “green” storage models for business data, introducing electric company cars, or deploying hydrogen technology. Blindly choosing the latest tech can also be counter-effective, however. The newest generation of plane engines, for example, is cleaner and more efficient. But there’s a downside: vibrations affect its functioning and lifespan. Algorithms may eventually provide the solution, however. In other words: technology never sleeps. When improving internal processes, this is always important to consider.
When to start process improvements
Smart managers in private and public sectors should always be looking for new opportunities to improve processes. Within their organization as well as without. They should always be on the lookout for new theories, techniques, and process optimization models. In (logistical) businesses and within so-called ecosystems, they should explore opportunities for further process optimization.
Process improvement on 3 levels
The road from process improvement to ultimate process control sometimes goes straight through a minefield. Managers and employees can dig their heels in or lose focus halfway through. How do you improve processes on a strategic, tactical, and operational level? Which successful and less successful practical example of process optimization can we learn from? And which parties can support you in making the right choices when it comes to improving processes?
Business process improvement tip
The processes to be improved, redesigned, and implemented should be directly related to and comply with the wishes, demands, and expectations of your (potential) customers, employees, and all other relevant stakeholders. Another important evaluation criterion is risk management, so don’t forget to accounts for legislation in your processes.
Improving and optimizing processes using big data
Aside from traditional production factors such as labor, capital, nature, and entrepreneurship, big data is becoming increasingly important as a production factor. Big data, unlike traditional production factors, is usually less scarce and more abundantly available. How to use big data as efficiently as possible in the context of improving business processes is an ongoing debate many managers are faced with. Many developers try to offer solutions in platforms like Hadoop, Snowflake, and Splunk Enterprise. Process mining can also be used to analyze big data and improve processes.
An example of business process improvement
Our process improvement consultants have gathered several example projects. The drop-down menus below contain short summaries of these examples, which illustrate how you can approach process improvement concretely. Most projects are focused on process improvement through IT – the digital transformation.
Example: accounting process improvement
- Digitization plays a big role in the world of accounting. From electronically depositing financial statements to new means of digital identification. Developments like blockchain will impact every accountant.
- The tasks of accountants in mid-sized organizations can increasingly turning into digitized, automated standard products: commodities. Customers don’t want to pay too much for these. The mid-sized entrepreneur expects their accountant to support, advise, and coach them (trusted advisor). This presents an opportunity to increase your added value, because more and more customers want real-time information management reports and analyses. Process improvement is an important added value accountants can offer.
- Real-time data processing provides up-to-date management information that entrepreneurs can use, supported by their accountant. This turns a threat to accountants (digitization) into an opportunity, allowing entrepreneurs and accountants to benefit from new technologies.
Looking for process improvement advice?
Nowadays, there are many high-quality improvement methods and process improvement models available. From the scrum method to the data-driven PDCA cycle. These methods support you in achieving your process improvement goals. But which specific improvement method is best suited to your organization, department, and team? Our process optimization advisors can help you decide the best method for you.
Match process improvement to your company culture
Process improvement usually starts by noticing, analyzing, and solving bottlenecks in your business processes. New techniques and models, such as process mining, use event logs to analyze where employees deviate from the standard process steps and procedures. There is a whole host of proven improvement methods besides process mining. When choosing the right method, an essential factor is determining which improvement method best matches your company culture.
Improvement process step by step
A step by step plan to improve processes doesn’t need to be complicated. Impatient internal line or process managers that want quick results can follow these three simple steps:
- Make an inventory of your processes. First, the manager will take an inventory of the processes. They will ask several important questions: what are the most crucial processes on the relevant department, in the team, or within the function? What’s the goal of the process? What are the start and end points of the process and how much time does the total process take up? Which steps are taken in between? What employees and departments are formally and informally involved? What data and information streams are running through the process? Next, all that knowledge can be put into a process description and process schema.
- Eliminate waste. Next, the manager will try to determine any sources of waste, bottlenecks, and improvement opportunities in the production process. Are there links in the chain (middlemen or process steps) that don’t add value to the process and are thus redundant? Can these redundant links be eliminated with relative ease? To what extent are there zero defects in the process, in other words, a flawless delivery to the client? To what extent is there 100% reliability of delivery: a delivery that’s just in time, according to the agreed upon specifications, and on the right date and time?
- Implement the redesign. Finally, the manager starts optimizing, implementing, and automating their improvement solutions. In the last step, the manager uses data-driven technology to facilitate process improvements and process optimizations. Whatever can be automated should be. The more the data registration process is automated, the more efficient and reliable it is. The process manual is updated and the new and improved processes are communicated to everyone involved and deeply embedded in the organization.
This simple plan of action for process improvement is fully in the spirit of Lean improvement as it was intended and applied in companies like the Japanese car manufacturer Toyota.
Improving business processes is a specialist’s work
In our improvement methods overview, we’ve listed 12 substantial improvement methods and robust process improvement models. Is process improvement one of your focus areas and are you looking for process improvement advice? Our data-driven process improvement specialists would be happy to advise you. Contact us now. In the spirit of different models for different purposes, they will recommend the right improvement method for you, and they can offer many suggestions to improve the processes in your holding, division, or department.
Optimizing processes: choose Process Model as a Service
If you want immediate insight into your processes using a process model, flow chart, and/or process description, choose Process Model as a Service, our new service for organizations that want to start improving processes in a lean and mean fashion. Get immediate feedback and insight into the effectiveness and efficiency of your processes. Contact us for more details.
Intermezzo: from process thinking to process improvement
Data-driven working leads to an optimized work process: process optimization. The concept also reveals where there is no learning or improvement taking place, or not enough, and where you have to intervene. It reveals which factors you can influence as a process manager or team to steer holistically. How does this principle work?
- The data tells you exactly where in the production or service process there are errors. It shows you where and when things went wrong for every customer, product, batch number, and part of the process.
- Because you can see exactly where problems occurred after the fact, data-driven working is a practical, problem-solving approach. There isn’t just one big bucket of data, or just an average output, but you can focus on every outlier, high or low.
- Because data-driven working enables you to look deeper into the process, you can better differentiate and locate where problems occur. Instead of putting an entire department on notice, you can zoom in to the exact location of the problem.
- The work you do is not a stack of separate activities. It’s a holistic process that you’re a part of. In that process you receive input and deliver output to others. Input and output are measurable, the data about them is registered over time. All the information and knowledge you work with are facts, creating insight into the progress of every part of the overall process.
- Improvement suggestions, choices, and conclusions are also based on facts that are constantly kept up-to-date. That creates the possibility of continuously improving a process. It’s no longer about opinions, positions, or biased information that reveals the manager’s pet project. Letting the data do the talking leads to the most streamlined process and stimulates process thinking.
IT process optimization: the odd one out
The term information technology (IT) combined with concepts like process optimization, process improvement, and process improvement models can quickly lead to confusion. The terms IT process optimization, IT process improvement, and process optimization IT are used seemingly at random. Due to the lack of a clear definition, the concept of IT process optimization remains an odd one out. But functionally, IT process optimization doesn’t really differ from sales process optimization or optimizing the sales department.
Process improvement with flowcharts
One approach to IT process improvement is using IT resources and digital technologies when analyzing and streamlining a certain department instead of the old-fashioned method of manually drawing flowcharts. Most process managers these days use one of the available online (cloud-hosted) software solutions. These are tools like flowchart software, diagramming tools, or flowchart makers. Visio, a Microsoft product, is a well-known product in this segment. But there are more software providers who sell software that allows you to quickly map your processes and share the results with others.
Improve processes using scrum
You can also improve IT processes within the IT department itself. Scrum as a method for improving business processes was initially introduced as a software development method by Jeff Sutherland and Ken Schwaber. Scrum is based on the theory of empirical process management. Empiricism assumes that knowledge is born from experiences and decisions based on what is known.
IT process optimization on a low code platform
Within the IT domain, process improvement should be a top priority. Here, too (or especially here): time is money. What does process improvement in the IT department mean concretely? Consider efficient software development on low code platforms. This is the development of software aimed at visually designing applications, limiting traditional coding as much as possible. The clear advantages are lower costs, fewer bugs, and more time for innovation.
Improve IT production processes using helpdesk software
Within the IT domain, there are more options for process improvement. Helpdesk software and ticketing systems present IT and customer service departments with the option to clearly communicate and co-operate with internal and external clients, leading to greater productivity. This also enables you to minimize waiting times as much as possible while also making them more predictable. These are important aspects of process improvement and process optimization that should not be underestimated. It always pays off to compare the various offerings in helpdesk software.
A properly functioning ticketing system is an essential component of enterprise software. This enables you to design an online helpdesk so that you can access customer information and the status of their requests any time, anywhere, allowing you to always provide the proper level of service. In short: a ticketing system is a wise choice when optimizing processes, especially when this enables you to connect various channels.
TIP: operational process improvement starts with the business
All process experts agree: process improvement shouldn’t be approached just from an IT or software perspective, but from a business point of view. Business managers with a continuous improvement mentality have a clear advantage here.
Improving processes in 7 steps
This extensive 7-step plan for process improvement may be the go-to solution for every experienced (interim) process manager.
Within an operational improvement team that’s guided by an interim process manager, the process of business process improvement will always show the following steps to arrive at structural process improvement.
- Introduction. The interim manager prepares a kick-off session. During this meeting, they will extensively cover the reasons why the organization needs to improve its processes. The problem is defined and some basic questions are covered, such as what is improvement? How do I start improving? What is process thinking? They will also make a context analysis. After this introductory session, everyone will have a clear idea of why process improvement is urgently required.
- Planning interviews. Next, the interim manager will plan interviews with the key roles, the process owner (the person responsible for the process), and those who play a role in executing the processes.
- Process analysis. Over the course of several enrichment or moderation sessions led by the interim process manager, all the tasks and processes are inventoried and described. The current process performance is measured and the project team sets a target for what constitutes a quality process. The mediocre process performances and the underlying causes of hitching processes and bottlenecks are extensively covered and described. The end result of this phase is a process analysis from multiple perspectives. Both the client and the employee or the organization play a role in this. Process improvement is, after all, the interaction between people, processes, and systems.
- Tracking improvement suggestions. All the improvement suggestions are described. Once the bottlenecks have been defined, the project team can make improvement suggestions or continue to develop them. The team checks what can be improved or optimized per process part and draft instructions for the tasks to be performed. It’s important to share these improvement suggestions. The end result of this phase is an overview of improvement suggestions that match the process analysis. Every improvement suggestion is developed in a special format, including the mentioned advantages and disadvantages for the implementation.
- Presentation of the measuring instruments. The interim manager presents the available monitoring tools for measuring the effectiveness, efficiency, quality, and results of the processes. Based on the format, the project teams decides which improvement suggestions to implement. These decisions are announced to the organization and the implementation project gets the formal green light.
- Implementation. The organization designates optimization as a fixed part of the tasks. By regularly measuring the results of processes and regularly discussing process improvement, you’re securing the implementation. Sometimes, specific agreements about the implementation are made. These are considered in the regular measuring points. A separate plan is made for scaling up.
- Visualizing progress. Show your work. The project team visualizes the progress of the improvement project, the redesign, and the influence on the process performance. This can be done in various ways: narrowcasting on screens, on dashboards, or a simple poster on the wall of the production hall or the call center.
If you need a last push to start seriously working on process improvement, contact one of our process improvement consultants now.
Process improvement & politics
It should be clear by now that (IT) process improvement and optimization, or improving logistical process, isn’t something you do for fun. The projects are simply too time-consuming, and expensive, and impactful for that. Political considerations, status, and power always play a role in the background. This partly explains why optimizing a relatively simple process can be a matter of persistence, because all the stakeholder interests have to be carefully considered. The time-worn habits of employees can also seriously slow down the process of business process improvement.
Working and learning: process improvement in practice
Passionned Group’s interim managers have been intensively involved in dozens of process improvement projects, typically in combination with data-driven working. We’ve achieved project improvement success in dozens of organizations, from municipalities to power companies, production companies, tech companies, and telecom agencies. Check our references and the list of improvement methods to get a clear view of which models and what advice can add value to your organization.
Want to improve your operational processes? Contact us
Are you considering redesigning your primary and/or secondary processes? Do you want to streamline your organization and make your processes more predictable? Are you looking for a plan of action or specific practical examples of optimizing operational processes? Are you interested in objective advice regarding the improvement of your business processes? Contact us for a conversation. We’d love the opportunity to tell you about our approach and the results you can expect.