What is the benefit of optimizing business processes for companies and enterprises?

The business process is based on the algorithm of work within the company, which clearly distributes the sequence of actions of employees, their responsibilities, as well as responsibilities. A well-established algorithm ensures timely completion of production tasks, maintains brand reputation, and increases profitability. If the processes are not debugged or have failed for some reason, the coordinated system of actions is disrupted. Officials face problems in solving their tasks, which reduces the productivity of all production units of the company. You can fix the situation by resorting to optimizing business processes, i.e. debugging them.

How should the expression «business process optimization» be understood?

Let’s analyze the concept of a «business process» using two examples – a small coffee shop and a chain of coffee shops. In the first case, no more than 2-3 people work in the staff, their duties are simple and clear: the owner buys coffee, the barista prepares it. The fact that the grain is running out, the barista informs the owner in advance, so there are never interruptions.

In the second case, there are more links in the production chain, since there are already:

• roasting shop;
• Marketing Department;
• most likely, barista training courses to maintain the company’s image.

Coffee raw materials should no longer just be bought at a wholesale warehouse, but ordered in large quantities, perhaps even from the manufacturer, arrange delivery to the workshop, then roast, then dilute in coffee shops. Failure at any stage will disrupt the entire network.

If the company is large, for example, a clothing factory or a factory producing household appliances, then everything is more complicated. The efficiency of work depends entirely on the timely delivery of raw materials, spare parts, accessories, and compliance with assembly deadlines at each stage. Any hitch leads to a production shutdown.

Nevertheless, failures occur because not all processes can be robotized and computerized. The human role remains high. This means that we need tools that debug precisely human activity. The most effective of them is the optimization of production. It implies a redesign of the algorithm, consistent with the company’s strategy and has the goal of improving the functioning of all structural units.

Optimization of business processes of an enterprise is the search for the best way for its further development. At the same time, it is important not just to eliminate the shortcomings that have arisen in the work, but not to add new ones to them. And this can happen if you start changing:

• too abruptly on the principle of «starting tomorrow we will do everything differently»;
• All at once;
• without a clear goal, as well as a step-by-step plan;
• not knowing the technique.

Optimization is a procedure of step–by-step changes made to individual links, which are carried out according to a clearly developed plan with a summary after each stage. This approach will help the team to avoid psychological stress, and the management to restore the efficiency of the enterprise without losing staff.

What effects can be achieved from optimizing business processes

Achievements can be intermediate and general. The first include:

• improving communication between employees, departments, and production units;
• reducing staff turnover;
• cost reduction when performing individual operations;
• improving logistics;
• reducing the number of defects.

But all intermediate goals should always correspond to more global ones:

• reduction of production and administrative costs;
• increased profits;
• improving competitiveness;
• increasing the number of customers;
• increasing the profitability of production;
• creating new business conditions.

The effects depend on the strategic goals. If the problems are small, then to solve them it will be enough to adjust the shortcomings, taking as a basis the information received from the heads of the lower levels. However, the technique of «patching holes» is strategically short-sighted. Optimization is always aimed at the long term, even when minor local problems are being solved.

Managers of the world’s largest corporations, developing strategies and methods of enterprise optimization, prioritize a global strategic goal. And only then they begin to develop a roadmap that includes goals and objectives for the near future. The table below shows examples of such planning.

Global strategic goal	Intermediate goal	Tasks
Increased profits	Reducing the cost of production, as well as production costs	Decline: – marriage; – personnel costs; – administrative expenses; – raw material costs
Customer satisfaction	improving the accuracy of order processing, as well as the speed of their execution	Raising: – the speed of reviewing applications and issuing orders; – the accuracy of the functioning of warehouses; – reducing the number of complaints; – simplification of the product return scheme
Improving the quality of work	increasing employee engagement, reducing staff turnover	– improve the personnel selection system; – improve the quality of corporate training; – simplify the procedure of registration of documents; – to improve the bonus system

When developing an optimization strategy, it is important to accurately identify the growth points of an organization. Global goals (increasing competitiveness, increasing profitability, increasing profits) are a response to the challenges of the external environment. Their solution always leads to the development of the company, the transition to a higher competitive level, and the opening of new business opportunities. The tasks that are set to achieve intermediate results are specific and do not carry any additional values. But their solution is necessary to achieve the result in a complex.

How to understand that the time for change has come

Internal changes are needed when it is obvious that something is going wrong. For example, the organization is working, the business is expanding, the team is growing, but the profit is not. Why is this happening?

1. The quality of goods or services has decreased. This can be understood by the increase in the number of complaints, negative reviews in social networks, as well as the media, an increase in returns of goods, and a decrease in the number of customers. For example, in the sewing workshop, due to the low qualifications of seamstresses and cutters, the quality of finished dresses has decreased. The design department offers interesting models, but there is no one to sew them using technology.
2. Uncoordinated actions between departments. The sewing algorithm includes modeling, cutting, assembly, packaging, and marketing. Each operation is performed in turn, as on a pipeline. It is impossible to start assembling the product if the receipt of cut parts is delayed, accessories of a different color or for a different model have been brought.
3. Lack of division of responsibilities. If the division of responsibilities in the workshops is obvious, then in management departments employees often do not really know the scope of their job responsibilities. As a result, some actions are duplicated, and no one is doing other things.
4. Slow decision-making. Many companies suffer from this: the lengthy approval procedure delays the implementation of projects for months, as a result, a number of good initiatives lose their relevance by the time all documents are prepared.

The reasons for low work efficiency that require immediate changes may be:

• lack of control over the fulfillment of assigned tasks, as well as their documentation;
• duplication of functions of departments, when different departments are forced to do the same thing in accordance with their official duties;
• disruption of communication between departments;
• incorrect task setting by management, in which subordinates do not understand what to do and how to do it;
• blurred management structure: there is no clear understanding of which department reports to whom.

Optimization principles

To avoid the mistakes of the «pioneer» optimizers, it is necessary to strictly follow the rules that these people have accumulated over decades of practical experience. There are four of them:

1. Identification of the problem. When starting modernization, it is necessary to assess the situation «as it is», i.e. analyze and describe the processes taking place in the organization, determine digital parameters, for example, how much time is spent on cutting and how much on assembly. This is data that you can start from, starting to make changes, and then evaluate the result. However, not everything can be expressed in numbers. For example, the toxicity of the climate in a team cannot be described in numbers, but people cannot work normally in such conditions. Such circumstances are incorrigible, they must be completely broken and something new must be built.
2. The path from simple to complex. Some managers believe that the sooner the old is destroyed, the sooner something new and effective can be created. This is a mistake! Simultaneous actions in all directions are fraught with the omission of many small details, as well as the rapid exhaustion of resources. At the same time, the destruction will be clearly visible, but the achievements will not. Changes should start with small steps, which are easy to achieve, get results and avoid dissatisfaction with the workforce. Any restructuring actions are very stressful for the staff, because people are reluctant to leave their comfort zone, even if they understand that the time has come.
3. A comprehensive view. Changes in one segment of the company entail changes in others. At the same time, the latter may turn out to be negative. To prevent this, it is necessary to calculate every action and analyze the possible consequences. If there is a fear that innovations in other sectors will fail, then it is better to abandon them and look for something else.
4. Be guided by statistics, not opinions. Violation of the principles will cause resistance from the collective. When carrying out modernization, it is necessary to take into account the opinion of employees, but you can not go along with them. It is necessary to look for ways to convince employees and increase their involvement. The most effective figures are those that show what was and what has become.

Business process optimization methods

Engineering is the optimization of internal processes without global restructuring. Engineering changes relate to the technical restructuring of production and management. They include the introduction of innovative technologies, automation, document management improvement, and market research.

Reengineering (BPR) is a method of radical restructuring. It is used in cases when the company is on the verge of bankruptcy. Reengineering is a painful procedure, since it involves the complete destruction of established norms, replacing them with fundamentally new ones, and starting work from scratch. It is difficult for management to implement and for employees to survive. BPR is a resource–intensive and risky method, but effective in critical situations.

A method of continuous improvement. It is aimed at increasing customer satisfaction. The management constantly monitors the opinion of customers and works closely with the staff. Managers listen to the opinions of subordinates, their suggestions and, based on this information, adjust the work of all departments.

The lean manufacturing method. It was developed and implemented by the Japanese automotive corporation Toyota in order to minimize production costs.

The method of restrictions. The goal is similar to the idea of lean manufacturing – to set up production with the minimum possible amount of costs. To do this, we are looking for a limiter that allows us to minimize expenses, but maintain the high efficiency of the company, as well as ensure profit growth.

How optimization is carried out

The enterprise optimization scheme includes several stages.

Setting a goal

To figure out how to improve, you need to figure out what’s going wrong. It is impossible to set abstract goals of «improvement for the sake of improvement», because in this case it is not clear what to change, how to do it and how to evaluate the result. You can specify the goal by asking consecutive questions and searching for accurate answers:

1. Why do we need optimization? To reduce the presence of the human factor.
2. Why lower it? To reduce the number of errors and defects.
3. What will it do? It will help to reduce production costs and increase productivity.
4. What is productivity growth for? To increase profits.
5. How much should I increase my profit?

This example shows how consistent analysis allows us to understand exactly what we are doing and why. When the goal is clear, specific and narrowed, has a numerical expression, it becomes clear which ways to achieve it.

Preparation

This stage should be divided into several sub-stages:

1. Create a project team, appoint a responsible person. The group may include employees of the company or invited specialists, the main thing is that everyone has enough experience and qualifications to carry out their tasks.
2. Analyze the state of things. Describe the processes that are planned to be improved, identify their strengths and weaknesses, compare them with competitors’ performance and determine what they do better.
3. To create a model, i.e. in theory to reproduce the changes that we would like to achieve.
4. Identify and cut off unnecessary elements. When planning, there may be tasks that duplicate each other, they need to be installed and deleted. Also, to simplify the implementation of the project, it is necessary to reduce the number of approvals.
5. Select the tools.

Implementation of changes

For the successful implementation of the project, it is necessary to draw up regulations. Changes should occur gradually so as not to cause technical and emotional disruptions. But the timing of each stage should be set, otherwise the project will start to slip and drag on indefinitely.

Every step, achievement or failure must be documented. This will make a clear picture of current events, illustrate what is happening and what is not and why. 

At the implementation stage, it is important to rely on the support of the team. This can be attributed to the most difficult links. Most employees are skeptical of any changes, because it is uncomfortable: you need to retrain, change the usual pattern of actions. However, without the support of the team, it will not be possible to optimize the company’s work. The team must be prepared for changes: to hold explanatory meetings, to motivate, to consult, to increase the personal interest of each employee. It is much easier for people to cooperate with management when they see that their ideas and suggestions are listened to and implemented.

Evaluation of the results 

It is based on a comparison of the initial numerical indicators and those that were achieved as a result of the implemented changes. The effect can be expressed in:

• reducing the time from the development of the model layout to its introduction into production;
• increasing the number of customers;
• reduction of production costs as a result of reduced defects and refunds.

Possible errors

1. An incorrect or vaguely formulated goal. 
2. The wrong approach, which implies changes of everything at once or on the principle of «from big to small», while it is necessary to act the other way around.
3. Poor description of the processes. A superficial description of the strengths and weaknesses of production, the lack of numerical characteristics will not allow you to understand exactly what needs to be changed.
4. Ignoring external factors. Competitors will continue to develop, customers have their own expectations, and staff cannot work for a long time in a stressful environment. If these and other external factors are not taken into account, the effect of implementing changes may be much lower than expected.
5. Mindless automation. If an enterprise is operating inefficiently due to a poorly organized management or production structure, then simple automation will not do anything. The introduction of technologies should be parallel with a comprehensive restructuring, including updating approaches to leadership and management.
6. Partial optimization. That is, when the restructuring is aimed at individual links in the chain, and not at changing the system as a whole. To make it clearer, we can give an example like this: if one employee started working faster, it does not mean that customers will start receiving orders faster.
7. Ignoring the opinion of the team. This error is the most common. On the ground, it is better to see what needs to be changed and how. The opinion of the staff should be used. The more employees are motivated and involved in the process, the easier it is to implement it.
8. Implementation of ready-made solutions. Optimization can be compared to the treatment of a patient. The prescribed medicine cures one quickly, the other does not work at all. In order for optimization to be successful, you need your own roadmap.
9. Saving on specialists. It is not always possible to find a specialist in the company who is able to organize and take over the management of business process optimization. In this case, it is better not to save money, but to invite an outside expert. The losses from the failure of the conversion attempt may be much higher than the payment for outsourcing services.

Optimization Tips

They stem from the most common mistakes of its organization:

1. Do not disregard the opinion of the staff. Consult with people, explain the importance of what you have planned, motivate, engage in discussions, demonstrate intermediate achievements.
2. Develop instructions and checklists for the staff to make it easier for them to navigate and rebuild.
3. Do not start a revolution without a clear plan of action, in which the goal is formulated, tasks are set, approaches and tools are selected, and the state of affairs is analyzed.
4. When drawing up a business plan, take into account the influence of external factors.
5. Don’t use other people’s solutions, develop your own.
6. Don’t skimp on outsourcing.

How can FollowUP help

Our company has developed a convenient service based on artificial intelligence – Al-secretary (secretary program), and now adapts it to any type of business. Al-Secretary:

• transcribes conversations (translates from audio format to text);
• records agreements, tasks, deadlines and responsible persons;
• sends the materials of the online meeting to its participants.

By integrating our product into your calendar, you will receive sammari 15 minutes after the end of each meeting, where you will be highlighted:

• the main topics of the negotiations;
• participants and their roles;
• offers;
• questions that have not yet been answered.

The transcription accuracy is 98%, which guarantees the safety of all information.

Our adapted developments are already being applied in the field of:

• education, helping to record lectures highlighting important points;
• media for creating transcripts and subtitles for videos;
• recruiting, facilitating the selection of the most promising candidates;
• designing for meeting records and decisions made;
• marketing for the effective implementation of specialized tasks.

Our company guarantees the complete confidentiality of your negotiations: transcription and sammarization are performed on our servers and stored in secure databases. 

The introduction of artificial intelligence in the form of an Al-secretary should become one of the priority aspects of optimizing your company’s business processes, since it will allow:

• it is more efficient to use the staff’s working time;
• improve documentation of meetings, conferences, negotiations;
• simplify approvals, which means speeding up decision-making.