COMPREHEND THE SIGNIFICANCE OF BUSINESS PROCESSES (part 2)

We discussed what a business process is in my previous entry. Now, in this entry, I will show you how to successfully execute a business process or improve an existing business process in order to generate profit and give the company or organization an advantage.

Do you recall the terms efficiency and effectiveness? We can measure both of these through customer satisfaction of products/services, cost reduction in producing products/services, cycle and fulfillment time reduction in producing and delivering, quality of the product/services from design to production, differentiation of each product/service from others, and worker productivity.

Now, how do we go about correcting the mistakes? There are two ways to improve or correct a business process in the business world. The first is business process reengineering (BPR). BPR works by inspecting the business process from a "clean sheet," or from scratch, and then either creating something new or completely reconstructing the process. However, in practice, this process is difficult because it requires a significant amount of time and resources, increasing the risk. As a result, BPR is rarely used.

The following method is by business process improvement (BPI). In this manner, the business process is not completely destroyed, but rather the root cause of the problem is sought. There are five basic phases that must be followed for BPI to be successful.

1. Define phase: The team will collect all inputs, resources, and outputs, as well as the problem.

2. Measure phase: They identify process metrics such as time and cost to generate a product based on the information they have gathered. This information can also be obtained from IS, as well as through customer and employee observation, interviews, and surveys.

3. Analysis phase: During this phase, the organization will analyze the data and determine the root cause of the problem. They can also compare their process to that of other successful businesses. During this phase, they can use IT applications or software to aid in the analysis and decision-making process.

4. Improve phase: After determining the root cause of the problem, they can move on to determining the solution and selecting the best solution to implement.

5. Control phase: To ensure that the solution is beneficial, the team establishes process metrics and continues to monitor its implementation.

Because BPI is less risky and less expensive than BPR, many businesses have adopted it to improve or correct their business processes.

This article is about a company that appoints a new executive director in their organization, and one of the steps the executive director takes to improve their organization is to use business process reengineering.

While this article is about a person who works as Process Improvement Engineer in his company. Read this article for more information on how he does his work.