By Iqbal Thokan
Review, analyse, improve. Review the way you deliver value to your customer, analyse the shortcomings and find efficient ways to implement in order to enhance your customer experience and improve your value to them.
Every business is about delivering value to a customer and in most cases the way we deliver value includes systems which helps to enhance certain processes. Each of these processes need to work in harmony in order to achieve growth and profitability.
Within every business there are 6 core processes:
- Procurement – How well we buy our products, when we buy them, the price we payas well as the time of delivery to us from the supplier.
- Marketing – How well we inform our customers about our existence as well as ourvalue proposition and the products or service we deliver.
- Sales – How well we are able to convert marketing efforts into actual purchasing customers.
- Operations – How well are we able to deliver on the expectations we create withinour customers minds.
- People – How well we manage the people within our business to be able to do theright thing at the right time.
- Finance – How well we manage the monies coming in and going out of our business in order to make a profit, but more importantly to aid us with growth.
While each of these are defined separately, many make the mistake of treating them separately while in fact each of these contribute to a particular function and the success of the other and thus need to be treated as one. Each function is separate, but the purpose needs to be as one and ultimately that is to provide value to the customer with the aim of improving the bottom line, or simpler to make a profit.
Optimisation is one of those things that each of our businesses should strive to achieve, unfortunately many of us struggle to find that ideal balance between each process working independently while at the same time working in harmony to achieve the vision we set out for the business. There are many factors that contribute to why businesses struggle with achieving this harmony and sometimes it is the friction that occurs between the individuals at the helm of each of these processes or the systems used for each process are not able to properly communicate with each other. Another factor is that many of us make the assumption that if we focus on one of these, usually sales and marketing the other processes will automatically fall in place. However, the only way to achieve harmony is for each of these processes and systems to be aligned and to be optimised.
Working with various businesses over the last 10 years I have found that processes and systems that are aligned and optimised improve the capacity for being in harmony and growth. I have also seen that when there is optimisation there is also harmony amongst the team and an environment of encouragement and support is created.
So, how do we go about optimising our processes and systems in order to deliver value to our customers? The first step is to review and analyse our current systems and processes and check where we can improve. Once this is done, we need to gain clarity on how each of these processes and systems function within our business and how significant are each in terms of their contributions. Finally, we need to agree on what requires optimising and then to prioritise this in terms of importance and urgency.
Remember, while each of these processes and systems need to operate independently, they need to function in a way that contributes to the whole in order to achieve harmony.
In 2018 I started working with a lovely lady called Brenda. Brenda had taken over the family air-conditioning business due to the ill health of her husband who had started the business back in 1972. After having built the business over decades Brenda still struggled with moving the business forward and continued to work within a particular cycle of turnover and with the same clients. Working with Brenda, I realised that like many owner-run businesses there was a challenge of implementing the right systems to bring harmony to the processes in the business. The challenge was that Brenda had all the information in her head and most of her systems depended on her involvement and as we know when you are working in your business it is hard to see the horizon and plan. So, using specific business methodologies we began what seemed to be a tedious and arduous task of optimising the business to bring increased value to customers. After months of hard work, we started seeing some results and a year later we managed to optimise some key systems and process and this could clearly be seen on the income statement where within one year the turnover had increased by 58%. All it took was understanding where the problems lay and finding unique and creative solutions and using the resources at hand to develop an effective and implementable plan.
A business that has its processes and systems optimised and in harmony creates an environment of support and encouragement to find new, unique and creative ways to stay relevant, survive and thrive.
Iqbal Thokan is an experienced business management consultant and the founder and co-owner of breedingpositivity.com
How do the top minds in digital marketing operate? Contributor Kevin Lindsay discusses the mindsets and habits that lead individual marketers — and their organizations — to success.
I spend my days surrounded by some of the boldest, most innovative thinkers in the digital marketing universe — and it’s pretty incredible.
They’re taking risks, experimenting, testing, and through it all, changing the way we think about optimization. These elite doers know testing and optimization are critical pieces of their digital monetization strategy, and they’re pushing the envelope as far, as fast and as hard as they can to maximize it.
These thinkers have given me a unique perspective on what really separates optimization leaders from the rest of the pack. From where I sit, it’s clear what they’re doing that most organizations aren’t — and it’s equally clear how fellow marketers can benefit from these elite best practices and learned behaviors.
Digging in, it seems to all boil down to five areas of understanding and action:
1. Using Data Religiously
Above all, optimization leaders are using data to understand who their audience is — and from there, to deliver spot-on experiences.
Yes, there’s the discipline and commitment that comes with building out a robust data platform. And yes, there are the marketing best practices, processes and systems that need to fall into place to make it all actionable, and ultimately, help you go from insights to action, to impact, then back again.
But for our purposes, it boils down to this first step: committing to being a data-driven marketer, then using data religiously in your testing, optimization and personalization initiatives.
To emulate the optimization leaders, start by putting your existing behavioral and contextual data to work. Leverage these valuable metrics to build out comprehensive audience segments — segments that deliver greater relevance than last year, last month or even last week.
That’s another key distinction between optimization leaders and the rest of the bunch: optimization leaders know that their audience is constantly evolving and expanding, and yesterday’s most profitable segment might look totally different from today’s. Stay on top of these real-time shifts by constantly pulling in new profiles, then drilling down on existing data to find the most valuable segments… even if they aren’t what you expected.
Sounds straightforward enough, right? Yet surprisingly, according to Adobe’s latest Digital Marketing Survey, nearly half of companies do not have formal plans in place to grow or enhance their data-driven marketing initiatives.
Simply put, there’s no room for a “spray and pray” approach in today’s always-on, last-millisecond landscape. Don’t let yourself and your organization get left behind.
2. Making The Most Of Mobile Experiences
It feels like we’re in the same place in our mobile evolution as we were with web eight or so years ago. It’s like digital déjà vu.
The good news? Since we’ve been here before, there’s no reason to let labels and silos trip us up. Mobile accounts for 50 to 70 percent of all consumer interactions with leading brands, and app session launches alone are up 51 percent year over year. We can’t wait any longer to dig in and optimize those critical consumer touch points — which, it seems, are growing by the minute.
According to Adobe Digital Index’s 2015 Mobile Benchmark Report, just 34 percent of surveyed companies have a defined mobile strategy. Those 34 percent are poised to dominate the market starting right now. (Adobe is my employer.)
Now think about your own business. Are you part of that 34 percent? Or the two in three without a defined strategy?
It’s understandable why this platform has tripped up more than a few marketers. Mobile comes with its own set of unique challenges, from the small screen to the lack of app engagement. All too often, brands try to move from the big house (laptops and desktops) to the apartment (the smartphone or tablet). You simply can’t take everything from the big property and pop it into the small one. You’ve got to adapt and optimize your space.
And that’s exactly what best-in-class optimization organizations are doing. They’re deeply invested in hypothesizing, testing and optimizing, all with relevance delivery top of mind. They know the experience, context and device all matter and all play a role in whether consumers will engage and convert.
And more importantly, they’re pushing their organizations to go beyond mobile engagement and really start monetizing these powerful experiences.
3. Automation To Mitigate Risks And Maximize Wins
Marketers know they have to take risks to be successful, yet few would call themselves risk-takers. So what’s holding marketers up?
It seems to come down to a massive fear of failure paired with self-doubt and an inability to tie ROI to every movement — and it’s become borderline paralyzing. But optimization leaders aren’t letting any of this hold them back. Instead, they’re tapping into a powerful sidekick to push their efforts ahead: automation.
A good example of automation in marketing optimization? Machine learning. This tactic leverages unique algorithms to decide on the optimal content to connect to each site visitor.
An organization may choose, for example, to integrate an algorithm that optimizes against customer lifetime value metrics, enabling the machine to do the heavy analytics lifting. Done well, automation (in this scenario) could even eliminate the need for an in-house data scientist.
Another perk to embracing and integrating automation is that it mitigates much of the risk associated with testing content or campaigns. It’s impossible for a marketer to make the kinds of real-time decisions a machine can.
Automation has the power to spot trends on the fly and equally importantly, can act on them, funneling traffic one way or the other to maximize live traffic.
I see optimization leaders integrating automation all of the time — and, as a result, they’re effectively scaling their marketing efforts and realizing quicker wins. What marketer out there doesn’t what that?
4. Optimizing Every Step Of The Journey
At Adobe, we always fall back on consistent, cohesive experiences as a cornerstone to every solution and service we deliver. Sure, it’s a “back to basics” approach, but no matter the circumstances, it always seems to drum up serious results.
But while the industry talks about consistency, optimization leaders take it a step further. They’re not only cognizant of delivering consistent, cohesive experiences, they’re also razor-focused on what works at each point of interaction, plus what it would take to cultivate micro-successes every step of the way.
Where you and your organization sit on the optimization spectrum is key to what your next steps should be here. Start by thinking about the way you approach testing and optimization.
Are you focused on creating an experience that’s triggered the moment a user lands on your site? Is that brand entry point — the home page, for example — the first and only piece of the journey that’s optimized?
Focus on best practices of the optimization elite. In their quest to determine the success of their personalization efforts, they know they need to carry the experience through a consumer’s entire journey — and that means multi-page, multi-touch point testing woven through every page, email and social engagement.
5. Optimization Leaders Dive In Head First — And They Love It
Last — but certainly not least — there’s the importance of marketers’ own experiences. Very simply, you’ve got to be passionate about what you do to really savor the moments and indulge in every minute of testing, experimenting and evolution.
Optimization leaders are always at the head of the class, hand in the air and ready for more, more, more. They’re diving into anything and everything, ready for whatever optimization adventures arise. And always backing these elite leaders are their organizations, constantly feeding them the visually interesting and data-oriented tools they need to succeed.
I like to think of it this way: optimization leaders are the ones putting a high value on user experiences and, in turn, they deserve to have good ones, too. Whether it’s discovering interesting new segments, testing offers, optimizing personalized content, or even observing results in compelling visual, easily shareable report snippets, the best of the best optimization pros relish their work — and great UX just makes them want to do more of it.
But They Do Sleep…
All of this said, it’s not that optimization-centric marketers never sleep — quite the opposite. As brands integrate more and more of these tactics and best practices into their own work, digital marketers can better impact all channels 24/7, optimizing customer experiences and marketing impact without the heavy lifting that can cripple other companies.
Now more than ever, I see these five areas as being the foundation of established, ongoing success — and they’re clearly playing out in a big way within the most successful optimization-driven organizations I encounter.
Major corporations have spent so much on technology over the years that they tend to think their systems are a lot more sophisticated than they really are, argues Steve Sashihara, the CEO of Princeton Consultants, Inc. and the author of “The Optimization Edge: Reinventing Decision Making to Maximize All Your Company’s Assets” (McGraw-Hill, February 2011).
“The biggest mistake we’ve seen is the assumption lot of company leaders have that they have made such massive investments in IT that they must have optimization all over the place,” Sashihara says. I interviewed Sashihara several months ago but only recently got around to finishing his book (I have my own business optimization issues, you see).
One of his most interesting arguments is that a great deal of the effort spent on information gathering and analysis is wasted — or, at least, used sub-optimally — when it’s used to feed business intelligence systems that produce reports that ultimately wind up with being fed into spreadsheets and PowerPoint slides. Managers then sit around in a conference room listening to presentations and debating what the data means and what decisions should be made about it — when, in many cases, good software could make the decision itself. The GPS in your car is optimizing when it says “turn left at Main Street” rather than presenting you with a list of possible routes.
“What makes a piece of software optimizing is that it makes a recommendation,” Sashihara says.
That’s not to say an optimizing system can’t be wrong. Sometimes your GPS gets confused and sends you down the wrong street. If you don’t entirely trust a corporate optimization system to make a decision, you may instead want to have it present a ranked list of recommendations. That’s essentially what Google does when it searches the web and presents you with a list of the pages it considers the most likely match for your keywords. The IBM Watson computer system that won on Jeopardy earlier this year also used an internal system of ranking the best matches for a given question, although it ultimately made it’s own best guess at the answer (see Computerized Jeopardy Champ Shows IBM What Is Analytics?). Some of the best optimization software gives users a way of seeing how it arrived at its conclusion so they know how far to trust it, Sashihara said.
Some industries have made extensive use of optimization software for specific business problems, such as supply chain optimization, transportation management, and price optimization for retailers. But Sashihara argues businesses have barely begun to tap the potential of the technology to be applied to any problem of limited resources — whether those resources are people, fuel, space on a shelf or in a truck, hours in the day, or dollars in the bank.
The current sate of the airline industry is proof that optimization software is not a silver bullet, Sashihara acknowledges. But maybe the airlines ought to be looking for new things to optimize. One of Marriott’s recent optimization successes came when it took the yield management techniques it had applied over many years to the pricing of individual rooms and brought them to the pricing of group deals for weddings and conferences, which previously had not benefited from that kind of automation. This entailed working out the right formula for pricing group rates based on how far in advance the reservation was being made and what other revenue a hotel might be giving up by selling a large block of room and potentially locking out more profitable customers. Marriott attributed a $46 million boost in revenue between 2008 and 2009 to this change, according to Sashihara.
One way operations research can go wrong is it goes a little too far in the direction of research and fails to concentrate on delivering real results. The operations research group at UPS was nearly shut down at one point in the early 1990s because it had failed to deliver any significant bottom-line results in years. After achieving success with a series of skunkworks optimization projects, UPS had created a formal department and flooded it with money, encouraging the internal consultants to pursue “moonshot ideas.” Once the group refocused on delivering incremental improvements like changing the way boxes were packed and trucks were loaded, the effort was much more successful.
No, not all business decisions can or should be automated. “Most optimization is at its prime making lots and lots of repetitive tactical decisions — turn left here. If the question is, ‘Should we buy our biggest rival?’ that doesn’t lend itself to optimization,” Sashihara says.
Still, he believes many executives are so enamored of their decision-making prowess that they resist the thought of offloading even the routine decisions to a computer system — even where the decision can be reduced to a mathematical calculation where a piece of software can examine a much larger number of possibilities and make a decision free of human biases. Another thing holding back broader applicability of optimization to new business processes is that relatively few people have the required skills or the experience with optimization software engines like COIN-OR, an open source product, or IBM’s ILOG CPLEX Optimizer.
At the same time, one of the constraints that has gone away is access to computing power. It used to be only those organizations with access to a mainframe or a supercomputer could tackle ambitious optimization problems. With the advent of cloud computing, that obstacle has gone away. You can rent a thousand servers from Amazon Web Services or one of its competitors and have each of those servers chew on a piece of the puzzle and send back its results, using something like the Hadoop open source system for distributed data analysis.
This style of data analysis without a relational database is becoming increasingly important, particularly for real-time analysis, Sashihara says. “By the time you’ve figured out how to load the data into Oracle, the moment is probably gone.”
If you have been asking yourself what to do with the cloud, here is your answer, Sashihara says. “What’s a good app for it? Optimization is a good app. It’s tremendously processor intensive, so the challenge is to make the analysis run in a tractable amount of time.” But given enough processors to work with, it’s not such a challenge anymore.
Business processes are a frequently used term across industry verticals today, and there’s also a lot of confusion regarding them. To provide some clarity, here is all the information you’ll need regarding what they are, and why your business needs them.
What is a business process?
A business process is a series of steps performed by a group of stakeholders to achieve a concrete goal. Each step in a business process denotes a task that is assigned to a participant. It is the fundamental building block for several related ideas such as business process management, process automation, etc.
While there’s a deluge of things written and said about business process management, sometimes it’s hard to think about them in both abstract and concrete terms.
The importance of business processes
The need for and advantages of a business process are quite apparent in large organizations. A process forms the lifeline for any business and helps it streamline individual activities, making sure that resources are put to optimal use.
Key reasons to have well-defined business processes
- Identify what tasks are important to your larger business goals
- Improve efficiency
- Streamline communication between people/functions/departments
- Set approvals to ensure accountability and an optimum use of resources
- Prevent chaos from creeping into your day-to-day operations
- Standardize a set of procedures to complete tasks that really matter to your business
Do you know these 7 compelling reasons to go for cloud BPM?
The 7 steps of business process lifecycle
- Define your goals
- Plan and map your process
- Set actions and assign stakeholders
- Test the process
- Implement the process
- Monitor the results
Step 1: Define your goals
What is the purpose of the process? Why was it created? How will you know if it is successful?
Step 2: Plan and map your process
What are the strategies needed to achieve the goals? This is the broad roadmap for the process.
Step 3: Set actions and assign stakeholders
Identify the individual tasks your teams and machines need to do in order to execute the plan.
Step 4: Test the process
Run the process on a small scale to see how it performs. Observe any gaps and make adjustments.
Step 5: Implement the process
Start running the process in a live environment. Properly communicate and train all stakeholders.
Step 6: Monitor the results
Review the process and analyze its patterns. Document the process history.
Step 7: Repeat
If the process is able to achieve the goals set for it, replicate it for future processes.
An example of a business process
As an example, let’s consider the content marketing workflow process. You’ll find it in every marketing department. The issue is, it can be rather hectic and chaotic unless you know the process. There will be writers, designers, SEO experts, and web designers, all working together to create a single piece of content.
Naturally, this involves a lot of steps and communication.
Although this can vary from organization to organization, a simple workflow might look like this:
- The content writer receives the brief and writes a first draft.
- The draft is reviewed by an editor and sent back for any corrections
- The designer takes the content and adds any infographics or images
- The SEO expert reviews the article to ensure that keywords are correct
- The article is published and promotion begins
Here are 6 real-world business process examples.
What are the essential attributes of an ideal business process?
There are 4 essential attributes that constitute an ideal business process:
- Finite – A good business process has a well-defined starting point and ending point. It also has a finite number of steps.
- Repeatable – A good business process can be run an indefinite number of times.
- Creates value – It ultimately aims at translating creation of value into executable tasks and does not have any step in the process just for the sake of it. In other words, if any step in the process isn’t adding value, it should not exist.
- Flexibility – It has an in-built nature to be flexible to change and is not rigid. When there is any scope for improvement that is identified, the process allows that change to be absorbed within itself without operationally affecting its stakeholders as much.
See how Kissflow, a BPM workflow software, can make your workplace faster and more efficient, whatever your field.
Business process automation is a technology-driven strategy to automate a business process in order to accomplish it with minimum cost and in a shorter time. It is extremely useful for both simple and complex business processes. Some areas where business process automation is greatly helpful are:
- Achieving greater efficiency
- Reducing human error
- Adapting to changing business needs
- Clarifying job roles and responsibilities
BPM is a systematic approach to make an organization’s processes more efficient and dynamic in order to meet the changing needs of business. Continuous improvement is one of the core underlying philosophies of BPM and it aims to put it at the centre of all BPM initiatives. BPM is an ongoing approach to continuously make execution of business processes better. Several cloud and on-premise software solutions are available to implement BPM.
Business process modeling is a diagrammatic/structural representation of flow of business activities in an organization or function within an organization. Its primary use is to document and baseline the current flow of activities in order to identify improvements and enhancements for speedy accomplishment of tasks. Usually, they follow a standard such as Business Process Modeling Notation (BPMN), which is a globally accepted standard that most process professionals easily identify with. However, process modeling software like Kissflow enables even a business user to model a process based on business steps, without having to know any modeling notation.
Business process improvement is a strategic planning initiative that aims at reshaping business processes based on operations, complexity levels, employee skills, etc. in order to make the entire process more meaningful, efficient, and contribute to overall business growth. It is a rather drastic way to rediscover more efficient ways to run a business process rather than taking small incremental steps. It usually starts with process mapping and its core aim is to align IT resources with organizational business goals. There are a lot of process improvement tools in the market that’ll help you out with this.
Business process reengineering is a complete redesign of business processes after thorough analysis in order to bring drastic impact. It involves identifying the core of inefficiency, culling out tasks that don’t add any value, and even implementing a top-to-bottom change in the way a process is designed in order to bring about an overall transformation.
Business process optimization takes an existing process and uses analytics and business process mining tools to weed out bottlenecks and other significant inefficiencies in a process.
Business process mapping is a procedure to document, clarify, and break down process sequences into logical steps. The mapping is either done in written format or visualized using flow charts. Choose a process mapping software that empowers business users to map all the processes based on logical steps with an intuitive visual interface.
Business process analysis is the process of identifying business requirements and deciding on solutions that best solve business problems. This can consist of process improvement, policy development, organizational change, or strategic planning.
Kissflow, our process tracking software, can help your business stay constantly aware of every last business process.
Business process integration is the ability to define a process model that defines the sequence, hierarchy, events, and execution logic and movement of information between systems residing in the same enterprise.
Business process simulation is a tool for the analysis of business processes to measure performance, test process design, identify bottlenecks, test changes, and find how a process operates in different environmental conditions with different datasets.
Business process transformation is a term that means radically changing a series of actions needed to meet a specific business goal. This is aimed at ensuring that a company’s employees, goals, processes, and technologies are all in line with each other.
Business process flow is a representation of the process that you’re creating. It usually looks like a form or flow chart. Every business process flow is composed of stages, and inside each stage, there are fields (or steps) to complete.
Business process monitoring is the active monitoring of processes and activity to help management gain insight into important transactions and processes within an enterprise. This helps management understand how their processes are functioning, and if they’re aligned with the company’s business goals.
Benefits of using business process software
BPM solutions are uniquely designed to boost efficiency of processes across verticals and organizations. Implementing them brings a host of business benefits such as:
Reduction of risks
BPM software helps prevent and fix errors and bottlenecks thereby minimizing risks.
Elimination of redundancies
Monitoring processes allows for identification and elimination of duplicated tasks. Implementing BPM software also enhances resource allocation to ensure human effort is invested only in relevant tasks.
Improved visibility into processes helps zero in on wasteful expenditure. This way costs are kept to a minimum and savings are boosted.
Transparency fostered by BPM software boosts collaboration between internal teams as well as external vendors and buyers. Everyone is aware of responsibilities as well as timelines and bottlenecks.
Optimized processes enable greater agility in organizational operations. Minimized errors, bottlenecks, and duplication facilitate quicker turnaround times.
When processes are shipshape, approvals are faster and information retrieval is easier. Tasks are routed sequentially without human intervention. These benefits significantly boost productivity of teams.
Comprehensive dashboards in BPM software provide bird’s-eye view of process performance. It helps managers ensure that turnaround times are short and accuracy levels are high.
With BPM software, it’s easier and more methodical to create audit trails and comply with industry regulations and standards.
When someone mentions the term business optimization, most imagine it refers to business process optimization used to improve various elements of a business. It’s an activity that often involves procuring the services of a business consultant who analyzes the business, identifies process issues and recommends changes to optimize the operation.
This procedure, if not carefully managed, often results in minimal gain and less than satisfactory results because of the difficulty external consultants have in really understanding a business.
This doesn’t mean business optimization doesn’t work, nor that it isn’t important. Many organizations, especially manufacturers, have adopted various business optimization techniques such as lean manufacturing, Six Sigma and the Toyota Way with great success.
In fact, every business should be constantly seeking ways to improve efficiencies, reduce waste and optimize resources as part of their ongoing business practices. Business optimization works best when driven internally and supported by decision support software that helps executives determine which of the many possible business optimization strategies offers the best return.
What Is Meant by the Term Business Optimization?
The dictionary definition of optimization includes phrases such as:
- Make as perfect as possible
- Fully perfect
- Most effective
- The best alternative
Business optimization is the process of identifying and implementing new methods that make the business more efficient and cost effective. Examples of business optimization include:
- Introducing new methods, practices and systems that reduce turnaround time
- Reducing costs while improving performance
- Automation of repetitive tasks
- Machine-learning techniques that improve equipment operation
- Increasing sales through enhancing customer satisfaction
- Reducing all kinds of waste such as wasted time, scrap production and repeat work.
Key elements of business optimization include:
- Measurement of productivity, efficiency and performance
- Identifying areas for improvement
- Introducing new methods and processes
- Measuring and comparing results
- Repeating the cycle
Business Optimization Techniques
While the ultimate goal is to aim for a philosophy of continuous improvement as espoused by the Kaizen Institute in Japan, the first step is a business optimization project. As part of that first step, the organization needs to clearly determine objectives and stipulate specific targets and goals.
Executive support is essential, as is the appointment of a capable team to manage the process. For many reasons, it’s best to appoint an internal team that understands the business rather than relying on outside consultants to perform the work. This does not preclude the use of an external business optimization analyst who can guide the process and provide critical input.
It helps to have a business optimization framework that outlines the program and identifies specific goals, especially those that affect employees. It’s vital not to neglect the potential impact on employees and take steps to allay fears and create buy-in.
Most optimization processes start with what’s termed low-hanging fruit, which are changes that are easy to identify and implement, as these early successes boost confidence. Thereafter, deeper analysis is required to identify and solve more difficult optimization challenges.
Business Silos Impede Business Optimization
Most companies are organized around functional capabilities, and it’s almost inevitable that there’s a degree of internal competition between different functions. For example, production and maintenance are often at loggerheads over machine maintenance. Maintenance wants to take machines offline for essential maintenance, while production wants to continue running to meet production targets. Another example would be a production manager who resists plans to move production to other lines, even when there are clear benefits.
Internal competition is the primary cause of organizational silos where the goals of each silo differ from each other and those of the organization. The danger of this approach is that as each silo attempts to improve functional performance, it’s possible, and in fact probable, that steps to optimize individual silos are incompatible with other plans to improve overall organizational performance. Focusing on internal departmental efficiencies at the expense of organizational agility can severely disrupt business optimization processes.
Benefits of Having One View of the Organization
While organizational silos are detrimental, what’s even worse are data silos. These exist in any scenario where an organization has separate software solutions for different functions.
A common example is an organization that has general ledger software for finance, a payroll system for wages and a separate procurement system for manufacturing. Each package offers a different view of the organization, and it’s not unusual for information to differ in context, timing and detail. Although IT would almost certainly have software interfaces that permit a degree of data communication between packages, these rarely run in real time, are often one-way and don’t resolve the underlying problem of information being held in separate and often incompatible databases.
The problem with this is that data in separate legacy systems is not accessible to everyone, nor is it transparent. Most importantly, it’s much harder to create a coherent picture to support data-driven decisions. What’s really needed is a solution such as enterprise-wide ERP that offers one view of the organization. While this is the ideal, it’s not always immediately feasible, and a viable interim alternative is implementing an integrated business planning solution that extracts information from legacy systems to present information in a commonly understood format.
Business Optimization Processes Versus Decision-Making Tools
A key factor for success is a philosophy of making data-driven decisions that measure the financial benefits of proposed changes compared to current practices. This approach does away with guesswork and natural human bias.
A major focus of optimization processes such as continuous improvement and lean management is continually evaluating business processes. These may include simple examples:
- Rearranging a work station so the operator doesn’t have to walk across an aisle to fetch parts
- Eliminating and consolidating unnecessary paperwork
- Automating repetitive tasks such as data capture or order entry
In these instances, the costs and benefits of these changes are easy to measure. The difficulty arises when evaluating complex changes such as the best production line for manufacturing a product or how to optimize a product distribution network. In this situation, analysis is complicated because of multiple inter-related variables and many possible outcomes. It’s here that decision support tools which use advanced analytics to determine optimal solutions in complex scenarios are powerful alternatives.
Finding the Right Business Optimization Answers
Even where an organization has enterprise-wide software, transactional data held in its databases is structured to optimize business functions, and not for optimization purposes. Despite this, these databases contain a wealth of data that can help organizations determine the best business optimization strategies.
This can be achieved through modern data analysis techniques that make use of algorithms to identify patterns in unrelated and unstructured data sets to support data-driven decision-making. Some even leverage mathematical capabilities like linear programming to provide the absolute best-case scenario for a business to be optimized. This form of business optimization technique is known as prescriptive analytics.
Thanks to the capabilities of advanced modeling software, it’s possible to prepare a mathematical model of the business. Once prepared, the model is validated using historical data to verify its integrity. Then, using structured and unstructured data available to the company, optimization solver software identifies the best decisions and organizational changes required to optimize the business. Because the model has been validated, answers have credibility and are free of personal bias.
The Value of Business Optimization and Why You Need it
The direct benefits of business optimization include:
- Improved productivity
- Less waste
- Lower costs
- Increased profitability
Added to this are less obvious benefits, such as the development of a culture of excellence, improved morale and the elimination of organization silos that impede business operations leading to greater organizational focus.
The cumulative effects of business optimization are such that the business becomes more efficient. In this context, it’s wise to bear in mind the Kaizen philosophy of continuous improvement, which means business optimization isn’t a one-off project, but an ongoing process that becomes part of the organization’s culture. In this way, the business will continue to move forward, remain viable and outclass competition.
What is Process Optimization?
Process optimization is the discipline of adjusting a process so as to optimize some specified set of parameters without violating some constraint. The most common goals are minimizing cost and maximizing throughput and/or efficiency. This is one of the major quantitative tools in industrial decision making.
What is business process optimization?
Business process optimization is the practice of increasing organizational efficiency by improving processes. It’s a part of the discipline of business process management (BPM). Optimized processes lead to optimized business goals.
Some examples of optimization include:
- Eliminating redundancies
- Streamlining workflows
- Improving communication
- Forecasting changes
The rewards of optimizing business processes
Your organization is in constant competition and faces threat from other companies, disruptive technologies, and changing norms.
Optimizing business processes offers many benefits that can help businesses stay afloat in the tidal waves of change such as:
- Market compliance
- Streamlined operations
- Reduced risks
- Well-utilized resources
- Assured quality
- End-to-end visibility
Business process optimization can be the secret to navigating choppy seas of the industry.
Steps to implement business process optimization
Planning is essential to make the most out of your business process optimization effort. Here’s a brief step-by-step guide to help you carry out a process optimization plan.
Step 1: Identify
Pick a problematic process you want to optimize. Define the purpose and goals.
Step 2: Analyze
Is the process meeting desired goals? Is there excess wastage you need to cut down on?
Step 3: Implement
Once you get rid of unnecessary elements, automate the revised process in its new form.
Step 4: Monitor
Take a micro and macro look at process performance and fine-tune it until you get desired results.
What does business process optimization look like in the real world?
Because optimizing business processes is one of the steps in the wider application of BPM, it often gets mixed up with other concepts like business process improvement or business process automation.
Here’s an example to showcase what business process optimization techniques look like:
A news website has a separate workflow to promote articles on various social media platforms. However, in reviewing its processes, the marketing team found that they were wasting a lot of time posting an article several times a day and coming up with unique messaging and images for each platform.
By looking back at the processes, the team took advantage of preparing multiple lines of promotional copy and images before an article went for publishing. Therefore, promotion was much more automated and the workflow was optimized.
How to choose the perfect process optimization software
With the countless process optimization software available today, finding one that’s right for you can quickly get overwhelming. Here are some critical capabilities that you should look for when shopping for process optimization solutions.
This feature is pretty much a no-brainer. Without automation capabilities, process optimization will be very challenging, if not impossible. Software options you’re considering should have visual workflow designers and intuitive form builders to make the effort simple for business users. They should also feature customizable notifications to enable a completely hands-off process.
Considering the growing complexities of business, it’s a good idea to invest in software that can help you optimize structured and unstructured work. Processes, projects, and cases all require streamlining in order to meet business goals.
2. Data and document management
Poor data and document management are contributing factors to a chaotic process. Good process optimization applications overcome these hurdles with cloud-based hosting, which facilitates a centralized database. They also enable role-based access control so that you can prevent unauthorized access to confidential data.
When companies grow beyond a certain size, they tend to fall into silo-ed patterns of functioning. This prevents the organization from reaching optimum productivity. Process optimization solutions enable greater collaboration among teams resulting in more cohesive efforts. This helps prevent delays, redundancies, and misinterpretations leading to errors.
Processes can’t be optimized without data-backed insights. Businesses need to be able to monitor their processes and measure performance using relevant KPIs (key performance indicators). Competent process management applications have customizable dashboards that allow businesses to track processes in real time. This can help organizations promptly resolve bottlenecks and possible errors before they cause havoc. In-depth reports also let teams see where processes need tweaking and improvement.
The modern business arena necessitates on-the-go access. Mobile process optimization applications let organizations stay on top of approvals and increase productivity. Organizations will no longer need to wait until process performers can access software on their desktops to keep progress going.