As an entrepreneur, your business relies on certain business processes to keep day-to-day operations running smoothly. But what is a business process? A business process is a series of tasks and activities that make up a business system and without which there would be no business at all. It can also be described as a group of steps used to improve customer satisfaction.
Setting up efficient business processes allows you many benefits. First, you are able to run your company at lower costs. Next, you are constantly improving your bottom line. Additionally, you gain an edge on the competition on your side of the market. As you can probably tell, getting your business processes running smoothly can have a powerful impact on the quality of your product. In contrast, deficient business processes result in high overhead costs, increased uncertainty, and wasted time.
In this article, we will give you the rundown on how business process analysis works and also provide great insight into how to take your business to the next level.
Business Process Analysis
In order to get a business process running smoothly, one needs to understand exactly how it works. To do this, managers perform business process analyses. A business process analysis identifies every single part of the structure, from the parties involved to the logistics of the process, to the process itself.
The analysis helps to identify weak spots in any business process and to document them. This makes it much easier to improve a process, help the business save time, cut down on costs, improve the quality of its services, and prepare for any emergencies that may arise.
See also: How to Write A Business Continuity Plan
When Should You Carry Out A Business Process Analysis?
Here are some cases where you should carry out a business process analysis (BPA):
- When you want to replace an old process with a new one
- In cases of issues like customer complaints or regular delays
- When you want to introduce a new piece of software or automation
- When there are regular breaches in protocol or employees are confused about how to complete a process
Analyse a Business Process In These 6 Steps
Step 1 – Define The Process
First, identify the process you want to analyse or fix. Here are the 9 core business processes found in most medium to large businesses:
- Business Process Analysis and Quality Improvement: unsurprisingly, a business process analysis is itself a business process!
- Customer Acquisition
- Customer Satisfaction
- Financial Analysis & Resource Management
- Customer Strategy
- Product/Service Development
- Product/Service Delivery
- Accounting Management
- Technology Management
Many of these processes would be carried out by different departments in your company.
More generally, examples of a business process include invoicing, making deliveries, setting an annual budget, documenting orders, and reviewing employee performance.
In general, every BPA should start with definitions. As a manager or business owner, you want to define inputs, suppliers, actions required to complete a process, metric to measure customer satisfaction and outputs. Additionally, as obvious as it may seem, identifying the process boundaries i.e. what is included in the process and what is not included in the process is very important.
Step 2 – Gather Information
After defining a process, the next step is to gather as much information as possible on it. This is when you collect data on process objectives and on any instances of failure in the past.
In a similar vein, it is important to identify any information opportunities. An information opportunity is a problem that you learn about from the people who are using your process. These include staff and of course, customers. Information opportunities are usually documented in problem statements and customer reviews.
Discuss With Relevant Personnel
Talk with the people who are most involved in process implementation. This could be through in-person interviews or digital surveys. The goal is to use their input to identify any potential improvements. Ask:
- For suggestions on how to tackle regular problems.
- What your staff do and why they do it.
- What inputs/resources are needed to complete each task in a process as well as where they come from. For example, if you are a furniture maker, you want to know who supplies the wood to your workshop and how often they do supply.
- Similarly, what the outputs are for each task or process. Also, who receives the output? Is it the customer or another department in your company?
See also: How To Start A Palm-Oil Business
Step 3 – Measure Efficiency Of The Process
This step is fairly straightforward. To determine whether to fix, upgrade, or completely get rid of a particular business process, you need to measure how successful the process is in its goal. Measuring efficiency can be done in several ways, and what works for one business might not suit another.
In general, feedback from end-users and progress reports will allow you to design measures that work best for your company.
See also: 35 Great Business Ideas
Step 4 – Analyse The Process
Now we arrive at the core of BPA. Your analysis of a business process does not have to complicated to be successful. Essentially, at this point, you want to quantify or qualify the following:
- The amount of time it takes to complete a process task
- How much it costs
- What it contributes to profits or customer lifetime value
- How much waste is created as a result of process production
In general, the goal of a BPA is to minimise waste, costs and time consumed while maximising customer lifetime value and overall efficiency.
See also: How To Measure Customer Lifetime Value
Step 5 – Take Action
Without effective action, BPA would be a complete waste of time and money. At this step, you want to recall why you decided to carry out a BPA in the first place. Was it to identify the cause of a problem or to perform routine maintenance of established business processes? Here are examples of corrective actions you might choose to take:
- Start focusing on outcomes/results as much as the tasks themselves.
- Reduce the waiting time required for step in the process to be approved.
- Use as few people as possible in a process.
- Remove bottlenecks and roadblocks no matter how little they seem.
- Optimise and automate processes as much as possible within your budget.
- Have a strategy to keep all processes functional during exceptions or emergencies.
Step 6 – Monitor Effectiveness
In the final stages of a BPA, analysis should evolve into process monitoring.
Be sure to monitor process performance and/or improvement at least once a month. You can accomplish this with regular interviews, check-ins with the accounting department, and requests for customer feedback. Finally, any problem that is resolved should be replaced by newer, more challenging problems. This is necessary to take your business to new heights.
See also: Habits of An Effective Entrepreneur
In this post, we dug into the realm of business processes. We also presented 6 systematic steps to analyse these processes properly.
Furthermore, we made sure to touch on what actions to take after an analysis is completed as well as how to monitor progress. Trust us, if you analyse your business processes regularly and properly, you’ll see consistent improvements in your bottom line!
How about you? Have you ever analysed your business process? Let us know in the comments.
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