Business process improvement: 6 smart steps to contain costs

Business moves quickly, and zeroing in on business process improvement is a pivotal step many business leaders and managers feel they simply don’t have time to take.

After all, you’re working hard to keep your business going and growing, often wearing multiple hats just to survive the day, make the next sale or launch the next product. Quite often, the majority of a company’s business practices fall into place out of necessity organically – not necessarily by design.

Think about what it takes to run your business.

Can you write down all your business processes? How about just your human resources processes? If you can’t, don’t worry – you’re not alone. The good news is, there are smart ways to assess your processes and improve your company’s efficiency dramatically.

Yes, dramatically.

What exactly does business process improvement entail?

Let’s start by defining business process improvement.

IT education website Techopedia defines business process improvement (BPI) as “an approach designed to help organizations redesign their existing business operations to accomplish significant improvement in production.” It further defines BPI as an effective way to help improve operational efficiency and customer focus, and potentially reduce operational costs and cycle time.

So, it’s really all about making things run more efficiently so your business can grow. And that usually comes down to your processes and the people behind them.

Does your business have room for process improvement?

Before you can answer this question, you’ll need to ask yourself a few more:

  • Do you still operate with a lot of manual processes that involve passing items from department to department?
  • Are your employees still filling out time sheets or copying various people on emails and waiting for their approvals and changes?
  • Do you have multiple software systems that don’t communicate with each other, which means you still have to manually transfer data between them?
  • Do your employees have to email (or go ask) coworkers for information that could potentially be automatically routed to them with a more efficient system?
  • Are you reactive far more than you’re proactive?

If any of this sounds familiar, then you’re probably operating in a slow, un-orchestrated, unguided, error-prone world that tends to over-involve people’s time.

For example, when you ask someone to fill out a paper form, you’re really asking two people to do the same task, since someone else will have to do the data entry later. That doubles your team’s time investment immediately.

As a result, focusing on business process improvement is usually a wise investment of time.

Time lost equals money lost, eventually

A lack of workflow in your processes costs you time, accuracy and awareness across all aspects of your business. This puts you in a constant position of looking backwards, as opposed to having that critical understanding of what’s going on.

Watch for signs your processes are sabotaging your business goals, such as slow processes that result in your data getting old before you can act on it. When you have inefficient, non-integrated systems, it can take weeks to process data. And delayed reports and analyses can cause blind spots on trends happening in your own company.

Bottom line: Inefficient processes equal time lost – which, ultimately, translates into dollars lost. So, what can you do to improve processes and help contain costs? These six steps are a great place to start:

1. Shed systems you’ve outgrown

Just because you bought certain equipment or software a few years ago, doesn’t mean it’s still functioning well for your company. Isolated spreadsheets don’t talk to each other or send automatic notifications to employees.

Look for faster, more accessible technology that saves steps and solves more problems.

Are you using a database that someone built or purchased 12 years ago? Many companies continue to use low-tech, inappropriate tools just because it’s the way the company has done it for years. That may seem like a budget-conscious tactic, but this often results in time lost through inefficiency and confusion due to duplicate data entry.

Don’t let a fear of change impede your company’s growth. Clinging to the “devil that you know” can cripple your business in the long run, especially if your competition embraces business process improvement. While they may face a temporary disruption, your competition could leap ahead of you with more efficient systems.

Another cost to sticking with outdated systems is a watered-down human capital investment. Inefficient systems don’t allow you to fully leverage the talents and skills of your most valuable employees.

Think about it. Isn’t it more important to have your specialized, experienced people working in that core skill set you hired them for, not spending time chasing down what they need to do their jobs?

Providing those employees with high-quality and efficient solutions that offer a technically modern user experience shows them you genuinely care about their working conditions. And that can boost employee engagement and retention.

2. Be sure to upgrade, not just update

Beware: A newer product is not always a better product.

When companies are looking to modernize, they tend to jump to technology as a quick fix. And to keep costs down, it’s tempting to go with what’s cheaper.

The truth is, cheap is easy, but it’s usually not a thorough solution that solves the wide range of business challenges your company is currently facing – or the ones that will crop up several years down the road.

Key reasons to insist on scalable technology:

  • It’s smarter to invest in systems that can handle larger business volumes than your current load.
  • As your business grows, you’ll need a solution that can manage a wider array of products, services and people than your present lineup does.
  • Your people make it all happen, so look for a solution than can handle significant increases in employee headcount to ensure seamless scalability and avoid interrupting momentum.

3. Make business process improvement an official project

Rather than bargain-shopping in haste, a better approach is to actually formalize a company-wide project to address business process improvement.

Commit to finding ways to impact your company’s efficiency for the better.

Look for opportunities that offer team members cohesive blocks of focused work time. Focus on processes or technology that will improve timeliness, and therefore decision-making.

Before you take on process improvement:

  • Make sure your leadership recognizes the need to do better as a whole.
  • Establish a unified goal to change for the better.
  • Commit to being honest about what’s working and what’s not.
  • Develop a holistic company objective on results you’re looking for.

For such an effort, it’s imperative to get buy-in across your entire leadership team. Explain the importance of their endorsement of your business process improvement effort.

Don’t stop with just your executive team or top managers – this is the time to get all your smart people in the room. Tap your best thinkers and most experienced employees from various departments to utilize their insight.

  • Ask the team to look at your entire business process end to end, with no sacred cows.
  • Don’t shy away from things that might seem too hard to change.
  • Assess the efficiency – and inefficiencies – of each of your core disciplines.
  • Analyze the workflow of finance, accounting, HR, sales, production and so on.
  • Challenge your team to find the best remedies for your process challenges.
  • Make a list of the problems you want to solve.
  • Document each problem, and don’t forget to assess the cost of slow processes.

Be sure your team takes a global view, and try to avoid getting sucked into dealing with one problem. It’s better to have a broader view, rather than gravitate toward one particular process or problem.

If you must focus on just a few key challenges, make sure you utilize tools that can show you the big picture before you make those big decisions.

4. Don’t make small decisions on technology solutions

One flashy solution might solve your hottest problem, but that’s just one. Then you’ll have to seek various other solutions for the remaining problems that still affect your day-to-day business. That’s how you end up with 12 different solutions that don’t talk to each other.

For example, do you just want to streamline your internal accounting, or are your problems more widespread? Do you also have a customer relationship management issue with the way customers enter your accounts receivable process? How effectively and efficiently do your financial reports feed the analytics that help you forecast for production?

An accounting-only solution won’t fix all of these woes.

5. Don’t pick the narrowest platform

Go with a holistic platform that delivers numerous game-changing advantages companywide.

Yes, cost is a significant factor for smaller businesses. But it’s key to avoid the temptation to buy what’s OK for now – it may not suffice as your business changes over the next few years.

Look for products and services that are broad, integrated, accessible and expandable. Find out if you can add on capabilities as you grow. Will that solution still work for you when you have triple the people and triple the revenue? Hence, the importance of scalability.

With any software or technology solution, it’s important to free your data from silos. Otherwise, the same problem might get solved five times by different groups or teams across the company. That’s not using anyone’s time wisely.

For example, the ideal HR technology platform should be comprehensive. It should be your dashboard for essential functions, such as payroll, benefits, performance management, and time and attendance.

And look for a solution that your entire employee base can access from any device.

The broader you distribute technology, the greater the gains you can expect. When your employees have the tools to keep your business moving with them wherever they are, you’ll have the ultimate chance of success.

6. Make implementation a top priority

Communication about process and system changes is extremely important. This is another reason to shore up that leadership buy-in discussed above – any non-supportive leaders will kill your efforts.

Explain that change is hard, and the change may cause business drag, but paint the picture of where the company is headed. It’s essential to maintain a level of honesty and humility, and you should also be sensitive to the insecurities and frustrations of others.

When announcing or discussing new processes:

  • Develop a clear, global message – even if you’re just changing one process, communicate that the whole company may feel impacts.
  • Encourage everyone to ask, “How can I help?” Allow employees to blow off anxiety, and empower employees to share their feedback and ideas for further improvement.
  • Understand your employees’ concerns, but be sure to maintain your enthusiasm and commitment to change – and ask them to do the same.
  • Give clear, regular updates to all stakeholders and your working teams – people get uncomfortable when they don’t know what to expect.
  • Be realistic about time allocation: New processes will be slow before they get better.

One management mistake to avoid: not including people on the front lines in the design of your change plan. They are your best sensors. People who have been part of that design will be more deeply committed and will positively influence others.

Seeing is believing

As you implement a comprehensive solution that’s well-suited for your business, it will be easy to spot the most measurable and visible cost improvement: productivity gains.

Increased revenue and higher output volumes will be abundantly clear. Also, be on the lookout for secondary gains such as greater customer satisfaction and improvements in employee engagement and morale.

Transitioning from repetitive manual tasks to a smoother, automated workflow brings a level of ease to your employees’ daily experience. And with increased employee satisfaction comes reduced employee turnover.

You’ll spend less time recruiting, onboarding and training new employees because you’re able to retain more of your seasoned employees. Companies with great workflow keep good people and attract similar stand-out employees.

Make business process improvement an ongoing initiative

Business process improvement should never be considered a one-and-done endeavor. To ensure that your business continues to grow and thrive, it’s important to consistently evaluate your processes and make changes as needed.

A top-tier human capital management solution will empower your people to improve your processes. When they have the tools and resources needed to do their jobs better, your business gets better as a whole. And that means everybody wins: your business, your employees and your customers.

Want to know more about how a comprehensive HR technology platform can facilitate business process improvement and address many of your current pain points? Download our free e-book, HR technology: How to choose the best platform for your business.