No matter how many different business processes available in different industries, at the end there are three main performance metrics that define how successful your business processes are. These are effectiveness, efficiency, and agility, which significantly contribute into your overall business productivity!
A business process is designed to bring desired effect into business. However, due to many reasons business process might be far from doing so. An effective business requires its processes to run without any deviations and violations.
The problem with deviations is that you designed a business process to work in a certain way, but reality deviates from the plan due to many possible reasons. Although some deviations might be good, in most cases deviations either diminish or completely clear away the desired business outcomes. There are ways to prevent deviations though. For instance, one can identify and investigate deviations by employing fact-based methodologies, and take timely actions for undesired deviations to prevent any financial or legal impacts.
Violations are more critical than deviations. What happens with violations is; one defines set of business rules for particular business process, but some of the rules are being broken. As a result of violations, often undesired problems occur and some of them even causes serious issues due to incompliance with policies and regulations. Of course, violations can be prevented with well-known assessment and audit methodologies. But these methodologies are time taking and costly. Fortunately, data-driven and real-time compliance monitoring methodologies, such as process mining, are emerging. Thus, it is possible to incorporate business rules into processes, increase control on certain obligatory activities, and continuously monitor them.
In simplest form, business process efficiency means how much outcomes a process produces for a unit of input. The inputs here can be any resources in an organization such as time, money, human resources, materials, and so on. The goal here is to produce maximum possible outputs (products and services for customers) by providing minimum required inputs to a process. There are some issues that challenge this goal here. Let’s have a look at this issues in more details.
For instance delay is one of these issues. Some activities are taking more time than expected due to many reasons in a particular business process. The process slows down and the overall costs get increased consequently. There are many factors that cause delays in a business process. The key here is to identify what kind of delays are happening with what reasons in processes, and prevent the ones that can be prevented. Today it is possible to do so by leveraging the data that organizations log in every actions, and generate actionable insights. For instance, one can easily build necessary competence to measure a process on every steps by leveraging existing data and take preventive actions to limit business impacts of such delays.
Repetition is another issue that heavily hampers process efficiency. It is the case when certain tasks are unnecessarily repeated due to many different reasons in processes. There is no doubt that the resource usage increases indirectly, although the total outcome remains the same. They may sound complicated to identify in very involved business operations, but it is easier than thought. For instance, if similar inputs are employed in multiple different steps to produce similar outputs within a process, then there is a sign of repetition. Once it is identified by applying analytical and data-driven approach, one can also define the norms and track it in run-time. It doesn’t go without saying that such repetitive tasks are indeed great opportunities to be considered for automating by employing RPA like solutions.
Last issue that causes efficiency problems is waste of critical resources. Particularly, the human resources are most critical resources of organizations in contemporary business life. It is quite often the case in organizations that some basic activities are done by very senior human resources. This is not because, the roles and responsibilities are not correctly defined or incentives are not rightly aligned, but purely because of lack of measurements in that dimension. As a result, valuable resources are being wasted and opportunity costs are increased considering such resources could have been employed on more rewarding activities. Companies who run its processes on digital environment already possess vast amount of information (event logs recorded in various IT systems) about who does which activity in what frequency. There are disciplines like process mining which can swiftly and wisely interpret these event logs. Thus, it is quite easy for a company today to map activities with desired skills, and always ensure right activities are done by right resources via continuous monitoring.
Agility in business process means being able to adapt quickly to internal and external market changes. Rapidly responding to fast changing customer demands, mitigating the risks of disruptive competitors by swiftly developing new innovative products, and being flexible enough to reduce the negative impacts that may come from suppliers are all good outcomes of being an agile organization. Agility is highly related with organizations existing culture as well, but having the right culture per se does not guarantee the agility in business. It can be achieved technically with lean business operations by preventing rigidity and sluggishness in business processes that usually occur with the growth of business.
It makes sense to talk about rigidity problem if a business process is not flexible enough to timely respond the requirements coming from customer as well as the threats from competitors. So what happens is, actually the revenue opportunities that could have been achieved at a cost of little flexibility are being missed and business is being left vulnerable to disruptors. There are fundamental steps, such as process standardization, to be taken in order to achieve lean and flexible business process. However, there are low-hanging-fruits that can already be applied. For instance, it is quite possible to ensure the orchestration between frontend (customer facing) and backend (internal value creation) processes by leveraging data-driven and process oriented technologies.
Sluggishness in a business process is another significant problem that hinders the agility. Quickly adapting to changes in the market is nearly impossible for the organizations that possess sluggish business processes. As a result, company loses its competitive advantage and its attractiveness to both internal and external stakeholders due to slowness on responding to market changes. Undisputedly, the goal here is to aim for nimble business processes and simplify processes wherever it is possible to maintain the desired agility. Here the question is: How? With a clear goal, strong strategy, and solid support from data-driven technologies, such as process mining (to strengthen informed and fact-based decision making), it is possible to identify the issues that are hampering nimbleness and remove them from processes.
In a nutshell, business productivity is a function of effectiveness, efficiency, and agility. There are three most important elements in a business: people, technology, and processes. Thus, focusing on productivity issues on business processes in effectiveness, efficiency, and agility dimensions would be a concrete starting point to accomplish overall business productivity improvement. Undoubtedly, process mining is the key technology that will help you to identify productivity issues in processes and provide you the actionable insights to improve your productivity.
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Opticoms offers process boosting and RPA services using the process mining technology to overcome the key challenges. If you want to learn more about how Opticoms can assist you with your organization’s initiatives as well as productivity challenges contact us via our website or write us an e-mail.
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