Continuous improvement of business processes is important for the business to stay ahead of the competition. The first step to improving business processes is to analyze and measure process performance. Business process analysis is an effective way to review and govern business operations. A thorough analysis of business processes helps identify the process loopholes and opportunities for improvement and changes. Read on to understand the what, why, when, and how of business process analysis, and the benefits of business process analytics.
What is Business Process Analysis?
Business process analysis is a method for reviewing the processes that govern your business operations. Analysis of the business process throws light on the status of the business process and helps identify the areas for improvement. When starting up a business, processes are the first thing that is set. Business processes are not the fit-and-forget types, they could break down or become outdated as businesses grow. Routine analysis and review of business processes help determine their relevance and effectiveness. Regular review and analysis of business processes are highly beneficial for the company. Successful business processes are capable of generating more revenue, spurring growth, and streamlining business operations.
Without proper process analysis, the business is at risk of wasting valuable time and resources on outdated or inefficient processes. As businesses expand and mature, processes get more complex and involve more resources in daily operations. New technologies are also introduced to meet the growing needs of businesses. Investing time and effort to analyze processes regularly allows you to identify and address process gaps and inefficiencies. Business process analysis tools allow users to document each step of the process, which makes it easy to understand the process workflow and identify improvement areas.
The business impact as is to be analysis process helps identify the detrimental elements in business operations and figure out ways to overcome/eliminate these drawbacks. Business process analysis techniques are part of the business process management (BPM) umbrella. The business analyst performs business process analytics.
Need for Business Process Analysis
Why should you analyze business processes? From a simple travel request logging to approval to handling a customer inquiry – several steps are involved. By conducting a business process review, you can streamline these actions, improve efficiency, and remove redundant steps.
Here are 5 reasons why you need an analysis of the process:
1. Minimize operational costs –
Business process analysis is the most effective way to identify the repetitive and redundant steps in a process. Once these steps have been identified, finding a solution to either do away with these steps or improve them becomes easy. When excess steps are trimmed from the process, the operational costs automatically come down.
2. Identify the cause of delays –
During the inception stage of business processes, an estimated time of completion is assigned to each process. The time taken to complete a process is usually calculated by adding the time for each step, and it usually factors in a buffer time for unexpected delays. When the run time of processes consistently exceeds the estimated completion time, it means that inefficiencies or redundancies have crept into the process cycle. Business process analysis helps identify the cause of these delays. Task-level analysis of business processes identifies and plugs the loopholes and eases the bottlenecks.
3. Eliminate manual data entries –
Not only do manual processes bring down operational efficiencies, but they also bring down the accuracy and consistency of the process. Needless to say, manual processes are tedious and time-consuming as well. On average, managers spend 8 hours a week on manual tasks. They are better off spending this time on more productive tasks. Business analysis process mapping helps in identifying steps involving manual data entry. Once identified, these steps can be automated to save time and effort.
4. Keeping up with technology –
Every business needs to constantly evaluate various options to improve process outcomes. Investing in the latest technology is one of the safe and secure ways to improve business outcomes. Not aligning the process with the latest technological trends renders the as-is process obsolete and inefficient. Business process analysis helps in identifying the areas in the process that can be improved by using technology.
5. Effective resource utilization –
Process analysis and mapping help in understanding the resource requirements of each step. Business process analysis allows you to have a thorough and detailed look at the process and its components, and identify ways to improve process performance. Once the steps have been mapped, the resource requirements for each step become clear. Assigning the right resources to each step so that they are optimally utilized is possible with BPA.
Steps in Business Process Analysis
Implementing a business process analysis cycle on your team requires a good amount of understanding and planning. Successful implementation of BPA requires a dedicated in-house team that takes care of the analysis, mapping, and documentation of the business process.
Here are 5 business analysis process steps that are commonly implemented by businesses.
1. Review how the process fits into the bigger picture –
Ultimately all the processes must lead back to larger initiatives and business goals. Processes define the “how” of your business; how do you go about achieving the goals and objectives of your business? It is also important that they are aligned with the “why” of the business, which is the company’s objective/goal. While analyzing the business process, one must understand how and where the process fits into the larger picture. Reviewing existing processes and understanding where they fit into the organizational-level workflows and departments is the first and most important step in BPA.
2. Gather information on current status –
The second step in BPA focuses on gathering information about the process. Data on how the process works, who the stakeholders are, and the inputs/outputs of the process need to be gathered during analysis. Interviewing the stakeholders, creating employee surveys, and reviewing associated KPIs and metrics are some of the effective ways of gathering process information. Although this step takes more time than the other steps, the information gathered forms the basis of BPA. Making changes or improvements in the process is based entirely on the process information that is gathered.
3. Analyze and map process data –
BPA must cover all process steps, relevant process diagrams, associated team members, and current success metrics and KPIs. Business process mapping can be used for creating a visual layout of your processes and workflows, which simplifies review. Visual mapping of the process makes it easier to identify patterns and gaps in the process flow.
4. Identify opportunities for change/improvement –
The analysis step identifies the gaps and redundancies in the process, which are areas for improvement or changes. For example, the process analysis shows that it takes 3 days for a leave request to get approved. Based on interviews with stakeholders, you understand that delay is caused by the difference in time zones. Adopting technology options that enable asynchronous communication would speed up request approval and reduce the time spent on communication. Process analysis reveals the business impact of the changes/improvements to the process.
5. Implement changes –
After business process analysis comes business process improvement (BPI) where you make changes based on the analysis. BPIs will be used to adapt and make changes to the processes to improve productivity and increase profitability. Business process analysis is a discovery guide that shows you what is “in” and what is “out” of your business. All the information gathered during analysis is used to implement changes that improve these processes or create new ones.
Business Process Analysis vs Business Analysis
It is very common to confuse business process analysis with business analysis. There may be some overlaps between the 2 concepts, but they are distinct disciplines.
- Business Process Analysis focuses on specific process analysis and business process modelling.
- Business Analysis on the other hand applies to the larger business operation landscape. The focus of BA is more on financial forecasting, cost analysis, budgets, hiring, and budget cuts.
- Business Process Analysis collects data and makes recommendations based on the core processes of the organization.
- Business Analysis is used to identify any business requirement or issue in the organization, which could involve financial controls, market research, hiring practices, and cost-cutting.
Benefits of Business Process Analysis
Business process analysis provides several benefits to the organization. It gives the management a clear idea of how current processes are performing and areas for improvement. The main benefits of business process analysis are:
Improves efficiency of current business processes
BPS improves time-to-value for product applications. A thorough BPA exercise lowers the time in operational cycles for workflows, like employee onboarding or patient intake process, or customer in-take process.
Reveal capacity issues
Improper resource utilization or limited resource availability or overuse of resources are some of the capacity issues in a process. BPA helps identify the capacity limit, and how it affects the process and ways to improve it. The findings of the BPA can be used for scaling up the resource requirements of the process. BPA can help in identifying the changes you need to make so that the process is closely aligned with organizational growth.
Clarify the rules and policies
As organizations move more toward remote work models and increased adoption of digital devices, the misalignment between security and device usage tends to increase. BPA helps identify an optimal path for faster IT approval processes and brings about uniformity in security policy enforcement.
Improves risk management
Risk management is a priority for organizations. Risk management and compliance is a costly endeavor for organizations for maintaining compliance and even more costly when compliance issues arise. Process analysis can reveal spots in the process where the compliance mechanism has faltered.
Identify the cost savings
Redundancies in tasks and labor are revealed via BPA. The tasks in the process that can be digitized can be identified through process analysis. Doing away with these redundancies results in cost savings for the organization.
Eliminate process bottlenecks
Siloed channels for communication, development, and execution cause process bottlenecks. BPA can expose these gaps and resolve approval process bottlenecks.
Optimize deployment and release processes
BPA focuses on optimizing the deployment and release process so that they are event free.
Strengthen company culture
Efficient processes help build a positive work environment. The areas for improvement identified by BPA can be acted upon to improve process efficiencies. Optimized and streamlined processes foster a positive company culture.
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Business Process Analysis Methods
As mentioned above, BPA is part of the business process management umbrella. The most popular BPM approaches are Six Sigma and Lean Six Sigma models. Other methods include root cause analysis, SWOT analysis, and Gap analysis. The business process analysis template used by the business varies according to the nature and scope of the business. Analysis of agile business processes requires a combination of various analysis methods.
Let us examine each of these methods in greater detail.
Root cause analysis
This type of analysis is used when the foundation of the process needs to be analyzed. Root cause analysis can be used to identify the base of the process to ensure that it connects back to the company’s larger goals.
Any missing steps in the process can be identified through GAP analysis. All the gaps in the process and missing steps in the process as compared to larger company goals.
Stands for Strengths, Weaknesses, Opportunities, and Threats. This type of analysis enables a comprehensive analysis of the business process. They provide deep insights into how the processes are performing and how they can be improved.
Six Sigma analysis
This model defines various techniques and management tools designed to make business processes more efficient and effective. This model is based on a statistical approach that represents the standard deviation of the bell curve from the center. This approach is highly effective in identifying and reducing errors. DMAIC and DMADV are the main methodologies in the Six Sigma approach. Customer focus, assessing the value chain, and eliminating the defects and outliers are the main points that Six Sigma focuses on.
Lean Six Sigma approach
This is a smart combination of the Lean methodology that focuses on removing waste and optimizing the workflow. Lean Sigma focuses on eliminating waste, while Six Sigma focuses on identifying and removing the cause of the issue. Delivering from your customer’s perspective, eliminating all workflow waste, and continuous improvement are the main areas that Lean Six Sigma focuses on.
Also Read: How to improve the performance
When to Implement Business Process Analysis?
When should you go for BPA? Given all the benefits of BPA, businesses are likely to go for BPA to improve their business outcomes.
Unidentified issues in the process like regular delays or increased customer complaints. Manually operated approval-based processes are ridden with delays and bottlenecks. Unexplained and unexpected delays in business processes ultimately affect the customer experience.
Lack of clarity in roles
A business process is as good as its stakeholders. All stakeholders need to be clear about their roles in the process so that there is no confusion in executing their work. Conducting BPA helps understand the roles and responsibilities of each stakeholder so that there is no confusion or duplication of roles. Clear role assignment ensures that stakeholders are aware of their roles and perform their duties on time.
Automating the process
Prior to automating business processes, BPA needs to be conducted to ensure the viability of automation. The process needs to be optimized before being automated, and BPA helps businesses make the right decisions toward automation.
Introducing a new process version
Making changes to the process or introducing a new version of the process requires a thorough analysis of the existing process. Business process analysis helps in identifying effective ways to change the process or build a new version of the existing process.
Tools for Business Process Analysis
Business process analysis tools are technologies that businesses use to analyze and improve individual business processes. Business processes are typically individual operations with specific goals and objectives that comprise smaller steps or tasks. BPA tools can be used in several industries from manufacturing to medicine to hospitality. These tools are made up of 6 components:
BPA considers the way processes are accessed and archived. Access to this repository must be given to authorized users along with passwords and other authentication features.
Graphical modeling and documentation
Visual process modeling help create a graphical representation of the process in the form of a process diagram or flowchart. BPM tools use BPMN notations to avoid misinterpretation.
BPA tools publish processes in the cloud, which make it easier for everyone in the organization to access process documentation. The data is also secured through data encryption.
Process version control
Every time a change is made to a process, it is important that the previous version is automatically saved. This way, individual files need not be created for each version of the process.
BPA tools analyze a process to improve bottlenecks, eliminate wasteful steps and delays, and facilitate smooth handoffs.
BPA tools enable smooth collaboration between team members and process users. They enable timely notification of process owners so that there are no delays or bottlenecks.
Automation and Business Process Analysis
Enterprise businesses are increasingly considering process automation as a top business priority. BPA is like a precursor for automation. Based on the observation via BPA, businesses can make a decision on how automation can be conducted. BPA helps businesses to analyze automation viabilities based on the following points –
1. What are the key areas that the business must automate and why?
The main intent of BPA is to identify the processes that are prime for automation. The key areas for automation can be identified through BPA.
2. Where are the high-volume tasks concentrated?
Typically, high-volume tasks are the ones that take up a substantial amount of the employee’s time. BPA tools help in identifying areas of the process where several tasks are concentrated, which helps in coming up with an automation solution.
3. Have the obvious process problems been identified?
BPA tools help in prioritizing the issue areas in the process. So that the more important ones can be addressed first and the other ones can be taken up later. The obvious problems that are affecting the process should be addressed first so that productivity is not affected.
4. What are the causes of customer dissatisfaction?
A drop in customer satisfaction or customer experience is not something that any business would like. BPA tools can be used to analyze the processes that are causing customer dissatisfaction and identify the corrective measures.
Business process analysis is necessary for improving business outcomes and customer satisfaction. Identifying process bottlenecks and redundancies can be effectively done through BPA. The business process analysis template and the business analysis process steps depend on the nature and scope of the business. Choosing a workflow automation software like Cflow enables businesses to automate key processes quickly and effectively.
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