Business Process Improvement

Baker, Jake & Powell Partners are experts in business process improvement, a field which is the embodiment of economic Darwinism.  Those organizations most capable of adapting to changing conditions will displace those less able to adapt. Organizational willingness to engage in process improvement is essential to success in a rapidly changing business environment.  BJP partners will help your organization achieve success in all steps of the process described below.

The foundation of business process improvement is scientific management.  Only recently did management science become available as an undergraduate degree on our university campuses.  During the 1980’s, the ambiguities inherent in the name "management science" led  led to evolution of a new moniker, “operations research.”  Today, business process engineering is operations research applied to the challenge of maximization of productivity, i.e., efficient and effective use of resources achieved through an optimum process design, deployment and its subsequent reevaluation. 

Business process improvement is both a continuous and recursive process of managing resource use through business process design and modification. 

• It is continuous in that shifts in the market necessitate ongoing improvement activities, or the organization runs the risk of being left behind by the competition

• It is recursive in that the results of process changes become the subject matter for  subsequent process design modifications.  For this reason process improvement is often termed reengineering

Business process improvement consists of several steps: 

1. Discovery

2. Mapping

3. Opportunity identification and selection

4. Modeling and validation

5. Requirements analysis

6. Processing engineering

7. Go back to step 1…

Business process discovery is the task of identifying exactly what a business unit seeks to accomplish, methods employed, resources consumed, quality standards applied and success measures evaluated. This task is typically performed by department staff assisted by business analysts who are seeking to improve efficiency and effectiveness.

An illustration summarizing the findings of process discovery known as a business process map is then produced. It is a graphical representation of the process. It represents the entire process from start to finish, depicting inputs, outputs and units of activity, action or decision points, and ultimately, completion. It can serve as an instruction manual or as a tool for facilitating detailed analysis and optimization of workflow and service delivery or production.  It can be used as a training tool or, in this case, a communication tool that aids in the identification of opportunities for improvement. 

Discovery (step 1) and mapping (step 2) are essential to analyzing an organization’s operations.  Understanding, documentation and communication arise from these steps.  These results allow for control.  These steps are absolutely essential prerequisites to steps 3 through 5. 

Despite this fact, organizations often give little respect to these foundation steps and dive directly in to opportunity identification (step 3) and  modeling (step 4) which may then cause a failed reengineering (step 5). 

This abbreviation of the process often arises because managers and planners believe that these steps are unnecessary because they “already know the business”, i.e., they “know what they know.”  This attitude eliminates the opportunity to learn that which they “don’t know that they don’t know”, i.e., to identify the “unknown unknowns.”  Very frequently, the greatest opportunities for improvement lie within these unknown unknowns and consequently are never discovered if the process is abbreviated.

Discovery, process mapping and subsequent communication of observations to a project task force of workers, supervisors, managers and directors will inevitably yield identification of opportunities (step 3).  Opportunities to improve operations (processes) will thereby reduce financial costs or enhance revenues.

Business opportunity selection (also step 3) is achieved by building a financial pro forma for each opportunity and then ranking opportunities according to a matrix of risk, rewards, complexity and available resources.  In other words, business analysts will calculate a return on investment for each opportunity and then order the opportunities accordingly.

Business process modeling (step 4) is the creation of a pro forma process map that reflects the manner in which business would be conducted to achieve the benefits of the selected opportunities. 

Financial validation (also step 4) should be performed at this point by independently re-forecasting the financial differentials arising from the proposed implementation of the new process model.

Of equal importance to the process model is a business requirements analysis (step 5) developed by business analysts.  This analysis will describe the expected outcome and results of the re-engineered process.  This description is made in terms of not financial results, but in terms of units of production, quality and time.  These are concepts that can be easily synthesized by process engineers or system analysts who think in terms of inputs, processes, outcomes and products, not in terms of financial results.

Business processing engineering (step 6) is the easy part.  The process map and requirements document are delivered to the implementation team, which may be a project task force, and engineering department or external consultant. The implementation team, upon review and discussion with the business unit, will design and implement the details of the proposed changes. 

Results are achieved by various means depending upon the industry.  For example, in manufacturing, new technology, tools and machines may be implemented and plants may be reorganized or consolidated.  For a services firm, delivery channels for incoming orders and outgoing services may be automated, decision processes may be altered, databases may be consolidated, job descriptions may change, etc.

Quality control of the reengineering task is conducted jointly by the implementation team and the business unit to assure that the changes made comply with the specifications of the requirements analysis.  The business unit conducts internal analyses to assure that specified effects on operations do indeed have the expected effect on financial performance.

Next iteration (step 7) reflects the recursive nature of business process improvement.  A typical reengineering task in a typical business unit spans three months at a minimum to several years.  In any case, shifts in consumer tastes, technology, substitute or complementary product pricing, consumer confidence, national economic aggregates, supply-side shocks etc. will necessitate another process reengineering in the near future.

Return to Professional Services