The Power of Business Process Improvement

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IN THIS SUMMARY
Most aspects of business equate to a process. However, those processes are frequently not as efficient or effective as they could be. Business process improvement or BPI can help companies demonstrate greater customer responsiveness, increase employee productivity, and become more competitive in the market. In The Power of Business Process Improvement, Susan Page describes a ten step approach to BPI that is pragmatic and focused on ease of use. To alert management about improved business processes, the author also recommends developing an executive summary document with six sections: project focus, goals, summary, key findings, deliverables, and appendix.

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The Power of Business Process Improvement

  1. 2. THE POWER OF BUSINESS PROCESS IMPROVEMENT 10 Simple Steps To Increase Effectiveness, Efficiency, and Adaptability AUTHORS: Susan Page PUBLISHER: AMACOM DATE OF PUBLICATION: 2010 338pages
  2. 3. FEATURES OF THE BOOK Given the ubiquity of business processes in the corporate world, The Power of Business Process Improvement is a helpful guide for teams in every industry. It is useful for people with minimal experience with business process improvement, as well as for experts. Newcomers to business process improvement will benefit from the book’s step-by-step approach to success.
  3. 4. THE BIG IDEA Business process improvement or BPI can help companies become more competitive in the market by demonstrating greater customer responsiveness and increasing employee productivity. In The Power of Business Process Improvement , Susan Page describes a ten step approach to BPI that is pragmatic and focused on ease of use.
  4. 5. INTRODUCTION Most aspects of business equate to a process. However, those processes are frequently not as efficient or effective as they could be. Business process improvement or BPI can help companies become more competitive in the market by demonstrating greater customer responsiveness and increasing employee productivity. In The Power of Business Process Improvement , Susan Page describes a ten step approach to BPI that is pragmatic and focused on ease of use.
  5. 6. STEP 1: DEVELOPING THE PROCESS INVENTORY The first step of business process improvement (BPI) is developing a process inventory . This inventory outlines all the business processes that exist in a particular department or part of a business. A list of business processes can be developed by analyzing the work that is done in a group, by evaluating job descriptions, or by interviewing employees about their tasks and responsibilities. When creating a process inventory, it is important to recognize that one business process may be comprised of several sub-processes. The process inventory should also include the individual who is responsible for each process – that person is often referred to as the “business process owner.”
  6. 7. STEP 2: ESTABLISHING THE FOUNDATION The next step in the BPI process is creating the scope definition document . The purpose of this document is to provide the baseline information about a business process and to establish the boundaries of the process.
  7. 8. STEP 3: DRAWING THE PROCESS MAP The next step is to draw a process map . This visual representation of a business process is very effective in communicating how the process works and where it can be improved. The goal of a process map is to illustrate a series of related activities that in combination deliver an outcome to either a customer or an internal client. Process maps may be high level or very detailed. Each team must decide what level of detail is needed to accomplish its goals.
  8. 9. STEPS 4 & 5: ESTIMATING TIME AND COST, AND VERIFYING THE PROCESS MAP When estimating the time associated with a business process, it is necessary to look at process time and cycle time . Process time is the amount of time needed to complete a single activity. One way to determine process times is for the team members to make an estimate. Another alternative is using a more formal quality control method, such as a time study. The disadvantage of formal techniques is the amount of time they take to complete. Usually, that level of detail is not needed. Each process time should be added above the appropriate activity box in the process map. The sum of the process times for all the activities is called the baseline time.
  9. 10. STEP 6: APPLYING IMPROVEMENT TECHNIQUES Page uses a concept called the “ improvement technique wheel ” to communicate the six methods that can be used to improve business processes: bureaucracy, value added, duplication, simplification, cycle time, and automation. Automation is applied after all the other techniques to ensure that inefficiencies have already been removed from the process.
  10. 11. STEP 7: CREATING INTERNAL CONTROLS, TOOLS, AND METRICS Once a business process has been made as efficient as possible, it is time to create internal controls, tools, and metrics . Internal controls are intended to improve the reliability of a business process and to reduce the number of mistakes that are made by process workers. The first step is to determine the different points in the process where errors can occur. After the problem areas have been flagged, the team should analyze how to avoid them. The solutions should be captured in an internal controls document which will be added to the overall process documentation.
  11. 12. STEP 8: TESTING AND REWORKING After a team makes improvements to a business process, they cannot simply roll the new process out to the entire organization. First, they must test the revised process and eliminate any unforeseen problems. Effective testing is based on answering who, what, where, when, and how questions.
  12. 13. STEP 9: IMPLEMENTING THE CHANGE Once the business process has been tested adequately, the team must develop an implementation plan. This plan covers how the new process will be rolled out in the organization, as well as how to communicate to and train employees, and how to continuously improve the business process. If the business process is complex, Page advises uses project management software to handle the implementation. For simple business processes, a spreadsheet may be adequate. Implementing a new business process requires three tracks: a change management track that covers impact analysis, a communications track which follows a communication plan, and a training track which follows a training plan.
  13. 14. STEP 10: DRIVING CONTINUOUS IMPROVEMENT Once a team has implemented business process improvements, their work is not done. They must monitor the business process and make adjustments so it improves continually over time. When teams engage in continuous improvement, it ensures that the process continues to deliver the original improvement gains. There are four phases in the continuous improvement cycle: (1) evaluate, (2) test, (3) assess, and (4) execute.
  14. 15. CREATING AN EXECUTIVE SUMMARY To alert management about improved business processes, the author recommends developing an executive summary document. This provides a high level overview of the project and allows teams to gain recognition for their work in a professional way. The key point about executive summaries is to address what the executive sponsor cares about. There are six sections in an executive summary:
  15. 16. CREATING AN EXECUTIVE SUMMARY <ul><li>Project Focus . The executive summary should begin with a story that illustrates the problems that prompted the BPI project. Describe the situation from the reader’s perspective and include information that demonstrates the business need which drove the analysis. </li></ul><ul><li>Goals . The goals section describes the purpose of the work. It can be helpful to review the scope definition document and see what customers wanted from the process. The goals should be stated succinctly in a bulleted list. </li></ul>
  16. 17. CREATING AN EXECUTIVE SUMMARY <ul><li>Summary . The summary provides a synopsis of the project. It can be helpful to incorporate analytical results which provide concrete statistics for the reader. </li></ul><ul><li>Key Findings . This section makes management aware of the key points that were uncovered during the project. </li></ul>
  17. 18. CREATING AN EXECUTIVE SUMMARY <ul><li>Deliverables . The team should describe all the materials that were created during the project, which could include the process overview, process maps, detail documents, the internal controls document, checklists, impact analyses, implementation plans, training plans, and communication plans. </li></ul><ul><li>Appendix . The appendix is the appropriate place to include additional materials that support the team’s conclusions. </li></ul>
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