Business Process Improvement: What it is and why Is It important?

June 09, 2022

Importance of business process improvement

According to Forbes, process improvement is critical to avoiding a so-called “death spiral” and achieving business growth. Ever since companies started embracing digital transformation, many have been placing more scrutiny on Business Process Improvement (BPI).

These companies realize that improving processes is an important step. Whether improving existing technology or undertaking new product development, process improvement is necessary.

Today, we will discuss BPI, why it is needed, and give you some ideas on approaching this process within your company. 

How does business process work?

Workflow is a term used in business process management to describe the steps involved in completing a task or process. Let’s break it down into two base parts: sequential steps and parallel steps.

Sequential steps occur one by one, while parallel steps coincide (e.g., two people working on a project). Sequential and parallel workflow happens in the same order, but they can affect each other differently depending on their relationship.

Business process improvement techniques

BPI is the systematic, continuous process of analyzing and improving business workflows and allows companies to identify inefficiencies, eliminate waste, and reduce costs. It is a vital business management strategy that helps improve profit margins and increase customer satisfaction. 

Improving workflows requires a structured approach, and several methods exist. The first step is to map out the existing workflows. After that, you should analyze each process from two perspectives: quantitative and qualitative.

If you’re wondering which workflow will have the most prominent business benefit if you were to improve it or which will have the most significant impact on improving customer satisfaction and increasing efficiency with minimal costs, don’t sweat it too much. The final step is to modify the process as needed, and for many companies, this often involves automating some of the steps.

The most common BPI methodologies explored

Six Sigma, Lean Management, Agile Management, and Total Quality Management (TQM) are all ways of approaching process improvement. 

Six Sigma

Six Sigma uses standardized methods and techniques to solve problems, collect data, and measure results, but it’s also focusing on reducing process quality variations and increasing customer satisfaction.

It is widely used for process improvement in quality control, analytical research, and manufacturing. As this approach relies heavily on data, teams adhering to it must pair it with a strong data quality strategy. 

Having accurate data is critical to ensure the team can adequately address any problems they identified.

Lean Management

Lean Management focuses on improving the company’s culture and boosting productivity at work by eliminating unnecessary tasks and prioritizing work with the most value for the organization. 

Managers can make daily activities more efficient and reduce waste using Lean principles. The improved workflow ultimately leads to more productive and happier employees.

Agile Management

Agile Management is about implementing processes that enable the company to react to changes quickly, avoid overloading the team with work, and be flexible to changing customer requirements

The primary goals of Agile Management are to improve team performance and increase efficiency through frequent process review and change, improve communication and collaboration between team members, and enable the team to respond quickly to change by reducing process inefficiency.

Total Quality Management (TQM)

TQM involves looking at an organization’s activities and processes from the customer’s perspective to identify and correct problems. This process emphasizes constant improvement by actively seeking out problems, collecting data, analyzing information, and taking action to address issues.

It’s an ongoing process that’s integrated into every aspect of the company’s activities. Applying TQM principles is possible, and you can apply them to any part of an organization, including non-production activities such as HR, supply chain, marketing, accounting, and customer service.

Benefits of BPI

Improving workflows benefits the company, its employees, and customers alike. By aligning business processes to meet the needs of each, the company can expect to see significant results, such as:

Better customer service

When your team operates at maximum efficiency, they provide a better customer experience. The team uses set standards to meet customer needs, communicates effectively with the customer, and solves customer issues quickly.

Improved product and service quality

When teams operate under optimal workflows, there is little room for making mistakes. As a result, there is less rework to fix problems. Ultimately, the customer gets a quality product from the start.

Higher productivity

Improved workflows reduce the amount of time wasted on unnecessary items. That way, the team can accomplish more in each workflow.

Improved profitability

Depending on how high the process’ efficiency is, you’ll need less time and money to produce those products or services. 

Conclusion

Business process improvement is a vital part of any business owner’s toolkit. It is essential for better internal processes, increasing efficiency, and saving money.

Ultimately, BPI helps boost customer satisfaction, improve customer loyalty and create a culture of continuous improvement. Therefore, if you haven’t already, think about whether you should implement BPI to your business.

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