Business Process Improvement – Continuous Improvement Cycle

After you have improved a business process, can you simply relax and move on to the next process? Not if you want to retain the strategic gains you achieved.

Continuous improvement (CI) can seem like a theoretical concept unless you have experience working with business processes. But, this is far from the truth. You should make sure that you do not move too hastily to improving the next process until you have created a CI plan for the process you just finished. Otherwise, you will find that the process works fine for a while. Then you will see it starting to slip backwards a little, then a little more, until it becomes outdated and you are back where you started.

This step is similar to losing weight. If you lost 20 pounds and never weighed yourself again, you will probably find the pounds slowly creeping back. The “maintenance phase” of a business process is just as important as that of a weight loss program.

There is plenty written about continuous improvement and you should think about the four steps in the improvement cycle: (1) evaluate, (2) test, (3) assess, and (4) execute.

Identify what you want to evaluate on a recurring basis – did your customer needs change, are the internal controls still working, or are you measuring the most important items? Try the changes out on a limited basis (test), determine if they worked (assess), and deploy them across the organization if successful (execute).

It helps to identify the following before you leave a process you just improved:

  • the key topics you will evaluate
  • how often you will revisit each topic
  • the time frame when you will revisit topics

For example, you may choose to validate the customer needs every 12 months and plan to conduct that analysis in the second quarter of each year. Putting a plan and schedule in place will help to keep an improved business process at the forefront of your mind and make certain that you routinely look for improvement opportunities.

Developing a continuous improvement plan and schedule is the tenth step to improving the effectiveness, efficiency, and adaptability of your business.

Copyright 2010 Susan Page

What is Business Process Management?

Managing a business involves a variety of processes and responsibilities on the part of the project managers. What is business process management? Business process management (BPM) is a set of activities that helps the businesses to run more smoothly. These processes figure in all stages of the company’s activities from the starting stage to the final sales.

Business process management mainly comprises design, execution and monitoring. The key components involved in business process management are risk management, business process modeling, business process outsourcing, employee motivation and product inventory. The main advantage of business process management is that it can be remolded as well as modified again according to the needs of the changing business environment. It can also be changed to cope with the new trends in the industry. By introducing a business management plan, core processes such as budgeting, capital expenditures, and administrative processes can be perfectly managed.

Business process management should be planned after considering all aspects of the particular business so that it will be the appropriate up to date system. Regular inspection and evaluation at different levels is needed to improve the workflow and also to enhance the work output of a business. If proper business process management is not done then those companies will not be able to attain their potential output. In such companies, the risk management will be poor, and they are more prone to pitfalls and future losses. This can even lead the business to a stage of collapse.

Nowadays, software tools are commonly used to aid business process management activities. These tools are known as business process management systems. These software tools carry out suitable process analysis so that negative consequences are nullified. Business process management systems make the designing and implementation of all business management processes cheap, easy and efficient.

Business Process Improvement – Eliminating Bureaucracy

You can use several different techniques to improve a business process and you should put eliminating bureaucracy at the top of the list. Do you remember Jack Welch calling bureaucracy “productivity’s enemy?” Seems very fitting!

In a business process, bureaucracy requires following a complex series of activities that hinder the process. We have all seen bureaucracy and red tape continually added to a business process. Bureaucracy does not happen all at once, but rather incrementally over time. The process can easily become bloated, making it ineffective, inefficient, and inflexible.

You might wonder, because bureaucracy seems so counterproductive, how it can have any advocates. You can normally trace the cause of bureaucracy to either the need for excess control, the fear of making a mistake, the desire to cover our backs in case something goes wrong, or simply something that grew over time.

Even though no one outwardly admits to supporting bureaucracy, you will run into resistance as you work to eliminate it because of the fear of the unknown and the inclination of human nature to just carry on doing things in the same old way.

So, how do you go about eliminating bureaucracy? After drawing a process map of the current state, walk the project team through the map activity-by-activity and ask if bureaucracy exists in each step. If it does exist, use a blue highlighter to color the box on the map to denote bureaucracy. You should move slowly through this step. If everyone immediately says that no bureaucracy exists in a step and you think it does, you may have to force the project team to feel uncomfortable. Hesitate. Do not say anything for a few minutes. You will start to see the project team squirming, but eventually someone will talk. You have to possess good facilitation skills to feel comfortable challenging a group, but you have to do it if you want to improve the process.

Think of the case where a process requires multiple approval levels. Are they needed? Could you reduce the number of approvals by fifty percent? If one of your goals is to reduce the time a process takes, then you should challenge the number of approvals required because this will shorten the cycle time (the time required to complete a process from its first to last step). Ask simple questions like, what would happen if the company eliminated some levels of approvals, would the world fall apart, is a particular employee incompetent, or would the next approval level not catch any possible errors?

Another filter you can use to eliminate bureaucracy is evaluating whether an activity supports a statutory, audit, legal, or tax requirement. If it does, then it may have to stay. You have to show a little caution with “audit” though because sometimes we audit too frequently. Validate the reason for the audit to determine whether it should continue. If it does remain, still ask if you can use a “spot” audit, instead of a full audit, where you only examine a subset of the data.

Bill Gates wrote in his book Business @ the Speed of Thought: Succeeding in the Digital Economy that “A rule of thumb is that a lousy process will consume ten times as many hours as the work itself requires.”

Eliminating bureaucracy is one of the steps to improving a business process so that you can make it more effective, efficient, and adaptable.

Copyright 2011 Susan Page