How do we know what’s working in our processes and what needs improvement? How do we know what can be optimised in the process to improve efficiency, productivity and customer response time?
This is where Business Process Analysis comes into the picture. Business Process Analysis is an approach to examine the current process to understand how it operates, what is working well, the bottlenecks and delays and how the necessary improvements can be made.
Business Process Analysis is at the centre of driving your improvement initiative as it guides your team to direct their time and efforts in the right direction. Without business process analysis, you will be shooting in the dark and wasting a lot of time addressing the wrong problems.
Business Process Analysis vs Business Analysis: Is there a difference?
Due to similar names, a lot of people get confused between Business Process Analysis and Business Analysis. While both concepts focus on analysis and improvement, Business Process Analysis focuses specifically on improving business processes. It involves identifying areas in the processes for optimising efficiency, reducing costs and enhancing effectiveness.
On the other hand, Business Analysis is a more comprehensive approach to analysing and improving an organisation’s overall business operations. It aims to identify problems, gaps, and opportunities, and to develop and implement solutions that meet business needs and objectives.
How to Analyse a Business Process?
To effectively analyse a business process, follow these steps:
Identify the process: Identify the business process to be analysed and define the scope and boundaries of the process. Map the process flow, including all activities, tasks and decision points.
Gather process information: To gain an in-depth understanding of your processes, record process attributes, such as Business Rules, KPIs, text descriptions, roles, documents and RACI (Responsible, Accountable, Consulted, Informed) charts. These process-related details will make your analysis results richer.
Capture insights and identify improvement opportunities: Analyse the current process to record actionable insights, such as process cost, time and efficiency. Carry out root cause analysis to capture process-related issues. Further, segregate tasks in the process on the basis of customer-value-adding, business-value-adding or non-value-adding activities. Using this data, you can identify redundant tasks in your processes, process waste and delays and understand tasks that can be automated to improve efficiency and minimise the chances of human errors.
Improve and monitor: Implement the identified improvements and measure their impact on process performance. Continually monitor the processes to find further improvement opportunities.
Benefits of Business Process Analysis
By giving an idea about what needs to be fixed in the as-is process to increase performance, efficiency and effectiveness, Business Process Analysis results in numerous benefits:
1. Increased Customer Satisfaction: The findings of business process analysis can be used to formulate a strategy for enhancing your customer service. Analysing customer processes that have low customer ratings will help you uncover the specific problems within these processes that contribute to their low scores. You can realise immediate improvements in customer satisfaction by addressing these pain points.
2. Cost Reduction: Business Process Analytics provides crucial insights into key data, such as the overall cost of a process, the cost of any delays, and the cost and utilisation of resources. With this information, you can make informed decisions, such as eliminating repetitive tasks, redirecting tasks to more cost-effective resources, and eliminating delays. This can help you achieve significant cost savings.
3. Improved Productivity: As Business Process Analysis removes inefficiencies and streamlines processes, organisations see significant productivity enhancement.
4. Better Risk and Compliance Management: By analysing business processes, organizations can identify potential risks and compliance gaps and mitigate them, leading to improved risk management, compliance adherence and a lower likelihood of disruption.
5. Identifying automation opportunities: Business process analysis gives insights into high-volume, high frequency, manual-intensive processes with a number of handoff points. Using this data, you can understand tasks that are suited for automation and will result in increased productivity and reduced errors.
Business Process Analysis Techniques
There are many techniques for Business Process analysis, however the end goal is the same: to optimise process performance.
Some powerful techniques for Business Process Analysis include:
Root cause analysis: Root cause analysis is a problem-solving technique used to identify the underlying causes of process issues, such as bottlenecks, inefficiencies, and errors. This technique involves asking “why” questions to determine the root cause of a problem and developing solutions to address the underlying issue.
Process value analysis: It is a systematic approach to examine the steps involved in a process. Value analysis eliminates any unnecessary activities, expenses, and steps in a process. In this analysis, every activity in a process is examined and categorised as either a customer-value-adding activity, a business-value-adding activity, or a non-value-adding activity. By identifying and removing the non-value-adding activities and waste from the process, its overall performance can be enhanced.
Process cost analysis: This method involves examining the various activities and resources involved in a specific process and identifying the direct and indirect costs associated with each step. This analysis can help businesses to determine the total cost of a process and to identify areas where costs can be reduced or eliminated, such as reducing material waste or overhead cost, etc. The analysis can also help businesses make informed decisions about pricing, budgeting, and resource allocation, and can provide valuable insights into the process cost structure.
Process cycle time: It takes into consideration the time required to complete a process from start to finish. This analysis points to important metrics, such as execution time per activity and delay time or lag associated with any task in the process. Measuring process cycle time and comparing it against industry threshold enables organisations to identify improvement opportunities. For example, if the cycle time is too long, this may indicate that there are bottlenecks in the process or certain steps could be eliminated or streamlined to reduce the overall time required. On the other hand, if the cycle time is too short, this may indicate that quality is being sacrificed or the process is not being executed in the most effective way.
Process cycle efficiency: It is a metric used to measure the overall efficiency of a business process. Process cycle efficiency is calculated by considering the ratio of value-added time to the total cycle time of a process. Value-added time is the time spent on activities that directly contribute to creating value for the customer or business.
To calculate process cycle efficiency, the total cycle time is divided by the value-added time, and the resulting ratio is expressed as a percentage. The higher the percentage, the more efficient the process. Analysing and removing any inefficiencies to optimise the process cycle efficiency delivers quick results in terms of productivity and improved customer service.
How to maximise the results from Business Process Analysis
Not all processes are created equal and will deliver the same result on analysis. Selecting the right process is critical for the desired benefits. Below are the example of processes that are the apt candidate for business process analysis:
- Processes that are manual intensive or have multiple handoff points are prone to errors. Analysing them helps understand many opportunities for process optimisation.
- High-volume, high-frequency processes give better results when analysed as compared to infrequent processes. Analysing a routine process that is executed daily certainly adds more value than a process running monthly or yearly.
- Standardised processes also present better opportunities upon analysis as compared to processes that depend on human involvement and judgement.
- Criticality of the processes in terms of business and customer value add is another factor to be looked into when selecting a process for analysis.
Choosing the software for Business Process Analysis
A comprehensive Business process analysis tool is crucial to establishing a continuous improvement culture. Only with a proper tool can you ensure sustainable analysis and improvement. An end-to-end BPM suite that includes in-built modeller, analyser and improver tool gives the desired output.
One such tool is PRIME BPM that allows organisations to map, analyse, improve and monitor their processes from a single platform. The tool comes with a powerful in-built analytics engine that empowers you to get crucial data, including process cost, time and efficiency, with just a single click. The tool also allows you to see how your process efficiency compares to the industry threshold to take the required action.
PRIME BPM automatically calculates the percentage of customer-value-adding, business-value-adding and non-value-adding tasks in a process to help you take an informed decision. Explore the full features of the PRIME BPM Business Process Analysis software at Zero Cost. Get the free license of PRIME BPM.