Organizations of all sizes depend on processes to get work done. These can be as simple as following up with a lead or as complex as sending a purchase order.
Your organization likely already has processes in place for individual activities. But when was the last time you reviewed them? How often do you evaluate whether they’re allowing your employees to focus on important tasks or bogging them down with delays?
Inefficient business processes can lead to financial loss and missed deadlines. But identifying bottlenecks in a process and where it can be improved isn’t always easy.
In this article, we’ll provide an in-depth look on what business process analysis is and how you can apply it to improve overall efficiency. We’ll also look at how you can use frevvo’s business process automation software to automate processes in your business.
This is a comprehensive guide. Click the links below to navigate to the section that interests you most:
- What is Business Process Analysis?
- Why Should You Analyze a Business Process?
- How to Conduct a Business Process Analysis
What is Business Process Analysis?
Business process analysis is a method that organizations use to increase efficiency. It involves evaluating a process and finding ways to improve it.
Without a proper process analysis, you risk wasting valuable time on processes that are inefficient or outdated. The reality is, this can easily happen as your organization expands and matures — more people become involved in daily operations, new technologies are introduced, etc.
Taking the time to regularly conduct an analysis of your processes allows you to identify and address operational inefficiencies. It also allows you to document each step of an existing process, which can then be used to improve training materials for new employees.
Business process analysis involves the following steps:
- Identify a Process to Analyze
- Collect Data About the Process
- Map Out the Process
- Analyze the Process
- Develop a “To-Be” Plan
- Implement and Reevaluate
We’ll take an in-depth look at each step later, but for now let’s look at why analyzing your processes needs to be a part of your overall business strategy.
Why Should You Analyze a Business Process?
Every time you send a purchase order (PO), approve a travel request, or handle a customer inquiry, you likely follow the same set of steps. By conducting a business process review, you can streamline these actions and improve efficiency by making sure there are no wasted steps.
Business process analysis can also help you:
Identify Causes of Delays
Your company likely already has policies for purchase orders. But if you don’t have a clearly defined process, there can be delays in getting those documents out.
For example, if employees don’t know where to send purchase orders for approval, they’ll end up wasting time trying to figure out the answer. Or they may send the purchase order to the wrong person.
That’s an inefficiency that can lead to delays and slow down procurement. But it would be difficult to pinpoint the reason for that delay without analyzing each step of a process map.
Reduce Operational Costs
Making a process more efficient reduces overall operational costs, allowing you to get more work done in less time. The result is a more productive workforce.
Let’s look at purchase orders again as it plays such a vital role in procurement. It’s also an example of a process that benefits from continuous improvement — improving a process through incremental changes.
Relying on a manual process to manage POs results in higher operational costs. Identifying and addressing that bottleneck allows you to reduce cycle times and save money.
Organizations with a manual procurement process have a significantly higher cost per PO ($89.73) than organizations that use process automation software ($30.72).
That’s a difference of $59. Now multiply that figure by the number of purchase orders you send a year and you’ll get a better idea of how much you can save by automating this process.
Eliminate Manual Data Entry
Manual tasks like data entry are tedious and time-consuming.
Managers spend an average of 8 hours a week on manual tasks, while 25% spend at least 20 hours a week on such tasks. That’s valuable time that can be spent on more productive work.
With business process analysis, you can dig deep into your processes and identify what may be slowing down productivity. If employees spend a lot of time manually filling out PO forms, you can streamline that process with a business process analysis (BPA) tool like frevvo.
Here’s an example of how frevvo’s process automation software populates each field when selecting a vendor for purchase orders:
Employees won’t have to manually enter data for each field. The fields automatically populate with the correct information. This not only saves time, but also reduces human errors.
How to Conduct a Business Process Analysis
Processes can become obsolete or inefficient as technology changes and regulations are put in place. Organizations should regularly evaluate their processes and take process improvement steps.
Follow these steps to analyze a business process.
#1. Determine a Process to Analyze
The first step is to determine the process that you are going to analyze. This means selecting an “as-is” process — a current process you use in your business — to observe and analyze before you jump into making any improvements.
Choosing an “as-is” process allows you to establish a benchmark and measure any changes you make.
Here are examples of business processes that you can analyze:
- New hire onboarding
- Purchase orders
- Travel requests
- Invoice approvals
- Expense approvals
- Audits and compliance
- Vendor management
- Accounting processes
- Appointment scheduling
- Attendance tracking
- Sales orders
Ideally, you want to choose a business process that gets performed regularly and has an impact on your bottom line. Establish a clear start and end point with the business process you choose to analyze.
#2. Collect Data About the Process
The next step is to collect as much information as possible on the process you selected. Identify the individuals (or stakeholder) involved in the process.
Then gather data about how they tackle the process, including when they do it, how often, what tools they use, what written steps they currently follow (if any) and more.
At this point, it’s helpful to watch someone complete the process from end-to-end, so you can see for yourself how it flows and what steps it involves.
You can also ask for their feedback on what they would do to improve the process. This feedback will be especially valuable as you begin to implement changes in a business process.
#3. Map Out the Process
A typical business process can consist of numerous steps. Keeping track of the particulars of each step isn’t exactly easy, especially for more complex processes. This is where business process mapping comes in — visualizing a process from start to finish.
Creating a workflow allows you to visualize each step in processes like employee onboarding, purchase order approvals, and more. It also helps you understand what individual stakeholders are responsible for and the steps they take to complete a task.
Working from a customizable template allows you to map out the business process you want to analyze from start to finish much faster and easier than if you’re starting from scratch.
Here are some of the workflow templates you can install in frevvo:
Here’s an example of a workflow for sales orders:
From frevvo’s workflow designer, you can add additional steps and even preconditions (e.g., route a sales order to a VP for values over a certain amount).
#4. Analyze the Process
With a process mapped out, you should have a better idea of what you can improve. The main purpose here is to identify any weaknesses in the current process and find ways to address them.
Ask yourself the following questions as you analyze the process:
- Are there any steps that are causing delays?
- What aspects are the most time-consuming?
- Do stakeholders have the resources they need?
- Can any steps be automated or even eliminated?
- What are common complaints from the people doing the work?
- Where are human errors likely to occur?
You can find the answers by taking a closer look at your process diagram that you created in the previous step. To ensure you’re not missing anything, you’ll want to solicit feedback from key stakeholders.
Mistake Proofing (also called Poka-Yoke or Error Proofing) is a common process analysis technique you can use at this stage. You look at each step in your process flow map and ask which mistakes could be made due to human error.
Let’s look at a case study. Central Wyoming College, a public community college in Wyoming, used frevvo to map out their purchase order requisition process.
Analyzing their workflow allowed them to pinpoint delays in their process — employees were wasting time manually chasing approvals. Multiple follow ups led to hours of wasted time that could’ve been spent on more productive tasks.
Pinpointing this bottleneck would’ve been difficult without a thorough analysis. So what did they do? They used frevvo to streamline this process and dynamically route purchase orders.
#5. Develop a “To-Be” Plan
The point of each step up until now is to understand a process better and identify areas of improvement. Now it’s time to develop a “to-be” plan — what you want your process to look like in the near future.
For example, let’s say one of your objectives with purchase orders is to reduce cycle time. An analysis of your process might reveal that employees are sending all purchase orders to the VP of Finance for review regardless of their value.
This might not be the best use of their time. A to-be plan might include a new rule that only sends purchase orders over a certain value like $10,000 to a VP for review.
Here’s an example of a conditional rule in frevvo:
And here’s what the new workflow looks like:
Approvals still need to go through a manager, but adding this rule ensures that the VP can focus their attention on purchase orders with higher values.
Once you finish developing a to-be plan for your new process, be sure to preview and test it to make sure that everything is working.
#6. Implement and Reevaluate
After your plan is developed, phase out the old process and introduce the new one. Be sure to communicate any changes to the stakeholders involved and keep tabs as they follow the new process.
Keep in mind, business process analysis is not a one-time event. Processes should be reviewed on a regular basis to keep them fresh and continually seek out improvements.
Conducting a business process analysis allows you to assess and evaluate different operations in your business. This makes it easier to identify any bottlenecks in a process that are causing costly delays.
With frevvo’s process automation software, you can map out an existing process and identify areas of improvement.