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Business Process Improvement: A Primer

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So, we have all heard, “if it ain’t broke, don’t fix it”, “We tried that 2 years ago and it didn’t work”, and my favorite “this is the way we have always done it”. We may avoid improving our processes because we are comfortable with the current way of doing things, perhaps there is a lack of process mindset in our organization, we don’t have time, the effort to get stakeholder engagement and buy-in into the change is too much work, we don’t tie change initiatives to business strategy, or we were unable to sustain the results from the last improvement project so why bother. There are probably more reasons we can come up with as reasons to not improve our processes that I can possibly list. However, there is no other skill that can yield immediate results and payback than learning how to improve business processes.

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Current Organizational Realities

Why spend time improving our processes? Because our environment does not stand still. Customers demand our products and services faster, better, and cheaper. Due to the pandemic, a virtual workforce is the norm. Customer expectations are dramatically increasing while resources are declining. Organizations are having to change rapidly due to customer demands. In addition, cross-functional interdependencies are becoming exceedingly complex in organizations, and over time interactions become obscured and measurement systems reinforce the wrong behaviors.

Start Small

Although business process improvement efforts can take two paths – continuous improvement or radical changes every now and then, it is often best to start with small, incremental changes. In most cases, this allows the stakeholders to adapt to the changes a little easier and will not feel as overwhelming to get started.

Lean practitioners often believe that these small, incremental changes will take an organization further than radical changes. When a business process improvement effort is implemented, we think our work is done. However, when we are standing still, we are really slipping backward because our competition is continuously improving. A great process yesterday is just adequate today and will be substandard tomorrow. To maintain the strategic gains, continuous process improvement should be ongoing.

Adding Value

One of the key components of process improvement is ensuring processes optimize value-added activities, minimize the non-value-enabling activities, and eliminate non-value-added

Business Process Improvement Pie Chart

Value-Added Activities -Any activity that adds value to a product or service the customer is willing to pay for.

Non-Value-Added Activities (NVA) -Any activity that consumes resources but does not add value or is not necessary is considered waste. These types of activities should be eliminated, simplified, reduced, or integrated.

Non-Value-Enabling Activities – Any activity the business takes to enhances its value-adding capability or is required.

Team Improvement

To provide an example, think of a football game. Regulation time is four 15-minute quarters giving a total of 60 minutes. Yet if you watch football, you will notice the total elapsed time to watch the game is about 180 minutes or 3 hours. So now let’s look at the actual value-added time – the amount of playtime with player movement. If we assume there are about 140 plays, and each play is about 10 seconds, we get 23 minutes of value-added time which represents about 12% of the total time a football game is played. Now, one could argue that point – especially if the teams were not playing their best, but you get the general point. So, the question as you look at a process in your organization, what steps in the process really add value – an activity that is needed and that the customer is willing to pay for and what steps don’t add value to the process.

3 Simple Steps to Improve your Processes

Here are three simple steps to improve your processes for immediate return.

Process Improvement Steps
  1. Optimize the value-added work. Enhance or optimize any process step that provides value. For a process step or activity to provide value, it must satisfy three criteria: It must be work that the customer is willing to pay for, work that physically transforms the product or service into something the customer wants and any step that ensures work is done right the first time.
  2. Remove non-value-added (waste) activities: Review your processes and remove any process steps that are not needed to provide value. Some wasteful activities may not have initially existed when a process was first created, but as time progressed, customer requirements or technology may have changed or perhaps activities that were needed in the past are no longer needed. These changes can make an existing process step either obsolete or no longer the ideal process. If a process is not regularly examined for efficiency, these unnecessary or ineffective steps can stay in place long after their necessity ends.
  3. Tightly control any non-value-enabling (non-value-added but required) activities. This work is sometimes difficult to identify. For example, any work that might be to comply with a government regulation, a customer contract or specification, an industry standard such as ISO 9001. It could include processes such as payroll, credit checks, or regulations that must be followed.

Analyzing your organizational processes, no matter how big or small, can put your organization on a path to saving money while boosting efficiency, increasing customer satisfaction, and even enhancing employee morale. All it takes is asking the question, does this work add value?

What’s Next?

If you are interested in getting practical hands-on experience in business process improvement, go to https://www.watermarklearning.com/business-process-management-training to find out more about Watermark’s Business Process Management Certificate program. You may take all three classes or one or two courses of interest.

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