Strong business processes deliver better organization results because organizations that deploy strong business processes execute better against their strategic intentions. Shown here are nine ways that strong business processes produce better results.
Strong business processes,
1. Improve the Customer Experience.
Improving the customer experience begins by understanding the internal business processes that must align to deliver better customer outcomes. Customer value is in the eye of the perceiver and by systematically studying customer wants and needs, an organization can build robust business processes that consistently meets those needs and delivers a significant competitive advantage over time. Happy customers come from a series of business processes that align to meet their needs. The more business processes are in sync with one another, the more likely an organization can consistently deliver superior customer value over an extended period of time.
2. Reduce Response Time.
By understanding the business processes that produce and deliver products and services to a satisfied customer, an organization can systematically analyze the time and activities behind that value creation. When we study task time to total cycle time in clients, we see the value-added component of time spent is well under 15%. By removing non-value added tasks and time and by balancing supply and demand, any organization can dramatically reduce cycle times. The key to cycle time reduction as a competitive weapon comes from understanding the response time that delivers a competitive advantage in the customer’s view. An organization that builds a consistent capability to deliver a faster response will enjoy a preferred position with customers.
3. Improve Employee Engagement.
By defining and deploying strong business processes, an organization can engage its employees in a meaningful and valuable way by distributing responsibility and accountability closer to the front lines serving customers. The best way to access employees’ knowledge, wisdom and experience is by engaging them to define the problem, solicit their participation in solving it, and then supporting them as they implement that solution. Standard business processes are much easier to manage and operate and contribute significantly to reduced stress in the workplace.
4. Improve Organization Efficiency.
In understanding the key resources that contribute to a business process purpose, an organization can drive conversion efficiency to higher and higher levels. Conversion efficiency comes by delivering a greater output of goods and services relative to the assets required to execute that purpose. This is particularly important when asset values come at a high cost to the organization.
5. Increase Asset Utilization.
By understanding the demand/supply profile through a well-defined business process, an organization can match asset needs with customer demand to execute a process that effectively meets customer requirements. Process understanding includes supply and demand volumes, resource requirements, and time requirements. The assets utilized in process execution can include people, equipment, facilities, and information technology.
6. Reduce Working Capital.
Working capital can be a substantial requirement in many business models. By studying supplier-customer relationships, an organization is capable of minimizing the working capital required to satisfy customer needs. This reduced working capital can be seen in fewer inventories, lower accounts receivable, and reduced work in process time.
7. Reduce Corporate Risk.
Few companies operate today without some level of regulatory compliance governing their industry. By documenting and managing standard business processes, a company is in a far better position to mitigate the risk of compliance and catastrophic failure in the marketplace. The best way to capture business process knowledge is to engage employees on the front line who understand how work gets executed and can commit to owning the business mission within their area of responsibility.
8. Reduce Costs.
By understanding detailed cost drivers, an organization can improve its core value stream costs. These costs come from four basic areas, including inputs, conversion, people, and supporting overhead. When organizations operate through strong standard business processes, the costs of goods and services become transparent, which facilitates visible and sustainable improvement.
9. Improve Shareholder Satisfaction.
Strong business processes also improve the shareholder experience. An organization that executes standard business processes is transparent, can demonstrate how work gets accomplished, how customers are served, and how employees contribute to the mission. This visibility provides shareholders with an understanding of organizational capability and how that capability delivers a competitive advantage. In addition, strong business processes provide an essential organization asset that contributes meaningfully to overall enterprise value.
In conclusion, developing strong standard business processes provide superior results, by delivering a delighted customer, a better employee experience, a more transparent operating environment, and ultimately a more knowledgeable, confident, and satisfied shareholder.