Development and optimization of business processes: what every owner needs to know

Any company is a set of business processes, the smooth operation and quality of which determine its success and profitability. Each business process is important for full-fledged operation, and eventually for growth.

Development and optimization of business processes is a method of increasing profits and reducing the time spent on the operational management of a company. In this article, I plan to thoroughly examine the basics of business process optimization, their essence, and a method of application using the example of a real business.

More articles on usa.visotsky.com

What is a business process?

A business process is a specific set of actions performed by company employees. It has a goal, and most often this goal is to benefit the customer. The number of processes depends on the niche and scale of the business. Approaches to business process optimization can also vary.

Each business process consists of a series of stages or steps that need to be performed in a certain sequence. At each stage, certain resources are used: people, equipment, materials, information, and so on. And the result of one stage is the beginning of the next stage.

Business process management is a systematic approach to identifying, designing, documenting, monitoring, controlling, and improving the internal work of an organization to improve operational efficiency and achieve strategic goals.

Real examples of business processes

Let me give an example of an ideal process: a manager receives an order for the production and delivery of a product. He passes this information to production. Production, in turn, informs about the dates of manufacture. This information is reported to the customer and he waits until everything is ready.

A process that needs to be optimized might look like this: a manager enters data incorrectly - a human factor. Another employee uses this data and makes the wrong order. Or doesn't make it at all because the order was lost. As a result, a lot of additional clarifications are required, deadlines are disrupted, costs rise, and the customer irritatedly says that he will no longer deal with this company. Of course, such an example is quite exaggerated, but misunderstandings and mishaps most often occur with those organizations that have insufficiently optimized internal business processes.

Here are a few more examples of business processes that are present in most organizations:

• Order processing

This process involves initial communication with the customer, order confirmation, product assembly, packaging, shipping, and subsequent feedback.

• Hiring employees

It starts with posting job vacancies on different platforms and ends with the onboarding of the new employee. This business process includes resume screening, conducting interviews, and work offer – a direct job proposal for the most suitable candidate.

• Product creation

From the idea or concept to the launch of the finished thing. It usually includes the following stages:

• market research;
• design and prototyping;
• testing and manufacturing.
• Project management

Covers all stages of a project, from initiation to completion. The stages of this process include planning, execution, control, and project completion.

• Customer service

In addition to the first stage, it provides support and assistance to customers after purchasing a product or service. The service process includes processing requests, problem-solving, and feedback.

It should be noted that specific business processes will vary depending on the type of company, its size, industry, and goals.

Optimization of Business Processes: Basics

The essence of business process optimization is to analyze the stages of each sequence and simplify them. Every business process can be improved from the point of view of execution time, number of employees, financial resources, and other resources.

Small and medium-sized businesses often don't understand how to determine if they need to optimize existing business processes. At the very beginning of the journey, the company may not need optimization — it simply doesn't make sense.

Usually, a business starts with an idea that the owner intends to implement. And when the project is just starting its activity, all efforts are directed toward attracting an audience and generating stable profits. Only after reaching a certain level does the need for a strategic review and a change of direction arise.

When a Company Needs Optimization

You can tell that a stage has been reached when optimization is becoming difficult, by the following signs:

1. the number of employees is constantly increasing;
2. new departments are appearing, and existing ones are rapidly growing;
3. you cannot handle everything alone;
4. remote employees or new branches appear;
5. there is no unified company information system.

Here are a few serious "symptoms" that may indicate your company needs to optimize internal business processes:

• all decisions are made very slowly, leaders are afraid to make decisions;
• operational activities take too much time: you are constantly in meetings, calls, and documents;
• the team falls into a state of suspense where nothing is clear to anyone and everyone is constantly stressed;
• the cost of business processes is growing.

How can we motivate managers and employees towards continual optimization of business processes?

I like this idea — after all, if employees are concerned about enhancing the quality and optimization of business processes, the results will follow. Moreover, anything that does not improve tends to degrade over time.

There are quality management standards (ISO) - we register all deviations and also hire employees who work with them and take actions to prevent these deviations from happening again. They are very straightforward. To improve your situation, I suggest organizing such a game: anyone who finds any inefficiency or deviation in quality reports it and scores points. The points are always calculated and published, after which employees can receive prizes. People like this!

Also, organize a quality council and invite specialists from production, personnel, and sales. Let it meet every two weeks and review the list of these deviations. The task of the council will be to process them and issue corresponding orders.

The idea of a rapidly growing scalable business is simple: you need to select those services, products, and concepts that can be provided in large quantities, make a profit, and at the same time not let the quality drop. This is why works of art are expensive because they are unique - unlike business. To expand quickly, you need a mass-produced product.

Conclusion

The development and optimization of business processes are an important component of the functioning of any company. Optimization is important for maintaining all aspects of activity and avoiding possible errors. Without proper improvement, the campaign will fall into emotional tension and misunderstandings, and the owner will be burdened with routine tasks instead of managing.

Optimization is needed at the stage when the company has overcome the initial line and has moved from project activities to process activities. When there is already a certain customer base, steady income, and staff. The need for optimization can be indicated by various factors, including, among other things, the growth in the cost of all business processes.