Beginning with this post, we will introduce in detail how business process optimization may help medium-sized businesses develop competitive advantages (BPO). This article examines four areas of business process outsourcing: definition, significance, common problems, and implementation.
What is BPO?
BPO evolved from the concept of Business Process Reengineering (Hammer, 1993). With globalization and rapid digitalization, companies need to remain flexible and resilient to the turbulence of the market environment.
The main goal of BPO is to select the right process and maximize the value-added content of processes, thereby reducing operational costs, controlling operational risks, and improving operational efficiency. To achieve this goal, Niedermann and Schwarz (2011) provide three steps:
1. Data integration: As a first step, it is necessary to collect and integrate all potentially relevant data.
2. Data analysis: After collecting the raw data, it is necessary to examine both the process model and the process data (e.g., the measurement of fundamental metrics like duration, cost, or frequency).
3. Detection and implementation of improvements: based on the results of the analysis, faults within the process are identified and corrected. After identifying the flaws, suitable approaches for fixing them are chosen and implemented inside the process or its context (e.g., the resources executing the process).
By examining the prevalent problems and obstacles that firms face in process management nowadays, we can appreciate the significance of process optimization and management systems.
In general, a lack of clarity in process operations can result in procrastination, difficulty in interdepartmental cooperation, mutual evasion of responsibility when problems arise, and ineffective collaboration.
The difficulties can be attributed to the following three factors:
- Project operations: unclear processes within the department, ineffective project management, and excessive operational costs. This could be caused by the process layer design does not make sense (e.g., some employees use Excel while others use Visio) or due to the fact that the process maintenance is not regularized, resulting in untimely process changes and maintenance.
- Departmental cooperation: departments function in silos, and duties are unclear. The responsibility is shifted, and management is divorced from operations.
- Order loss: the inefficiency leads to delayed delivery or poor delivery quality, resulting in unsatisfied customers and loss of follow-up opportunities, and lost business.
Moreover, Niedermann and Schwarz presented a number of issues with three BPO business application steps:
First, in the data integration stage, data warehouse (DWH) processing will not integrate operational data.
Then, in the analysis stage, algorithms are not coupled to optimization strategies without a comprehensive understanding of how businesses operate.
Lastly, in the stage of detection and implementation, automation is likely to be limited to a very narrow area and a certain formalism.
How to do BPO?
We advise that you try the following five steps to achieve process optimization in order to address the issues that arise in the aforementioned processes.
1. Business research
It means clarifying the company’s business model, organizational structure, and issues through interviews and research. Determine the number of enterprise conventions, such as whether task A should be made clear to the head of department B, and if so, how and to what extent.
2. Evaluation of reasonableness
To assess how peers are performing in each connection, identify and collect business processes together with case studies from the same industry. For instance, what procedures can be optimized from the acquisition of commodities to the placement of orders?
3. Improve the procedure
Redesign or enhance the procedures that haven’t worked well based on competitive analysis and pre-business combination.
4. Curing the process
Although procedures are not always the same, they must adhere to a set of established rules at a specific stage. Processes need to be examined on a regular basis, like job evaluations, which usually happen once a year.
5. Staff development
The business culture needs to be adjusted to include process management. Employees should be motivated on time and given a process optimization mindset so they understand how to handle business, strategy, and management tasks effectively.
BPO Cases in Medium-sized enterprise
Let’s consider a medium-sized healthcare company as an example. Our definition of midsized businesses is the companies with between 50 and 250 people and/or turnover of 10M€ – 50M€. In order to consolidate its present business and grow into additional European markets, this healthcare services provider must optimize its internal management systems and stakeholder procedures.
Then we could think about the working process of one stakeholder: the healthcare professional. In their work, they may encounter obstacles such as disorganized and delayed patient histories, which make it difficult to track the progress of various clients. Also, the busy clinical practice leaves little time for investigations into current medicines. Moreover, spending administrative time on useless tasks such as information verification.
A mapping of the workflow of these employees was performed in order for the business to improve its operational procedures. Staff members and projects are able to make better use of their time and do more work when repetitive processes are streamlined and unnecessary procedures are eliminated. It does this by cutting down on repetitive work and getting rid of unnecessary steps in the process, which in turn makes employees and projects more productive. Using a user-friendly business management system that is based on this methodology, multiple roles, including those of professionals, patients, and administrative staff, can have their processes streamlined, optimized, and automated. Similarly, process mapping is a methodical approach to documenting the stages and amount of time required to finish the administrative duties. It is conceivable that company administration processes can be optimized using this method. The processes can then be automated, which will save time, make the work less repetitive, and reduce the likelihood of mistakes being made by humans.
Business optimization tackles the interconnectivity between all that is going on in a business, combining strategy, people, processes, and systems. Business process optimization is a key part of this ecosystem. Organizing corporate processes is essential for project management, interdepartmental collaboration, and customer service. Through business research, logical analysis, and staff training, companies can optimize their business process systems in order to save expenses and increase productivity.
Before creating your business process services, you need to ask yourself the listed questions:
- Whether the company’s objectives are distinct;
- Whether the logic of the operation flows smoothly;
- Which elements influence the outcome of the decision;
- Whether responsibilities are clearly assigned;
- Whether exact timing and planned results are anticipated.
Regardless of the stage of your business, you should not wait for all the information to become evident before making a decision. And we are here to help. At Business Basecamp, we have the right tools and accountability partners to help you ensure your business is healthy and thrives now and in the future.
If you want to know more about business processes optimization in middle-size businesses, book some time with us to tell us about your aspirations and find out how we can help you realize your goals: https://lnkd.in/duCXQ3Z
Hammer, M., & Champy, J. (2009). Reengineering the corporation: Manifesto for business revolution, a. Zondervan.
Niedermann, F., & Schwarz, H. (2011). Deep business optimization: Making business process optimization theory work in practice. In Enterprise, business-process and information systems modeling (pp. 88-102). Springer, Berlin, Heidelberg.
Kostas Vergidis, Tiwari, A. and Majeed, B. (2008). Business Process Analysis and Optimization: Beyond Reengineering. [online] ResearchGate. Available at: https://www.researchgate.net/publication/3421894_Business_Process_Analysis_and_Optimization_Beyond_Reengineering [Accessed 7 Aug. 2022].
Mazurkiewicz, E. (2022). 10 Examples of Business Processes You Can Optimize with Software. [online] inwedo. Available at: https://inwedo.com/blog/post/10-examples-business-process-optimization-software-solutions/ [Accessed 9 Aug. 2022].
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