Ever wondered what's the secret of organizations scaling up fast & yet delivering consistent experience to their stakeholders. The secret is their awesome internal business processes.

But, improving business processes isn't as easy as it seems. There're many variables involved - employees, customers, control, cost, margin, etc. A single process mis-step can cost your business dear.

Don't panic. You're not the only one who's struggling to improve her business processes. Most small business owners are on the same boat. In fact, you should be happy that you're looking to improve your process (that means you already have a process). Because most business owners don't even have a process at the first place! Though, I don't have a stat to prove this.

So, what's the solution? Simple. Follow this article. I'll be sharing 5 simple steps you can use to improve your business procedures.

Yes, no big deal. You're just 5 steps away from making your business super-efficient. Ready? Let's get started.

What Is A Business Process

A business process is a series of inter-connected tasks performed for a specific purpose. There're generally two type of business processes:

  • Functional processes
  • Cross-functional processes

Functional processes are the processes that are performed within the ambit of  a functional department. On the other hand, cross-functional processes are the processes that are cut across more than one function department.

Example of a functional process: Recording & approval of a billing software annual subscription payment. Here the payment voucher will be raised, recorded & approved by the accounts or finance department. The complete process is performed within the ambit of a single department.

Example of a cross-functional process: Recording & approval of a stationary expense. Here the payment voucher will be raised by the admin department & approved by the accounts department. The complete process is performed cross-functionally by more than one department.

By nature, functional processes are more prone to error or fraud. Therefore, they require more internal control. I'll talk more about this later in this post.

Problems With Most Processes

Most business processes especially in a small business suffer from the following:

  • No checks or internal control
  • No continuous improvement
  • Inefficient & redundant
  • Duplication
  • Informal (not documented)
  • Prepared haphazardly (without giving much thought)

This article is all about improving or streamlining your processes dramatically.

Benefits of Streamlining Processes

There're various benefits of streamlining your business processes like:

  • Improved customer satisfaction
  • Better employee morale
  • Improved workflow efficiency
  • Lower costs
  • Better product quality
  • Improved profit margin
  • Easy to scale up

Now, let's see some real-life examples of business processes. You encounter them almost everyday.

Real-Life Examples of Business Processes

Ford

It's well documented how Ford revolutionized the assembly system. Bringing the process time from 12 hours to 90 minutes (for a single car). The result? Affordable cars for everyone. That's the power of process improvement.

Assembly process at Ford involved 3000 parts that were broken down into 84 steps. Each step carried out by one employee as the chassis moved automatically down the chain. This moving assembly process reduced the cost of Model T Ford car down from $ 850 to $ 300.

Domino's Pizza & McDonald's

The Ford assembly system not only inspired the automobile industry but also a completely different sector - fast food restaurants.

Do you know that your favorite Pizza or Burger passes through a well-defined "assembly line" before being served to you? Yes, that's the core reason why McDonald's or Domino's are so consistent with their food taste, quality & customer service. Whether you taste french fries at New York's McDonald's or London's McDonald's, they'll most probably taste the same. Won't they? Yes, of course, sometimes these fast food chains change or tweak their recipes based on their regional customers' preferences. But, did you get the idea?

The best part? Their meticulous process is not just at display at their kitchen but everywhere else. Note how their orders & delivery systems flow. It's all about process, process & more processes.

So, you want to franchise like how Domino's or McDonald's? Then, apart from your recipe, try improving your processes. Thank me later.

Related: Domino's Pizza Turnaround: From Zero to Hero

Amazon

The eCommerce giant, Amazon, is also an example of how great organizations leverage their processes to delight their customers.

Have you noticed their ordering system? Their delivery system? Their customer complaint resolution system? They're all well-defined.

Example: This is how a typical order flows in Amazon:

Customer checkouts > Order is approved > Seller & customer get notified > Seller warehouse or FBA warehouse label, pack & invoice the order > The order is picked up the courier > Customer is notified > The order is out for delivery > Customer is notified > The orders gets delivered > Customers & seller are notified

HOW TO IMPROVE INTERNAL BUSINESS PROCESSES OR PROCEDURES AT WORK

Step 1: Create A Process Manual

A process manual is a manual where you record or document your business process. It's a guide that helps everyone in your organization to follow the processes. And, not to forget, how handly it is when onboarding new employees.

So, if you want to improve your business processes, you need to first document your existing processes in the form of a process manual.

To create one, take a draft sheet of paper & note down various business activities that takes place in your organization. Each & every.

Thereafter, break each activity into a series of tasks. Note down these tasks under each activity. The cumulative of these taks (for each activity) is nothing but a process. You can also further add a task owner (the person(s) who would be responsible for executing that task) against eash task.

Its not necessary that your map your processes as a flow chart (though that's recommended). Bullet points would also work.

Example 1: Imagine yours is a manufacturing organization with a purchase activity. So, your activity will be purchase & the tasks under this activity will be:

  • Raise purchase requisition (Owner: Engineering/Operation department manager)
  • Invite for quotations (Owners: Purchase department executive + manager )
  • Evaluate quotations & finalize supplier (Owners: Purchase dept. manager & Engineering/Operation dept. manager)
  • Issue purchase order to the supplier (Owners: Purchase dept. executive + manager & Engineering/Operation dept. manager)
  • Issue advance payment to the supplier (Owners: Purchase dept. manager + Finance dept. executive + manager)
  • Receive material (Owners: Warehouse manager + Purchase dept. manager)
  • Receive & account for the final bill received from the supplier (Owners: Purchase dept. manager + Engineering dept. manager + Accounts executive + Accounts manager)
  • Make balance payment to the supplier (Owners: Purchase dept. manager & Accounts executive + manager)

The aforesaid steps are cumulatively nothing but the purchase process of your manufacturing organization. Map it & record it in your process manual (under Purchase activity).

You can similary decode other activities of your organization (like sales). Let's understand this with another example:

Example 2: Imagine yours is a B2B management consulting firm with a sales activity. So, your activity will be sales & following will the tasks under this activity:

  • Receive & respond to an inquiry from a potential client (Owners: Receptionist & Sales manager)
  • Send a proposal/quote to your potential client (Owners: Sales executive + manager)
  • Send a retainer invoice (for advance payment) (Owners: Sales manager + accounts manager)
  • Record & account for advance payment (Owners: Sales executive + manager & accounts manager)
  • Send the final invoice & account for balance payment (Owners: Sales executive + manager & accounts executive + accounts manager)

Please note that the task owners generally have separate roles with regard with execution of that node. For example: An admin expense voucher will be raised by an admin executive, checked by the admin head & approved by the accounts manager. So, in total, there're 3 tasks with 3 node owners, each having separate function.

Makes sense?

Once you've your draft process manual ready, time to convert it into a final process manual. For this, I recommend you to a workflow software called Process Street. Its a software specifically designed to map your business processes. The best part? You can also assign task owners for each task of your processes.

Here're how to get started with Process Street:

Go to processstreet.com & create an account

how to improve internal business processes1

Create a process template

how to improve internal business processes2

Assign task owners(employees) to each task

Run the process as checklist every time a business activity is done

That's it. Using technology to manage your processes is one of the best business decisions you can make.

To better visual clarity, here's a video on how to use Process Street:

Click here to know more about Process Street.

Whats more? Process Street comes with a no-credit-card 14-days FREE trial! So, try that out & see if it fits your business needs.

Now, with your existing processes mapped, time to study & find loopholes in those processes.

Step 2: Study & Find Loopholes In Your Existing Processes

This step involves gathering & studying the process feedback from your employees & customers/other stakeholders.

So, get started by asking your team the following:

  • Are they frustrated or satisfied with your organization's present processes?
  • If frustrated, ask them to specify the process & the reason (loopholes).
  • Are they frustrated with a particular task or the whole process in general?
  • Is their frustration justified?
  • Are they finding your organization processes productive?
  • Is your organization processes creating bottlenecks & preventing your employees to perform at their full potential?
  • Do your employees understand the importance of having good processes?
  • How much time does a new employee take to get accustomed to your business processes?
  • Do your employees commit error while executing processes?

A word of caution: Sometimes employees don't appreciate the importance of having a process with strong internal control checks. So, account for the same while evaluating your employees' process feedback.

I recommend you to share the Process Street templates with your team to help them better visualize the process & pinpoint loopholes.

Now, lets move to gathering feedback from customers or other stakeholders. Survey them with the following questions:

  • Are your customers satisfied with your sales or service processes?
  • If unhappy, ask them to mention the reason
  • Are they unhappy with a particular task or the complete sales or service process in general?
  • Is there a delay in sales turnaround time? If yes, what's the ideal turnaround time for most customers?
  • Is the product quality upto the mark? Do you hamper product quality in the quest to improve your sales turnaround time?
  • What is more important: product quality or service speed?
  • How helpful are your employees in handling customer complaints?

The answers to the aforesaid question will help you to unearth the bottlenecks in your processes. Yes, it takes a third eye to really understand what's wrong with your processes. That's the reason I recommended you to involve your employees & customers.

Note down all the bottleneck tasks & processes. In the next step, we'll brainstorm ideas to improve our processes by getting rid of these bottleneck.

Step 3: Brainstorm Improvement Ideas

Take out the list of problems/bottlenecks you prepared at Step #2. Based on that list, try answering these questions:

  • What if you completely remove the bottleneck task(s) from the process? How'll it impact the process integrity, performance or efficiency?
  • Can you add a better task(s) in place of the removed bottleneck task(s)?
  • Can the number of task owners be reduced without impacting the internal control much? (This'll dramatically reduce the process time but increase the risk of error or fraud)
  • Can two or more bottleneck tasks be merged to form a single task? Will it reduce process time or improve efficiency?
  • Does the complete process needs re-structuring?
  • Can an extra task be added to strengthen internal control or check?

Pro Tip: Try soliciting process improvement ideas/feedback from employees or customers at step #3.

Example 1: A typical leave application approval process involves the following nodes:

  • Application for leave via an HR app (Owner: Employee seeking leave)
  • Pre-approval check of the leave application  (Owner: HR manager)
  • Approval of the application (Owner: Dept. Manager)

This is pretty easy one. Does the second task (pre-approval check by HR manager) add value to the leave application process? No, not really. So, this task can safely be removed from the process. Since, the employee works & reports to the dept.'s manager, there's no point of involving the HR manager into the leave approval process. If at all, the HR manager wants to keep an eye on the leaves, she can do so by downloading & studying the leave reports (preferably once a week).

So, here's how the new leave application process looks like:

  • Application for leave via an HR app (Owner: Employee seeking leave)
  • Approval of the application (Owner: Dept. Manager)

Result: Quicker approval of employee leave applications.

Example 2: A customer complaint redressal process involves the following tasks:

  • Raise a complaint by email (Owner: Customer)
  • Categorize & forward the complaint to the respective dept. (example: technical, billing, operation, etc.) (Owner: Customer support executive)
  • Reply to the customer email (Owner: Dept. executive)

Here, we find substantial delay in the second task where the support executive categorizes & forwards the complaint to the relevant employee. Can we remove that? What's the alternative? Let's reframe the complaint form & add a dept. field there. Let the customer herself fill the category field. Based on the category, the email will directly be sent to the concerned dept. Makes sense?

Also, let's improve the overall process by giving a live chat & phone options as well.

So, this is how the improved process will look like:

  • Raise a complaint by live chat, email or phone (Owner: Customer)
  • Reply to the customer chat, email or phone call (Owner: Customer support executive or the Dept. executive)
  • Escalation of the customer complaint, if customer is not satisfied with the resolution (Owner: Customer & the dept. manager)

Result: Better customer satisfaction (less time, instant resolution & better control)

Example 3: An eCommerce order fulfillment process involves the following nodes:

  • Raising (& paying) an order (Owner: Customer)
  • Generating shipping label & invoice (Owner: Operation executive)
  • Packing the order (Owner: Warehouse executive)
  • Scheduling a pick-up with the courier (Owner: Warehouse executive)
  • Dispatching order (Owner: Warehouse executive)

Here we find 5 tasks for a simple eCommerce fulfillment. Can it be tweaked?

Ok, let's move the packing part one task up. And, merge the shipping label, invoice & pick-up into one task.

Here's how the revised process will look like:

  • Raising (& paying) an order (Owner: Customer)
  • Packing the order (Owner: Warehouse executive)
  • Generating shipping label, invoice & courier pick request (Owner: Operation executive)
  • Dispatching order (Owner: Warehouse executive)

Result: Faster fulfillment & better customer satisfaction

Example 4: An expense reimbursement process involves the following nodes:

  • Filling up the expense reimbursement voucher along with expense proof (Owner: Employee claiming reimbursement)
  • Pre-reimbursement check & accounting of the voucher (Owner: Accounts executive)
  • Reimbursement voucher approval (Owner: Accounts manager)
  • Reimbursement of expense (Owner: Cashier)

Here there're 3 people of the accounts department involved in the expense reimbursement process. Without impacting the internal control, we can safely remove the second task (pre-reimbursement check) & pass on that function to the accounts manager. In other words, we need to merge second & third tasks into one. Here's how the revised process will look like:

  • Filling up the expense reimbursement voucher along with expense proof (Owner: Employee claiming reimbursement)
  • Accounting & approval of the voucher (Owner: Accounts manager)
  • Reimbursement of expense (Owner: Cashier)

Result: Faster expense reimbursement & employee satisfaction.

Example 5: Lately you've been receiving complaints about your product(ABC) quality. Here's how you manufacture ABC:

  • Grinding of A & B (Owner: Operation executive)
  • Heating C (Owner: Operation executive)
  • Layering the AB (grinded) over the heated C with glue(Owner: Senior operation executive + manager)
  • Drying the ABC (Owner: Operation executive)
  • Quality check of ABC (Owner: Quality control executive)

Though the process looks robust, there're loopholes when it comes to quality control. No wonder you're getting product quality complaints lately. Let's tighten up this process by adding better quality checks against appropriate tasks.

  • Quality check of raw material A & B (Owner: Quality control executive)
  • Grinding of A & B (Owner: Operation executive)
  • Quality check of raw material C (Owner: Quality control executive)
  • Heating C (Owner: Operation executive)
  • Layering the AB (grinded) over the heated C with glue(Owner: Senior operation executive + manager & senior quality control executive)
  • Drying the ABC (Owner: Operation executive)
  • Quality check of ABC (Owner: Quality control manager)

Result: Better product quality & improved customer satisfaction.

Step 4: Create, Document & Implement New Processes

Time to record your new & improved process in the process manual (the process template in Process Street).

After that, you need to communicate the following to your employees:

  • The changed, improved, new or revised process(es)
  • Reason(s) for the changes
  • The new process(es) implementation timeline
  • How the new process(es) would impact their work
  • The training timeline
  • How the testing & iteration (Step #5) will work

Training is crucial if you've made substantial changes to your processes. If not training, you can at least try something like demo, mock drill, etc. The point is - you should not jump directly from creating new processes to implementation of the same. Your employees, first, need to absorb what has changed & then practice those changes.

Once you're confident about your new process(es), you can implement them by assigning access of your process template to your employees. Make sure the process templates & checklists (in Process Street) are followed for each activity in your organization.

Step 5: Test & Iterate Over The New Processes

Once implemented, your improvised processes need constant testing & iteration. Take feedback from the task owners or customers. Look if there're any bottlenecks that are preventing the new processes to be implemented swiftly. Work on removing those bottlenecks.

Also, you may even encounter something like - the new process isn't as productive or efficient you thought it to be. Now what? You need to again start brainstorming ideas & changing the process.

The idea is to not to sit idle & always keep improving your processes. So, keep that feedback loop open. Listen to your employees & customers regularly. Act on those feedback.

Conclusion

I know. Improving internal business processes isn't as easy as it seems. As I said earlier, sometimes things may not go as planned. Maybe the new process will turn out a disaster. But, hey, did anyone promise that its going to be an easy ride? And, look at the reward! a good process improvement exercise will help you delight your customers, save cost, improve profit & boost employee productivity. Now, tell me, is it worth improving your processes? Absolutely.

All big dreams start with a small step. So, take that step. Start creating a process manual (step #1) & you'll see how easily the next steps follow.

Don't you want to be the next Ford or the next Domino's? If they could do it, why not you? Its time to rise up & change the game for your business.

Remember, its all about process, process & process.

Related: 20 Simple Ways To Improve Staff Productivity & Performance

So, what do you think of the aforesaid steps to improve your internal business processes? Share your thoughts by commenting below.