Business Process Improvement

Published on May 22, 2016

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Sabbir Ismail

Sabbir Ismail

FollowSabbir Ismail

Investment Banker

To keep an organization focused in achieving organizational goals and to keep a business steady, it is important to
maintain and improve the business processes that are being practiced by the organization. A well balanced, structured
and a well-defined business process ensures accountability, clarity of job responsibilities of the employees and value
creation for the customers.

Some may assume that business processes are in place to ensure internal controls remain strong and to make people
accountable for what they are doing. Business processes constitute all the activities your company engages in—using
people, technology, and information—to carry out its mission, set goals, measure performance, serve customers, and
address the inevitable challenges that arise while doing so. Processes determine the effectiveness and efficiency of your
company's operations, the quality of your customers' experience—and ultimately, your organization's financial success.

In an organization, all the employees and people related to the organization carries out many different processes every
day. The position where you are currently working in might be subject to be a part of couple of business processes. For
example, for those who are working in customer care might have to different operational procedure to answer different
types of customer query every day. A person might be responsible for too many tasks at a time. The higher the people
go in organizational hierarchy, the more they involve in different processes. For example, those who work in top level in
finance, might have to look after financial compliances, Reporting to the board of directors, day to day operational
processes, approving vouchers, signing in the bank payment checks/instructions, manage the treasury functions,
maintain budgeting, various reporting to other departments etc. Some of them could be more complex than regular
business processes. I hope by now you understand the importance of business processes in your organization and why
your actions are important to your organization.

In this era of modernization, customer consensus and globalization, even for the highly established companies, it is
important for the management to continuously update their existing processes and evaluate the performance of the
processes to identify any flaws in the process and bottleneck points.
To enhance the effectiveness of a process, managers use Business Process Improvement (BPI) (also called as “Business
Process Management” or BPM) which is a set of disciplines approaches and tools.

Organization where BPI is used:

Managers and employees are well aware of the business processes and applies those by following process maps,
standard policy manuals and via agreed upon procedures.

Managers can track the performance of the processes by using different performance metrics to evaluate the quality of
outputs and effectiveness of the activities performed.

Top management invests in its process to achieve organizational goals and to improve the company’s competitive
position.

Employees are well trained and specialized in performing business processes.

Processes can be improved both formally and informally. Some of the proven and widely practiced formal process
improvement methodologies are.

Six Sigma: Disciplined data-driven approach for eliminating defects in any process, designed to deliver high performance,
reliability and customer value. Motorola developed Six Sigma in the 1980s after recognizing that products with fewest
defects failed least often during use.

Total quality management (TQM): Management strategy aimed at embedding awareness of quality in all organizational
process and encouraging employees to steadily increase customer satisfaction at continually lower costs. This approach
focuses at reducing costs as well as improving the quality to maximize the customer satisfaction. This concept is widely
used and popular in Japan.

ISO 9000: Family of standards for quality management systems from the International Organization for Standardization
(ISO). These standards do not ensures the quality of the products or services. Those standards certifies that a company is
applying consistent business processes.

Business Process Reengineering (BPR): This approach radically redesigns the processes and workflow of an organization
to achieve dramatic performance improvement.

Reasons why BPI efforts are undertaken:

Problematic performance and inefficient use of resources.

Major changes in business environment: Emerge of a new competitor, technological advancements, economic
turnaround, new investments etc.
Business process improvement offers numerous benefits to an organization and to enjoy those benefits, an organization
needs to take structured approaches to perform a BPI. Those are:

Plan: Selecting the business process that needs to be improved and clearly define the scope of improvement.

Analyze: Closely examine and analyze the business process that needs improvements and make a detailed process map
of the existing process.

Redesign: Identify the areas for improvement and redesign the process and consider its impact on the business
operations as well as on the employees who will perform the process.

Acquire resources: Obtain the personnel, equipment, technology and other resources to make the process changes.

Implement: Carry out and implement the process change. You can run pilot projects and simulations to test the changes
in the process and then finally implement it in a broader scale.

Improve: Once a business process has been changed, it is necessary to evaluate it continuously to see if further
improvements are required and improve the process whenever it will be necessary.

There could be resistance from the employees and managers to chance an existing process. But it is the duty of the
management to take proper steps so that those resistance can be minimized by involving the employees in designing a
process and proper skill development trainings should be arranged to improve the capabilities of the employees. It is
also important to consider that how customers will perceive the changes. Once a new process is in place, the artifacts of
old process need to be removed completely so that everyone participating in that process can get a clear message that
the new process is here to stay!

I am hopeful that I will discuss more on how to make the process changes and implement it. Thank you for reading it and
I will be glad if you can please leave your suggestions and opinion in the comment box.

Thank you.

Regards,

Sabbir Ismail

ACCA Student