Business process optimization: Why it’s important, and how to boost your success
By: Jill Huettich
If you’ve been thinking about business process optimization, you’re in good company. Research shows that more and more organizations are opting to invest in business process optimization initiatives. As a result, the business process management market is expected to reach a whopping $13.5 billion by 2021.
As further evidence business process optimization is on the upswing, consider a survey done by PricewaterhouseCoopers. It found that senior executives are well-aware of the importance of optimizing business processes to remain competitive.
In fact, many executives believed their businesses would cease to exist a decade later if efforts to continually improve and optimize processes weren’t pursued.
So, if you’re looking to learn more about business process optimization, this practical guide was designed with you in mind. In it, we’ll explain business process optimization in greater detail, discuss business process optimization techniques, and offer step-by-step guidance for optimizing a process.
What is business process optimization?
Before we jump into a deeper discussion of business process optimization, it makes sense to develop a common understanding of what exactly it is. Business process optimization aims to improve business processes, with the goal of maximizing efficiency.
There are a number of reasons a company might opt to improve processes. For instance, some of the benefits of business process optimization include:
- Market Compliance
- Reduced Risk
- Better Utilization of Resources
- Streamlined Operations
- Improved Quality
- End-to-End Visibility
So, now that you have a better understanding of why a corporation might want to devote time and effort to business process optimization, you may be wondering what the best way is to go about it.
That’s been hotly debated over the years, and we won’t take a side one way or the other. However, we will briefly review some of the differences between the three most common business process optimization techniques in the next section.
Popular business process improvement methodologies
There are a number of business optimization approaches that exist. Some of the most common ones include:
1. Total Quality Management (TQM)
TQM is a quality-improvement system that aims to cut down on defective products or poor service within an organization. To achieve this aim, TQM’s emphasis is on individual departments and quantifiable goals, with the overall objective of improving customer satisfaction.
2. Six Sigma
While Six Sigma maintains some of the same goals as TQM, it emphasizes continuous improvement. As such, when Six Sigma is implemented correctly, it continues to yield benefits long after its initial goals have been realized. That’s because the aim here is to create a workforce culture that’s forever focused on improvement.
As with the previous methodologies, Lean’s goal is to make manufacturing and production processes more efficient. To achieve that objective, Lean’s emphasis is on eliminating unnecessary or wasteful steps in a process.
Specifically, the Lean methodology promotes only leaving steps that add to a product’s value. The only way to determine whether a step adds value is if customers would be willing to pay for it. With the Lean methodology, if they would, that step is retained. By contrast, steps that don’t add value are eliminated, streamlining operations.
These business optimization techniques (and others) are used throughout the world, most commonly in industries like manufacturing, healthcare, finance, IT, and the military.
While it’s useful to have a general understanding of them, for most small-to-medium sized businesses, they would probably be considered too formal. So, rather than drown you in the details of how each methodology works, we’ve prepared a step-by-step guide in the next section, illustrating how you might more easily improve processes at your own organization.
Steps to business process optimization
There are five primary steps of business process optimization:
1. Define the Current Process
Before you can optimize a business process, you have to have a good understanding of how the process works currently. To help in that regard, it’s useful to perform business process mapping with a software like MindManager.
2. Analyze the Current Process
Once you have the current process well-defined, it’s time to dig into the data, looking for potential areas of concern. For instance, is there a bottleneck in the process causing one part of it to take significantly longer than it should? Are there tasks within the process that are redundant and can be eliminated?
3. Redesign the Process
Once you’ve identified potential problems, you’re ready to redesign the process so it’s more efficient. While there is no one tried-and-true way to improve a process, you’ll definitely want to make sure during this step that you:
- Define the scope – By defining the scope of the process change in advance, you reduce the risk of your improvement initiative getting hijacked by other goals.
- Speak to employees in the field – Before making sweeping changes, it’s very important to seek the input of those employees who will be directly affected by the process change you’re proposing.
- Perform a risk analysis – A risk analysis should be done whenever you’re contemplating changing a business process, so you’re aware of any potential pitfalls and subsequently, have a plan in place to prevent them.
4. Implement the Optimized Process
After you’ve completed the preceding steps, you’re ready to actually implement your process. If you can, we recommend beginning on the smallest scale possible. Once you’ve been successful with that endeavor, you can later roll the process change out company-wide.
How did the new process do? Do any changes need to be made to it? During this final evaluation step, you’ll want to document important lessons your company learned throughout this 5-step process.
Now that we’ve covered the steps of business process optimization, you may be wondering what the best way is to get started with it at your own organization. We recommend that before you begin optimizing processes at your workplace, you make sure you have the right software.