The Importance of Process Improvement in Your Business

By Eric Dickmann

April 23, 2019

Business Process Improvement, Process Improvement, Process. Business Process

Businesses run on processes. Whether they are formal or informal, processes are an integral part of daily business operations. They are a critical aspect of commercial success. By overlooking its importance, a company may be limiting success or damaging its bottom line. Process improvement can play an integral role in fixing business problems and laying a strong foundation for success.

Process Improvement is making a process better through some form of change or optimization. It’s critical for any organization to identify, evaluate, and modify their existing processes proactively to maximize efficiency. It can be a complicated effort because often processes evolve over time rather than being designed. This requires deconstructing the process and rebuilding it to new and more efficient business realities.

What is a Business Process?

Appian defined Business Process as a collection of tasks in the delivery of goods and services. They are activities that, once completed, will accomplish an organizational goal. As such, processes involve clearly defined inputs and a single output.

What is Process Improvement?

Process Improvement is the task to identify, analyze, and improve a business process. It aims to streamline activities and balance the increase in value with more efficient resource allocation. The goal is to make the company more competitive by reducing costs, increasing service levels and optimizing resource allocation.

Inefficient Processes Lead to Problems

Customers might complain about poor product quality or bad service. There is a high possibility of work duplication, increased cost and wasted resources. Bottlenecks can develop, causing teams to miss deadlines and be frustrated. Efficiency is a major driver of profitability. Streamlining processes and yield big results and have significant impacts on the bottom line.

What are the Benefits of Process Improvement?

Successful companies are always looking for the next innovation. They know the importance of continuous improvement. Even if things are going well, they look for ways to perform better. Plainview cited some benefits of Process Improvement:

Process Improvement Results to Higher Quality Products and Services

An efficient process resolves the performance and security issues of a product or service. It helps achieves timely delivery. As a result, customers often return, and that loyalty increases revenue.

Streamlining Tasks Improve Efficiency

Removing unnecessary steps and adopting new methodologies make a process more efficient. Using business analytics can provide insight into potential bottlenecks, highlight trends, and monitor workflow processes. Such steps ultimately can increase productivity.

Improve Processes Reduce Business Costs

Balancing the increase in value maximizes resource allocation. Likewise, an improved process can speed up both production and delivery. When implemented, it can result in a reduction in both material and labor costs.

Improved Employee Morale

Efficient processes reduce poor decision making and the frustration employees feel knowing a process is inefficient. It creates confidence among the team that their efforts are producing tangible results. In contrast, inefficient processes are highly discouraging for workers. It weakens the morale of employees if their efforts are overwhelmed by the flaws of the system.

Process Improvement Provide a Competitive Advantage

Continuous process improvements can help set companies apart from their competition. A good process is a company asset. But it must be adaptive to changing circumstances such as a competitor’s action. Take Amazon as an example. They relentlessly work to improve their processes to get packages to your door faster. This has given them an undeniable competitive advantage in the marketplace. It didn’t happen overnight but is the result of constant process improvement efforts.

How to Improve a Business Process

Improve Business Process

Like good maintenance, business process improvement usually happens in a recurring cycle. According to Kissflow’s Business Process Improvement Guide, there are four basic steps to improving your business processes:

Analyze

Use a flowchart to detail the stages of the current process you want to improve. Identify the areas that need improvement and prioritize steps that will have the greatest impact. Identify the specific goals you want to achieve.

Redesign

Brainstorm with the people who handle the process. They will provide good insights into how the process needs to be changed. Set up scenarios, and see how the ideas will translate in a real-life situation. You can then fine-tune the workflow design.

This stage is an excellent time to bring in an outside facilitator. Sometimes, employees are too close to existing processes and how things are currently done. Bringing in someone from the outside who can facilitate a meaningful dialog to challenge current thinking and assumptions can often be extremely helpful in process redesign.

Implement

Inform all stakeholders of the change. Execute the new process on a daily basis. Monitor and gather data, using analytical tools if possible to track progress. Check for possible bottlenecks and improvement points.

Testing

Check how changes affect progress in real-time. Test what works and what doesn’t work. Update as needed. Understand that some ideas don’t translate as expected from the whiteboard to reality. Be flexible and adapt as needed.

Conclusion

For any company, its crucial to improve your processes if you want your business to grow. Optimizing processes to avoid errors, cut waste, reduce costs, and increase profitability. Keep in mind that there is always room for improvement. It’s a never-ending cycle. Make it part of your strategic plans and a regular focus of your attention.

About the author

Eric Dickmann is the founder of The Five Echelon Group, host of the weekly podcast - The Virtual CMO, and a CMO On Demand for a variety of small and midsize companies. An executive leader with over 30 years of experience in marketing, product development, and digital transformation, he has worked with large, global companies and small startups to develop and execute marketing strategies and bring innovative products to the market.

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