What is Business Process Improvement? Why is it Important?

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Most businesses have a huge issue with time management and never seem to be able to execute on their strategic goals. They’re spending hours every week on inefficient tasks but don’t know where to start in order to fix the problem. Business process improvement offers a way to optimize business processes and help your business operate smoother.

Business process improvement is the process of systematically and purposefully analyzing tasks, transactions, and other activities that are performed in an organization to identify current requirements for their design, development, and operation.

Business process improvement helps organizations by improving the efficiency of their processes. It also helps them to identify inefficiencies, waste and errors in their processes. This helps them to reduce costs by eliminating these issues from the system.

In this article, we will cover what is business process improvement, its benefits to organizations, the five phases, and key challenges faced by businesses.

Why Business Process Improvement is Important?

Business process optimization offers many benefits to businesses, including cost savings and increased revenue. Here are a few of these benefits:

1- Cost savings

One of the most important benefits of process optimization is the ability to eliminate or decrease the need for people to complete a task by automating it with technology. In addition, it helps reducing the amount of time it takes to complete a task by streamlining it, which is often done by combining two tasks into one.

For example, if you use the best contract management software to automate contracts processing within your organization, you could complete the entire contract lifecycle in minutes.

2- Increased revenue

A business can increase its revenue through continuous process improvement. For example, a company that provides customer service might see an increase in revenue if it improves its customer communication processes.

When internal business operations are streamlined and smoothly executed using the best workflow management software, tasks and services can be executed faster which makes employees more productive.

3- Boosts productivity

Have you ever wondered how businesses get the most out of their employees? It is because they mastered the art of continuous process improvement. Making the daily operation efficient, effective, and less confusing which results in employees being able to focus on more critical and satisfying tasks.

One of the most important benefits of BPI is the ability to get the most out of your resources without the need to scale to get work done faster.

4- Improved customer experience

All organizations have one strategic goal in order to outperform their expectations. It is the need to make customers experience as enjoyable as possible. You are risking losing new potential clients in case your business process operations are lacking.

Business process improvement helps organizations improve the customer journey by identifying bottlenecks and providing solutions on how to get from point A to point B as fast as possible without risking quality of service.

5- Improved quality of service

When organizations have aced their business process improvement practices, it will allow them to execute tasks in the fastest way with the highest quality of service needed. That alone can increase customer trusts and will potentially convert new clients to recurring ones.

What are the five steps in business process improvement?

The five steps in business process improvement are defining, analyzing, redesigning, implementing, and monitoring each process. These steps are carefully created to help organizations achieve the ultimate process execution efficiency and normalize high quality process outputs.

1- Define

The Define phase is the first step in business process improvement. It is about understanding the current state of a process, identifying the problems, and monitoring process efficiency. The goal of this stage is to identify the root causes of problems in order to develop solutions.

2- Analyze

In this phase, you need to collect information about your current processes and analyze them by using different tools such as business process modeling, BPM tools, histograms, flowchart software, etc.

It is also recommended to try to simulate the process in order to get deeper understanding about each phase, who are the key stakeholders, what information needs to be circulated, and so on.

3- Design

This phase is all about designing a better way for your current processes by considering all aspects such as cost, time, quality etc.

It is also recommended when designing the business process to engage all stakeholders and get them on board in order to allow them to be part of the process efficiency. If stakeholders are left out, there is a risk that the new process won’t be able to work.

4- Implement

The implement phase is often overlooked by companies that are not used to implementing changes to their processe efficiency. This can be due to a number of reasons, such as lack of resources or time, or simply because they forget about it.

However, it is important for all stakeholders involved in the continuous process improvement project – from top management down – to understand what this phase entails and how it will contribute to the success of the project.

5- Evaluate

Evaluate is the final phase in the business process improvement model. This phase is used to determine whether or not the changes applied to process optimization were successful.

The evaluate phase is important because it allows for a second chance to fix any problems that may have occurred during the implement phase. It also allows for a chance to make any necessary corrections to improve and optimize the process before moving on to another area of business.

What are the challenges associated with Business Process Improvement?

Even though BPI is a great way to streamline business workflows, there are some challenges that organizations face while trying to improve their processes.

Some of the most important challenges of BPI include

1- Change management

One of the most common challenges when introducing any change within the organization is the resistance from employees. This is a top concern and if left unplanned it will result in total failure.

To combat this, you need to engage key employees from the first moment and listen to them carefully in order to help them get on board and get their trust.

2- Lack of understanding of the benefits

The best way to help introduce changes to any process is to explain properly why we are doing the changes in the first place. If employees can relate to the added value you are bringing to the table, they will help you optimize and improve how they work.

3- Lack of time to improve processes

Organizations are always busy with their day-to-day activities and might think that they can’t afford to work on improving their processes or delay the process.

If that’s the case, outsourcing this process could be one of the perfect solutions which will help you keep your current resources working as expected while third party employees will join to help identify and analyze how certain processes could be managed and controlled.

4- Introducing new technologies

Most often when business processes need optimization, you are required to introduce new technologies or retire legacy ones. This is again one of the most faced challenges for business process improvement. Introducing any technology change will have to follow a certain plan to get people acquainted and on board.

For example, accounts payable automation software is on high rise these days to help automate the complete cycle of purchasing and receipts.

What are the top BPI methodologies used?

The two most popular methods for improving business processes are Six Sigma and Lean Thinking. These methods assist organizations in re-engineering and mapping their processes to fully optimize their operations, resulting in a positive impact on their overall business performance.

Six Sigma process improvement

Six sigma is a process improvement methodology that focus on data-driven techniques to identify and clarify bottlenecks, errors, and wasted time in a process execution. The ultimate goal is to help businesses achieve high quality process outputs that meet their customer expectations and improve employee’s productivity.

It involves a set of tools and techniques, including statistical analysis, process mapping, and project management, to help organizations achieve their quality improvement goals.

Lean process improvement

Lean process improvement is a methodology that focuses on identifying and eliminating waste in a process. Tasks that do not add value to the customer should be removed or eliminated. The goal of Lean is to create a streamlined process that is responsive to customer needs, with minimal waste and maximum efficiency.

Conclusion

In conclusion, BPI is a critical aspect of any organization that wants to stay competitive and efficient in today’s fast-paced business environment. By adopting a structured approach such as Six Sigma or Lean, businesses can identify and eliminate waste, improve efficiency, and enhance quality, resulting in a more productive and profitable organization.