Introduction
The benefits of business process improvement vary, but a rough rule of thumb is that it will, at a minimum, double the gains of a project by streamlining outdated practices, enhancing efficiency, promoting compliance and standardization, and making an organization more agile. Business process improvement involves three key steps:
1. Measure what matters to most customers.
2. Monitor the performance of key business processes.
3. Assign accountability for process improvement.
Comprehensive business process management systems help organizations model and define complete business processes, implement those processes integrated with existing systems, and provide business leaders with the ability to analyze, manage, and improve the execution of processes in real time.
Examining Business Processes
Waiting in line at a grocery store is a great example of the need for process improvement. In this case, the “process” is called checkout, and the purpose is to pay for and bag groceries. The process begins when a customer steps into line and ends when the customer receives the receipt and leaves the store. The process steps are the activities the customer and store personnel do to complete the transaction.
A business process is a standardized set of activities that accomplish a specific task, such as processing a customer’s order. Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools. This simple example describes a customer checkout process. Imagine other business processes: developing new products, building a new home, ordering clothes from mail-order companies, requesting new telephone service from a telephone company, administering Social Security payments, and so on.
Examining business processes helps an organization determine bottlenecks and identify outdated, duplicate, and smooth running processes. To stay competitive, organizations must optimize and automate their business processes. To identify which business processes need to be optimized, the organization must clearly understand its business processes, which typically have the following important characteristics:
■ The processes have internal and external users.
■ A process is cross-departmental. Departments are functional towers of expertise, but processes cut across departments.
■ The processes occur across organizations.
■ The processes are based on how work is done in the organization.
■ Every process should be documented and fully understood by everyone participating in the process.
■ Processes should be modeled to promote complete understanding.
A business process can be viewed as a “value chain.” By contributing to the creation or delivery of a product or service, each step in a process should add value to the preceding step. For example, one step in the product development process consists of conducting market acceptance tests. This step adds value by ensuring that the product meets the needs of the market before the product or service is finalized. A tremendous amount of learning and improvement can result from the documentation and examination of the input-output linkages. However, between every
input and every output is a process. Knowledge and improvement can only be completed by peeling the layers of the onion and examining the processes through which inputs are converted into outputs.
Some processes (such as a programming process) may be contained wholly within a single department. However, most processes (such as ordering a product) are cross-departmental, spanning the entire organization. Business facing processes are invisible to the external customer but essential to the effective management of the business and include goal setting, dayto-
day planning, performance feedback, rewards, and resource allocation.
Understanding the importance of Business Process
Organizations are only as effective as their business processes. Developing logical business processes can help an organization achieve its goals. For example, an automobile manufacturer might have a goal to reduce the time it takes to deliver a car to a customer. The automobile manufacturer cannot hope to meet this goal with an inefficient ordering process or a convoluted distribution process. Sales representatives might be making mistakes when completing order forms, data-entry clerks might not accurately code order information, and dock crews might be inefficiently loading cars onto trucks. All of these errors increase the time it will take to get the
car to the customer. Improving any one of these business processes can have a significant effect on the total distribution process, made up of the order entry, production scheduling, and transportation processes.
Business Process Improvement
Improving business processes is paramount for businesses to stay competitive in today’s marketplace. Over the past 10 to 15 years, companies have been forced to improve their business processes because customers are demanding better products and services; if they do not receive what they want from one supplier, they have many others to choose from (hence the competitive issue for businesses). Many organizations began business process improvement with a continuous improvement model. A continuous process improvement model attempts to understand and measure the current process, and make performance improvements accordingly.
Organizations begin by documenting what they do today, establish some way to measure the process based on what customers want, perform the process, measure the results, and then
identify improvement opportunities based on the collected information. The next step is to implement process improvements, and then measure the performance of the new process. This loop repeats over and over again and is called continuous process improvement. It might also be called business process improvement or functional process improvement. This method for improving business processes is effective to obtain gradual, incremental improvement. However, several factors have accelerated the need to improve business processes. The most obvious is technology. New technologies (like the Internet and wireless) rapidly bring new capabilities to businesses, thereby raising the competitive bar and the need to improve business processes dramatically.
Fig:Continuous Process Improvement ModelCompanies want breakthrough performance changes, not just incremental changes, and they want it now. Because the rate of change has increased for everyone, few businesses can afford a slow change process. One approach for rapid change and dramatic improvement is business process reengineering (BPR). BPR is the analysis and redesign of workflow within and between enterprises. It relies on a different school of thought than continuous process improvement.
In the extreme, BPR assumes the current process is irrelevant, does not work, or is broken and must be overhauled from scratch. Such a clean slate enables business process designers to disassociate themselves from today’s process and focus on a new process. It is like the designers projecting themselves into the future and asking: What should the process look like? What do customers want it to look like? What do other employees want it to look like? How do best-in-class companies do it? How can new technology facilitate the process?
It begins with defining the scope and objectives of the reengineering project, then goes through a learning process (with customers, employees, competitors, noncompetitors, and new technology). Given this knowledge base, the designers can create a vision for the future and design new business processes by creating a plan of action based on the gap between current processes, technologies, structures, and process vision. It is then a matter of implementing the chosen solution.
Fig:Business Process Reengineering ModelBusiness Process Design
After choosing the method of business process improvement that is appropriate for the organization, the process designers must determine the most efficient way to begin revamping the processes. To determine whether each process is appropriately structured, organizations should create a cross-functional team to build process models that display input-output relationships among process-dependent operations and departments. They should create business process models documenting a step-by-step process sequence for the activities that are required to convert inputs to outputs for the specific process.
Business process modeling (or mapping) is the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence. A business process model is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint. A set of one or more process models details the many functions of a system or subject area with graphics and text and its purpose is to:
■ Expose process detail gradually and in a controlled manner.
■ Encourage conciseness and accuracy in describing the process model.
■ Focus attention on the process model interfaces.
■ Provide a powerful process analysis and consistent design vocabulary.
A process model typically displays activities as boxes and uses arrows to represent data and interfaces. Process modeling usually begins with a functional process representation of what the process problem is or an As-Is process model. As-Is process models represent the current state of the operation that has been mapped, without any specific improvements or changes to
existing processes. The next step is to build a To-Be process model that displays how
the process problem will be solved or implemented. To-Be process models show the
results of applying change improvement opportunities to the current (As-Is) process
model. This approach ensures that the process is fully and clearly understood before
the details of a process solution are decided. The To-Be process model shows
how the what is to be realized.
Fig:As-Is and To-Be Process Model for Ordering a Hamburger
References:BPM spaces sites
