BPM: Understanding Where Business Process Adherence Gaps Are

Your business processes determine how efficiently your employees create the company’s services or products. They drive the milestones in your business plan, so you reach your goals. Periodically reviewing and revamping your business processes can result in cost savings and efficiency improvements.

Business Process Defined

The term business process refers to the task series employees perform to manufacture or create a service or product which is linked to an objective and goal that provides stakeholder value. Originally created from scratch at the company’s outset, every business process can be refined.

Gap Analysis Gone Wild

Discovering those needed improvements requires a gap analysis. Implementing changes from it creates the change that can improve productivity and the bottom line. The term gap analysis refers to a comparison of current performance with the goal performance, comparing key metrics like costs, quality and time.

You can develop a gap analysis according to your needs, whether that is strategic or operational. Strategic gap analysis addresses the organization as a whole while an operational gap analysis examines a product, team or department. The analysis requires four simple steps:

1. Document the current state of processes and procedures. Discuss problems with the status quo.
2. Define future goals. Be specific.
3. Identify the gap or deficiency that blocks your business from achieving the future goal. Document the gap.
4. Research and develop a project plan that alters the business processes, but ensures they still align with the company’s strategic goals. This is your evolution plan.

Business Process Improvement

The term business process improvement (BPI) refers to a methodological collection used to identify, analyze and improve existing business processes to meet organizational objectives with greater efficiency. BPI can include a variety of initiatives such as the implementation of automation, waste reduction, redesigning employee responsibilities and streamlining approval processes. Potential methodologies for BPI include Kaizen, Lean, Six Sigma, Scrum and Total Quality Management. The steps in BPI resemble those involved in gap analysis:

1. Identify the business process that requires updating. Document it using a process flow diagram.
2. Analyze the business process. Start by analyzing the process flow diagram to identify process issues.
3. Redesign the business process by eliminating the identified issues.
4. Obtain project resources to implement the process improvement.
5. Implement changes even if it means altering existing systems.
6. Review the updated business process at regular intervals to monitor performance.

Profit Margins and Performance Indicators

Gap analysis and BPI can contribute to significant improvements to profit margins and can uncover issues with performance indicators. Applied to a portfolio analysis, it helps identify emerging sales opportunities – new products to develop. It also identifies existing products selling poorly and why. These situations provide an opportunity to improve the product, stop producing it or to promote it.

Gap analysis can also analyze a missed product percentage to determine the failure in profits. It can pinpoint if stemmed from materials costs, poor pricing, etc. This allows the company to find alternate materials or develop more competitive pricing. Similarly, you can apply it to performance indicators such as average order amount, customer acquisition or return on investment (ROI) to determine why a goal wasn’t reached.

Let Starr & Associates help you launch your business process management (BPM) program. You can leverage gap analysis and BPI to eliminate adherence gaps and improve your productivity and profits.