The 5-Step Blueprint to Improve Your Business Processes

As a business department manager, never underestimate the power of streamlining your business processes. We've seen many small and medium-sized businesses lose money because they were unsuccessful at performing efficient business practices, where revenue brought in is lost due to inefficiency. In contrast, businesses that implement successful business processes have seen their net margin increase 5 to 10% year over year.

We've put together this guide to Business Process Improvement to help you meet your business goals, whether you're looking to reduce departmental costs, increase production or service output, or standardize your business practices.

What is Business Process Improvement?

Business Process Improvement is an initiative to increase efficiency in your company by optimizing your processes to gain increased output. For example, a less efficient company will send a paper form to a supplier and have staff enter the details into the system, while a highly efficient company uses a digital form that lets the supplier enter information directly with proper approvals, saving staff time, digitizing paper and eliminating manual errors.

A few signs of inefficiency to look out for:

• Using paper forms to collect information from suppliers, customers or internally
• Managing and tracking transactions with an Excel spreadsheet
• Having staff enter data from one system into another system

Answering "yes" to any of these identifies opportunities to improve. The best approach is to improve business processes strategically, considering the impact on other departments, using industry best-practice frameworks and properly evaluating options for the best value.

1. Map the Current State of Your Process

Visually mapping the steps in a process makes it easier to identify inefficiencies. You can use tools like Microsoft Visio or Lucidchart to map out the current state of your process.

2. Perform Gap Analysis

Once you have mapped all the business processes, identify the gaps and inefficiencies, such as manual work, data entry, duplicate information and staff error. Highlight them in your processes.

3. Look for Improvement Opportunities

From the identified inefficiencies, look for ways to improve. For example, if an employee is manually entering information from paper, determine whether the process can be digitized, whether the step is redundant and can be eliminated, or whether training can address a bottleneck.

4. Map Out the Future State

After identifying opportunities, map the future state of the flow to see how the process will look. This also serves as a guide for staff working in that process.

5. Plan Your Implementation Roadmap

Plan when improvements can be implemented over the next two to three years, mindful of dependencies. Classify opportunities as high impact or low impact and start with the high-impact improvements to get more return on invested capital. The ideal time is to have recommendations ready and budgeted for the new fiscal year.

Umbrella Consulting has experience improving business processes for mid-market manufacturing and distribution companies across Canada. Contact us to start your business process review.