As your organization scales and changes over time, managing business processes becomes increasingly complex. Organizational leaders are often so busy keeping things running that there’s little time left to devote to reviewing processes. This lack of review essentially institutionalizes inefficiency and ensures that you will stay in a continuous cycle of wasting time and resources.
Whether your processes started out inefficient or you’ve just outgrown the old way of doing things, process improvement is vital to the continued growth and success of your organization.
The first (and simplest) way to evaluate your processes is by having a collaborative conversation. Gathering a cross-functional group of people in a room provides an opportunity to identify how processes really work and outline inefficiencies that you can immediately improve. For example, your operations department leaders may not realize that the finance department leaders use inventory reports to make strategic business decisions. It’s natural for information to become siloed, as teams are often so focused on keeping their pieces moving that they lose sight of how interconnected business processes really are. An open conversation can help form a big-picture view and allow teams to deliver shared information in a faster, more cohesive way.
Another way to strategically weed out inefficiencies is to visualize your processes with a strategic business process map, like a swim lane diagram. A swim lane diagram is a flowchart that will allow you to see the workflow of each process and where each functional player touches a piece of information. This can help you see where there are bottlenecks and redundancies within a process.
Here’s what a swim lane diagram might look like. Notice that these diagrams are similar to flowcharts but provide more detail in the “lanes” that identify which person or group is responsible.
There is a misconception that technology and automation are a quick fix for streamlining processes. However, your digital processes can have just as many bottlenecks and redundancies as your person-driven processes. People and technology cannot stand alone; you can’t talk about one without talking about the other. It’s important to analyze how technology is used to support your key business processes and whether or not your organization’s IT environment is meeting strategic needs. Start thinking from an improvement mindset by focusing on these four key areas:
Not sure where to start? Download our Data Analytics Playbook so that you can learn how to start making strategic, data-driven decisions.
Once you’ve evaluated your general applications, operations, data and security, you can dive even deeper by asking yourself the following questions to identify inefficient business processes and explore additional technology solutions to streamline them:
If you don’t have the time to devote to a process improvement analysis, it might be time to call in backup. Eide Bailly has a specialized team devoted to providing solutions to your business challenges. We can help you work through your digital transformation, business and technology initiatives, strategic planning, organizational design assessments and implementation projects.
It’s important to look at your organization holistically so that you can get a big-picture view of your processes, but the size of your organization may make this seem overwhelming. It’s tempting to review processes on a department-by-department basis, but you can’t make real change in your organization by looking at your departments in a vacuum. Instead, pick a department to start with and work your way outward, examining how each department functions individually as well as how each department interacts and shares information with other departments.
For example, in an examination of the accounting and finance function of one of our clients, we found that inefficiencies in the AP invoice processes (invoices needing investigation, item receipts not completed prior to invoice receipt, missing information on purchase orders/receiving, methods of recording freight, challenges with staggered shipping, etc.) were actually born from inefficiencies in other departments.
This resulted in the purchasing and receiving processes being reviewed for efficiencies and opportunities to reduce the work performed by accounting and finance personnel.
We determined that it would be beneficial for the organization to move toward more centralized purchasing. With over 50 employees having purchasing cards, a large number of invoice-approvers and a very decentralized purchasing philosophy, a more centralized approach to purchasing would simplify purchasing functions, streamline invoice workflow and approvals, and provide for better vendor management, as well as leverage the organization’s buying power and any volume pricing benefits.
We also discovered that the client could utilize functions in their business management software to streamline their processes. By implementing an added module to their existing ERP, the client would be able to easily onboard vendors and track their performance, automate tedious tasks, improve collaboration and, overall, make their jobs easier.
Once you’ve identified your inefficiencies, the first step to process improvement is change management. Whether you’re restructuring your teams, replacing outdated systems, upgrading your IT environment to stay compliant, or even implementing a whole new technology stack to address your evolving needs, the digital demand on your business is felt most acutely by your people. Studies suggest that less than half of organizational change initiatives are successful, so as your business shifts and responds to the market, you need to keep your people at the top of your change management.
Your people, processes and technology each play a vital role in your success. Remove one and your project is no longer capturing the full scope of your business. It’s like a tripod with a missing leg; you’ll never capture a balanced, complete picture without all three.
Employee buy-in of organizational changes can either make or break your project. Follow these four guidelines for a successful change management plan in your business:
You’ve identified your inefficient processes, you’ve taken immediate action to eliminate waste, you’ve identified where technology can streamline processes and support your strategic initiatives, and your people are ready to move forward with change. Now what?
Our Digital Transformation Roadmap can help you identify potential resources and define your next steps. Knowing where you are, and where you want to go, will help you make strategic decisions that drive growth.
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