The secret art of process optimization

The secret art of process optimization

Processes are needed for employees from different areas to work together. Processes are needed so that employees in the same department can deal with routines and avoid unnecessary mistakes. In order for customers to receive a quality product on time, processes are needed. This is the case everywhere, in particular in IT.

But building processes is half the battle. The main difficulty is to make them effective. So that they start bringing benefits and money. A couple of ideas about this will be in the article, please under the cat.


Greeting! My name is Ilya Pracht, I am a manager-consultant, manager and trainer of management courses at OTUS.

Business processes occupy a worthy place in the work of a manager of any level. There are fewer of them in timlid, and they are the most standard. There are a lot of them in the COO (director of operations), and each requires its own creative approach.

Many different methods have been developed to optimize business processes. But all of them, in my opinion, are quite abstract. What is clear: the processes are different, and the methods should be applicable to all. I want to offer a simple and effective approach to optimization, which in no way negates all other approaches, is used calmly with them, but can help to look at this task from a slightly different angle – through money.

So let’s go!

About business processes

What is a business process? To put it simply, it is a certain sequence of operations that collectively leads to some result. What is important is that it is an agreed sequence of actions, and the actions themselves can be performed by different employees. The result can be many:

  • Product or service;

  • Added value;

  • Information or artifact;

  • Decision;

Business processes allow you to solve various tasks:

  1. Recording of work scenarios and specific instructions of performers;

  2. Decomposition of complex actions into simple and understandable operations;

  3. Delegation of management;

  4. Synchronization of the work of different employees and different departments.

Basically, any repetitive activity can be isolated into a business process. Another thing is that it doesn’t always make sense. But more on that later.

Efficiency of business processes

What business process can be considered effective? At a minimum, it should produce the result that was set. But the result can be achieved at a different price. Let’s analyze several criteria for the effectiveness of business processes, they are the causes of problems and further optimization:

  1. Impact on the client – an inefficient business process can harm the sales process. For example, if your customer is forced to wait too long, he may abandon the purchase, and even standing at the checkout, we will get an increase in churn. A bad and silent script of sales managers or a rude support operator can significantly reduce the volume of your sales.

  2. Cost – any process costs money, and if its cost is incomparable to the result, it is a problem. In the process, too long operations, extra people, even extra steps can be encountered. An extended circle of participants at the meetings, among whom the majority are silent and glued to their phones. Requirements for reconciliation of each ticket with IS. All this calls into question the effectiveness and content of such a process.

  3. Utilization of resources – Disposal problems may not affect a specific business process, but add losses to the company as a whole. For example, a simple developer may not affect the budget of the project, but it definitely increases the cost of the bench. And bottlenecks, which indicate a shortage of people at some stage, lead to rework, fatigue and increased turnover, for which the company will again pay.

  4. Opportunities for development – the world is changing, the company always has development plans, and business processes must support it. If a certain flexibility is not embedded in the architecture of the process, then its redesign may turn out to be too expensive a pleasure, and as a result, good strategic initiatives will remain lying on the table.

If you look at this entire list, you can see what they all have in common. One way or another, all criteria for the efficiency of a business process can be expressed in money. As well as the cost of implementing this same optimization. I am not advocating looking everywhere only through the lens of money. But it is necessary to understand that money is a convenient general coordinate system in which decisions can be measured, in particular, business process optimization.

Methods of optimizing business processes

As I wrote above, there are no specific applied tools for optimizing business processes. They are all, in a certain sense, abstract. Roughly, all methods can be divided into 3 large groups:

  1. Philosophy – sets of ideas, focuses and value systems underlying the definition of effective business processes. This includes Lean Production, Agile, Total Quality Management, 6 sigma and t primeworks.

  2. Ready templates – libraries of specific process implementation options that can be taken and implemented “out of the box”. This includes the familiar Scrum, Kanban, ITIL, ISO, and some Lean practices. The main idea is to take a specific implementation in a specific situation and use it. Some refinements or adaptations of the processes are not allowed, but are very welcome.

  3. Ideas for inspiration – Sets of checklists, typical process scenarios, problem-finding methods that you can apply to your process and see potential points for optimization. Here I would include Optimization Patterns, 7 Loss Streams from Lean, Value Stream Mapping, Goldratt’s Theory of Constraints. The main drawback of these methods is the lack of solutions. They show how to find a problem, and how to solve it is a big question.

In addition to all these methods, as I wrote at the beginning, I want to propose an approach of evaluating efficiency and further optimization due to cost – due to money. I will emphasize once again that this option does not negate all the previous ones, and can be combined with them. But it also gives a certain picture of the current state of the business process and opportunities for its improvement.

Another optimization method

So, the business process optimization algorithm will look like this:

  1. We determine the execution time of each step;

  2. We determine the execution time of the entire business process;

  3. We determine the cost of each step;

  4. We determine the cost of the entire business process;

  5. We profile – we look at the most difficult and expensive steps of the business process;

  6. We optimize;

  7. We evaluate the result;

  8. If necessary, repeat the cycle.

To make it clearer, let’s take a look at one of the company’s key processes – the hiring process. In our company, we had to optimize it more than once, and one of the methods that helped was through cost estimation.

The problem is typical: the process takes too long, costs too much. Let’s go all the way through the algorithm. For simplicity, let’s take only the main part of the process so as not to drown in calculations. The idea will be clear and yes.

Step 1 – We determine the time for each step

The hiring process looks quite typical for the industry, everything starts with the search for resumes, then there is a technical interview, then an interview with the manager and finally an offer. There is some waiting between stages.

  • Resume review – recruiter, 30 min.

  • Waiting – 2-3 days.

  • Technical interview – engineer, 1.5 hours.

  • Waiting – 3-5 days.

  • Managerial interview – HR + manager, 1.5 hours.

  • Waiting – 3-5 days.

  • Offer – HR + manager, 1 hour.

Step 2 – We determine the execution time of the entire business process

We add up all operations, we get an interesting combination:

  • 4.5 hours of work;

  • 8-13 days including waiting.

Interesting ratio, isn’t it? You can already think. But we go further.

Step 3 – Determine the cost of each step

We take the average salary on the market for specialists at each step, calculate by the cost of an hour of work.

  • Resume review – recruiter, 30 minutes = UAH 150.

  • Technical interview – engineer, 1.5 hours = 2000

  • Managerial interview – HR + manager, 1.5 hours = 5000 UAH.

  • Offer – HR + manager, 1 hour = 3500 UAH.

Step 4 – We determine the cost of the entire business process

We add up all operations again, we get UAH 10,650.

Step 5 – Profiling

  • Resume review – recruiter, 30 min = 150 r → acceptable;

  • Waiting – 2-3 days → reduce;

  • Technical interview – engineer, 1.5 hours = 2000 r → acceptable;

  • Waiting – 3-5 days → reduce;

  • Managerial interview – HR + manager, 1.5 hours = 5000 r → reduce;

  • Waiting – 3-5 days → reduce;

  • Offer – HR + manager, 1 hour = 3500 → can be removed.

What do we see here? The waiting time between stages is clearly exaggerated, they should be reduced, some measures are needed for this. Managerial interview is very expensive, almost 50% of the total cost of the process – the most important place for optimization. The last stage of the offer is also expensive, much more expensive than the technical interview (if not the most important stage) and the initial search of resumes – another candidate for optimization.

Step 6 – We optimize

For optimization, we use specific steps and practices that change our business process.

  • Resume review – recruiter, 30 min = 150 r → leave as is

  • Waiting – 2-3 days → shorten:

  • Technical interview – engineer, 1.5 hours = 2000 → leave as is/

  • Waiting – 3-5 days → reduce:

  • Managerial interview – HR + manager, 1.5 hours = 5000 r → reduce:

    • Checklist of questions, scenario;

    • If the manager trusts, one HR interviews.

  • Offer – HR + manager, 1 hour = 3500 r → you can remove:

    • We combine it with a managerial interview;

    • The offer is being prepared for the meeting, then it will be confirmed.

  • Waiting – 3-5 days → reduce:

Step 7 – We evaluate the result

Let’s count again what we get, draw conclusions. The optimized process will look like this:

  • Resume review – recruiter, 30 min = 150 r;

  • Waiting – 1 day;

  • Technical interview – engineer, 1.5 hours = 2000;

  • Waiting – 1 day;

  • Managerial interview + offer – HR + supervisor, 1.5 hours = 3,000 r.

The total cost of the power supply was halved. The total execution time of the BP was reduced by 2-3 times. Good optimization result.

Conclusion

There are quite a few methods of optimizing business processes. At the same time, all of them require the appropriate level of creativity of the manager, since they do not give a ready answer to the question “how to optimize?” But they allow you to find the main points of non-optimality in the processes, to answer the question “where to optimize” in order to further use this creativity.

The more different tools you use, the better the analysis will be. And therefore, the optimization of the business process will be the most effective.


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