IT Chapter 3 - Ariana - Business Process Optimization.docx

**IT Chapter 3 - Ariana - Business Process Optimization** Welcome to chapter three. In our last chapter, we looked at business processes and how they give us a deeper understanding of how a business performs its functions. Obviously, if we optimize these processes, we can improve the efficiency and...

**IT Chapter 3 - Ariana - Business Process Optimization** Welcome to chapter three. In our last chapter, we looked at business processes and how they give us a deeper understanding of how a business performs its functions. Obviously, if we optimize these processes, we can improve the efficiency and quality of a business. Think about that. Let\'s say one of your processes is to bake cupcakes. Until now, this process has involved 15 activities that took three hours in total. After mapping out the process with BPMN, you realize that you could create the exact same result with only five activities and a time total of two hours. Bingo, business process optimization. Now, here\'s the mistake that we all make as beginners. You map out a process and you immediately start thinking of ways to improve the process. That\'s natural. That\'s creative. And it\'s also fun. But it\'s not the best starting point. First, your starting point should be somewhere else entirely. Your organization\'s strategy. That begins with your vision and mission. What are you really trying to achieve? Why does that matter in business process optimization? I\'m glad you asked. Let\'s take the cupcake process example. Let\'s assume that the 15 activities you currently carry out involve a lot of customer communication, which makes each customer feel like an individual. Now, if your mission is all about delivering as many vegan cupcakes to the world as you can, then cutting the baking process down to five activities is exactly what you want to do. Go. But if the key focus of your mission is making every customer feel like an individual, well, then you absolutely would not want to cut out most of the activities that involve customer communication. So that\'s your starting point. What are we really trying to accomplish here? What is our USP? What are our core values? And you, as a company, need to be really honest about these things with yourselves. The answers to these questions set the course for your business process optimization. Next up is your business model. Who are the target groups you\'re selling to? What wants and needs of theirs are you fulfilling? What experiences are you providing? What resources do you need for this? What revenue streams keep the lights on in your office? Again, these questions may not seem like they have anything to do with business process optimization, but they\'re really, really important. Because good business process re-engineering is not primarily about making a process faster or cheaper. It\'s about allowing a company to implement its business model in a better way than it did before. So if we don\'t consider who our target groups are and what\'s important to them, then we might redesign a business process to be faster and cheaper, but at the same time, drive away our customers and the revenue stream they provide. Third up are your organization\'s strategic goals. What specific measurable results are you planning to achieve within the next five years? Three years? One year? Considering your strategic goals helps you to prioritize what\'s important in the big picture. If your entire five-year strategy is to expand production to South America, then any production process you re-engineer needs to be optimized with that in the back of your mind. How can we optimize these processes so that they\'re ideal, even when one of our factories is in Upper Austria and the other is in Minas Gerais, Brazil? At the same time, other processes that are not as relevant to your five-year strategy will take a back seat. So mission, business model, strategic goals. Review them. If you don\'t have an excellent understanding of them, you have no business optimizing a process. But now what? Well, it\'s time for some serious data collection and analysis. You may think you know why and where a process needs to be re-engineered, but until you\'ve actually collected and analyzed the data related to the process, you\'re just guessing. So you need to measure. How long does each activity of the process take on average? What resources are used up? In what quantities? How do customers react when they experience activities of the process? What about employees? Which other processes in your company are connected to activities in this process? That\'s a bunch of internal data that you\'ve collected, but you also need external data. How do other organizations carry out this process? Is there a best practice model that you can refer to? What technology is currently available and how might it help re-engineer your business process? What are current and forecasted customer trends that might affect how they experience the process? What are current and forecasted employee trends for that matter? What legal regulations affect your process? What cost developments do? Once you\'ve collected and analyzed all these types of data, you\'re finally ready to optimize your process. This begins abstractly and it always involves three questions. What would change if I eliminated some of the current activities? What would change if I added new activities? What would change if I shuffled the order of some of the activities like it\'s a Rubik\'s cube? These questions will take you down a lot of rabbit holes and many of them will make your process worse rather than better. But you\'ve got to get a little experimental if you want to find a better way of doing things. And you\'ve got to involve employees that are involved in the process. They generally know far better than you whether a change is realistic. Doesn\'t mean they\'re always right, but it does mean that you should seek their input. Once you\'ve redesigned the process on an abstract level, the next questions you need to consider are, first, how will the activities in this new process interact with all our other processes? Are there any risks, opportunities, or synergies that might arise? Then, how will the new process affect stakeholders? So customers that experience the process, employees that carry it out, our physical environment. Just because a new process is efficient doesn\'t automatically mean it\'s wise. So here is where we really see whether you take your corporate social responsibility seriously or not. Once you\'ve mastered this phase, it\'s time to try out the new process. Because company graveyards are filled with processes that looked great on paper, but simply didn\'t work in a real-life environment. So you need to test the new process in a pilot project and then iterate, make changes again and again until the process delivers the desired results. And only then are you ready to implement the new process on a wide scale.