What leads to the desired output from a process improvement initiative? There is no one-point answer to the question as many elements need to come together, however, business process analysis is a key step on which the entire improvement initiative rests.
After all, the improvement results will be based on the issues and bottlenecks identified in the current state process. Comprehensive analysis of the current processes gives insights into areas in the processes that are resulting in delays or lags and need to be improved. These findings can then be used to target the improvement initiative.
Business Process Analysis Techniques
Many process analysis approaches can be chosen to gather data related to current processes. Some of the effective ones include:
Process Value Analysis: The goal of Value analysis is aimed at eliminating unnecessary activities, expenses, and steps incurred in the process. For value analysis, each activity in a process is analysed and classified into: customer-value-adding activity, business-value-adding activity and non-value-adding activity. Eliminating the non-value-adding activities from the process improves the process performance.
Process Cost Analysis: It helps understand role cost and overhead costs in the process.
Process Cycle Time: Points to important metrics, such as execution time per activity and delay time or lag associated with any task in the process.
Process Cycle Efficiency: This helps understand value-adding time in a process by taking into account process execution time and delay time.
Identifying the Right Processes for Analysis and Improvement
With all these powerful techniques, how do you ensure you are targeting your analytics and improvement efforts in the right direction? A lot depends on choosing the right processes for business process analysis.
Here we discuss 4-point criteria to select processes that are perfect candidates for process analysis and improvement and deliver maximum benefits to the business in the shortest possible time.
- High Frequency, High Volume: It’s important to look for processes that are frequent, have high transaction points and have multiple handoff points. These processes are usually prone to errors and analysing them gives the biggest opportunity to understand improvement opportunities. Given the frequency, any efficiency or productivity benefits lead to maximum benefits for the business. Hence, look for routine processes running daily or weekly instead of monthly or yearly for effective business process analysis outcomes.
- Prone to Lack of Compliance: Given the potentially serious consequences, such as fines and reputational damage, ensuring compliance is a top priority for business leaders. Compliance is not something that your organisation is, you have to continually ensure adherence with rules, policies, regulations and standards in day-to-day operations. Analysing processes that are prone to compliance mistakes helps organisations recognise compliance and regulatory breaches and risks and vulnerabilities on a task-by-task basis. This information proves extremely useful in putting necessary measures and targeting the compliance management plan.
- Repeatable, Standardised Processes: Processes that are repeatable and standardised also promise great benefits upon analysis as compared to a process that is subject to change or depends on human judgement or creativity. Analysing and improving a repeatable process result in productivity and efficiency benefits each time it is run, thus leading to significant value for the business.
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