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Why processes are crucial for improving business performance in 2022

Is it your responsibility to improve business performance, increase revenue, and cut costs? You probably know there is room for improvement in the efficiency of your operations and a huge amount of data available - but you don’t know where to begin.

Maybe you feel stuck because you don’t know exactly what is causing issues in your business in the first place: your automation projects aren’t turning out to be as profitable as you were promised, your digital transformation journey is slow and cumbersome, and your customers are switching to competitors.

These are very common problems that can be solved by focusing on business processes and utilizing the available process data.

Let me explain why that is and how you can do it.

Why should you care about processes?

Processes are core to everything a business does. Whether it is producing products, paying suppliers, or turning customer orders into cash, there is a process behind it.

The quality of these processes determines how effective these business operations are. As a leader, it is your job to ensure that operations are efficient – and you also have the power to pave the way for a more process-oriented approach in your organization.

Let’s have a look at three real-life examples of why processes are important for your business performance.

 

Improve customer satisfaction

First of all, well-designed and executed processes improve your customer satisfaction. Let’s consider the delivery of products as an example.

If customers don’t receive their goods on time and in full, they will most likely turn to competitors for their next orders – or at least, they won’t be happy.

With good quality processes that are executed as designed, you will be able to deliver goods on time and your customers will receive what they expected. This way, you ensure that your customers will come back to you.

 

Enable a smooth digital transformation journey

Second, processes also help you reach your digital transformation targets. Most of today’s processes are handled in a complex and fully digital environment. Executing a single process often requires several different systems.

A lot of useful information about your processes exists in these systems and applications. This information should be utilized to gain transparency into your processes, get everyone on board, and ensure your digital processes are working as they should.

Moreover, you will be able to make decisions in a data-driven way instead of relying on hunches or gut feeling for decisions that will reflect on your business.

 

Gain value from automation projects

This was the most common issue in business performance that I came across during last year: Everyone wants to automate processes, but if you’re trying to automate bad processes, it will be costly and lead to a huge mess. 

Processes can help you succeed in your automation projects and reach the automation goals you set out to reach.

Have you made sure that the processes you are about to automate are working as they should? As mentioned, bad processes result in bad outcomes. Well, what do you think happens if a bad process is automated? It will only create waste more efficiently. Yup, you heard right.

To get the most out of your automation initiatives, it is absolutely crucial to first make sure your process is optimized, and only after this begin automating the process.

For example, by focusing on analyzing processes first, a large bank was able to increase the automation rate of their existing automation initiatives by 35 %. This saved them € 2.6 million in just two months!

"By focusing on analyzing processes first, a large bank was able to increase the automation rate of their existing automation initiatives by 35 %. This saved them € 2.6 million in just two months!"


As we can see from all the examples above, business processes are key to improving your business performance. There are a lot of ideas and perspectives when it comes to improving business, but remember that behind each idea lies a corresponding process.

Therefore, you should pay careful attention to how your processes are doing: in the end, the quality of processes determines how well you operate.

 

Why should you analyze processes?

As you are likely to know, most processes operate in various kinds of IT systems, such as ERP systems. This means that they produce enormous amounts of data in those systems every day.

Often, such systems may strike people as a “black-box”, since people know a lot is happening there, but they don’t know what exactly is happening. Do you know exactly what kinds of activities are performed each day? Furthermore, are you using this knowledge to improve your business?

Not only is the IT system itself a black box: companies also suffer from low transparency of their processes. Large enterprises might have hundreds of processes, being handled in thousands of applications, yet no one knows how the end-to-end processes work. Lack of visibility into the complete processes is becoming one of the most common problems for today's enterprises.

"Lack of visibility into the complete processes is becoming one of the most common problems for today's enterprises."


Indeed, understanding how you are currently performing is the first step towards improved business performance. That’s why analyzing the data in your IT systems is an important task. Even though the analysis itself as an activity brings you zero value, the understanding you get afterward is invaluable.

With this understanding, you’ll be able to know what exactly happens in your processes. You will be able to see where you are doing great and where you could improve. And with such understanding, you’ll be able to make the right decisions to keep your customers and business happy!

 

Best practices for analyzing your processes

Since analyzing processes is a necessary but not directly value-adding activity, your goal should be to quickly get an analysis outcome that you can trust. By minimizing the time spent on the actual analysis, you will gain value more quickly - through the fact-based and trustworthy outcomes of the analysis.

However, it’s important to consider that not all tools and technologies for analyzing processes will give you a) 100 % data-based results, or b) immediate insight.

In the next part, we will cover three different analysis methods you can use to get that invaluable process understanding.

 

How can you analyze processes?

Traditionally, process analysis has been conducted through interviews and workshops, or by analyzing a small part of the data.

While the only resources you need for this kind of analysis are the people working with those processes, this type of analysis will not give you the truth of your processes.

This is because you are only considering a (small) part of the data and ignoring some other important information. Furthermore, interview and workshop results often become biased, as people naturally have their own opinions and gut feelings on topics.

Use data analytics to get rid of human bias

To get the real truth out of your processes and avoid human bias, data analytics is needed.

Business Intelligence tools have been developed to analyze data. While they do a good job at visualizing the high-level numbers of your operations, they lack the ability to analyze the process activities in detail.

Analyzing process activities in detail allows you to find root causes for problems in the process. It also allows you to predict how the process is about to be executed, which makes it possible to act before mistakes happen.

A detailed analysis isn’t as complicated as it sounds

A technology called process mining (page: what is process mining) has been developed for the purpose of analyzing processes in more detail.

Process mining software extracts all the data from your IT systems and automatically creates process flowcharts and analyses, finds root causes to problems, and makes predictions based on this data.

Some process mining tools – like QPR ProcessAnalyzer – include a built-in root cause analysis functionality, which means that you will find the reasons behind almost any operational inefficiencies.

Business performance is best improved with the help of process mining, as you don’t waste time on building your own analyses and KPIs thanks to automatic analyses.

These analyses are also automatically gathered on dashboards, which can be used as reports to the management team in a format that is easy to read, understand, and investigate on a deeper level. The results of process mining analysis are based on real data which doesn’t leave room for opinions or bias, making the results trustworthy.

This way, process mining software is able to give you immediate transparency into business performance as well as suggestions for improvement activities. Analyzing processes with process mining also helps you monitor and communicate your goals, targets, and policies across your organization. With process mining software, you can make data-driven decisions when you are deciding on the best choice of action to improve your business.

Watch our video on how process mining with QPR ProcessAnalyzer works below!

 


Do you know the state of your processes and what you’re currently doing to improve them?

I hope that after reading this blog, you understand why business processes are an important asset in improving an organization’s efficiency.

I encourage you to reflect on how your organization deals with business processes. Try to answer the following questions in your organization:

  • What kind of process discovery and improvement methods you are using and how well do they work?
  • How are you making sure that your automation and digital transformation decisions are data-based and successfully prioritized?
  • How are you making decisions? What are those decisions based on?

 

Hopefully, this blog has been an insightful read! I would love to hear your thoughts on the topic, so feel free to send me a message or comment below. If you would like to see if process mining would be your tool of choice to get the most out of your business processes, book a meeting with our experts and learn how we can help you improve your business!

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Jaakko Knuutinen

Jaakko works as a Business Development Specialist helping people solve complex business problems with process mining. His passion is to purify businesses of muda to ultimately drive customer value and make life easier.

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