22 Best Steps For Business Process Improvement

Have you ever wondered why some businesses seem to experience consistent growth while others never make it past their first few years in the industry?

The key to success often lies in having reliable business processes—systems that guide day-to-day operations and help ensure employees are productive and customers are satisfied. With documented recipes for tasks and processes, companies can create products and services with remarkable precision and consistency. For instance, customers have come to demand certain levels of quality from restaurants, coffee shops, and service-oriented organizations.

To meet these demands without fail, companies must model processes that lead to consistent results. Without attention to detail and effort to develop reliable business processes, growth is a challenge or even impossible. Thus, the importance of business processes cannot be overestimated.

In this article, I’ll share the 22 best steps to understand business process improvement, so you can create better systems and processes that increase speed and performance.

1) The importance of process improvement

When it comes to keeping a business running smoothly, process improvement is a key factor that may be easy to overlook. Although it often takes time and effort to implement changes, the long-term payoffs can be significant. New businesses, start-ups, or established companies must continue looking for process improvements that will keep up with technological developments, company growth, and customer demand.

That’s why it is so important for an organization to have an appropriate and effective business process management strategy in place to continuously improve existing processes. Organizations that want greater market competitiveness need a long-term business process improvement plan that will stay focused on improvements in efficiency, effectiveness, and overall performance while staying within the existing budget.

2) What is “process improvement”?

Process improvement is a systematic approach to continuously improving operational processes. This can be done through business process mapping and analysis, eliminating unnecessary tasks, and reviewing current work methods. It also includes the creation of new processes that are based on goals and objectives. You need to make sure that everyone in your organization is on board with this change, or it won’t work.

Process improvement projects start with a plan that has been approved by senior management for the changes to be made (usually at least six months in advance). What follows is an assessment of what needs changing and how the proposed changes will affect operations, employees, and customers.

3) What is a process map?

A process map is a diagram that shows how a process works, including what goes in, what comes out, and how it is controlled. It has been found that organizations can improve their business processes by improving the flow of their process maps. A sequential diagram that shows the sequence of actions in a process is called a flowchart. Flowcharts are used as an analytical tool for studying existing processes or designing new ones.

A simple way to map a process is by making four boxes: input, processing, output, and feedback.

For example, in order for a company’s sales team to generate revenue from customers, they need to identify potential customers. The input would be prospect data that includes lists of people with likely buying capacity from different sources, such as online databases. Next, the salesperson needs to reach out to these prospects, either through email or phone calls. As soon as a person agrees to have their details added to a database of leads, it becomes an output because this individual is now one step closer to being turned into a customer.

An important part of mapping out the process is looking at what happens when things don’t go according to plan and how those issues are handled within your system. An organization could use business process improvement techniques such as Total Quality Management (TQM) or Six Sigma that help them keep track of trends and make adjustments accordingly.

4) Identify the value-add and non-value-add activities

A good way to start the process of business process improvement is by listing all of the tasks that your organization engages in and then separating the activities into two groups: value-add activities and non-value-add activities. Value-add activities are those that create either revenue or reduce expenses for the company. Non-value-add activities are those that do not generate revenue or reduce expenses but are necessary for some other reason, such as compliance or appearance.

Note that in Lean Manufacturing, these two terms—value-add and non-value add activities, are described a little bit nuanced.

Eliminating these types of activities will give you more time, knowledge, and resources to focus on increasing the value-add aspects of your business process.

In order to improve a current business process, organizations should take a step back and ask themselves questions like, “How much time am I spending on this task?” Is there an easier way to accomplish this task? What will happen if I spend less time on this task? Can I automate this task? Do I need a robot to complete this task?

Any one of these questions can be a starting point for your business process improvement project. The more work you do upfront, the easier it will be to answer questions about existing processes and what changes should be made. Use that insight to identify non-value-adding activities and invest your time, knowledge, and resources in value-adding activities to transform your business processes from good to great.

5) What are Talk time, Cycle time & Lead Time?

Talk time, Cycle time, and Lead time are fundamental to business process improvement (BPI). Let’s explain them one by one.

Takt means rhythm, so this term refers to the pace set by management and followed by workers on each assembly line. Takt Time is the time between the completion of one unit and the beginning of the next. In one simple but practical example, Talk time is the duration of a conversation between an employee and a customer. It can help measure customer satisfaction.

Cycle time is the average time it takes to complete a unit of work.

Lead time is the amount of time between an order being placed and the customer receiving it.

The three go hand-in-hand, as optimizing one could help you optimize the others as well.

Each of these measures can be tracked in order to improve processes. By making changes such as streamlining procedures or implementing new technology, BPI teams can work to reduce Talk time, Cycle time, and Lead time. This will help increase efficiency, decrease costs, and improve customer satisfaction.

6) What is a Bottleneck?

A bottleneck is part of a business process that slows everything else down. For example, at the checkout line in a store, if only one cashier is working, there will be long lines and customers waiting for their turn to check out. This can lead to slower customer service because workers have less time per customer, and it might even result in customers abandoning their items in order to speed up the process by getting out of the store quickly. The entire organization suffers from this problem when bottlenecks cause other parts of the process to slow down.

Focusing on improving each business process and making sure that all processes in your company are always getting better is the key to getting out of this cycle. It’s important that you take care of your existing processes first before moving on to new ones because they are what keep your company running every day. Organizations should make a map of their current business processes so they can see where delays happen and where they can make changes.

7) Define your goals

Before starting any BPI activity, you need to define what you want to achieve. What are your objectives? What are your targets? What do you expect to obtain after the implementation of the business process improvement? Be metric with your objectives and targets.

For example, if the objective is to improve efficiency, the target can be increasing efficiency by 1%. Then, we should be able to calculate how much money is saved by each new process. In other words, what is mean this 1% by increasing efficiency? So, know your numbers.

8) Which are the steps for Business Process Improvement?

The process improvement cycle consists of the following five phases, called DMAIC: Define, Measure, Analyze, Improve, and Control. In other words, for a business process improvement to be successful, it must be followed through each phase. This includes evaluating an existing process, determining what needs to change, and implementing these changes. Finally, and most importantly, there is the need for constant evaluation of the new process in order to verify whether it has been effective or not.

For a successful business process improvement, goals and objectives must be set up in a clear way. Specific, measurable, and achievable goals are crucial for a successful business process.

One example of a good goal would be reducing customer wait time by 10–15%. Why not 50% or more? Well, business process improvement is an incremental process, step by step. In other words, we look for progress, not perfection. This is Kaizen: evolution, not revolution. Another reason is that big changes at once can create big waves in other processes. And that, too, we try to avoid.

Takeaway

Small improvements (kaizen) are like little waves that create a tsunami with an exponential effect. If something goes wrong, you can adapt it as needed during the improvement process. On the flip side, big improvements are like thunderstorms, which produce a strong effect with an unpredictable result. They look like a logarithmic curve, having a huge financial effect (not always a positive one).

9) What are the tools used for Business Process Improvement?

There are several different tools that can be used to measure and improve business processes.

For example, Lean Six Sigma is a methodology that combines principles from Lean and Six Sigma to focus on reducing waste, cost, and cycle time. Some other popular tools for BPI include process mapping, benchmarking, simulation modeling, and data analysis.

Swim Lane Diagrams allow you to map the entire process, allowing you to identify problems before they occur and work through solutions methodically.

Kaizen events also give organizations a way to keep improving their current processes by getting the whole organization involved in fixing problems right away. In the long term, organizations should always have an eye on identifying new ways of streamlining their workflow or automating it all together.

SIPOC is a tool for creating an overview of processes. It stands for Supplier, Inputs, Processes, Outputs, and customers. SIPOC diagrams provide a visual representation of the entire process and help identify areas that could be improved.

Spaghetti Diagrams are also a useful tool for business process improvement. They help visualize the movement of resources and where delays may occur.

Pareto analysis is used in business process improvement in order to gain insights into how processes are working. A Pareto diagram shows where a problem lies in terms of resources, customers, or any other factor. A Pareto chart can show that for a specific region, over half of all sales come from one account, and those accounts with problems have also had an unusually high rate of error calls.

Overall, there are many different tools that can be used to measure and improve business processes. By using these tools, businesses can learn more about how they run, find ways to improve and make decisions based on data, which will make them more efficient and save them money.

10) Mapping the process

One of the most important aspects of business process improvement is identifying the current process. This step can be a little tedious, but it’s worth it in order to fully understand how the process works. One way to identify processes is by using what is called VSM, or Value Stream Mapping.

A company will map its entire value chain from suppliers to customers and analyze all the internal and external factors that affect its production. It may take some time to complete this mapping, but when you’re done, you will have an understanding of where your weaknesses are as well as areas that need improvement and increased efficiency. The more you know about your business processes, the better prepared you’ll be to improve them!

11) Test small changes with high impact (based on the 20/80 rules)

Business process improvement is not about implementing big changes and expecting that they will solve all your business problems. In many cases, the answer lies in small changes and adjustments to existing processes. By making a few small adjustments and changes, you could make your business much more productive in key areas without spending a lot of money.

Ask yourself, “What are the 20% of bottlenecks that are most important, and can I speed up my process by 80% if I remove them?” Or, what are the 20% of quality issues that generate 80% of losses? Another question (as Pareto-to-Pareto): What are the top 2 activities of my business that, if I focus my resources on improving, I will get the most benefits?

These basic techniques for improving business processes have been used for a long time and have been shown to improve business practices while making them more competitive over time.

Takeaway

When testing, do it in small batches (to avoid wasting resources). Ask high-quality questions.

Laser focus on metrics. Connect the dots. Trust the process.

12) Identify bottlenecks and pain points

Business process improvement continues with identifying bottlenecks and pain points. Once they’re identified, you need to understand the cause of the bottleneck or pain point. Always look for the cause. Use the “5 Why” technique to identify the root cause. Once you identify a bottleneck, ask yourself: How does this step affect my process and our customers? Be as metric as possible; precision is important.

To begin, you must inventory all bottlenecks and the connections between them. One bottleneck will influence others and create a domino effect in the whole process. You should also document everything about them, from inputs to outputs, including critical tasks that must be performed under the influence of these bottlenecks. These records will be useful for future reference when it comes time to improve business processes later on.

Short Case Study

Bottlenecks in the sales process often occur when there is a long wait time between leads being generated and the customer making a purchase. For example, let’s say that every week, 100 people contact your business through its website, but only 10 of those people become customers. This indicates that there is likely a bottleneck somewhere in your sales process.

To identify where this bottleneck is occurring, you can start by looking at the initial inquiry stage and seeing how long it takes for customers to move through each step in your sales pipeline until they make a purchase. You may find that certain steps take too much time or resources, such as contacting leads to follow up on inquiries or setting up a consultation. Well, you can ask yourself: “The theory is pretty clear, but how exactly can I do that?” If you have a website where you sell your products, you can map your process using a heatmap application like Hotjar.

In this way, you will understand what exactly happens during the customer journey and when and where bottlenecks bump up. If you want to install Hotjar, here you will find some useful video tutorials.

Once you’ve identified the bottleneck, you can start to make improvements to your sales process. You could invest in automation software that would help streamline follow-up communications with leads, create more efficient appointment-scheduling systems for consultations, and develop stronger customer onboarding processes so customers feel supported after making a purchase.

13) Assess your current state

This can be done by conducting interviews with stakeholders and gathering data on processes. Interviews can help find problems that a process map or other tool might not show. It’s also important to look over any existing documents, like policies and procedures, to see how they affect performance right now.

When you map your processes, you’ll find opportunities for efficiency gains and other improvements that will improve your customer service, quality, competitiveness, and profitability. The following are some questions that should be considered when assessing your current state:

What are my organization’s critical business processes? – How well do the current processes serve customers? Are they efficient and effective? What is their impact on costs or revenue? How can we improve them? By learning more about how the organization is doing now, BPI teams can later start to come up with and implement plans for improvement.

14) Brainstorm potential solutions with a minimum cost

Once you have identified your bottlenecks and pain points, you will want to brainstorm possible ways that this could improve or new methods that could improve efficiency. In the above example, another potential solution to reduce costs associated with sales process improvement is the use of free or low-cost software and automation tools.

For example, automated lead management systems can help streamline communication processes between leads and sales representatives, reducing manual labor costs. Additionally, cloud-based appointment scheduling solutions allow customers to book consultations online without having to manually coordinate with sales reps.

Another cost-effective option is to outsource certain tasks in the sales process, such as customer onboarding or technical support. By outsourcing more complex tasks, businesses can save time and money while still providing quality service. Finally, businesses can use data analysis tools to measure progress and identify areas for improvement in their sales process that need to be addressed. By utilizing these low-cost solutions, businesses can maximize efficiency and minimize their spending.

By considering the different options available with a laser focus on small improvements, businesses can effectively implement business process improvements without breaking the bank. With some creativity and a focus on cost reduction, any business can reap the rewards of BPI without putting too much strain on its budget.

15) Implement process changes

Once you have identified the bottleneck and brainstormed potential solutions, it’s time to implement process changes. Start by creating a timeline for each step in your sales process and setting clear goals for what needs to be accomplished at each stage. For example, if you want leads to move faster through your pipeline, set a goal of having them complete the process in a certain number of days.

Be sure to include all the stakeholders involved in the sales process, such as marketing and customer service teams, so everyone can be on the same page with expectations and timelines. Then, make sure your team has the tools it needs to achieve these goals.

For example, if you are outsourcing customer onboarding, make sure you have the right software and systems set up for them to use.

Finally, communicate any changes made in the process to your team so everyone is aware of what’s expected of them. With clear goals, expectations, and communication in place, your team will be better equipped to execute the improved process and maximize its effectiveness.

16) Confirm the results of the new process

Once you have implemented process changes, it’s time to measure the results and make sure they are having a positive effect on your business. To do this, track the key performance indicators (KPIs) that you established. In any kind of business, we can talk about generally speaking—customer satisfaction, conversion rates, and revenue growth. Of course, be very specific with your KPIs. Avoid using KPIs that you can’t measure with an acceptable level of precision.

These KPIs will provide an indication of how successful the process improvements were and help you identify areas for further improvement. Additionally, it’s important to get feedback from customers and team members on how the new process is performing. This will provide valuable insights into what areas are working well and which need further attention.

17) Encourage employee feedback

This point is so crucial. Your employees are the most important asset in the continuous improvement journey. Without their involvement and feedback, you can’t close the loop of business improvement. The reason for businesses is to create value. As a result, they make a profit. With whom do they make this money? Yes, with the most important asset: people.

Without employee input, it can be hard to know where the business process improvement opportunities are. Ask your employees where they think the process improvement opportunities are, and use this feedback to constantly improve your results. Ask employees what they like about the current system and what is frustrating them with it. Get them involved!

18) Celebrate successes

Yes, the most powerful motivator is success. All of us want to have success in any endeavor, and more than this, we want to share this success with others. So, it’s important to celebrate and recognize successes. This will make sure that everyone on the team knows they are appreciated for their hard work and encourage them to keep trying to get better in the future.

By taking the time to thank employees for their hard work and letting them know how much you appreciate it, businesses can create an environment that encourages employees to work together and think of new ways to do things.

19) Monitor and adjust

Even the best-designed processes can benefit from regular monitoring and fine-tuning. Businesses need to be ready to change their processes as customer needs and industry trends change. Businesses should continue to track KPIs and review feedback from customers and team members in order to make sure that the process is meeting its objectives.

Also, don’t be afraid to make changes as needed. Even small tweaks can have a major impact on the efficiency of your processes. Businesses can make sure their BPI efforts are working and staying relevant in a world that is always changing by keeping an eye on them and making changes as needed.

20) Extend the benefits

Fix it. Improve it. Extend it.

If some improvement can be extended, then implement it. All the processes must run like a train, with all the wagons connected and moving at the same speed. If you improve the results in one “wagon” in your business, you need to replicate them in all “wagons.” In this way, your business will run like an express train.

The process improvements will have a huge impact on competitive advantage and customer satisfaction. They also mean that the organization’s efforts are not just going down a well-worn track. They’re headed for something new.

21) Lesson Learn & Best Business Practices

Lessons learned and Best Business Practices are essential for any business aiming to achieve process excellence. Businesses can make sure their processes are efficient, customer-focused, and effective by keeping track of best business practices and applying the lessons they’ve learned. This will enable them to quickly identify and share solutions to common issues that arise along the way. Not only will this help improve existing operations, but it can also help inform future initiatives to ensure they are successful.

By putting best practices and lessons learned in one place, businesses can make it easier for departments, divisions, and even other companies to share what they know. Ultimately, taking the time to document lessons learned and best business practices is an essential step in keeping processes running smoothly and ensuring desired results are achieved.

22) Continue the cycle

Business process improvement is about continuous improvement and having the tools and knowledge to make changes. It’s about understanding your own workflows and making the necessary adjustments so that your processes are more efficient, better organized, and easier on you.

Process improvement does not end when the desired results have been achieved. It is a cycle that should be repeated and improved over time based on customer feedback, market trends, and changes in technology.

Businesses must also consider environmental factors such as economic conditions, legal requirements, and customer preferences to ensure that their processes remain up-to-date and relevant. By staying on top of these changes, businesses can be proactive in their approach to process improvement and remain competitive in an ever-changing world.

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