Business Process Improvement (BPI) is an
approach used to improve efficiency, quality, and response time of a business
process, by removing non-value adding activities and costs through incremental
enhancements. The overall goal of BPI is to determine problem causing processes
and implement appropriate fixes. The demand for improving business processes
increased in the early 1990s, after the Business Process Re-engineering (BPR)
wave. It was realized that in order for a business to remain successful and
profitable in the long run, its processes must be carefully examined.
Why is Business Process Improvement required?
In
today’s struggling economy, more and more businesses are starting to realize
the need to improve their processes and deal with the concerned areas. The
long-term success of a business can only be achieved by gaining a clear
understanding of its day-to-day operations and processes. No business runs
perfectly without efforts to improve its practices. Often, businesses struggle
in one way or another. For example, a business might be poor in customer
services or they might have an outdated IT system. Also, there are competitors
out there, who are determined to snatch customers away. Hence, in order to
optimize its performance, a business must look into its existing processes and
make improvements.
Here
are some of the objectives of Business Process Improvement:
- To continually improve the productivity of business processes
- To improve customer satisfaction
- To improve the ability of an organization to anticipate, manage and respond to changes in the marketplace
- To maximize business opportunities
- To deliver products of better quality as a result of effective and efficient processes
- To provide the organization with a competitive advantage
- To maximize the use of its assets
What are the required steps to improve business processes?
An organization can undertake the below
mentioned steps to carry out BPI:
Identify all key business processes – All the
key business processes and their sub-processes are identified in this step. Process
owners are interviewed to gather details of the processes. If required,
stakeholders and experts too, are interviewed. All the processes identified are
then prioritized.
Map and document the processes – In order to
gain a better understanding of the processes, flowcharts and documents are created.
Analyze the processes – Next, the processes are
analyzed to determine costs and lead time. Problem areas are recognized and the
benefits to be accomplished from improving processes are carefully considered
Re-design the processes to create improvements –
The identified processes with issues are re-designed keeping in minding the
costs, efficiency, lead time and return on investments. In this step, new
prototypes of process flows might be created. Policies and procedures might be modified
or some other change might be introduced.
Test the processes – Here, tests are created to
ensure that the re-designed processes work as planned and produce the desired
results.
Implement the re-designed processes – The
re-designed processes is implemented at an appropriate time in the business
organizational structure and all the employees who are going to be affected are
informed about this change before hand.
Perform continuous process management – All the
business processes are continually monitored to check for their efficiency and
any improvements if required. This is an on-going process.
Which are the existing methods for Business Process Improvement?
Some of the existing methodologies for Business
Process Improvement are as follows
- Six Sigma
- Lean
- Total Quality Management (TQM)
- Business Process Re-engineering (BPR)
- Rummler-Brache methodology
What are the challenges in achieving Business Process Improvement?
Business Process Improvement is not always easy
to implement. It might turn out to be a tedious process for organizations. Here
is a list of challenges which businesses might face:
- Produces too much data in a manner which is difficult to comprehend
- Gaining sponsorship from senior management while implementing large-scale changes
- Overcoming traditional ways of thinking
- With many different BPI methodologies available, agreeing on implementing one particular method becomes difficult
- The risk of implementing changes is higher now, and the pace of change has also become higher
- Higher cost pressure on organizations
As described above, Business Process Improvement
(BPI) is an important approach to help businesses adapt to the changing market
needs, stay up-to-date with latest technologies and provide a competitive edge.
Higher performance and increased profits can be achieved by implementing BPI.
About Author:
Onkar Lalla is a Consultant and an important part of the Systems Plus Pvt. Ltd. think tank. Within Systems Plus, he actively contributes to the areas of Technology and Information Security. He can be contacted at onkar.l@spluspl.com
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