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Businesses cannot thrive and grow without efficient business processes in place. From recruiting and hiring employees to sales, marketing, accounting, and managing computer networks, virtually every business function requires a series of processes. The process of business ensures that all related tasks are documented and well organised. In theory, those responsible for carrying out a given process will know exactly what to do and when. However, business methods are not necessarily efficient. Business method optimization seeks to make the business method as efficient as possible.

Why Optimize Business Processes?

Some business methods start out efficient but become less efficient over time. For example, as rules and regulations change, you may add tasks to a process to comply with the new regulation (Source: “Optimizing business processes”, InfoWorld). However, some existing tasks may no longer be required due to the change. Did you remove those tasks from the process? Likewise, changing one process may affect another process, resulting in unnecessary duplication or tasks that no longer need to be done. If secondary processes are not updated, inefficiency is the result.

Inefficient business processes can result in:

  • Unnecessary delays
  • Mistakes
  • Employee frustration
  • Customer dissatisfaction
  • Accidents
  • Wasted time
  • Unnecessary use of resources
  • Duplication
  • Unnecessary costs

How to Optimize Business Processes

Businesses cannot afford to waste time, money, and resources. They cannot afford the risks of errors and accidents, employee frustration, and unsatisfied customers. To address these problems, improve productivity, and streamline operations, a business method must be evaluated and optimized on a regular basis (Source: “What Are the Best Tips for Business Process Optimization?”, wiseGEEK). One approach to business method optimization consists of just three steps: identify, analyze, and automate.

  1. Identify – Identify the process that needs to be optimized. Break down the process into its most basic components. What are the individual tasks that need to be done to complete the activity? What is the activity’s desired outcome? When does the activity begin and end? Who is involved in this activity? Which deliverables, reports, or information is generated or required as part of this process? Are any secondary processes likely to be affected by your changes?
  2. Analyze – After identifying the components of a process, the next step is to rethink the process. Look at all of its parts in search of inefficiencies. Ask yourself “what if?” and “why?” and think of ways to reduce waste. For example, “What if we generated PDF copies instead of paper ones?” or “Why are we generating three paper copies for each order?”
  3. Automate – As you fine tune the process of business, explore solutions designed to automate it. For example, business management solutions exist for any number of the business method such as invoicing and accounts payable (Source: “Process Tracking System for Accounts Payable (PTS-AP) for SAP Finance”, Dolphin). Automation can ensure that the workflow is carried out consistently as well as do so more efficiently. Whether automating accounts receivable, invoicing, or any other process, business process automation can deliver substantial cost savings, risk management benefits, and cash-flow improvements.

At the beginning of a venture, small business owners often try to save capital by performing these duties themselves or have a family member assist them. This can be a great way to save, if the core skills are there. As the business grows, and especially in the case of accounting tasks, it is advisable to have a professional take over. In the small business, it is very common to use outside entities for human resource services. In this manner, there is a better chance for a good candidate being chosen, and the cost is most always reasonable. Consider the cost of hiring, training, and then having to let them go because they were not the right fit will cost much more than just letting a professional help you.

Each of these headings can be broken down into sub-processes which can sometimes become more important than the original heading. As long as the purpose of each process is focused on aiding the consumer, it will be valuable. When you are beginning to design your processes, start with a mission statement such as ‘I want my service to evolve with technical trends’. Then you can compose a strategic management plan which is closely linked to an operational management sub-process which will include research. Another example is ‘I want my product to have 100% turnover each month’. Your process to accomplish this goal will involve the purchasing and inventory management sub-processes under the operational process umbrella.

Starting a new business is exciting and scary all at once. If you have a good business plan, enough capital, and a marketable idea, then you have a good beginning. Those things do not guarantee success; you need to continue and develop your essential business processes. Then you have a better chance of success.

 

 

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