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How to Identify Business Process Inefficiencies

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How to Identify Business Process Inefficiencies? That is one of the most important things you should do as a business leader. No matter how incredible your product and team are, without effective processes, you leave so much impact and profitability on the table.

At the same time, inefficiencies compounded over time might end up literally hindering your whole company. And that’s why we will share a simple 4-way approach to identify business process inefficiencies in today’s post.

How to Identify Business Process Inefficiencies | Beyond Sapiens

Business Process Inefficiencies – Listen to the Blog

Operations Overview

In business, it’s easy to get lost in day-to-day operations. There’s so much that needs to happen to maintain the company’s momentum, but from the micro level, you can only identify micro issues. So, to identify key blockers that are hindering your company’s growth, it’s important to take a step back and look at the bigger picture.

A good starting point is to map out the business model and the key processes that happen within and between different business units. This can help you identify areas where processes are not working optimally and are causing delays, errors, or other issues that affect the business’s overall performance.

There might be several non-ideal processes, but you should identify the one that is leading to the most significant waste of time, resources, and money. That’s because fixing the weakest link will strengthen the whole business.

Identify Root Causes

When you have identified a potentially inefficient business process, it’s crucial to understand the root cause of the issue. To do so, you need to map out the process on paper to understand it better and then see how it works in practice. This implies analyzing each process phase and the resources required, such as workload, time, and money, and then examining the outcomes.

You can do this in excel, in software, through a mind map program, or however is best for your workflow. Just make sure you categorize the phases and list the inputs and outputs of the process. This will help you break it down into smaller chunks, making it easier for you to find potential bottlenecks.

When you have an idea of where the process might be lacking, you should see how it works in practice and understand if there is something you overlooked when going through it on paper. Analyzing the process live by observing how people execute what you’ve studied will give you more details and either strengthen or weaken your hypotheses of the identified inefficiencies.  

Analyze Metrics

Now that you have identified the potential root cause of the weakest business process, it is time to gather & analyze data. This allows you to have quantitative measurements of the business process you’re investigating, providing you with an accurate “snapshot” of the metrics involved. It can also help you shed light on underlying relationships between different metrics.

For example, for a Customer Experience department, two important metrics could be the response time and the percentage of happy customer ratings. While gathering both data, you might spot a correlation between the two, such as a very low response time – something usually associated with great performance – to a low percentage of happy ratings.

This might be underlying an excessive focus on time efficiency, where quality might take a hit, and it would provide you with insights on how to proceed. Talking of which, the gathered data will also serve you later on. In fact, after deploying a possible solution to the identified process issue, you can use the initial metrics as a benchmark to understand how effective your solution might be.

After all, data never lies, so to truly understand by how much you have improved a process, you need to measure it. 

Collect Feedback

Now that you’ve recognized the weakest process, the core issue of it, and analyzed the key metrics to strengthen your hypothesis, it is time for the final step. Gather qualitative data by asking for feedback from people who work with the process. As said, data provides valuable insights and never lies, except if it fails to capture the whole picture.

What we mean by this is that business processes are complex and include human aspects and communication that data can’t always capture. So, this stage is all about validating whether your analysis and data are accurate and comprehensive or if you’ve missed something important.

You will already have a holistic understanding and a clear picture of the potential bottleneck, so it will be easier for you to ask people how they feel about your findings. You may be surprised how often this phase uplifts details and correlations you may have overlooked, which is good. Because it will enable you to strengthen your image of the inefficiency, validate the accuracy of your data, and ensure that you address the root cause. 

How to Identify Business Process Inefficiencies

At this point, you will have all you need to create a plan of action to address the most ineffective process, helping you create a better-functioning business. Remember, identifying and addressing process inefficiencies is an ongoing process that requires constant attention and improvement, so make sure you create internal practices to make this a recurring activity.

We would love to help optimize your processes with our free productivity assessment. you can always book a free consultation call or read more about our business maximization assessment. You can find all the info about our service on this page.

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