What is business process improvement and why is it important

            The activities of an organization can be viewed as steps of its business process, a standardized set of activities that accomplish a specific task, such as processing a customer’s order. Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools (Baltzan & Phillips, 2009). The operation of the business processes has a direct impact on the organization’s outputs and profit. To stay competitive in the market, organizations must improve their business processes; make them smoother and more efficient.  Business Process Improvement (BPI) is a systematic approach which helps an organization optimizes its underlying processes to achieve more efficient results. It attempts to understand and measure the current process and make performance improvements accordingly (Baltzan & Phillips, 2009). It focuses on “doing things right” , which translates that it attempts to reduce variation and/or wastage in processes, to make the desired outcome can be achieved more efficiently (Wikipedia-BPI).

There are several factors have accelerated the need of business process improvement , such as technology and the increasing competition that caused by  globalization (Baltzan & Phillips, 2009). In addition, companies need to keep on improving their business performances in order to stay on top of their competitors. Business Process Improvement can help organizations optimize their business processes, increase their operation effectiveness, thus maintain or even increase the organizations’ competitive advantages.

Basic steps of Business Process Improvement 

                According to the textbook, there are five steps to perform the business process improvement--document As-Is process, establish measures, follow process, measure performance, and identify and implement improvements (Baltzan & Phillips, 2009).

1.      Documenting the business process with as-if process models. Organizations start their business process improvement by documenting what they are currently doing (Baltzan & Phillips, 2009). the model breaks down the daily business activities into smaller tasks, thus help business leaders examine the organizations’ process easier.

2.      Establish measures. It is important for business leaders to establish proper measurement for each step of the business processes. Without a proper measurement, there is no way to find out whether a particular process is operating efficiently or not.

3.      Follow process. In order to have better understanding of the business process, each steps of the process need to be carefully monitored. Following and controlling the process can help minimize uncertainty and reduce risk in the future improvement.

4.      Measure performance. Measure the performance of each process with established measurement; it helps business leaders perform SWOT analysis later and identify which step of the process need to or can be improved.

5.      Identify and implement improvements. Identify which part of the business process needs to be improved according to the performance measurement. Set up plans for the implementation, and put them into actions. Business process improvement does not end after the implementation of the plans. It is rather a never-ending process. Business process needs to be kept on improving due to the changing environment. The word "Kaizen", a Japanese term for continuous improvement of life, can be applied on business process improvement as well.

Implementation of the Business Process Improvement

            Implementing the business process improvement is not an easy task, and sometimes can be challenging, especially when it requires the change of organization’s structure (Wikipedia-BPI).  One of the reasons why it is so hard to implement the improvement plans is because there are different forces within the organization that are often resistant to changes. According to the Wikipedia website, managers often do not liking change the existing structure in the organization. It is the last thing they want to do when making improvement because it sometime will raise uncertainty or even anxiety within the organization. In addition, Employees often resist to business process improvement because they fear that layoffs will come alone with the implementation process.

            According to the Wikipedia website, many organizations that successfully implemented business process improvement usually start with a smaller scale, which gives the organization and its employees more time to adapt to the new changes. It is better to set clear time line for the implementation, since it will give business leaders the opportunity to examine the result and make adjustment accordingly. It is important for management and primary stakeholders to be involved with the implementation process (Wikipedia-BPI) because the improvement of a particular part of the business process can result in the change of the whole.

            When implementing the BPI, one thing that business leaders must keep in  mind is that the goal of the business process improvement is to make the organization operates more efficiently in the long-run. They need to be patient because the effect of the implementation will not show up overnight.

           

Reference:

Baltzan, P., & Phillips, A. (2009). Business Driven Information Systems. New York: McGraw-Hill/Irwin.

Wikipedia - Business Process Improvement

Wikipedia - SWOT Analysis

Wikipedia - Kaizen