Optimizing business processes must be done in a well-planned manner so that expected results are achieved. Optimized business processes must be able to manage the resources available in order to improve existing process outcomes. Process optimization must improve existing processes within your means. Business optimization is part of the business process management framework (BPM), which is a systematic framework for improving existing processes.
Who Needs Process Optimization?
We can also define optimization as an operational practice that identifies, evaluates, and resolves business issues and concerns. At the core of BPM are business process improvement and business process optimization. Do all processes need optimization? How do we recognize which processes are prime for optimization? Here are a few ways to recognize processes that require optimization:
Poor or broken communication channels – seamless communication is primal for any process, the lack of which causes chaos in the process execution. Irrespective of whether your team is working on-site, or remotely, they must communicate with each other about the projects they are executing. Effective business processes relieve employees of asking questions continuously for clarity in various tasks. If your processes do not provide proper guidance to the team members and clear communication channels, then they need to be optimized.
Redundant steps in the process – effective business processes must be straightforward, without any unnecessary or duplicated steps. While developing an exhaustive business process, businesses may actually create room for redundancy. The longer the process, the more execution time and increased resource requirements.
Repetitive issues – the issues with a process are repetitive and you receive complaints from employees and customers about a specific issue. Everyone complaining about the same issue shouldn’t be ignored at any cost. It is a clear indication that something is off with the process and needs to be fixed immediately.
Improper version control – how well are our team members utilizing document version controls? Are versions of a document mixed up? Although this may seem like a minor issue, the repetition of mix-ups costs the business dearly. Identifying different versions of a document may be tasking for the employees. Process optimization allows you to update each version of the process and documentation without any hassle or confusion.
Difficulty in filling out open positions – the requirement for new employees is a sign of business growth. Filling open positions can be a tedious process without streamlining recruitment and onboarding processes. Optimized HR processes can automate repetitive tasks, document processes, and collaborate seamlessly.
How to go about Business Process Optimization?
Business process optimization can be a daunting task without the proper plan. Proper focus on optimized process design is required while optimizing processes. Focussing on the following aspects of process optimization is an important part of process optimization-
Customer focus –
the end game of business operations is customer satisfaction. Putting customers first is important to re-design processes in order to cater to customer needs. Improve your business processes from the customer’s perspective.
Being aware –
process optimization requires awareness of process status and progress. A step in the right direction is an indication that you are on the right track. Defining tangible key performance parameters to analyze and measure process performance.
open and transparent communication accelerates the pace of process optimization. Team members and stakeholders should be aware of relevant information on the latest developments and changes that arise while improving the process. All these changes must be communicated to all the stakeholders.
each team member has a role to play in different stages of process optimization. Inputs must be derived from all stakeholders as feedback to ensure that employees and customers are getting the most from the processes.
Continuous execution –
optimization is not a one-time process, as processes evolve, new bottlenecks will emerge in the process. Process optimization design must make provision for effective change management. Process optimization must allow continuous process improvement with minimum downtime.
Business process improvement and optimization aim to redesign existing processes to make them more efficient, streamline operations, reduce errors and costs, and upgrade communication.
Pros and Cons of Process Optimization
Any major change in business operations, like process optimization, comes with pros and cons. In the case of business process optimization, clearly, the pros outweigh the cons. Let us consider the pros of optimizing a business process –
Improved compliance management – industry regulations are laid down to guide businesses on legal policies and procedures that they must follow. They enforce law and order in the best interest of society. Organizations that violate these rules and regulations are clamped down or are subjected to fines and penalties. Optimized business processes are streamlined and adhere to regulatory stipulations and laws.
Reduced risks – depending on the type and scale of a business, the associated risks vary. Risk management involves process improvement and optimization. Business process optimization helps identify the risks that arise from process execution and removes risk by improving process operations. Process optimization brings awareness among employees about standard operating procedures that are tested and certified as risk-free.
Streamlined operations – bottlenecks in a process affect the workflow and result in undue delays and sometimes halts the entire process. Process optimization eliminates process bottlenecks and creates a free and seamless workflow.
Maintains consistency and quality of process – acquiring new customers and increasing customer retention rate can be successfully done by enhancing the quality of deliverables. When new customers have been onboarded the quality of deliverables determines whether they will stay or not. Process optimization helps deliver quality products/services and also maintain the quality of products and services. As you optimize business processes for consistency and quality assurance, you can automate some complex processes to minimize human errors.
Improves resource utilization – sustaining process resources depends on how they are utilized by the process. Overutilization or underutilization of process resources is not good for a business in the long run. One effective way of ensuring proper resource utilization is to eliminate redundant steps, which in turn eliminates the wastage of resources. Process optimization is the best way to remove redundant and repetitive steps from a process.
Enhances customer satisfaction – the end result of any business process is customer satisfaction. Effective processes are the key to customer satisfaction. Business process optimization ensures that processes are aligned with their end goal at all times.
Let us go onto the cons of business process automation.
Improper issue resolution –
implementing process optimization measures is mostly done for the entire process rather than specific tasks or steps that need improvement. When the entire process is optimized, emphasis is more on the overall process efficiency rather than the condition of individual tasks. It is important to identify the root cause of the problems and fix them one after the other. When loose ends in a process are not tightened, they cause friction in operations.
Inadequate data –
for successful optimization, you need sufficient data to point out areas of improvement. Complete information on the current process like stakeholders, conditions for process execution, inputs, and expected outcomes. Data collection must not be limited to top-level officials while optimizing data, all the employees who are part of the process need to be included.
Moving too fast –
once the decision to optimize the process is taken, teams usually speed up the efforts to reach the finish line. Process optimization requires attention to detail and consistent efforts. The impact of changes to the process must be observed in detail to ensure that the changes are as expected.
Excessive dependence on technology –
process optimization without technology is unimaginable. Excessive reliance on technology for process optimization complicates the implementation. Technology must be used only in areas that warrant its usage.
Inconsistencies across departments or teams –
different departments that experience the same type of issues may use different terminologies for describing the issue. They might be referring to the same issue, but due to differences in their communication, you might assume that they are talking about different things. During optimization, it is important to ensure that the same process maintains the same terminology or language across the organization.
Delay in implementation –
business process optimization requires a collaborative effort between various teams or departments, which often stalls the process. When different teams work together, one team does its task and passes it on to the next team. The subsequent team may not be able to deliver on time, which does not allow the project to move on. Business optimization is not one-size-fits-all, so leadership has to choose the method that suits the unique needs of the business.
Steps in Process Optimization
Depending on the type and magnitude of the issues/setbacks you are facing in your business, you need to choose an optimization solution. However, there are some common steps of optimization that can be applicable to all types of businesses.
Identify the issues – the first step is to identify the issue with the process or process causing the issue. There might be several issues within a process, the best approach is to identify and address each one of them separately. Focus on a specific problem and zoom into identifying what is making it ineffective.
Rethink-process optimization thrives on efficiency and optimal use of resources. Rethink whether a complete overhauling of the process is needed or only a part of the process needs optimization. For example, if a process is slow, you are better off identifying the factors that are responsible for slowness and removing them instead of discarding the whole process.
Analyze – making changes to the process requires deep analysis of the impact of changes. Mapping out the objective of the changes first by considering all the areas at stake. Developing a set of KPIs will help in measuring the impact of the changes. In a situation where you have to implement workflow software to automate some of the repetitive tasks, these KPIs can be used to measure the success of process optimization.
Implement/Automate – automation is an integral part of optimization. Automating repetitive, low-value tasks is an effective way of optimizing the process. This way your team members will have more time on their hands to carry out more engaging tasks.
Monitor – most efficient business processes need to be continuously monitored for constant improvement. Despite proper planning for process optimization, without regular monitoring, it would be difficult to identify any slackness that may arise in the process. It is important to closely monitor the newly optimized processes to detect any downfalls.