Guide to Process Improvement
All About Process Improvement
If there were a process-improvement star to wish upon, it would likely hear a lot of the following: How can I nurture more productivity, efficiency, and innovation across my organization — yet do so realistically, with changes beneficial for all?
Wishful thinking–be gone! A business process improvement strategy will connect the dots between how your organization performs today and how it can deliver tomorrow.
Through process-focused data mining, applying the right process improvement techniques, and critical and collaborative thinking, organizations can cultivate the sorts of workflows, task pipelines, and performance outcomes they wish for. More importantly, that wish gets grounded in reality, with new work processes you track and measure.
The results? A lean, mean, high-functioning business machine with continual, data-driven improvements. Let’s explore how.
What Is Process Improvement?
Process improvement is simple in concept, but challenging in practice.
At its core, it focuses on a single question: What are the ways we get work done throughout the organization that directly contributes to the services we provide or the goods we produce — and how can we make those ways better?
Better, of course, is the operative word. For most organizations looking to perfect process improvements, “better” is achieved through two core methods: either by identifying, analyzing, and maximizing “value-added” tasks and procedures, or by identifying, analyzing, and minimizing their opposite, or “non-value-added,” tasks and procedures — in both cases to allocate time and resources more effectively.
In short, process improvements are all about knowing what’s contributing to or taking away from your organization’s business objectives throughout the day, then making measurable and manageable adjustments to achieve better results.
Today’s Approaches to Process Improvements
There are many theories on how to best define business objectives, and, therefore, remedy value-added and non-value-added activities.
Two strategies lead the charge toward value-based process improvements:
- Standard, or model-driven, process improvements
- Measurement, or data-driven, process improvements
While these strategies might seem binary, it’s important to note their guiding objective is the same — to create processes that bridge from the work being performed to business goals achieved.
With a model-driven approach to process improvements, businesses and institutions create a structured, consistent, and replicable template for daily operations to align with higher-level business objectives.
Suggested improvements center on gap analyses — formal and informal appraisals on current task and project-management activities among teams or departments. Rounds of observation, staff interviews, and process-data mining of current digital applications and databases provide the backbone for the gap analyses, which businesses can conduct internally or through the expertise of a business process performance consultant.
After the appraisal, the next step is to adopt specific, value-based performance practices. Those practices become the template — or model — across the entire organization. With performance protocol standardized across teams, everyone is now working toward the same purpose, following the same practices to reach them.
In other words, organizations with a standard approach to business process improvements now have a go-to “recipe” to follow for peak performance — and ultimately peak business — success.
Advantages of Model-Driven Improvements
- A single or set of standardized, cross-department practices based on proven processes standardized across an industry
- Repeatable and replicable work operations
- Teams and departments on the same page when it comes to approaching workflows
- Enhanced inter-department collaboration and communication
- Linear decision-making and task pipelines
- Compatible with CMMI and ISO 9001:2015
Disadvantages of Model-Driven Improvements
- A “one-size-fits-all” approach
- Templates tend to get modeled after other departments or even other companies who’ve broadcasted their model’s success. Their way of doing things may not work for you, particularly if you’re in a different industry or operating on a different scale.
- Process improvements can reflect an academic or abstract perspective. Personnel might see the model as a theoretical exercise, rather than a set of specific daily actions that execute business objectives.
A measurement-driven improvement approach prioritizes quantitative information to build new, better business processes.
At the heart of this approach is performance data. Organizations implementing a measurement-driven approach to process improvements use data as the compass to find what’s working and what isn’t.
By tracking both real-time and historical performance outputs, individuals can better assess things like process error rates, repeated or redundant steps, actual workflow timelines, bottlenecks, constraints, chokepoints, and other inefficiencies detracting from daily momentum. In short, every point of a process gets characterized by a real number.
These numbers provide the path to unlock their own solutions. From the gathered data, organizations can draft new process and performance metrics they want to hit. They then tailor pieces of their business’ activities to see which best helps them achieve these updated metrics, creating a roadmap to overall process change.
Advantages of Measurement-Driven Improvements
- Measurable improvements: When done right, these numbers prove the fruits of your labor.
- Straightforward and numbers-backed definitions of “value-added” and “not value-added”
- Straightforward and numbers-backed definitions of business objectives, rather than broad, generalized ideas
- Proof of return on investment
- Department or organizations can customize to suit their individual needs
- Compatible with Lean Six Sigma and Balanced Scorecard
Disadvantages of Measurement-Driven Improvements
- Requires continual data sourcing, compiling, and analysis
- Requires installation of data-tracking tools and technology
- Still must connect the dots between collected performance data and actual improvement steps — in other words, you have the data showing you where to improve, but not necessarily how to make improvements.
- Create less straightforward or replicable cross-department process models
Benefits of Business Process Improvements
The case for improving core business processes is intuitive.
You want your organization to work smarter, not harder. You want your employees’ time and talents to flourish. You want the business objectives set for that day, month, or fiscal year to see fruition. Anything short of this not only risks critical resources — it jeopardizes the future stability and competitiveness of your organization.
Consider the following reasons to invest in business process improvements, as well as what they can deliver:
- Eliminate waste — Exact definitions of “waste” vary by organization and industry. Yet core culprits pop up across the board, from high rates of workflow lag and wait times to approval constraints, customer dissatisfaction, or imbalanced budgets and expenses. Process improvements take a scalpel to waste, finding ways to circumnavigate — if not eliminate — their source.
- Reduce defects — Defects include any work done incorrectly the first time around, resulting in a correction, a change order, or even a complete scrap. Business process improvements introduce standardized work models, error-proof instructions and supportive structures to directly address common design, production, input, or delivery defects. Many organizations categorize rework, which is the work done to correct a defect, as indicative of waste.
- Be more efficient — Efficiency problems occur when work takes longer or requires more resources than it needs to. Reasons for this can include poor enterprise-resource planning or project management, missing or inadequate tools and technology for employees to use, or unnecessary, redundant steps in a workflow. Analyzing the processes identify the work that is adding value — which you therefore maximize — and the work that is detracting value or not adding value — which you consequently eliminate.
- Grow more competitive — Business process improvements mean you can make more effective decisions on where to channel valuable time, talent, and financial resources. Value-added activities get systematically stressed, while non-value-added ones get reduced. Ultimately, this means you decrease operational costs and overhead, become more cost-competitive, and deliver consistent goods and services at a fraction of the price you did before.
- Have happier customers — Process improvements are the backbone to a business that delivers less erroneous, more cost-competitive, high-quality, and consistent goods and services. Better, high-quality delivery equals happier customers. What’s more, the products and services grow into themselves. They build a stronger identity that matches your core objectives, lending you a boost in brand and market identity.
- Win more work — When you’re a better company from the inside out — and have the performance data to prove it — you procure more orders, win more bids, and ultimately grow.
Tips on Improving Your Business Processes
Business process improvements work when they’re actionable, not abstract.
This gap is often the most difficult one to bridge, identifying the exact tasks, tools, systems, or steps detracting from leaner and more efficient work activities. However, difficult does not mean impossible.
We’ve got a few core strategies and suggestions for your business to implement today to see performance changes tomorrow.
- Introduce New Performance Metrics
Data are the foundation of process improvements. Data are the objective pieces of information showing precisely how operations function at the moment, providing a set numbers to focus on either improving or reducing.
Business process consultants like those at BTI specialize in process-focused data mining. We track and extract data directly from your current systems, displaying which specific projects, procedures, or places are working effectively and efficiently based on their process performance. The results are accurate and actionable, providing you detailed, objective insights.
There are dozens of performance metrics data mining can highlight. Just a few key outputs include:
- Lag-time data — Changeover, validation or approval constraints, bottlenecks due to workflow “eddies”, inadequate staffing, machine, or system downtimes, information silos
- Error data — File and data input errors, invoice errors, change-order rates, product-return rates, broken procedures or machinery or equipment, routinely defective information and parts and components
- Production data — Late data critical to making progress, over- or under-ordering inventory, production pileup, issues with work order flow, under- or overused personnel or equipment
- Implement a Standard Model Based on Those Performance Metrics
With process data in hand, organizations now have direct evidence of value-added and non-value-added operations. No confusion, no generalities, no guesswork — only objective information diagnosing the source of current inefficiencies alongside their benchmarks for improvement.
That data then guides the implementation of model-based improvement approach. Organizations get the results-oriented, fact-based benefits of a data-driven improvement approach combined with the reliability of a model-based improvement strategy. It’s a seamless integration of analysis and action.
- Incorporate a Change Management Strategy to Smooth the Transition
To generate lasting process improvements, organizations can’t overlook one key thing: people.
Identifying performance metrics and creating a standard model to achieve them is only half the equation. You can improve these processes and have great new goals on paper — but are the actual people these changes will affect on board with them?
A change management strategy solves this riddle. It helps institutionalize process improvements, turning them from new routines or rules into the widespread mantra that “this is how we work here — and here’s why.” Plus, change management allows employees to see their work as part of larger objectives and therefore contributors to the business’ success — as well as emphasizes how new process improvements will likely make their tasks more straightforward and more intuitive.
Buy-in, engagement, and acceptance are critical to seeing your transition succeed. Adopting an inclusive change-management strategy that focuses on real people is a crucial tip in your overall guide to process improvement.
Hiring a Business Process Consultant
A business process consultant can guide an enterprise across every stage of process improvements.
Your interests are their interests, your success their success. Indeed, a business process consultant’s career and reputation rest on their ability to guide you through process transformation, delivering tailored, long-term results.
That makes them a valuable and rare asset for your organization. With their fresh eyes, energy, and expertise, there’s a reason business process consulting has risen to be a nearly $10 billion industry and, on average, enhances participating clients’ project success rates by 70 percent.
- Tips on Hiring a Business Process Consultant
Bringing on the right business process consultant is akin to hiring a new employee. Their time and talents will directly contribute to what your business can achieve. As such, there are a few key traits and characteristics to be on the lookout for:
- Those who emphasize education along with expertise — Of course, process consultants are experts in their field. That’s why you’re hiring one! More and more, consultants hyper-specialize in a process improvement methodology for a particular industry or application, such as DevOps implementation in IT departments. However, technical acumen should never trump knowledge building. Consultants should make their impact feel indispensable, not their physical presence.
- Crystal-clear communication — Communication is always a two-way street. But that street is a lot easier to navigate when someone is directing traffic and ensuring its maintenance. A business process consultant fits that bill. They should present clear, methodic approaches for how they intend to track, analyze, and suggest process solutions, as well as oversight and support in process and change-management implementation. At every step of the partnership, they communicate their methods and results, aligned with your interests.
- Big-picture thinking with everyday action — The best enterprise improvements generate significant results with small, serial adjustments. Real data guides those adjustments — no throwing darts in the dark. Organizations get the change they need without the stress, confusion, or system downtimes that so stereotypically come with the process.
- Benefits of Hiring a Business Process Consultant
There are dozens of benefits to hiring a business process consultant.
- Break out of the “business-as-usual” mode — Enterprise process improvements are a quiet revolution. They don’t disrupt, overturn, or toss out the entire system. Instead, they systematically and methodically build upon it, meaning the old way of doing things gets fine-tuning to create even more success.
- See ROI — Process improvements themselves are an investment, requiring time and attention. Those brought in to administer them are part of that valuable equation, one that results in capital being better allocated, expenses reduced, and work streamlined.
- Are positioned to grow — Enterprises of any size, in any industry, can’t see growth if they don’t know themselves. That knowledge runs across the board, from strengths and weaknesses, highs and lows, to core business objectives, workflows, and entire organizational structure. Business process consultants give you a clear, objective picture of these variables, plus the roadmap to make them a reality.
Partner With the Process Experts to See Real Results, Continuous Improvements
Business process improvements move your organization from one with potential to one with purpose.
We know it’s there. Let Business Transformation Institute help you see it, too.
Learn more about our tailored process improvement services, or contact us directly for information.