The Ten Steps to Business System Analysis

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A Business System is a series of business processes that align to create a flow of products or services delivered through the enterprise to an external customer. Business Systems begin with an input from an external supplier to the organization and end with a deliverable produced for an end customer. Business System Analysis can be an extremely valuable way to improve enterprise performance.

 

Business System Analysis Ten Steps

 

1. Define the Business System.

A Business System will typically contain between 8 – 16 business processes, beginning with an acquisition or need and ending with a disposition or fulfillment. Each process must contribute a meaningful conversion component to the overall Business System.

 

2. Develop process maps.

Process maps create the common understanding of what takes place within the Business System and define the contribution of each process. Process maps should define the who, what, when, and where for each task within each process. These maps are essential, as they create the critical backbone of workflow understanding for all subsequent analysis.

 

3. Perform a Customer Value Assessment (CVA).

The CVA assesses the relationship between a process and it’s customer(s) and ultimately defines the service level agreement for process deliverables on four dimensions; quality, cost, time, and service. The CVA should begin with the external customer of the Business System and then assess internal customers back through the Business System, defining the roles they play in creating the final customer deliverable (product or service).

 

4. Perform information analysis.

Information analysis identifies and helps determine the information necessary to execute each process within the overall system. We often find information disconnects where incomplete and incorrect information continues to be passed uncorrected throughout the Business System.

 

5. Develop organization profile.

Organization structures are often out of sync with Business System workflows. Organization profiling assesses the roles and responsibilities of management in the 300 – 600 tasks that can be found in most Business Systems.

 

6. Develop demand profile.

It is essential to understand the workload placed on the Business System on a daily/weekly/monthly basis. This analysis includes the customer unit demand for the products and services produced by the Business System. We have found that the traditional 80/20 profile of customer demand is more likely to be a 90/10 or even 95/5 profile.

 

7. Develop Business System profile.

The Business System profile assesses the extent to which a Business System is capable of meeting the customer demand profile. It studies process capacity as well as the configuration of process resources to meet demand.  In addition to internal business processes, we often find that key suppliers can meaningfully impact Business System performance. These suppliers should be assessed similarly to internal business processes to determine to what extent a key supplier can capably meet Business System needs.

 

8. Assess Business System quality.

Business System quality assesses the deliverable requirements of each business process within the business system and the extent to which these processes produce ACT (accurate, complete, timely) on the first pass without scrap or rework. This first pass yield establishes a quick way to understanding quality performance and the level of waste created by the system in producing products and services customers’ require.

 

9. Assess Business System cycle time.

Cycle time assessment studies the time required to move all deliverables through the Business System relative to end customers’ requirement for those same deliverables. While all processes have a cycle time, the Business System cycle time is dependent on the critical path of process workflow through the system.

 

10. Develop Business System characteristics.

The analysis summarized above provides a tremendous amount of data that can be turned into valuable information and meaningful insight. The final result is a Business System Analysis that thoroughly examines system performance and identifies the primary opportunities that can drive the greatest value to the organization.

 

Business System Analysis ROI

While business process analysis is commonly utilized, Business System Analysis is less so and requires a much more comprehensive analyst skill set and business experience. While a well-executed process improvement effort will generate 5-10X gains in performance, Business System Improvement efforts will far exceed that amount, generating from 10X to 100X ROI.

Learn more: the Perigon Method

 

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