Business Process Analysis
They say you can’t improve what you don’t measure. That’s why the first step in BPM is business process analysis: taking stock of what you already have. In other words: the first step to improving your business processes is to analyze how they’re working right now.
How do you choose which processes to analyze?
The first step in analyzing your business processes is to determine which processes you’re going to analyze. Ideally, you would analyze every business process—and if your business has the time, money and expertise to do so, that’s great! But for most businesses, analyzing every single process just isn’t possible. So focus your attention on the processes that need to be improved right away.
Analyzing business processes should be a team effort.
According to the book Fundamentals of Business Process Management, you should focus your attention on the processes that fit the following criteria:
“Importance: This criterion is concerned with assessing the strategic relevance of each process. The goal is to find out which processes have the greatest impact on the company’s strategic goals, for example considering profitability, continuity,
or contribution to a public cause. It makes sense to select those processes for active process management that most directly relate to the strategic goals of an organization.
Dysfunction: This criterion aims to render a high-level judgment of the “health” of each process. The question here is to determine which processes are in the deepest trouble. These processes are the ones that may profit most from process-centered initiatives.
Feasibility: For each process, it should be determined how susceptible they are to process management initiatives, either incidental or on a continuous basis. Most notably, culture and politics involved in a particular process may be obstacles to achieve results from such initiatives. In general, process management should focus on those processes where it is reasonable to expect benefits.”
If you’re new to BPM, don’t try to improve a whole bunch of processes at once. Start small. Focus on one important process. There’s no point attempting business process management if your organization isn’t ready for the changes that can result from new business processes.
According to Gartner, about 75% of businesses are “still in the process of standardizing” their business processes. But the 25% of businesses who have reached BPM maturity “succeed because they know what business outcomes they need to achieve over the next few years, in order to remain competitive (….) Their focus is on gaining the capabilities they need to adapt to change, whether they strive to become a digital business within five years or aim to deliver an outstanding customer experience.”
How to analyze your business processes
Business process analysis helps you identify the bottlenecks, hiccups and other obstacles in your current (aka “as-is”) business processes. Without proper analysis, you can end up wasting a lot of time and effort solving the wrong problems—or putting bandages on symptoms instead of treating the problem itself.
For each process you want to analyze, follow these steps:
- Determine the goal. What’s the purpose of changing this process? Are you looking to improve efficiency, reduce waste, improve quality?
- Determine the KPI(s) to measure success. It’s always best to base your results on data rather than something hard to measure, like “customer satisfaction”. For example: if you’re looking to improve efficiency, your KPI might be how long it takes to complete a process from start to finish.
- Collect baseline stats. These baselines will help you measure if your future process changes are better (or worse) than what you had before.
- Do an in-depth analysis of each process. There are many methods for analyzing processes, and ideally you would use all of them: each one offers a different perspective of your process, and together they help you create a multi-dimensional view of the process as a whole. But, of course, each analysis takes time, and time can be a limited resource. In addition to talking about the process with stakeholders and/or observing the process in action, some other good process analysis methods include:
Business process mapping
As you’re analyzing your processes, you’ll probably want to visually document the processes as well. Having a visual representation of your process—or, even better, a digital version that connects to your business systems—can be extremely valuable. Creating this visual representation of your business processes is called business process mapping.
Benefits of mapping your business processes include:
– more transparency into your processes
– better communication between individuals and departments
– increased understanding of how the process works
How to map your business processes
There are many different ways to create a visual representation of your business process, but the most common is a flow chart. This flow chart can be physical or digital: it can be shared with workers, hung on the wall, or incorporated into your business software systems.
As you’re mapping each process, ask these questions:
- who is involved in carrying out this process?
- what triggers the start and end of this process?
- where does the process happen?
- what is the outcome of this process?
- does this process cross paths with other processes?
- what information do the people involved in this process need, when do they need it, and where does the information come from?
It’s important to note that thoroughly mapping a business process might require a few iterations. Since business processes might involve many departments, there’s a high probability that each department sees the process (or their part of the process) differently. As it says in Fundamentals of Business Process Management:
“[It’s] very common for people to have a limited insight into why a business process is organized in the way it is: People know how to perform their own activities, perhaps some of the activities up and downstream from their position in the process, but certainly not much more..”
To put it another way: unless your business has very few processes, there is probably no one single person in the organization (even the CEO) who can explain, in detail, how every business process works.
It’s also important to use consistent symbols, labels and language on your flow charts. Consistency will help with transparency, and make all your flow charts easier to understand. You will probably want to use some kind of standard symbols, like BPMN.
At the end, you’ll have a map of what is called the “as is” processes: a snapshot of how your processes work right now. You’ll also probably have a lot of ideas on how these processes can be optimized.
Analysis is a crucial step in business process management, so take the time to do it right: it will make the next step, re-designing your processes, much easier.