Improve Your Business Processes to Save Money
Is the way you’re doing things costing your business money? You won’t know for sure unless you analyze and evaluate the way you do things now and identify opportunities for improvement. In fact, process review should be a standard part of your business activities.
Incorporating ongoing process reviews may seem tedious and time-consuming, but the continuous process improvement that results from regularly measuring the efficiency, effectiveness and flexibility of your business processes is well worth it. In fact, the use of a continuous improvement business strategy will pay for itself over time by improving the products, services or processes of any organization. Such improvements may be incremental over time or may happen quickly by incorporating breakthrough technology, such as incorporating Artificial Intelligence (AI) to manage routine, tedious processes.
The important thing is to begin and maintain an ongoing evaluation of your business processes, so ongoing improvements can be developed and applied.
Business process improvement (BPI) has become necessary for all kinds of organizations, regardless of size or industry, if they want to stay competitive. Nonetheless overhauling complex business processes can be costly, especially when new technologies must be purchased and implemented. Executives want to see the financial benefits before they agree to undertake the project.
Inefficient Business Processes Result in Lost Revenue
58% of businesses say that “stuck in process” is one of their biggest problems. This process inefficiency can cost your organization as much as 30% of your revenue. Compliance errors can skyrocket as high as 46%. By converting inefficient business processes into smooth operations, you can focus on performance and results.
Solutions such as data extraction, data migration and workflow automation turn complicated paper-dependent processes into digital tasks. When processes are digital and automated, it’s far easier to focus on one task at a time, and to make sure that the entire process is completed and error-free! Employees are more productive (and happier). Stake-holders see results in the bottom-line.
Look for the Biggest Efficiency Dividends
If you have a simple process that’s working well with paper, it’s highly unlikely that converting it to a paperless process will make a big difference. Don’t waste time on processes that work well. Just remember that there’s a difference between a process that works and one that works well. When it comes to process improvement, you want to make sure your processes are fool-proof
It’s up to you and your team to prioritize your process improvement. Most often, that means starting with the departments that manage multiple pieces of paper and multiple processes -- accounting, human resources, manufacturing, legal, data processing -- and other departments that perform processes requiring multiple steps, repetitive entries and paper-intense processes.
Analyze Your Processes
To guide you in your analysis, we have adapted these process analysis questions
- Why is this process in place?
- What is the desired outcome?
- When is the deadline and are there periodic checkpoints?
- How many employees are involved in this process?
- Who is responsible or accountable for which tasks or projects?
- Are there metrics or some form of measurement associated with this process?
- What obstacles or roadblocks prevent the process from flowing smoothly?
- What resources (people, time, dollars) are required to complete this process?
- How important is this process to our company’s core business?
- How can this process be more effective?
Don’t focus only on fixing certain parts of a process. A band-aid approach doesn’t work for process improvement. Focus on the entire process. With processes that involve multiple groups, it’s easy to lose sight of the goal when each team is only focused on improving their steps.
Here are some additional questions to ask:
- Do I still need this process?
- What works well about the current process?
- What parts of the current process take the most time?
- How is the information this process is generating being used?
- If I had to recreate the process from scratch, what would that look like?
Once you’ve done your analysis, look at the costs associated with implementing the process improvement. Compare the initial implementation costs plus the expected savings over time to what the current process is costing. Remember to include lost time, error remediation, costs of missed deadlines, etc. when you calculate your current process costs. What’s your ROI?