While many organizations use process mapping as a valuable improvement tool, very few think of business process improvement as a foundation for their organizational improvement strategy.
Business process improvement can drive very powerful and sustainable change. Defining, deploying and improving strong business processes is a very effective strategy for creating competitive advantage.
Process maps provide the foundation for how work gets done and insights into what can be done to improve it. By defining and deploying strong processes, an organization engages its employees in a valuable way, distributing responsibility and accountability closer to the work itself. The best way to access employees’ knowledge and experience is by helping them define the problems they face every day, solicit their participation in solving them, and then allowing them to implement their solutions. Strong Processes are much easier to manage and contribute significantly to reduced stress in the workplace.
Improving the customer experience begins by understanding the internal Processes that must align to deliver better external customer outcomes. Customer value is in the eye of the perceiver and by systematically studying customer wants and needs, an organization can build robust processes that consistently meet those needs over time. Behind every unhappy customer lays a broken process. Happy customers come from a series of processes that align to meet their needs.
By understanding process-based cost drivers, an organization can improve its costs effectiveness. These costs come from four basic areas, including inputs, conversion, people, and supporting overhead. When organizations operate through strong standard processes, the costs of goods and services become transparent, which facilitates visible and sustainable improvement. Along with building and serving loyal customers, a process must deliver a return on invested capital that delivers a successful economic outcome for all stakeholders.
Efficiency defines the extent to which a process performs relative to its full potential. Greater efficiency comes by delivering a greater output of goods and services relative to the assets required for that purpose. This is particularly relevant when asset costs are high. Less efficient organizations operate at a competitive disadvantage that manifests itself in many ways, including higher costs (often leading to non-competitive prices), less reliable and dependable solutions, and slower response times.
Organizations acquire assets with the express purpose of using them to produce profits. The productivity of those assets is derived from the ratio of outputs produced by processes relative to the resources required to produce those outputs. Assets include people, tools and equipment, facilities, information technology, and intellectual property. Few organizations measure the extent to which assets serve their intended purpose.
By understanding the 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 generally see that value-added time is well under 10%. 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 enjoys a preferred position with customers.