Business Process Improvement: A Step-by-Step Guide

Your business processes determine how successful you are at operating your business. This guide will help you review those processes and refine them to maximize efficiency.

Updated July 21, 2020

If your business was a house, your business processes would be the structure that holds it all together. Without this structure, the house would collapse into rubble.

You want to build a steady, solid structure so your business can execute with maximum efficiency and weather external and internal challenges. Sometimes that means taking a look at your business processes and figuring out ways to improve them.

This may seem like a complicated effort — and certainly, it will require legwork on your part — but this is a habit you must get into and practice on a regular basis. You will ensure the long-term health of your organization as a result.

This guide breaks down some simple steps to improve your business processes.

Overview: What is business process improvement (BPI)?

Business process improvement refers to the practice of examining all of the practices and procedures in an organization to determine if there is any way to make them better or more efficient, thus increasing productivity.

During a BPI exercise, company managers gather to analyze business practices to identify potential areas of improvement, such as specific operations that could be tweaked or additional skills that employees could learn to improve how the organization runs.

Leaders do a cost-benefit analysis to determine whether the expected benefits of the change would be worth what it would cost to make those changes.

6 steps for successful business process improvement

BPI is a methodical way to fix problems and inefficiencies within your organization, as well as streamline management. These six steps describe the basic BPI process, although you can modify them to fit your business.

Step 1. Identify the problem

What problem is your business struggling with? Do you want to increase sales? Is production lagging? The problem should not be vague, such as "business processes need improvement." You should identify a specific goal, like "increase monthly output of Product A by 20%."

If you're not sure, ask: It's OK to admit you're not quite sure what the problem is. For example, ask your salespeople if there's anything about the business they would change. You'll learn a lot just by checking with key stakeholders in your company.

Step 2. Map out your current processes

How does your business work now? Draw a flowchart of each process to understand how each works, or use software to create more detailed process mapping. Mapping out your business processes will give a thorough view of exactly how your firm runs and provide a roadmap to fix it.

Use project management software: A simple flowchart on paper is easy to make, but it may not capture everything you need to know about your processes. Many software applications have process improvement tools that will help you do detailed business process mapping.

Step 3. Analyze specifically what needs to change

Analyze the processes you have mapped out and identify inefficiencies. This is tricky, but the best way to do it is to ask yourself questions. Why is widget production down?

At what point in the process are we running into bottlenecks? What can we do to fix it? How will it impact the project budget? What deliverables will be affected?

Identify multiple solutions: Rather than commit to one solution to the flawed process, propose a few different ways and talk them over with your team. Test each of them out. You may find that the one you would have gone with did indeed fix the process, yet another solution did an even better job.

Step 4. Redesign the process

With problems identified, you can redesign the process to fix the inefficiencies. Perform a risk analysis first to make sure you aren't introducing new problems by streamlining. Then consult with employees to see if there are any blind spots and if you have a workable solution.

Start with incremental changes: Rather than radically overhauling the entire process, implement some small, incremental changes if possible. This gives your employees time to adjust and also ensures that you can reverse course if you find the change is not working as you intended.

Step 5. Execute the process and monitor it

Aggressively monitor the change early on. Note any shift in the numbers, good or bad, and continually ask yourself why you are seeing these results. Make adjustments on the fly until you see the numbers you want to see.

Stay in constant contact with employees: Your employees are your eyes and ears on the ground, and they'll be able to identify any problems — such as employees struggling to adapt to the new system, or an even worse bottleneck forming at a different part of the production line.

Step 6. Review

After a few months, you should have enough data to conduct a thorough review of the change. Determine whether you got the results you wanted, or if you need to change the process again.

When you’ve collected these data, set aside time to crunch the numbers. Get as detailed as possible and leave no stone unturned. Set up a meeting with your team to talk over the results.

Use software (again): Software is good for collecting data on the execution of your project and project management methodologies, which will help you generate reports and conduct a follow-up review with your team on how the new process performed. Use these insights to further tweak the process.

Business process improvement (BPI) best practices

BPI is an important part of growing your company. Follow these three best practices for lean process improvement to make sure you’re doing it right and increase your company’s chances of success as a result.

1. Go slow

Do not rush BPI. The purpose of this exercise is to make long-term, profitable changes to your organization's operations. If you need a few extra months to do it right, take that time. It beats having to go back and fix the process again when you don't get the results you need.

2. Get feedback

Have your employees as well as your customers weigh in on your processes. For example, send out a survey to your customers to find out if they're satisfied with your customer service response times. Ask your employees if they feel they are executing as well as they should and what they wish would be done differently.

By not making decisions in a vacuum and employing effective communication strategies, you reduce the risk of making the wrong kind of changes.

3. Be flexible

Chances are you won't get it right the first time, but you can make adjustments to the process after you implement the new one. Don't worry — you'll get there eventually. It will just take a little time and patience to get it right.

You'll learn through trial and error, but if you did the proper planning, your changes will at least be positive at the start, even if they’re not perfect.

Get in the habit

Improving your business processes shouldn't be a one-off event. You must get into the habit of reviewing the performance of these processes, identifying room for improvement, and making the necessary changes.

This effort should be repeated regularly given how quickly the business world changes; your processes must adapt at the same rate. By making BPI a regular routine, you can give your company a leg up over the competition.

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