We can not change what we can not understand, that is a fact. That’s why, when we think about improving a company through the improvement of their processes, the first step is to study, analyze and understand them.
Process analysis is the action of carrying out a review and obtaining an understanding of business processes. It is a review of the components of a process, including inputs, outputs, procedures, controls, actors, applications, data, technologies and their interactions to produce results.
The analysis covers the evaluation of time, cost, capacity and quality of the processes and can be used static or dynamic visual models of the process, the collection of data from the beginning to the end of the activities, the analysis of the value chain, modeling of end to end and functional decomposition.
Process Analysis Techniques
We will present the stages of the analysis of the business processes that must be followed so that continuous improvement can be promoted.
1. Identify the Processes
The first step is to identify the processes that need improvement. These are the ones that you need to study and understand. It is important to always think about the objectives of your business, and what are the processes that contribute to this goal. Give them priority.
But how to identify which are the most important processes? They are the ones that contribute most to achieve the organizational objectives and add more value to the final delivery of the processes.
How to analyze business processes with these 5 questions
- What is our mission?
- Who is our client?
- What does the customer value?
- What are our results?
- What is our plan?
- We are going to examine them one by one.
What is our mission?
Without understanding the reason for the existence of the company, it is not possible to determine which processes are fundamental for it to fulfill its mission.
The processes change, the mission lasts and must be achieved through them.
Identify the processes without which the mission would not be fulfilled, should be part of your list.
Who is our client?
Remember that despite its importance, it is not only the final client that must be part of this business process analysis technique.
After all, if the company has to deliver the highest possible value – perceived value – to the end customer, in order for the customer to pay for this delivery an amount that exceeds the operating costs, all this is done so that the company has profits.
Benefit for whom? For the shareholders! Therefore, there are many other stakeholders that must be taken into account at this time.
It is also important to remember that there are non-profit organizations and in this case, the final customer can be the society as a whole or a specific community, among others.
Identify the processes that add more perceived value to your clients (of all types) and include them in your list of processes that should have priority.
What does the client value?
One way to identify what customers value is to do good marketing research.
But follow what we have detailed in the previous item: the perception of value! This is closely related to the position of the company. But remember: only a collection of accurate information can provide adequate answers to this question.
What are our results?
In this stage of business process analysis, we are talking about KPI (Key Performance Indicators): Key performance indicators are management tools widely used by companies around the world to measure and evaluate the performance of their processes and manage them in the most effective and efficient way possible, with a view to achieving goals and objectives previously established by organizations.
There are several types of performance indicators, each with a different purpose in a different circumstance. These tools can be quantitative or qualitative, which means that depending on the intention of the manager and the types of KPI chosen, they can evaluate the processes numerically or also measure the quality with which they are being executed.
In addition to being powerful process management tools, key performance indicators also function as organizational communication vehicles, because through them, the development of companies is shared with employees of different hierarchical levels.
Therefore, the different types of performance indicators help simultaneously transmit the mission, vision and values of the companies to their employees, keeping them integrated and ensuring that they understand the importance of their functions within a collective context.
There are currently several types of performance indicators available to managers, who choose which and when to use them, according to the needs and planning of the companies.
To facilitate the decision-making process, the most used method is Balanced Scorecard (Balanced Performance Indicators), for its ability to integrate the strategic, operational and organizational actions of a company, while allowing the definition of the business strategies, business management or service management and total focus on quality.
Some of the main types of performance indicators are:
Time to Market: corresponds to the time of launching a product, from the creation of the concept to its availability for sale.
Lead Time: The duration of a given process.
Stock Out: indicates the number of times or days that an item or product in stock has its balance at zero.
Market Share: indicates the market share earned by a product during a certain period.
Idleness: calculates the percentage of time that a machine, equipment or a construction unit is not producing.
Inventory rotation: direct relationship between consumption (or output) and the average balance in stock.
Turnover: employee replacement rate, corresponds to the numerical difference between admissions and dismissals.
Medium ticket: total revenue divided by total sales.
There are also some types of performance indicators used exclusively by companies engaged in online business, such as e-commerce or social networking sites, such as:
Conversion rate: total sales divided by total site visits
Rejection rate: percentage of the number of visitors who have accessed a single page of the company’s website and shortly after they left without continuing the navigation on a subsequent page.
Index of commitment: total of users that had some type of interaction with the page, divided by the absolute total of visitors.
Index of social influence: widely used on Facebook and Twitter, corresponds to the total of publications of likes or retweets divided by the absolute total of messages published.
It is necessary to verify which processes are not fulfilling the established objectives and why. These, of course, should also be part of your list.
What is our plan?
Finally, what measures has the organization defined to achieve its strategic objectives? All processes that are connected to these actions should be part of your list.
Well, the list may have been huge, is not it? The fact that good business process analysis techniques recommend not trying to achieve too big goals.
Taking into account each of these criteria, select 4 or 5 priority processes, or perhaps even fewer processes, if they are very complex.
2. Establish the Equipment
Establish a team to help you with the analysis of business processes. The best people are those who already work with the process daily. They know the steps, the information, the goals and, most importantly, the flaws and obstacles of the process.
When gathering your team, it is very important to keep in mind, which professionals will help effectively analyze business processes.
Therefore, in addition to trained personnel who know about BPM, remember that it should also include:
- The leaders that are related to the chosen processes
- Employees who are motivated with the possibility of improvement
- A sponsor of the process, preferably from the top management of the company to empower the staff
- The front-line employees who deal with the process in their day to day.
3. Create a diagram / flowchart of the business process
This process analysis technique is very useful, and can give you a real picture of how it happens. With standard symbols and tools, the process can be represented in a clear and practical way.
By doing this, it becomes much easier to see what is right and what does not work, what are the obstacles and points of improvement.
Constructing a process diagram is one of the fundamental stages of the business analysis methodology, see a step by step how to do one:
Define the components of a process.
If you want to learn how to draw a flowchart to better understand a process, the first step is to determine its components.
Input or inputs: are documents, information, tables, materials, articles, etc. that will be used during processing and will be transformed into an output
Processing: These are the actions, which through the tools and techniques are applied to the inputs to transform them into outputs or products.
Output or outputs: Result of the processing that, in the same way as the entries, can be documents, information, tables, materials, articles, products, services, etc.
Pay attention: Have you noticed, because of the above, that the exit of one process is usually the entrance of another?
Exactly that is why a sequence of processes is formed that can be drawn in a flow chart, also called process flow.
Now that the components of the process have been defined, in order to learn how to draw a flowchart it will be necessary to know the symbols used and what they mean, and before that, some other steps.
Place each processing in the order in which they are produced
It should be noted that sometimes, some processing may arise in parallel, or have to wait for the departure of previous ones. This type of detail will be clearer in the next steps.
Make the arrows that connect the processing
At this point, you will realize that you may have to redesign the order of the processes. But take your time: just write the sequence of what is happening. In the next step, you will indicate by means of symbols what is produced in each step of the process: if you have to wait for another task, if it is necessary to make a decision, wait for data, documents, etc.
Draw the symbols corresponding to each step of the process
Before drawing them, you must know them, of course. There are several symbols and annotations to draw flow diagrams. We will present below those that we consider most convenient so that you can learn how to draw a flowchart in a simple and intuitive way. A description will be included within each of these symbols
Check your flow diagram drawing
Now that you have marked the beginning and the end, the points of decision-making, activities, waiting, etc., do the process again mentally and see if there is something that can be improved to present it with greater precision.
4. Define the AS IS process
With all the above information, define how the process occurs now. It is very important not to get ahead of yourself, and to stay with the real situation, no matter how it is.
That is, understand how the process develops at this time, not how you would like it to be in the future.
For this, in this stage of business process analysis, you must follow three fundamental steps:
Interviews with the actors: with the purpose of representing the activities of the process, its sequence, who are responsible, if there is a need for permits in other cases of the process and if any new information is generated.
Analyze the process model: find out what the purpose of the process is, what performance metrics are used, if there are interactions between clients, if there are handoffs (transfer of work or information from one person, team or system to another), which they are the business rules that apply, if there are obstacles, how the process control is done, among other points.
Documentation: at this point, everything that was analyzed should be adequately reported in the appropriate documents so that the consultation and clear presentation can be made, following the defined notations.
5. Specify the points of improvement
You may already know it, but it is important to determine what are the necessary and possible improvements. Keep in mind the strategic objectives of the company in doing so, since the whole process and the action must have them as a goal.
In general, the points of improvement focus on the following aspects:
Interaction with customers: these moments should always be perfect, especially with external customers
Activities that add high perceived value: these activities must always occur in the best way, in order to offer the highest possible perceived value to the final customer
Handoffs or transfers: whenever there is an exchange of information or tasks between people and systems there is a risk of errors. The fewer transfers, the better.
The business rules: these are standard procedures that facilitate the flow of the process and avoid the loss of time in decision making, as they are clear and objective rules to define how the process should proceed.
Obstacles: to find out why the process stops flowing at certain points and establish ways to avoid it.
6. Model the TO BE process
Gather all the information and model the new process in the way you want and that is useful for the company, its goals and objectives.
In fact, this step involves designing the new improved process, which is designed to achieve the organization’s objectives more efficiently and effectively. In the same way that we have created a diagram of the process in the AS IS stage, the TO BE stage will also have one, as well as all the necessary documentation to transmit the information and knowledge when necessary.
For us to design the new processes correctly, it is necessary to go through seven main activities. Below, we detail each one of these activities.
Design of the To Be Process
When designing the new process (To Be), the goal is to ensure that it offers the company exactly what the company hopes to achieve with this new process. And it must be duly documented in writing and must contain, among others, the following points:
- The detailed activities
- The business rules
- The interactions with customers
- The products
To achieve this result, different methodologies are used, such as studies of scenarios, brainstorming or exchange of ideas, modeling in real time, and even the old blackboard. The important thing is to define precisely how the objectives of the organization will be achieved.
Definition of the activities of the process
The key at this stage is to be as simple as possible, idealizing activities that are easy to understand and explain. This is a good way to check if the description of the activities is efficient and objective. See some tips:
- The activities must be chained in order
- Define activities without clinging to process agents
- Objectively define what will be done
- Try to create a parallel between activities
In summary, the definition of the activities of the To Be process should include a simple and direct vision of what should be done.
Discover: Optimization of industrial
Processes: efficiency with realism
Analysis of gaps and comparisons
The To Be process must be different and better than the current process. To achieve this, it is necessary to make a comparison between the results obtained at present, with the results to be achieved. This can be done with simulation tools. The purpose of this comparative analysis is:
- Outline what should be changed in the To Be process
- Make tangible the gains that are intended to be obtained with the new process
- Document the expected results
- Create greater collaboration and support for the way the To Be process will work
Design and Analysis of the Infrastructure of Information Technology
This is a crucial stage in the design of new processes, which is often not taken seriously. To successfully define an IT infrastructure, keep the following in mind:
- The data flow
- The applications
- The systems
- Interfaces between systems
- Who will use the information
- When will you use the information
- By what system
If you can understand all this, it will be easier to define the IT infrastructure of the To Be processes, without compromising its performance or using resources beyond what is necessary.
7. Simulation, testing and acceptance of the model
The Be Be process simulation, or how the process will be in the future, should take advantage of current technologies that help predict results with safety, reliability and also with agility. Since it is a simulation, this is the time to do the tests to set limits. Do not be afraid to imitate reality to the fullest, to be able to predict failures and solve them now. Afterwards, it will be late, and can cause serious losses to the organization.
As this is the final certification of the stages of the process, it is necessary to estimate the risks very carefully.
After formal acceptance, always have to have the person in charge of the process, who will give the last word.
8. Creation of the implementation plan
Everything that was decided and designed, will not be implemented on its own. The design of the new process is only one step towards its implementation. Now the reality begins to manifest, these are no more simulations and tests.
A good implementation plan should define the change management, which systems will be affected by the redesigned process, clearly determine the teams involved and indicate the following project activities point to point.
Now all the work of the To Be process is taking shape and is no longer a prediction of the future to become a real and tangible result. A flawed and disorganized implementation can jeopardize everything that has been done up to that point.
Undoubtedly, a good BPM tool will not only help to design the project, but also to put it into practice, especially if it has features that allow the creation of information flows, control charts and alerts, creating greater transparency and allowing Instant visualization of performance indicators.
As we can see, the analysis of the business processes generates the necessary information to evaluate and resolve the roots of the problems, and make informed decisions.
With this method, it is possible to understand how the work is carried out within the organization and how well the company achieves its objectives.
It is important to remember that this is a continuous operation, since the processes will never be fully optimized and perfect. It is possible that the process becomes incompatible with the objectives of the company, as it may change over time.