Posted in Workflow Automation

Why are Business Processes Important? (and How to Optimize Yours)

More than 50% of organizations are making significant strides to improve their business processes because they recognize that businesses perform better when their processes are aligned with overall organizational objectives.

The importance of business processes cannot be overlooked.

Not only do business processes enable you to pinpoint inefficiencies before they become crises, but streamlined processes also enable you to produce consistent results and scale up your business operations.

If you don’t understand the value of optimizing your business processes and you’re happy with business as usual, you’re going to fall behind your competitors. 

Read on to learn why business processes are so important and what you can do to make sure yours are under control and performing to the best of their ability.

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Why Are Business Processes Important?

Effective business processes are the backbone of your company, providing the organizational structure and support needed to hold everything together.

benefits of business processes

First, business processes help you design and communicate the different facets of your business strategy so that those measures are executed in a repeatable manner. 

With replicable processes in place, you’ll experience more consistent outcomes as all staff are completing workflows the same way.

Not only that but documented processes help streamline communication between departments and across external stakeholders. 

Business process documentation provides an easy-to-follow process map of how workflows should be carried out so that everyone is on the same page and accountable for their tasks in the workflow.

Plus, official written processes make process improvement more straightforward. With a process map drawn out, bottlenecks become more evident, so it’s easier to see how to improve processes to increase efficiency and effectiveness.

For example, almost 70% of firms are tweaking business processes to drive productivity and lower overheads.

symptoms of a bottleneck in business processes

What’s more, operational processes offer a framework for continuous improvement. 

Officially documented processes make business process analysis easier, enabling organizations to track overall performance and tweak the business system to give themselves a competitive advantage.

For example, 35% of organizations are focusing on boosting business processes to improve existing products, while 38% are enhancing them to increase customer satisfaction.

You’ll also find that business processes heighten agility within your organization, simplifying change management. 

With process documentation in place, it’s far easier to make and communicate a process change and make sure everyone is following it immediately.

What’s the Value of Business Process Optimization?

When your organization appears to be on the up and up, it can be tempting to keep working with business as usual. 

statistic on business process management technology

In fact, this can be the same, even if the opposite is true. Even if you find your organizational leaders are overwhelmed, you may feel like there isn’t enough time or there aren’t enough resources to disrupt the status quo.

However, business process optimization helps to ease these pain points by delivering better organizational structure to improve operational efficiency and drive competitive advantage. 

The value of updating each existing process can’t be overstated. 80% of business leaders agree that optimization tactics such as process automation can propel companies forward in new and exciting ways.

First off, business process improvement helps your organization better reach the objectives outlined in your business strategy. 

For example, 75% of process experts agree that a BPM tool helps their organizations achieve objectives better. 

Process improvement also helps with time management. Almost half of all organizational leaders say that they spend at least 20% of their day doing routine tasks that aren’t important to their core roles. 

Statistic about manual labor for business leaders

By introducing process improvement measures, such as business process automation, 78% of business leaders believe they could save up to 30 hours a month.

Take Initial Saudi Group, for example.

Prior to implementing frevvo as its BPM tool, the contracts process took 7 to 10 days to complete, as multiple parties had to sign all paperwork manually.

By switching to frevvo, Initial Saudi Group has now automated this process, accelerating it considerably. Contracts are now processed within six hours, meaning a 92% increase in processing speed.

Another reason for process optimization is to reduce errors. 

If you have lots of errors in a current process, you’ll be experiencing significant delays and excess costs to remedy incorrect work. This can also result in a poor end product and dissatisfied customers.

According to over half of organizations, business process improvement initiatives such as process automation can eliminate a considerable portion of human errors, while 45% say it can enhance process outputs. 

Cost-effectiveness is another huge advantage of process improvement.

Looking at process automation as a method for process improvement, 31% of business leaders agree it lowers labor costs. 

By taking on the burden of manual, repetitive tasks, automation reduces the need for huge teams and extra hours. Plus, by reducing errors, there’s less need to pay staff to rectify incorrect work.

La Cité is a great example of how process improvement leads to cost reductions.

Before installing automation software, the college made students register for classes manually. When students submitted applications by hand, staff had to manually check, scan, and submit each document.

Now La Cité uses frevvo. 

Students fill in online applications, which are automatically validated to eliminate errors. These forms are then automatically routed to the proper departments for submission.

No more manual checks and scans mean huge reductions in labor costs.

How to Improve Your Business Processes

To improve a business process, you need to map it out, analyze the steps, and introduce optimization tactics to boost efficiency and effectiveness.

Here’s a quick guide giving you the process improvement steps to do this.

1. Map and Model Existing Processes

Business process mapping and process modeling are the first steps to improve an existing process.

A process map is any form of documentation that maps out the process (from a hand-written flowchart to a whiteboard diagram).

A process model is a more formal version of a process flow chart that goes into further detail. Process models are usually built on modeling software using business process model and notation (BPMN), a unified modeling language.

SIPOC diagram of how to make pasta sauce

(Image Source)

Whether you’re using business process modeling software or simply doing process mapping by hand, you’ll need to map out the stages of your existing process so you can see who and what’s involved.

You’ll need to include:

  • Inputs and outputs
  • Tasks at each stage of the process
  • The flow of materials, information, and documents
  • Stakeholders and actors at each step

2. Analyze These Processes

After mapping out your process flow, the next stage is business process analysis.

Study the steps within your process to work out where there are bottlenecks that hamper efficiency and effectiveness. 

Ask yourself the following questions:

  • Which steps cause delays?
  • What’s most time-consuming?
  • Where are human errors likely to occur?
  • Where is there waste or excess costs?
  • Can any steps be automated or eliminated?

If you need an analysis framework, try using a Fishbone Diagram to drill down into your inefficiencies.

fishbone diagram to analyze high staff turnover

3. Design and Implement Improvements 

Now that you know what’s causing bottlenecks, create specific improvement goals and design process improvement tweaks to meet these goals.

Try the Plan, Do, Check, Act (PDCA) method.

PDCA Cycle
  • Plan: Plan the change based on analysis
  • Do: Implement the change
  • Check: Benchmark and monitor the change
  • Act: Scale the change

4. Automate Processes

Automation cuts out manual labor, streamlining processes to increase speed and accuracy while reducing costs and improving quality.

This is how Cricket Australia managed to reduce its invoicing time significantly.

Previous manual invoice processes took four days to complete. After implementing frevvo’s business process automation software, the organization managed to halve this processing time.

With frevvo, you can generate digital forms that automatically populate with data from your databases to save time. All forms automatically validate to prevent errors.

frevvo dashboard for a conditional order process

By customizing business rules, you can automatically route your documentation through the appropriate approvers and departments to speed up approval and increase accountability. Automatic notifications make sure everyone is informed of their role immediately.

What’s more, frevvo helps you to keep all records compliant and up-to-date with automatic record-keeping functionalities.

5. Train and Communicate Changes

Business process documentation is vital to make sure everyone is on the same page. 

Once you’ve improved an existing process, you need to create working procedure documentation that explains how to carry out each process.

You need to communicate these documentation changes to your staff and other process stakeholders, such as suppliers.

If you’re switching to business process automation software or a BPM tool, you may also need to train your teams and stakeholders on how to use these tools.

6. Track Process Performance and Review Regularly

Since process improvements are tied to specific goals, you should have clear metrics that demonstrate whether you’re meeting those targets.

You need to track your performance to see whether your changes are making the desired improvements and whether these tweaks have unplanned effects.

Try using a workflow analysis software like frevvo so that you can take advantage of its in-built analytics suite. This will help you create charts to track performance over time.

Review performance regularly to make sure there’s continuous improvement and processes haven’t stagnated.

It’s also wise to review your business objectives regularly to ensure your processes are suitable for reaching your growth goals.

Don’t Undervalue Business Processes

The importance of business processes cannot be overstated. 

Optimizing business processes can help you avoid mistakes and delays, improving cost-effectiveness, productivity, supplier relationships, and customer satisfaction.

There’s no better way to streamline your business processes than to implement a rock-solid businessprocess automation software like frevvo. 

Sign up for a free 30-day trial of our software.

Author:

Ashish Deshpande has worked in the process automation space for over 20 years. He has been instrumental in successfully deploying frevvo’s software at hundreds of organizations such as HBO, New York University, and Boston Public Schools. Ashish has contributed to leading publications such as Forbes, business.com and readwrite.com. Ashish received a PhD in Computer Science from Yale University, and a Bachelor of Technology in Computer Science and Engineering from the Indian Institute of Technology, Mumbai, India.