Five Steps to Business Process Management and Improvement [How to Begin Business Process Management]

improving business processes is one of the key elements of digital transformations and one of the key reasons why organizations go through digital transformations but how exactly do we improve our business processes that's what i want to talk about here today [Music] my name is eric kimberling i'm the ceo of third stage consulting we're an independent consulting firm that helps clients throughout the world with their digital transformation journeys and on the surface it sounds simple enough we want to improve our business processes and therefore we're going to deploy new technologies to help us do that unfortunately it's not quite that simple there's a lot more that goes into defining our process improvements and ultimately executing and deploying new process improvements so what i want to talk about today are those major steps that are important to help you get to that future state business process and operating model and also more importantly get you to the actual transformation of your business processes allows you to be more effective and more efficient as an organization [Music] now the first step in the process is the one that a lot of organizations are the least excited about and that is to assess your current state it's a way of looking at your current operations to figure out what your strengths and weaknesses are where the pain points are where the breakdowns of bottlenecks are and just as importantly what are our core competencies that we know we want to preserve as part of any business process re-engineering and or digital transformation effort there's a few reasons why this step in the process is so important first of all in order to get to the vision of what we want our future business processes to be we need to ground ourselves in something and that something is our current state as much as we may want to change it as much as we despise our current state we still have to understand where we're starting from so that we can figure out how we're going to get to where we're going the other reason why assessing the current state is so important is because from a change management perspective you want to acknowledge what your organization has spent years building and people are grounded in what you do today for right or wrong or better or for worse people understand what you do today better than they understand what they might be doing in the future so for those reasons you want to start with your current state so that you have a clear vision of how you're going to get to where you go as you define that future state as well now there's a few ways that we unpack and analyze a current state there's certainly a qualitative discussion that typically happens with key business process owners and stakeholders throughout the organization to understand how does a typical business process work from end to end where the pain points and the exceptions and the strengths of what you're doing today what systems you're using how data flows all that stuff but then there's also a quantitative aspect that can add a little bit more rigor and add a little bit more depth to your analysis and that is business process mining for example when we're helping our clients through their business process management we often use business process mining tools as a way to go into the current systems to understand and visualize what's actually happening transactionally based on data in the databases of your current system so that will help you identify where all the different variations of the same business process might be where the breakdowns might be the bottlenecks the delays in your overall end-to-end process what systems are being used what systems are not being used the capabilities that are and are not being used all that stuff can be uncovered with business process mining tools and that's a great way to augment the qualitative work that you might do in those workshops that i described before now one thing that's important to note about your current state is you don't want to overanalyze it you don't want to overthink it it is important for the reasons i mentioned but you also don't want to get down into transactional workflows and looking at each individual screen that's been used and you also don't necessarily need to spend as much time on every business process equally some business processes are more important for you to go a little bit deeper than others and more commodity or vanilla based business processes that are common across industries you might not spend as much time analyzing those but regardless you do want to start with your current state so that you understand where you're headed where your strengths are what you know you want to preserve as an organization and ultimately what it is you want to improve [Music] now the second step is to define your future state and this step is a lot easier if you've defined your current state in the step i just described a moment ago so in order to define our future state oftentimes you can start with a low-hanging fruit there's your pain points in bottlenecks you've identified in the current state assessment you have your process mining results and analytics that come from that that'll help identify and point to potential improvements and then you can also think more strategically too about how can we rethink our processes overall it may not just be a matter of improving efficiency or improving the speed of our processes there may be whole new fundamental changes wholesale changes to the way we do business the way our operating model works a good example of this that many of you may relate to is bricks and mortar retailers that add new business processes to their future state to add e-commerce capabilities to their business models that's not something that you necessarily identify in the current state but it is something you identify as you define your future state in some of the more strategic ways that you might improve your business processes so when you're defining your future state it's important to look at not only what you learned in the current state but also thinking outside of your organization looking to outside experts to help you define what you could be doing differently in the future and you also want to use this as an opportunity to preserve what you're doing well which was also defined in your current state so these are all things you want to look at as part of your future state definition now one last thing i'll mention about future state is that another important output from your future state definition is a change impact analysis of how people's jobs will be impacted or could be impacted as a result of moving to this future state and that's really important because in order to roll out future state processes you need to understand what the impacts to the people are the other thing you look at is how could potential technologies help us enable some of those business process improvements as well so those are some of the things to think about as you define your future state as part of your business process improvement [Music] a third step in this process is to define the performance metrics that drive these business processes and this starts with understanding a baseline of how you're performing today which you may have touched on in your as is or current state assessment but if you haven't done that at this point in the process you do want to make sure you've defined what all the metrics are that you use to drive your business and ultimately map those to how business processes can enable those process improvements and this is important for a few reasons one is that it helps drive accountability in the organization so that you have people that are on the hook or accountable for ensuring that you achieve whatever metrics or targets you've set for yourselves the other reason why it's so important is because it helps you identify where the highest value is in your process improvement efforts for example you might find some really high value areas where investing more heavily in technology can help you get a more positive roi on the flip side you might find that other areas aren't as high value so you don't want to invest heavily in technology but you might want to focus on more incremental lower cost lower risk types of improvements so these performance metrics become part of a business case that really help you define what your future state's going to be and ultimately help you define what the benefits realization and business value of the overall project might be [Music] now after we've done these first three steps we've looked at our current state our future state we've defined the metrics now we create a sort of laundry list of all the potential business process improvements that we could roll out and it becomes a true laundry list it could be dozens or even hundreds of potential business process improvements this is not to suggest that you're going to roll out all of these process changes quickly or even ever what it does mean though is you've identified where you could be improving your processes between your current state and your future state largely based on the metrics that you've defined as well and now it becomes a matter of prioritizing those potential process improvements so that you can figure out which ones you're going to focus on how you're going to phase the rollouts which ones might require bigger investments or bigger technology deployments to support and which ones you could start on right away so prioritizing those process improvements is very important and allows you to take some of this business transformation aspect of this work stream in more of a bite-sized chunk approach so we're not trying to boil the ocean we're not trying to change too much overnight but rather we're focusing on the low-hanging fruit and working our way through the multiple phases and priorities of different business process improvements [Music] now the next and final step in the process is to create a business process improvement plan this is where we consolidate that laundry list of potential improvements we define what those improvements are and then we start to create a more tangible concrete plan for how we're going to roll those improvements out it's not quite as simple as just putting a document in front of people and saying this is our new process we have to figure out how our systems are going to align with that we have to figure out how job roles and responsibilities might align we have to figure out how data and analytics might be needed to support that those are just a few examples of how we might define ways that we're going to improve processes it could also mean that we're just simply getting better usage of the technology we already have it doesn't necessarily need to mean that you have to put in entirely new technologies or rip out your old technology we find that a lot of times there's a huge amount of value to be had just in making simple incremental process improvements by retraining people on what their job should be or how they could be doing their job better by rolling out new capabilities or functionality within the technology you already have by integrating systems by moving the spreadsheets over to your current system those are just a few examples of easy low hanging fruit types of ways that you can be changing your processes now whether you're in the process of going through a digital transformation or whether you think you may never go through a digital transformation you could be doing those things right now without having to wait for a big technology investment and for some the business process improvement plans might entail new technologies and this will give you direction on what types of technologies and what types of investments can be justified via the performance metrics that you've defined earlier in this process so this is a way to really help you be a little bit more prescriptive and surgical about how you can use technology to improve specific processes rather than trying to deploy technology across the board now we can focus on specific processes and specific areas of business value that we're trying to get out of our transformation so these are a few things to keep in mind as you think through your business process improvements whether you're doing this as part of a digital transformation a business transformation or just any sort of incremental improvement so i hope this has given you some guidance and some things to think about i also encourage you to download some of the resources i've included links to below that are meant to help you through your business process improvement journey as well as a digital or business transformation if you're also going through that i've included a whole host of resources below for you to check out so i hope that helps you through your transformation journey i hope you found this information useful and hope you have a great day

Channel: Digital Transformation with Eric Kimberling

Views: 9,256

Keywords: current state assessment, define future state, performance metrics, process improvement plan

Id: moP7JQajq4Q

Length: 11min 0sec (660 seconds)

Published: Thu Mar 17 2022