We can’t change what we don’t understand, that’s a fact. So when we think of improving a company by improving its processes, the first step is to study them, analyze them and understand them.
This is where process analysis comes in. It’s part of an efficient method that allows us to understand every detail of the process, building a solid foundation for improvement.
What is business process analysis?
Definition of process analysis:
Process analysis is the action of conducting a review and gaining an understanding of business processes. It involves reviewing the components of a process, including inputs, outputs, procedures, controls, actors, applications, data, technologies and their interactions to produce results.
The analysis includes the evaluation of time, cost, capacity and quality of processes, being able to use static or dynamic visual models of the process, data collection from the beginning to the end of activities, analysis of value chain, end-to-end modeling and functional decomposition.
Source: ABPMP BPM
Process Analysis Techniques
Let’s have a look at the business processes analysis steps that must be followed in order to promote continuous improvement.
1 – Identify the processes
The first step is to identify which processes need improvement. These are the ones you need to study and understand. It’s important to always think about the goals of your business, and what processes contribute to that goal. Prioritize them.
But how do you identify which are the most important processes? They are those that most contribute to achieving the organizational goals and add more value to the final delivery of the processes.
A business analysis methodology suggested by Peter Drucker, can help you understand these strategic company objectives, and then define which processes need to be improved.
How to analyze business processes with Peter Drucker’s 5 Questions
- What is our mission?
- Who is our client?
- What does the customer value?
- What are our Key Results?
- What’s our plan?
Let’s look at them one by one.
1- What is our mission?
Without understanding the reason for the company’s existence, it won’t be possible to determine which processes are fundamental for it to fulfill its mission. Processes are changeable, the company mission endures and must be attained through them.
Identify processes without which the mission would not be fulfilled, they should be on your list.
2- Who is our client?
Remember that despite their great importance, it’s not just the end customer that should be part of this business process analysis technique.
After all, if the company needs to deliver the highest possible value – perceived value – to the end customer, with the goal that they pay for that delivery an amount that exceeds the operating costs, this is all in order for the company to make a profit.
Profit for whom? For the shareholders! So there are many more stakeholders which must be considered and accounted for at this time.
It’s also important to remember that there are for-profit organizations and that, in this case, the end customer may be society as a whole, like a specific community, among others.
Identify the processes that add the most perceived value to your customers (of all types) and include in your list of processes which should be prioritized.
3- What does the customer value?
One way of identifying what customers value is to thoroughly do market research.
But, follow the details in the previous question: value perception! This is very much related to the positioning of the company. But remember: only an accurate collection of information can give you the right answers to this question.
4- What are our Key Results?
You need to check which processes are not meeting the stated goals and why. These, of course, should also be on your list.
Here are some posts that might help you on this subject:
- Get to know 8 Process Performance Indicators (KPIs)
- How to create business process performance indicators
5 – What’s our plan?
Finally, what actions were defined by the organization to achieve its strategic objectives? All processes that are linked to these actions would fill your list.
Taking into account each of these criteria, choose 4 or 5 at most priority processes, or maybe even fewer processes if they’re very complex.
Check out this infographic that illustrates Drucker’s 5 questions, one of the most well-known techniques of business process analysis:
Source: Sandro Ribiero
2 – Establish the team
Establish a team to help you with the business process analysis. The best people are those who already work with the process on a daily basis. They know the steps, the information, the goals and, most importantly, the flaws and bottlenecks of the process.
Some effective ways of interacting with the team are:
When assembling your team, it’s very important to consider which professionals will effectively help you analyze business processes.
Therefore, in addition to qualified personnel who know BPM, remember to also involve:
- Leaders who are related to the chosen processes
- Employees who are motivated by the possibility of improvement
- A supporter of the process, preferably from top management, to empower the team
- Front-line employees, who deal with the process on a day-to-day basis
3 – Create a business process diagram / flowchart
This process analysis technique is very useful, and can give you a real insight into how the process happens. With standard symbols and tools, you can represent the process in a clear and practical way.
By doing this, it becomes much easier to see what’s right and what’s not working, and what are the bottlenecks and improvement points.
Building a process diagram is one of the fundamental steps of the business analysis methodology, check out a step-by-step plan on how to do one:
Drawing a process diagram step by step:
- Define those who are responsible: process diagrams define responsibilities by means of lanes, which are areas of the diagram in which the tasks of a team or position will be represented. You’ll understand this better by reading the post we indicated at the end of this step by step plan.
- Include a process initiator event: every process starts with some event, it can be an email sent by a client upon the arrival of a previous process part, for example.
- Define tasks and their relationships: in each lane you should indicate the tasks that need to be done, such as finding the part or answering the email request. Also indicate, through linking elements, which task is next and who is responsible.
- Signal the end of the process: in the same way that one event marks the beginning of the process, another marks its end. It can be something like “request fulfilled” or “part delivered”.
Sound complicated? See all of this in more detail here: How to draw a flowchart in 5 simple steps
Also, check out process notation.
And if you want to know even more, watch this video:
4 – Define the AS IS process
With all the above information, define how the process happens now. It’s very important not to get ahead, and stick with the actual situation, no matter how it is.
That is: understand how the process is taking place at this time, not how you would like it to be in the future.
To do this, in this stage of business process analysis, you have to follow 3 main steps:
- Interviews with the actors: is intended to represent the activities of the process, its sequence, who is responsible, whether there is a need for permissions in other instances of the process and if some new information is generated.
- Analyze the process model: find out what the purpose of the process is, what performance metrics are used, whether there are customer interactions, whether there are handoffs (passing work or information from one person, team or system to another), what business rules are applied, if there are bottlenecks, how the process is controlled, and other points.
- Documentation: at this point, everything that has been analyzed must be properly reported in appropriate documents so that the consultation and presentation can be made clearly, following the defined notations.
Read more: AS IS process mapping.
5 – Specify improvement points
You may already know, but it’s important to determine what are the necessary and possible improvements. Keep in mind the strategic goals of the company in doing so, since all processes and actions must have them as objectives.
Usually the points of improvement focus on the following aspects:
- Interaction with customers: these moments must always be perfect, especially with external clients
- Activities that add high perceived value: these must always occur in the best way, in order to deliver the highest possible perceived value to the final customer
- Handoffs: every time there’s an exchange of information or tasks between person and/or system there’s a risk of errors occurring. The more handoffs there are, the more risk there is.
- Business Rules: these are standard procedures that facilitate the flow of the process and prevent the loss of time in decision making, because they are clear and objective rules to define how the process should run.
- Bottlenecks: find out why the process stops flowing at certain points and set ways of how to avoid it.
6 – Model the process TO BE
Gather all the information and model the new process the way you want it to be and align it with the company and its goals and objectives.
In fact, this step consists of designing the new improved process, one that will achieve the goals of the organization more efficiently and effectively.
In the same way that we created a process diagram in the AS IS step, the TO BE step will also have one as well as all the necessary documentation to transmit this information and knowledge when necessary.
Also see: Mapping processes TO BE.
Latest thoughts on business process analysis
As we can see, business process analysis generates the information needed to assess and address the roots of problems, and make informed decisions. With this method, you can understand how the work happens inside the organization and how well the business achieves its goals.
It’s important to remember that this is a continuous operation, since there’s always a process to optimize or improve. Also, it’s possible that a process may become inconsistent with business goals, as it may change over time.
All process analysis techniques are important and you shouldn’t skip any. Good software makes the difference when it comes to analyzing activities, and HEFLO BPM is the right one!
So, with a dynamic and easy-to-use interface, it allows you to map, model, execute, improve, optimize and automate all the processes of your company, allowing continuous and effective improvement! Get to know BPM software, or Contact us.