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Tips for Business Process Engineering

Posted by Ted Sehl on January 24, 2011 at 11:17 AM

I have found that there are six critical considerations when creating a new business process.  Get these six right and you will be well on your way to building an effective process.

 

1)      Minimize handoffs:  every time that information is passed from one person to the next, there is a chance for misinterpretation, information to go missing or critical time delay. The more people involved in a business process, the more back and forth between departments, the less likely it is that the process will be completed accurately and on time.

2)      Person who knows the information first doesthe entry.  Long gone are the days when there were data entry departments.  Whenever information comes into an organization, the person on the receiving end should enter it into the system so that everyone is aware of it.  To hand it off to another person risks the errors mentioned in #1 and creates timeliness issues.  If salespeople are out on the road recruiting new accounts, then the process needs to be set up so that the salesperson can begin the creation of the new customer. The push back will be this is too time consuming for the salesperson and that they need to be selling.  This is a warning sign that the information process is too cumbersome.

3)      Simple is best:  Determine exactly what information is needed and in what format.  Asking for additional information can lead to fatigue for your business partners.  Whenever dealing with an outside source, insure that the information request is in their language, not yours and that your forms and processes lead to a high degree of compliance. 

4)      What is the approval for?  Approvals can be the most misunderstood part of a business process.  Many people who do approvals are not entirely aware of what their approval signifies.  In the case of approving an invoice for payment, approval can mean several things: you have verified the service or items has been  consumed, you approve of the price, you approve of the terms that the vendor has been granted, you approve that the expenditure was necessary at this time, you approve that the expenditure is within the budget etc.  The approvers’ assumption of what the approval is for may not match the company’s expectations, so care must be taken in communicating the role of each approver.

5)      Handle exceptions as exceptions:  Many people try to build a process that will handle 100% of the company’s requirements. The result is very complicated processes with many feedback loops.  You should build your process to handle 98% of the data.  The exceptions need to be handled at a higher level than the normal process, by people who have a better view of the company’s needs.

6)     Make it flow:  Just like in a manufacturing process, look for bottlenecks.  Anytimeyou find a bottleneck, you need to examine whether or not it is a necessary step, how you can add resources to get it done and how you can make the information more of a continuous flow.

 


Categories: Risk

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