This blog explores how a strategic focus on process excellence can lead to tangible financial benefits for organizations.
In today’s highly competitive business landscape, organizations across industries seek ways to enhance their financial performance. While factors such as market conditions and product innovation play a significant role, process excellence is another critical driver of financial success. By enhancing business process excellence, organizations can reduce costs, increase operational efficiency and improve overall financial performance.
What is Process Excellence?
Process excellence, or business process excellence, is a continuous approach to improving the efficiency, effectiveness and quality of an organization’s processes to create and deliver value to customers. Not only does process excellence focus on process improvement techniques, but problem solving, change management, productivity and performance, and culture, which all help align business strategies to deliver value to customers.
Because it’s an ongoing process, process excellence aims to identify and recognize opportunities to streamline, increase efficiency and improve results continuously. Key elements include creating a process map, redesigning and streamlining processes, evaluating and implementing technology solutions, fostering collaboration, monitoring and skill development. Learn more about each one in the step-by-step process excellence guide below.
Step 1: Identify Process Inefficiencies
Identifying and analyzing existing process inefficiencies is the first step to process excellence. This includes conducting a comprehensive review of key business processes. Organizations can employ various methodologies to uncover inefficiencies, such as value stream mapping and process mapping, and each approach will help pinpoint bottlenecks, redundancies, errors and areas where you can better use resources.
Some questions to ask to help realize process inefficiencies include:
- What is the purpose of this process, and how does it contribute to overall organizational goals?
- Are there clearly defined roles and responsibilities to support the project throughout its life cycle?
- Are there any redundant or unnecessary steps, including manual tasks you could automate?
- What barriers are employees facing as they carry out the current process, and are there bottlenecks that unnecessarily hinder the speed of the process?
- How are processes communicated? Are there documented procedures or a single source of truth?
- Are there certain errors that continue to pop up, and if so, what is the cause?
- Do employees possess the resources, skills and training to perform assigned tasks effectively?
Asking these questions can help you understand where you are and identify areas for improvement. Be sure to include all key stakeholders to fully understand how each inefficiency impacts the organization and the bottom line.
By identifying process inefficiencies, organizations can improve performance, reduce costs, enhance quality, and boost customer satisfaction for long-term success.
Step 2: Streamline and Redesign Processes
Once you identify process inefficiencies, the focus shifts to streamlining and redesigning the related processes.
- Define goals: Start this step by defining goals and objectives you want to achieve and ensure alignment with the organization’s overall strategy.
- Seek solutions: Challenge existing assumptions, established norms and traditional ways of doing things, and seek innovative solutions when redesigning processes to address inefficiencies.
- Design your approach: Combining lean management principles and agile methodology creates a dynamic and flexible approach to continuously adapt and refine the processes to achieve process excellence and financial goals.
Establishing consistent and standardized procedures ensures consistent output and quality.
Step 3: Implement Technology Solutions to Existing and New Processes
Organizations can streamline operations further by strategically implementing innovative tools and technologies such as robotic process automation (RPA), artificial intelligence (AI) and data analytics.
Automation can eliminate repetitive and mundane tasks to free resources for more value-added activities. Data analytics can provide valuable insights into performance metrics, enabling data-driven decision-making and targeted process improvements.
Take, for example, a macro-regional insurance carrier that wanted to increase profitability and operational efficiency, as well as increase value from employees by eliminating repetitive tasks. A lack of routine updates and integration with newer technologies left the company stifled by legacy systems, revealed process inefficiencies through highly manual employee workloads, and created a general fear of the unknown regarding automation.
After implementing RPA, the company immediately realized results in FTE hours saved through process efficiencies, increased profitability and operational efficiency improvements. To date, the solution has impacted six different lines of business over more than 90 use cases, and it saved or reallocated more than 10,000 annual FTE in one year. Additionally, the company offered employees training labs and lunch and learn activities to help create a culture of excitement around RPA, which many participated in.
Similar to RPA, new and emerging AI technologies can bring greater consistency, efficiency and adherence to standardized processes. By adopting a systematic approach to implementing technology solutions, organizations can successfully leverage technology to achieve process excellence, drive efficiency and deliver exceptional value to their stakeholders.
Step 4: Foster Cross-Functional Collaboration to Drive Process Excellence
Driving process excellence through cross-functional collaboration is another powerful strategy that can benefit organizations significantly. By bringing together individuals from different departments and areas of expertise, you can use diverse perspectives and knowledge to optimize your processes.
The larger an organization, the more important cross-functional collaboration becomes. One example is when we helped a 30,000-person company with lean resource capacity transition from a waterfall to an agile methodology. Through this, the organization enabled the company to focus team members on project workloads while others focused on support, leading to incremental benefits for customers and team members alike. One key to success was collaboration between team members supporting all project activities.
Through collaborative problem-solving and brainstorming sessions, teams can collectively address challenges, generate innovative ideas, and implement effective solutions that benefit the entire organization.
Step 5: Continuously Monitor and Improve Process Excellence
Process excellence is an ongoing journey rather than a one-time destination. By integrating continuous monitoring and improvement practices into initiatives, an organization can ensure ongoing optimization, uncover new opportunities, adapt to changing circumstances and drive sustainable improvements over time.
- Setting key performance indicators (KPIs).
- Regularly measuring process performance.
- Conducting periodic reviews.
Organizations can inspire further collaboration and drive sustainable progress by communicating the value and impact of their efforts through success stories or being transparent about challenges. By cultivating an evolutionary mindset, organizations can achieve long-term success.
Step 6: Provide Ongoing Training and Skill Development to Support Initiatives
Continuous training and skills development are essential for empowering employees to effectively contribute to process improvement initiatives. By fostering a learning culture and investing in employee development, you can build a capable, empowered workforce that drives continuous improvement and achieves sustainable results.
Putting It All Together
Achieving process excellence is a critical driver of sustained financial success for organizations. Whether you use process excellence to remove cost from the system or increase efficiency so you can do more with less, it can be a key value driver for your organization. By striving for efficiency, productivity, quality, adaptability and customer-centricity, organizations can continuously improve their processes, drive financial performance, and create a culture of excellence that fuels long-term success.