Capability Insights Consulting

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Process improvement benefits - where to look

Posted on August 17, 2010 at 3:14 PM

Identifying, analyzing and making changes to business processes takes time and effort, and incurs expense. Changing how things are done impacts roles and responsibilities and can trigger employee resistance. Before embarking on process reviews and changes, it is wise to consider the types of benefits you might gain.

 

Each organization is different and the actual benefit numbers will vary, but below are some common benefit areas to be aware of and better yet to plan for.

 

Revenue generating benefits. These are opportunities to change current processes and practices to directly or indirectly increase revenue. These benefits are often the hardest to achieve as the changes needed usually break current mindsets and can fundamentally change roles and responsibilities. They often also have the highest payback. Here are some examples:

 

  • Upsell opportunities. A telecom company wants to have its call center staff sell more products to existing customers whenever they deal with a customer. The process review, analysis and design work will focus on building in the analytic processes (and technology) necessary to ensure call center staff know exactly what products the client has and what products might be of interest, as well as adjusting the training processes and performance management processes necessary to skill and incent the call center staff.
  • Improved products and new product opportunities. In this example a retail organization believes its own customers hold the key to identifying improvements needed in the current products and in identifying new product opportunities. Given its target markets, the organization knows it needs to include social networks in its product development strategy. The process review, analysis and design work will focus on how best to expand its current engagement processes to leverage social media. The organization has proven in the past that customer-focused product changes and development leads to getting higher revenue per product and getting it faster.
  • Client experience and business reputation. In this example, a financial services organization wants to ensure its target market of high-wealth clients receives exemplary service. In their target market there is a strong correlation between the experience of the customer and their willingness to do and grow their business with the organization. In this case the process review, analysis and design work are focused on identifying the business processes from the customers’ perspectives, ensuring that all customer touch points are identified and that the internal functional processes are seamless from the customers’ perspective. The organization needs a reputation of service excellence, effectiveness and efficiency to attract and keep its target market.

These are just 3 examples. What examples can you imagine for revenue generating process improvements in your lead generation processes, your product placement processes or your sales processes?

 

Cost saving or cost avoidance benefits. These are process and practice changes that allow you to remove costs from the organization or to delay or avoid new expenses. This is where process improvement efforts are often focused. Every organization should be looking at running as efficiently as possible. Remember though that no organization has ever cost-cut their way to roaring success!

 

Here’s some benefit areas to look for:

 

  • Improve the efficiency of work in the office. Any changes and improvements to your business processes that make it simpler and faster for your team to get their work done or to coordinate on tasks results in time saved. That time saved my result in the need for less people or more often it frees up time for existing people to focus on higher-value and revenue generating work. Looking for efficiency involves looking for unnecessary hand-offs, storing of information never used again, unnecessary approval processes, processing rules that made sense once but are no longer of value and of course ways to use technology to reduce manual handling.
  • Get rid of invisible reporting processes. Over time, requests from management for information or reports can lead to tremendously time consuming efforts of questionable value. What reporting and information gathering is done in your organization? Are the reports used anymore? Is the method to create useful reports as efficient as it should be?
  • Onboard and train people faster. Documentation that makes processes easy to find and easy to use reduces the training time for new people and the people that have to train them. Getting new hires up and running faster means they are also working on client revenue activities that much sooner.
  • Reduce key-person syndrome. Improve the ability for the office to function effectively if one or more of the team is away. Small businesses are particularly hard hit when a team member needs to be away. Good process documentation makes it far easier for someone else to step in and handle their work.

Risk reduction or risk reaction benefits. There is little doubt that this is a growing area of process work. Benefit areas include:

 

  • Security of data, premises and people
  • Ensuring privacy of customer/client data
  • Meeting regulations

The ultimate benefit to risk reduction or being able to react to a realized risk, is maintaining the organization’s reputation. Fines can hurt but rarely kill an organization. But if customers, clients or funders lose faith in your ability to provide the product or service they expect, you may never recover.

 

Process review and redesign to build in the needed controls, checkpoints and governance are often required. The trick is to balance the cost of the process work, and the ongoing execution of the changed processes, with a realistic assessment of various risk scenarios actually happening. It is far too easy to paint emotion-laden pictures of horrific happenings that sway leaders to build in process controls that are just too heavy and ultimately hurt the organization’s ability to run efficiently. Worse, processes heavy with rules and controls are the ones people most often don’t follow, defeating the purpose of the process work in the first place. In some cases it is better to have a process to react to a risk when it happens than to have a heavy process that tries to eliminate or reduce the risk.

 

Measurement benefits. Process reviews and improvements provide an opportunity to define and build in key metrics for processes. It really is true that you can’t manage what you can’t measure. More importantly you can’t improve if you don’t know how things are currently working. Having the ability to measure current reality sets the stage for continuous improvement. As with process work to reduce risk, it is necessary to carefully assess what needs to be measured and ensure it can be done efficiently without adding unnecessary weight to the process. Beware the seemingly endless human desire to create and consume statistics whether they add real value or not!

 

 

Process review, analysis and redesign work can and must result in benefits that surpass the cost of the work to change the processes. Make sure you are looking in all the right places for benefit opportunities.

 

Cheers!

Brenda

Categories: leadership, management of change, business processes

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