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Business Process Analysis: Definition, Tools & Steps

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Business process analysis is an analytical technique to understand a work process and find ways to improve its efficiency. Read about 5 steps of BPA.

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Process Analysis

Business process analysis (BPA) is an analytical technique to understand a work process and find ways to improve its efficiency. It requires a complete breakdown of process including the process map, collaboration between teams & individuals, flow of information, use of technology and expected business outcomes.

What is Business Process Analysis?

What is Process Analysis
It helps in understanding the effectiveness of the work process or a part of a process. For example, find out whether a process is meeting its goals, discover common delays & blockers, observe the alignment of teams & individuals working on a process, identify need for technology to increase efficiency, and scope out areas of improvement.

Why do Businesses need Process Analysis?

There is a constant need to improve business processes to keep up with competition and grow overall revenue & profitability. Few important reasons why a business might need to use process analysis are:
  1. Gain Competitive Advantage
    At times competition from new entrants or incumbents make businesses take measures to offer higher value to customers. A detailed review of internal processes can help companies find out ways to add customer value and control delays. Improved processes can create product differentiation and build competitive advantage.
  2. Reduce Costs
    Business Process Analysis is also done to identify excess costs and inefficient activities and remove them to decrease cost and improve margins. For eg, reducing extra resources being deployed in some “as-is” processes.
  3. Expand into Multiple Geographies
    Process analysis can also be done to gather an understanding of operations and create a playbook that can be scaled to other geographies for expansion. Eg. Sourcing & kitchen procedure of a restaurant can be analyzed to open up new outlets.
  4. New Management Vision
    At times, new management wants to reevaluate existing business operations and incorporate a new vision. The new vision might create a need to accommodate new functions and make some existing functions redundant
  5. Documentation
    Some old processes could have been running without clear process flow and defined roles & responsibilities. Thorough digital documentation can help in creating an information database for knowledge transfer. Eg. Process Analysis of an old supply chain process that was recorded on paper and involved multiple teams
  6. Automation
    Some old processes could have been running without clear process flow and defined roles & responsibilities. Thorough digital documentation can help in creating an information database for knowledge transfer. Eg. Process Analysis of an old supply chain process that was recorded on paper and involved multiple teams
  7. Routine Health Check
    Experts recommend a continuous review of all internal and external business processes. Some companies do this quarterly while some prefer annual analysis. For eg. Reviewing employee onboarding process to decrease the time to onboard a new hire, so that they can start contributing immediately.

5 Steps of Business Process Analysis

There are 5 main steps to analyze a business process:
Step A - Select the Process that you want to analyze
Identify the process that you want to analyze based on the business outcome that you want to achieve. The process can be related to revenue, costs, profits or any other critical business function. You can also select some old ‘as-is’ process that has not been reviewed for a long time. Alternatively, you can pick a newly implemented process to review and align tasks right from the beginning. A few more points to keep in mind:-
  • De-mark clear boundaries of a process from point A to point B. This will keep you focused in your analysis
  • It is recommended to set a deadline to finish the review which can vary from 2 weeks to 6 months
  • You might want to create a small task force in case the process is complicated and time-consuming
Step B - Gather Process information & KPIs
Collect all the raw information related to the process at one place. Information could be of different kinds such as flowchart, list of teams and individuals involved, files & documentation, notes from individual interviews, email threads etc. It is recommended to collect key performance indicators of each step wherever applicable. A few points to keep in mind:-
  • Be very detailed in gathering necessary information to limit unnecessary to & fro
  • It is okay to be unable to fully grasp the process at this stage
  • Talk to several people to determine KPIs & measures of the process
Step C - Create a Process Map
Now you need to decode all the information and create a structured process flow. This is the longest and most time consuming step of the analysis. Please make sure that you refer to the next section of this article to understand common tools & techniques to create a process map such as workflow diagram.
Visual map of a process will increase your domain understanding and give you a bird’s eye view of the key components. A detailed map will enable you to complete the next steps effectively. A few points to keep in mind:-
  • Use abundant color-coding & shorthand notations as per your comfort. Eg. Red to highlight a bottleneck step.
  • Use a digital software instead of paper to create a process map. This will decrease your effort and time significantly
Step D - Analyze the Process
Once you have created a flow map, let’s move on to the most important step of analysis. The analysis requires a strong understanding of KPIs and effectiveness of measures. You need to look at the following analysis areas:-
  • Requirement Analysis
    • If you can be without this process or part of this process.
    • Is any part redundant that can be removed?
    • Does this process align with management / client requirements?
  • Delay Analysis
    • If any component is taking too much time and becoming a bottleneck.
    • Do you need technology, resources or money to prevent delays?
  • Resource Analysis
    • Whether any process step is taking too much resources or cost?
    • Can you reduce any cost?
    • Can you increase the efficiency of any individual?
    • Can you automate certain manual tasks?
Step E - Build a Plan of Action
Now that you have analyzed the process and identified clear problem areas, it is time to close the loop and implement an action plan. The following points summarize the main activities (wherever applicable):
  • Frame an action-oriented strategy to improve a process for short, medium and long term
  • Define Goals, Key Results, Effective measures
  • Identify necessary actions like Management sign-off
  • Involve HR for changes in personnel
  • Involve IT for tech automation
  • Define a hard time frame
  • Oversee the entire progress and create alignment
  • Work with a continuous feedback loop. It’s okay to go back and change your initial analysis

Process Analysis Tools & Techniques

Let’s talk about common tools & techniques that we need to map a process and enable better visualization. As discussed earlier, a better visual aids in faster turnaround of process analysis. Here is a walk-through of the some popular tools:
  1. Flowchart / Workflow Design - Construct well structured flowchart with all the steps written, connecting with other steps with conditionals. Also assign each step to a user / team working on it.
  2. Process Modelling - Data-driven approach to understand time taken at steps, workflow between users & teams to model a output using basic statistics working on it.
  3. Process Modelling Workflow
  4. Root Cause Analysis (RCA) - Deep-dive into core causes broken down as separate units that eventually lead to bottlenecks. Eliminating these ‘root causes’ will improve your process implicitly. working on it.
  5. Spaghetti Plot - Processes with complicated connections can be visualized with spaghetti plot with noodle-like flow through systems. working on it.
  6. Root Cause Analysis as Process Tool
If you are working with substantial data, you might have to step up from excel and look at working with R or Python. It is recommended to leverage automation to expedite the process.

Benefits of a successful BPA

A successful outcome driven process analysis can provide several benefits to a company.
What is an outcome driven process analysis?
A process analysis that is done with a clear vision of goals and objectives that are translated into quantitative and qualitative business outcomes
Indicators for a Successfully run BPA
  • Achieving predefined business outcomes
  • Positive feedback from the stakeholders
Benefits to a company
  • Ability to achieve the initial goals and objectives
  • Save costs by eliminating redundancies in the system & using automation
  • Increase effectiveness & productivity where your resources are focused and their work is free from unnecessary obstacles
  • Reduced errors and mistakes
  • Higher value addition for customers or end users

Common Mistakes to Avoid in Process Analysis

Process analysis at times can be counter-intuitive and you might run into unwanted mess and bad outcomes. Here are some common mistakes to avoid:
  1. If you are analyzing a process that you are also a part of, it is suggested to include third-person POV
  2. Don’t work without end goals in mind, process analysis can open new doors but you should only investigate things that are relevant
  3. Don’t confuse BPA with Business Analysis, which involves market research and strategic insights. BPA is a tool to improve & scrutinize internal mechanics of a process
  4. If your BPA plan involves changes in structure of teams & individuals; make sure that you have a “Change Management” expert on your panel
  5. Be proactive while gathering information (Step B) . Collecting details might fail if you are passive in your approach
  6. Set right expectations with top leadership from the beginning
We hope that this article will help you in conducting a successful and well-structured Business Process Analysis. All the best!
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