You can only improve what you can manage, you can only manage what you can assess and you can only assess what you truly know how to execute.
Without understanding the daily processes of a company, it is virtually impossible to implement changes and make improvements in an organized, manageable and predictable manner.
BPM is an abbreviation for Business Process Management, a field that focuses on the improvement of business performance by managing and optimizing a company’s business processes.
To achieve this goal, specialized software is used with the sole purpose of systemizing and facilitating individual complex internal and external organizational processes. BPM’s aim is providing pertinent information about how processes are executed concerned with making the workflow more efficient, effective and adaptable in an ever changing environment.
“Business Process Management or BPM – Business Process Modeling is a disciplined approach to identify, draw (or design), execute, measure, monitor and control business processes, automated or otherwise, to achieve consistency and results aligned with strategic organizational objectives. It also involves technological help and other ways to add value, improvements, innovations and management of end-to-end processes, leading to improved organizational performance and business results. “(2009)
Even though business functions and business processes are similar concepts they often raise questions, as both are “things that a company does.” Their differences are:
Transparency in all process stages.
Greater administrative control.
Increased process efficiency / productivity.
Cost reduction.
Process automation and evidences generation.
Increased flexibility and adaptability to change.
Increased customer satisfaction.
Customer satisfaction is not only the result of the product or service compliance with the technical specifications. Factors like deadlines, punctuality in delivery, payment conditions, pre, and post-sales support, flexibility, etc., have a lot of influence on customer happiness.
This is a story about four people named Everybody, Somebody, Anybody, and Nobody. There was an important job to be done, and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that because it was Everybody’s job. Everybody thought Anybody could do it, but Nobody realized that Everybody wouldn’t do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have. You don’t want your company ending up telling this same story, do you?
The management process is a fundamental tool to improve process quality and services provided. With process automation is possible to promote openness, to define responsibilities among the people involved, to standardize communication, to monitor activities and to act proactively consequently improving the quality of services rendered.
In the short term, BPM software helps organizations increase efficiency and decrease costs. This can mean more growth and revenue for companies, as well as increased speed, organization, and efficiency for government agencies. In the long run, BPM helps create competitive advantage by improving organizational agility. Below are some specific benefits of the implementation of software specially designed for business process improvement:
BPM decreases the number of emails sent between staff and departments. With interactive software available to all areas everyone can see and share information being sure that it is not going to be lost in a mailbox. With BPM, improved handoffs increase the performance of processes and help to avoid a loss of information (a handoff occurs in a process when responsibility for the next activity is passed from one person to another).
With process modeling, it is much easier to follow the process and check for bottlenecks and improvement points. A clear diagram shows each and every step of the process thus optimization is continuous.
Duplicated actions are easily spotted, and unnecessary tasks are dropped as a result of extreme organization and visualization.
Efficient and intelligent resources are allocated which make processes work better, in turn, spending less. Large companies can save millions of dollars with the use of business process improvement software.
All processes and steps are monitored thus ensuring they are followed correctly, always improved and executed in the best way possible.
“Management initiatives are supported by technology, people, and processes.” Davenport
People need to understand the processes, both to perform them properly and to execute them, as to be able to improve them continuously. Likewise, they must choose the appropriate technology to support them.
In doing so, people turn information, data, and experiences into knowledge that can be disseminated within the organization thus turning it into an asset that must be preserved.
Achieving a balance of these elements is no easy task. Large organizations capable of attaining this often develop adequate knowledge management through a continuous process of learning and refinement of systematic thinking, which means:
This is about all the interactions between customers and the company. They are called “moments of truth” in which the organization has direct contact with the customer, who starts trying/experimenting the company’s services or products. It is essential to have a “magical” moment, and the customer should feel his wants and needs are fully met.
BPM aims to enhance the entire value chain, and most importantly the customer experience. This is simply providing something they perceive as being of extreme value for which they would be willing to pay any price thus, generating income for the company. This concept is even more important when it comes to services, especially when you have constant contact with people, such as in cases like restaurants, hotels, and hospitals.
To understand this principle, there is just one question to answer: Would the client pay to have this activity accomplished? We have to specify these activities because they are the ones which will be tested taken at the moments of truth, these are the ones which make the product or service more valuable to the customer, and they should be studied deeply to be enhanced. Regarding the activities that do not add value, they should be eliminated when designing new processes.
These activities are sensitive, subjected to failures or errors, facing some risks of going wrong during their operations
Ideally, they should be reduced the most when making a new process design. To accomplish this, the use of technology can be a smart alternative, replacing activities that are subjected to human error by automating them wherever possible.
An organization has a large number of processes. If these processes can be standardized and reused by different functions inside the company, “speaking a common language”, the operation as a whole will gain speed and agility from this.
There are some rules that should permeate through operations and processes, making execution and mainly, decision-making easier. A straightforward example of a simple business rule is: children under 4- feet tall are not allowed on this ride. Here is how it facilitates the whole operation avoiding questions about age, documents, etc. – We simply need the child to pass under measuring equipment without bowing/bending.
Apply the most used patterns found in the market segment your company belongs to. Remember to check if there is a national standard which is derived from an international one and if it is the best one to use.
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A process is a sequence of tasks or activities when executed turn inputs into a result with added value.
A business process execution consumes material and/or human resources that come from internal or external suppliers that feed the process. The results are products or services which meet the needs of customers both internally and externally.
The BPM process mapping techniques have are aimed at determining the way the received inputs are treated and changed to accomplish this process with absolute effectiveness.
To apply the techniques of process mapping all of the details of the entirety of the processes must be analyzed so that afterwards a map is set showing the operational flow and the interrelationships between the different areas and processes.
Through this mapping and using these techniques it is possible to calculate:
The people who participate in this phase are the ones who perform the tasks in the process on a daily basis. It is also recommended that personnel from the supply process and the customer process participate at this stage. Leadership in general should not participate.
Definition: It is the gathering and documentation of the current process situation, commonly known as process mapping, represented in a flowchart or diagram. At this time, we also gather the following information:
Gather data about the policies that govern the processes, the executed tasks, time spent on each activity, number of people involved in each activity, who are the suppliers and consequential internal clients and what their interactions are.
Items to analyze when doing AS IS process mapping
AS IS process mapping techniques
The AS IS business process model can be done in a few ways, depending on the scenario and context of the company. The most usual are:
Interview: although it is the most common it is not advisable because it considers only the view of one person.
Observation: the person who documents observes who executes the activities. Survey: it is sent to the interviewee who fills it out and returns it to be used in AS IS process mapping.
JAD sessions: the representatives involved in the process gather and document the process. This is, by far, the most adequate because it is fast and delivers quality.
The level of granularity of the process documentation depends on the purpose of the projects. Usually, it is requested of the people, who are giving their deposition in the process mapping meeting, to relay the process as if explaining it to a new employee. It is required that all of the information is gathered in one meeting. It is normal to describe each process activity in a level of detail that improves its understanding and makes it possible for a new apprentice to understand how this process is conducted on a detailed level.
In the same AS IS process mapping meeting, after reaching conclusions about the detailed flow, we must document the problems and improvement opportunities in a spreadsheet. The quantification of the problem is considered to be the most important and difficult information to obtain. Without that the problem loses its importance and even worse, it is not possible to do the ROI calculation related to the suggested improvements. The following are some elements that cause problems and can negatively affect processes.
During the implementation of the AS IS business process model there are some items related to its documentation which must be highlighted. For example: work with prioritizing methods, always follow the Value Chain, effectively involve people with process knowledge on the project and consider the perspective of the managers in relation to the goals achieved in each process handled. Besides, it is also important to know the projects deeply, so that AS IS process mapping is done based on activities that are determinant to the continuous improvement of the process.
Develop alternative solutions for process problems. This is one of the most important procesess mapping techniques and we must evaluate each alternative as a result of their impacts on:
It is represented in a flowchart or diagram – also called modeling.
Precautions and preparations to the TO-BE process mapping:
What to consider when documenting TO-BE business process:
Some usual issues in TO BE process mapping:
Checklist to the improvements implementation:
Application to the TO-BE documentation process:
When you finish, the AS IS and TO BE process mapping do not forget to publish the positive results from the improvements!
Identify the primary processes to implementation and automating. Define automating strategy:
In order to implement a successful process automation strategy, you have to carefully choose between processes that will be automated, processes that will be manual and processes that will be divided between automated and manual tasks.
There used to be a tendency to automate everything possible indiscriminately. This mistaken view ended up becoming an outdated process, both ineffective and inefficient.
Remember: the process design’s aim is to generate deliverables with quality whether or not they are automated.
This step is about the creation of screen layouts in a manner that is similar to what we intend to have when the automation is concluded. We have to be sure that the process will be performed exactly according to its description, by defining the interaction points, the process diagram, the data flow, and standard layout.
In this step, we integrate the data banks and systems used in the process according to what was defined in the process design. See: how to design a process.
Business rules allow for the diminution of repetitive activities in the process. When we use BPM; when we automate business processes, it is possible to configure the application of these rules facilitating the decision-making process to work adequately.
The goal in this stage is to follow the process action to check if the results obtained are satisfactory, integrating the technology used, the tools, the interface and the user. Tests with users are highly utilized.
After we get approval, the process enters the stage of assisted operation with direct follow up, helping the IT team to implement it, monitor it and resolve questions. It is not impossible to automate business processes without the help of BPM tools. However, this will demand a high level of effort, especially from the staff who must be motivated and are constantly supervising the work performed by everyone.
It is common for small businesses to perform processes in different ways or even to skip them according to an employee’s will. A small school, for example, can have the teacher’s chart organized differently in the teaching area, the administrative area can have the marketing done according to the employee in charge at the time and the teacher available can give a class in the manner they think is best. All of this will affect the company’s profitability, the costs, the client’s satisfaction and the employees’ productivity.
Every organization, whether big or small, has clients, processes and people. Automation can make clients happier, processes run smoothly and people work more efficiently, even if there are three employees in the company. When the processes are performed in a standardized and automatic manner they become easier to execute, with more effective results.
Using BPM to automate business processes makes it possible to have information about process results related to KPIs at hands in real time. It is much easier to analyze and understand especially through dashboards.
Arrange periodical meetings to follow indicators and suggest improvements.
Capacity Indicators: The ratio between is the amount that can be produced and the time for this to occur. For example, Automaker X is capable of producing 200 cars per month.
Productivity Indicators: The ratio is the output generated by a job and the resources used to do it. Example: A worker can install 20 m2 of flooring in an hour. Another can install only 17 m2 of flooring in an hour. Therefore he is less productive than the first.
Quality Indicators: The relationship between total output (total produced) and the output suitable and appropriate for use, i.e., without faults or deformities. Example: 980 pieces suitable for every 1,000 produced (98% compliance).
Profitability Indicators: The percentage relationship between profit and total sales. Example: a company that sold US$ 200,000.00 of goods and calculated a US$ 20,000.00 profit. In other words, profitability is 10%.
Return on Investment (ROI) Indicators: The percentage relationship between the profit and the investment made in the company. Example: the same company from the previous example invested US$ 500,000.00, with a US$ 20,000.00 profit. The yield was 4%.
Competitiveness Indicators: A company’s relationship with the competition. Market share can be used to determine this factor.
Value Indicator: The relationship between the perceived value when you get something (a product, for example) and the amount spent to obtain it.
Effectiveness Indicators: effectiveness is the relationship between the expected results and the obtained results: the best way to do that is = achievement of the expected results
Efficiency is the relationship between the results achieved and the resources used = manufacturing good or offering services in the best way possible using the least amount of resources.
We can say that efficiency is to be effective using a minimum of resources. Focusing on the process and resources applied to, for example, reduce costs. Effectiveness already focuses on the product and the obtained results therefore bring benefits through higher profits.
The following are the main goal of process optimization:
Without process optimization, we spend most of the time correcting errors instead of fixing them. Process optimization doesn’t only help us correct errors; it also gives us permanent solutions to many problems.
Do a critical review of the processes to detect the root of the problems and improvement opportunities in processes. Sources of problems and opportunities:
These are just some of many process mapping techniques available to achieve the stage 4.
First, it is imperative to identify the existent need of the process optimization in your company. Think about a process in your company that is costing you more than it should or inducing client’s dissatisfaction or further causing stress among employees. Now, ask questions about this process aiming to determine what the core of the process are in other words the unchangeable items.
At this point, we are asking what is the process and not how is it done?
At this time we are ready to map the process. We should be concerned about how the steps are executed, how the process will flow and what part of the process will be optimized. Ask yourself and your team these questions:
It is important to have both a micro and macro vision. Each detail is important, from the way an email is written to the perception of what the client wants. Compare the answers to these questions to the ones in the first item and maybe you will find out that the tasks seemingly crucial are quite expendable is important to have both a micro and macro vision. Each detail is important, from the way an email is written to the perception of what the client wants. Compare the answers to these questions to the ones in the first item and maybe you will find out that the tasks seemingly crucial are quite expendable.
Business Process Reengineering Methodology involves the radical redesigning of the core business processes with the main focus in mind to achieve dramatic improvements in productivity, time cycles, and quality.
The change is extreme in the sense of starting with a blank sheet of paper and ending with a completely new process, always thinking about the value to offer the customer. The emphasis is always on the customer’s needs. Layers of work, steps, and employees can be cut if we realize they do not add any value to the customer.
An example of business process reengineering is a fast food company. It can completely redesign the way of delivering products. The process in this kind of restaurant goes like any other; the customer makes the order, the order goes to the kitchen, and the staff prepares the food.
By studying the process, we see that it would be more efficient if (some of) the food was prepared beforehand, at another location, and delivered daily to the restaurants. When the client orders then, everything is put together and delivered. This is a complete change in the process resulting in more
control, fewer accidents, higher employee satisfaction and a greater ability to focus on the customer’s needs.
In a company that offers products, such as cards (birthday, anniversary, Christmas, etc.), the restocking of their supply and changing of their design is crucial. For example, it takes roughly three months to get new items to the shelves. Through a market survey, it is possible to see that it would be ideal if there were new cards every month.
To an untrained eye, the production takes up most of those three months. When analyzing and mapping the process, we realize that the creation process was taking the longest. It is common that the concept is delivered to the creation staff and many employees do the same action (duplicated tasks), or an idea just sits on somebody’s desk for days. With this information, we can redesign the entire process, setting cross functional staff in the concept/creation part of the process, with incredible results in speed, costs, and efficacy.
An organization with a disconnected system can also be a possible situation, causing every staff member or even a client to go through many departments and people to resolve a problem or execute a task. Information is lost, data is constantly repeated, and frustration runs around. This is solved by a complete change in the system used by implementing efficient software that integrates all of the information and activities of the company.
With BPR, it is important to:
When implementing business process reengineering:
1. Prepare for re-engineering. Planning and preparation are vital to any kind of change, especially in a radical one like what BPR brings.
2. Analyze and map the AS-IS processes.
3. Identify the unnecessary tasks and processes, cutting then.
4. Design from scratch and validate the TO-BE processes.
5. Implement the reengineering process, adapting your organization to them.
This is a method that requires continuity. We improve a process and continue to study it and analyze it, looking to improve it again. It is a cyclical process that cannot end.
The continuous improvement model is more than a simple sequence of improvements implemented in a process. Continuous improvement has a cultural aspect that is strong, and we can even consider it a business philosophy. Because it has this cultural side, we must insert it in all of the company’s levels, from top management to the factory floor.
We can see the emphasis that it gives by the fact that a change has to bring benefits to all organization. It is not enough to improve an isolated area of the company or a segregated activity. Continuous improvement must include all processes and everyone who participate in them.
This system has this name because of the four steps that composes it:
P as in Plan
D as in Do, execute
C as in Check, analyze
A as in Act in a way to prevent error
The PDCA methodology is widely used by corporations that want to improve the management level through the efficient control of processes and internal and external activities. It standardizes information and minimizes chances of errors in the decision-making process.
It is crucial to say that, once is implemented, the PDCA cycle must become a constant inside the company, a virtuous circle always aiming the continuous process improvement.
Kaizen is a Japanese term that means improvement. The concept implies a continuous effort involving all the functions at all levels of an organization. The expression is so common that it is applied in Japan in all aspects of life. It can be used in the environment, road system, international relations, educational system, etc. At work, it is usual that collaborators ask themselves and others how to improve the procedure, the product, the service, the equipment, etc.
Kaizen is applied in processes (production and business), in products and services. Some of the commandments that rule Kaizen are:
As we saw, the crucial thing is to see the continuous process improvement the model really as an ongoing process, aiming to improve more and more the processes, the people and the company as a whole.
