Process optimization

Process optimization offers huge opportunities for each company to distinguish itself from its competitors and focus more closely on customer wishes and requirements. Customers assess the whole shopping experience and not just the product or service. Therefore, it makes sense to optimize processes at all levels, from handling a sales inquiry to processing an order, product or service, production, delivery, and support.

Note

Process optimization can increase revenue and profits considerably if done the right way.

A systematic approach to process optimization, which should include all end-to-end processes, has multiple positive effects on a company. It can help increase the competitive advantage of a company in several ways. The following are some of the most important effects of process optimization:

• Increased sales of products or services through better service, better and faster production, increased flexibility, better customer experience, the ability to better sense customer requirements, and so on.
• Cost savings are the most obvious benefits and are directly related to optimizing activity execution times and people and resource utilization. Simplifying business processes also saves costs. Sometimes, process optimization helps in identifying processes or parts of processes that can be outsourced or shared.
• Improved efficiency in business operations is another important aspect. Process optimization is not only about minimizing process activity times. It is also about coordinating private processes (those processes that a company executes internally) with public processes (processes that involve business partners). Just-in-time delivery and manufacturing are just two examples of highly-coordinated business processes between several partners. Such processes save money and allow more efficient business operations.
• Increased customer satisfaction can be achieved through process optimization. Better support for customers, faster response times, and higher visibility into processes (for example, the ordering process where the customer can monitor online what happens with their order) are directly related to customer satisfaction. Integrating online customer support with a problem ticketing system is another example, and we could identify more.
• Improved exception handling can also be achieved. Exceptions are the most undesirable events in business processes because they interrupt or even stop the usual process execution. The fact is that when exceptions occur, they take up considerable time and resources. Optimizing and automating exception handling can be very useful.

From a technical perspective, process optimization is about developing optimized process models, which we will look at in the next section.

The TO-BE process model

Process optimization is the final phase in the BPM cycle. The objective of this phase is to develop the optimized process models called TO-BE models.

Developing the TO-BE process model is a challenging task because we must balance different factors. First, we have to define the objectives that we want to realize through process optimization. The most obvious objective can be that the process performs faster with less utilization of resources and people. The other objective can be to improve visibility into the process execution. Knowing the stage at which the process execution currently is can be helpful to the management as well as to the customers, who might even be able to track the process online. The objective of optimization can also result in improvements in the quality of products/services, better working conditions for employees, reduced impact on the environment, and so on.

Then, we have to identify where to start the optimization. To identify this, we use the data gathered in the process execution and control phases. The data gathered by BAM tools can be very helpful in identifying process bottlenecks in real time and in identifying activities or sets of activities that would be suitable for optimization.

Another way of identifying process optimization points is process simulation, which we mentioned earlier in this chapter. It is important to understand that BPM provides tools that propagate the data from BAM (process execution and control) into the process-modeling tool, where this real data can be used for process simulation. This is important because the tedious work of estimating process runtime parameters (activity execution, resource utilization, number of requests in a given period of time, and so on) is eliminated. At the same time, data gathered through BAM is much more accurate than estimates.

An important aspect of process optimization is new ideas. In closed organizational structures, the people involved in process optimization may be blinkered and may lack the ability to look at the process from a broader perspective. It would, therefore, be useful to recruit external consultants or other people from outside the organization, who can generate fresh ideas. Only in this way can we realize the full potential of process optimization.

However, when we gather new ideas, we should be careful to assess each new idea and find out whether it is realizable. We have to find a balance between new ideas and the level of changes a company's existing organizational structure can accommodate.

As employees do not like changes, we have to be careful in deciding how much change we want to introduce at one go. Ideally, we could change the process model considerably and try to implement changes in one large step. However, in many organizations, this has proved to be a failure because employees were unable to accommodate such changes overnight. If we do not invest enough time in communication with employees, they could start showing resistance to the changes. Therefore, it is often better to optimize in smaller steps and reach complete optimization over several stages.

On the other hand, we also have to be aware that process optimizations require modifications in the applications. Software modifications can be costly and they require time and resources. Therefore, from the IT perspective, it might be better to modify the applications at one go, that is, to optimize all at once.

Process optimizations often require changes in a company's organizational structure. We have to think about these changes too and obtain the necessary support from the top management. Otherwise, we will not be able to change the organizational structure.

Finally, we have to check whether the optimizations have been successful and whether we have achieved our goals. We do this by process simulation before it goes into production and after the process has been deployed to production through process control and monitoring.

Typical problems in process optimization

Process optimization is not an easy task. The following are some common problems that you might face during optimization:

• Too little imagination: When optimizing processes, we should not only improve bottlenecks in existing processes, but also include innovations and new approaches.
• Noncritical experience consideration of other companies: Although it is good to consider the experiences of other companies in process optimization, we have to be critical while comparing their experiences with ours and the facts related to our company. Therefore, before adopting them, we should assess whether these experiences are really best practices, and if they are, we should adapt them to our specifics.
• Too much focus on IT: When modeling or optimizing processes, we should not focus only on end-to-end support by IT. This may generate unrealistically high expectations. IT cannot solve all problems.
• Praxis-relevance: An optimized process model might seem perfect, but this does not guarantee that the process model will work perfectly in the real world. Therefore, we should put enough effort in process implementation; otherwise, we might end up with a failure.
• Process metrics: We should measure process-related metrics, such as KPIs, to be able to assess whether the process works efficiently. Without metrics, we will not be able to optimize processes because we will not be able to identify where the real problems are hiding.

With this, we have concluded our discussion on the BPM life cycle.