It has become fashionable to use business optimization methods without delving into the essence of obvious or contrived problems. Optimization often occurs under the slogan “We must!” – such optimization results in even more complicated business processes, losses, and staff turnover.
And, like the icing on the cake, the company’s bankruptcy. Before starting something, you need to understand how the mechanism works, why it broke. And only then, to fix it, choose a suitable tool – a conventional screwdriver to tighten the screw that has loose, but not a hammer for gluing fragile parts.
Goals and objectives of business process optimization
Before defining the optimization of business processes, let us briefly list the functions of this management strategy, which is becoming more and more in demand. Business processes optimized to:
- Better adapt new employees;
- Do more accurate forecasts, plans, and projects;
- To strengthen the loyalty and trust of potential buyers to the brand or company;
- Make the business more manageable;
- Increase the company’s profitability;
- Improve the psychological environment in the team, establish horizontal connections;
- Save resources, spend budgets more rationally;
- Assign a personal area of responsibility to each employee.
In addition, business optimization pursues more general goals: improving the quality of work and speeding up the implementation of plans. Business optimization is not a one-time action but a long and complex process, the success of which lies in the correct course of action. Without a clear, well-thought-out plan, there is nothing to dream of successful optimization. All activities must be carried out on time and systematically.
The essence of business optimization: what is improving and how
First, you need to clarify which aspects of the company’s work are business processes. Few of the authors clearly define the term business process, and it is considered intuitive.
A business process is a regulated order of actions of several company employees aimed at a particular result, which is of value to the customer of this process. The customer can be the end customer and one of the employees working with the business process products.
Why are we talking about several employees? Because fruits of everyone’s labor are always in one way or another connected with fruits of the work of the rest of the team: the supplier has to interact with the seller, the painter has to interact with the bricklayer, etc. Business processes do not exist without the participation of personnel. Those chains of actions that are already 100% automated are called technological processes, and this is an entirely different category of processes.
It is most convenient to show the optimization of a business process with a practical example.
The furniture company has a design department responsible for calculating the parameters of products using Excel tables.
This process has weak points:
- You have to spend time printing files and then entering information into a computer from paper;
- The purchase of paper, ink for the printer, licensed software, and the need to periodically maintain repair the printer are financial losses for the business;
- The business process cannot control since there is no basis for analysis: information about how many designers made calculations, their labor productivity, etc.
After analysts examined this business process, it was possible to halve its duration and the number of securities by a third:
- Created a document was in the program, where all the required calculations for the furniture were made and stored;
- Also saved the results were in the database, and all other departments got access to them.
Can improve more complex multidimensional workflow in the same way.
4 rules for effective business optimization
1. Analyze the current situation
First, you need to identify the strengths and vulnerabilities of the company – without this, no business optimization methods will work. Localize the problem – state what aspects of the firm are of concern to you. Typically, the issues lie in four areas: financial costs, time costs, product quality, labor efficiency. Most likely, your business is developing more slowly than you would like, precisely because of them.
Describe the company’s work at the current moment in the form of an “as is” model: how many staff are employed, what are the costs, profits, and so on.
2. Refine the task
You have to improve not the situation as a whole and not the whole company, but solve one specific problem. Determine which one. For example, if a small company plans to sell ten harvesters per month, but it manages to sell only five, the optimization of the business will be aimed at sales: their indicators need to reach the target. It is necessary to analyze the firm’s activities, draw up a model “as is,” outline the prospects and problems, and then focus on the main one and choose methods of solution.
3. Implement changes gradually
Keep in mind that business optimization can take a long time. In some cases, it is necessary to radically restructure the company’s work to eliminate current problems, sometimes even change the direction of activities. The transition period to a new style and work methods is a challenging test for personnel, so it is advisable to break down business optimization into stages and implement them sequentially, rather than changing everything at once.
4. The importance of the human factor
The new work order will not suit all current employees. Be prepared for sabotage and layoffs, including massive ones. A leader in such a situation must explain to his subordinates that business optimization is beneficial.
4 methods of business optimization
There is no panacea for all industries and any situation. Still, a sufficient number of business optimization methods developed and tested, among which you can choose the one that suits your enterprise. The main thing is to analyze everything and identify urgent problems first thoroughly.
1. Standardization
In large organizations with a branch structure, each representative office often maintains documentation in its way, without a single system. It inevitably leads to logistical problems and confusion in reporting, and employees waste time performing tedious routines.
In this case, it is advisable to create uniform work standards for all branches and divisions. The company must have the exact requirements for everyone, which applies to the paperwork and the methods of performing technological operations. Developing a set of general rules is the first step towards standardizing business processes. The new standards must consider the company’s experience and other similar enterprises, the specifics of the activities of specific departments, and the entire industry.
2. Exception
In some processes, you can enlarge the execution phases and combine individual stages, simplifying and speeding up the entire business process.
For example, when hiring a new employee in a company, it is customary to consider a resume and conduct an interview in three stages. You can optimize this process by eliminating the interview stage with the HR manager. Instead, it is better to give the candidate a detailed questionnaire for filling out, containing all the questions of interest to the personnel officer, and send the candidate directly for an interview with the head of the department. It is he who must assess the professionalism of the future employee and his suitability for the position. An interview with the director or business owner is not necessary at all.
Analyze the business process structure and find those stages that can remove without compromising the result. The main thing is not to overdo it with optimization and not throw out the child with water.
3. Change
Analyzing a complicated business process will show you the points at which it can optimize. For example, replacing raw materials or materials and choosing more advanced processing methods reduces the cost of goods. But any such changes must be reasoned and planned. No matter what way it conducts, business optimization should negatively affect the quality of the product.
Some innovations need to test before full implementation. It, in particular, is the seasonal menu in restaurants: if can be transfer customers like new positions them to the category of permanent ones. Once approved by management, the changes should implement across all departments and services, including branch offices.
4. Establishing interaction
Business processes in which several different departments are involved slowed down if they have little contact. Lack of interaction between departments often becomes a “pain” of large firms: tasks duplicate, people perform the same work, the result is distant. It is irrational and unprofitable for the company.
Therefore, it is essential to debug communication between work units, be they departments or employees. There are enough classic plans for small organizations, procedures outline, and everyone reports on what to do. For more branched structures, only heads of departments participate in such sprints, and tasks duplicate in online services, where all employees can see them.
