Leveraging Value Analysis for Business Process Improvement

In a business, processes are everywhere. Whether it is sales, customer service or HR, every function is run by processes underpinning it. To streamline operations and ensure optimal efficiency, analysing and improving these processes is essential. Business Process Analysis is a key technique to understand what’s working well within your business and what needs to be improved. While there are many analysis techniques, one of the critical ones that helps you remove waste from the process is Value Analysis.

Value Analysis is a straightforward, yet powerful technique designed to swiftly identify and address inefficiencies within business processes. By focusing on the value each process or task contributes, it helps organisations pinpoint problems and eliminate or replace the activities that are not required. This method ensures that every step in the process is executed with the customer and business needs at the forefront, enhancing overall performance and customer satisfaction.

In this blog, we will explore the essentials of value analysis, its application, and how it can drive business process improvement, transforming your organisational processes to be more customer-centric and efficient.

What is Value Analysis?

Value Analysis is a methodical way of making processes smoother to save time and money while increasing customer satisfaction. Its primary goal is to eliminate unnecessary business activities, expenses, and steps involved in creating a product or service without compromising quality or performance.

How Does the Value Analysis Work?

In value analysis, organisations categorise each activity within a process into three main types: Customer Value Adding (CVA), Business Value Adding (BVA), and Non-Value Adding (NVA). This classification helps them prioritise improvements and allocate resources effectively to maximise value creation.

Customer Value Adding (CVA) activities are those that directly contribute to satisfying the customer’s expectations. Examples include answering customer queries via telephone or email. To identify CVA activities, one can ask whether a customer would be willing to pay for the activity. If not, it is likely not a CVA activity and should be classified as either BVA or NVA.

Business Value Adding (BVA) activities are essential for the business to function, such as activities related to policy, regulatory compliance, and necessary approvals. Although they add cost to the process, they do not directly add value from the customer’s perspective. However, the business cannot operate without them.

Non-Value Adding (NVA) activities neither add value to the process from the customer’s perspective nor are they necessary for conducting business. These activities represent waste in the process and offer opportunities for improvement. Examples include rework, unnecessary approvals, and double entries.

Once the Value Analysis is complete, organisations can focus on eliminating NVA activities from their processes. By doing so, they can streamline operations, reduce costs, and enhance overall efficiency.

How Value Analysis Drives Business Process Improvement

Value Analysis plays a pivotal role in business process improvement initiatives by methodically assessing each step’s alignment with overarching business objectives. By leveraging value analysis, organisations can strengthen their business process improvement efforts. They can focus on areas with the highest potential for value addition and cost savings and achieve sustainable efficiency gains. Some of the key ways value analysis boosts process improvement include:

1. Optimised processes: Analysing the value of tasks enables organisations to identify inefficiencies and bottlenecks within their processes. By understanding which tasks add value and which do not, businesses can streamline operations, eliminate redundant activities, and refine workflows. This optimisation leads to smoother, more efficient processes that can significantly improve overall productivity and operational effectiveness.
2. Cost reduction: By eliminating non-value-adding tasks, organisations can reduce costs associated with unnecessary activities, such as excess labour, materials, and time. These cost savings help organisations make more profit and compete better.
3. Time-Saving: It reveals areas where time is being wasted in the current process. By eliminating low-value or redundant tasks, businesses can reduce the time required to complete processes. This time saving can be substantial, allowing for faster delivery of products or services, which is particularly critical in competitive markets. Streamlined processes mean employees can focus on essential tasks, increasing overall efficiency and productivity.
4. Enhancing customer satisfaction: It allows organisations to focus on activities that directly contribute to customer value. By prioritising customer-value-adding tasks, organisations can enhance the quality of their products or services, meet customer expectations more effectively, and ultimately improve customer satisfaction and loyalty.
5. Better Resource Utilisation: Effective resource utilisation is the top priority for organisations. By eliminating non-value-added activities, organisations can figure out where to use their resources, like human resources, materials, and equipment, in the best way. This means they can get more done with less waste.
6. Driving Sustainable Efficiency Gains: It fosters a culture of continuous improvement within organisations by encouraging regular review and optimisation of processes. By regularly analysing the value of tasks and seeking opportunities for improvement, organisations can adapt to changing market conditions, customer preferences, and technological advancements, staying ahead of the competition and driving long-term efficiency and success.

Analyse the Value of Your Business Processes Quickly

The task of analysing the value of business processes to eliminate non-value-added activities may seem time-consuming when attempted manually. However, with the right tools, like PRIME BPM, this process becomes not only manageable but also efficient and effective.

With PRIME, organisations can quickly create detailed process maps and transform them into insightful assets. Using PRIME’s automated value analysis functionality, organisations can identify bottlenecks, assess the value added at each task level, and pinpoint areas of waste in a click.

Furthermore, with PRIME BPM, organisations can simulate and test process changes to evaluate their impact on both customer value and organisational efficiency. This capability empowers businesses to drive meaningful organisational change and continuous improvement initiatives.

To unlock the full potential of process mapping, value analysis and experience the benefits of PRIME BPM firsthand, we invite you to register for a 30-day free trial today.