7 signs a business process is broken

Sometimes it is easy to spot when things are broken. Photo: Bernhard Renner, Pixabay

7 signs a business process is broken

Sometimes it is easy to spot when something is broken. But not always. Do any of these signs seem familiar? Are your business processes broken?

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November 2016

When I talk about business processes, I don’t mean manufacturing processes. I have spent my entire career in the service industry, in financial services, the creative industry and in accountancy. So, I think of procure to pay (P2P), order to cash (O2C) and record to report (R2R) processes. Things like, taking sales orders, raising purchase orders, arranging payment, credit control, accounts payable, and that sort of thing.

How do you know if they are broken? Well, here are some signs to look out for. Not to let the cat out of the bag, but they are based on the seven types of waste identified in Lean production.

7. Inefficient office layout or staff distribution

Possibly the least noticeable, and difficult to quantify, but still worthy of the top 7. Sometimes your team have to move from one place to another to do their jobs. That is fine. If no work can actually proceed without travel, then this is a sign that your process may be broken. This applies to team members who work remotely, as well as office based staff. For remote staff this might be driving all day for a 1 hour meeting. For local staff, it could mean repeated trips to the printer, to the copier, to filing cabinets or to stand at a colleague’s desk.

Try to position people near the colleagues they rely on. Invest in instant messaging, a better phone system or video conferencing. Show everyone how to use it. That way staff don’t have to travel to meet with colleagues. Try to cut printing and physical filing out altogether. You’ll save hours!

6. Stuff is everywhere

Stocks of pre-printed forms and envelopes fill the office. Completed forms and other work-in-progress fill various workers’ in-trays or inboxes (see point 4!).

I have seen rebranding exercises where pre-printed letterhead, order forms and returns where just thrown away, at a cost of thousands of pounds. I have also seen office relocations result in literally tons of obsolete stationery. This could be solved with some careful thought. Options range from:

  • ensure that replenishment orders are economical, or
  • ‍move to Just-In-Time, with letters printed on plain paper with the logo at print time, or
  • move to emailing and e-invoicing.‍

None of these are ground-breaking, but they result in big returns.

5. Inappropriate staff authority levels

This is any easy one to overlook. But if your team can't get on with their work because they are waiting for someone else, then this is another sign that your process needs to change. More specifically, do your team have to wait for approvals, signatures or sign-offs? Could they be empowered to make those decisions themselves – within parameters, of course?

4. Processes rely on the movement of physical documents

Does that invoice have to travel from the purchasing team, to accounts, back up to the budget holder, then to a director for authorisation and then back to finance for payments? That is a lot of movement, and a lot of changing hands. The physical act of handing that piece of paper to a co-worker is wasteful.

And of course, work-in-progress lying around is just waiting to get lost. This would not impress your customers.

Solving work-in-progress takes a little more effort. But several solutions could help. Moving to email and online forms at least keeps track of the documents. A variety of Business Process Management suites exist to enforce workflows and move tasks from one user on to the next. Such a system could pay for itself very quickly!

3. Process output is duplicated

Invoices printed in duplicate, triplicate or worse, are another sign of waste and inefficiency. I have genuinely seen this mentality in action: “one copy for me, one for the team, one for the customer, one for finance, and one just in case someone asks for it”! This is a waste of time, a waste of paper and is just unnecessary in today’s world.

Files stored in multiple locations are also duplicated output. Do you have the same file saved in your inbox, on your desktop, in document management, on a shared drive and a myriad of other places? Having copies of documents can lead to duplication of effort too. I have often seen the same invoice processed twice because it was received by both email and mail (see point 2).

If you have any individuals with this mentality they need to be re-educated, and quickly. If the process relies on this thinking, then it is definitely broken!

A good document management system would help here. Possibly a Business Process Management system too – to move documents to the right individuals at the right time. Most important though, is staff culture. Changing a wasteful culture takes a lot of time, patience and perseverance, but it will reap rewards.

2. Duplicated effort

Does your business run multiple systems for record keeping? What company doesn’t! Do your team enter your customers’ details into the CRM, the accounts system, the delivery system, and a plethora of other places? Do they enter this data manually in to each of those systems? What if the customer’s details change, must they manually change it in all those locations too?

This duplication of effort is fraught with risk. Errors creep in. Inconsistencies pop up. And it is not pleasant work for the people who have to maintain multiple systems. This often falls to the most junior of staff, but how much is it really costing? Data entry roles, in my experience, have a higher than average staff turnover. So, management time is also being wasted recruiting and retraining for data entry work. Far better to develop those staff, give them less mundane work and build loyalty. Everyone wins!

Duplication of effort can be removed by integrating your systems, so that they automatically (or semi-automatically) update each other. You need to think carefully about which way the data should travel. Will A update B, B update A, or will changes in each be reflected in the other? You can get add-ins and extensions for a lot of the mainstream packages. They may handle this for you. Cloud based apps often come with built-in integrations – do use them!

If you need help with technical integrations, do seek professional help. Make sure to choose a consultant that knows both what you need to achieve and why you are doing it, and not just how to implement. This will lead to a far simpler implementation.

1. High level of mistakes

Of course, the number one sign that your process is broken is the level of mistakes. Errors. Defects. Whatever you call them, they are to be avoided.

These can take the form of typos in letters, incorrect address details, wrong specifications, incorrect orders, pricing etc. The knock-on effects can cost you far more than the cost of correcting your processes. The problem comes when trying to identifying the source or the errors. And here it is easy to jump to the wrong conclusion. In reality, it is often a combination of lots of different factors, including some discussed above.

To really get to the bottom of things, you need to walk the process through from start to finish. Look for weaknesses, bottlenecks, shortcuts and high-risk tasks. Then focus on these. Again, professional consultants may be able to help you with this. But do not underestimate the amount of staff time you will need to devote to this. Even if you outsource the review process, your consultant will need to sit with the workers who are managing the process day-in and day-out.

Done properly though, it will be worth it. Lean Six Sigma process improvement projects often cut process time in half and reduce costs at the same time. Stick with it!

Conclusion

Nothing I have mentioned here is ground-breaking or even new. The seven points are loosely based on the seven types of “waste” identified in Lean decades ago. The point is to get people to stop and look around at the way they work. Do any of these signs seem familiar? The old ways are not always the best ways. “Because that is how it has always been done” is not good enough.

Businesses have got a lot better in the last 10 years with a global move to “digital transformation”. Mainly though, this is still the buzzword that replaced the overly ambitious “paperless” drive of the nineties. Businesses do still operate with this wasteful mentality. To improve the situation, management need to critically review their own areas, empower staff and of course, listen to staff suggestions. Find out who the innovative thinkers are in your organisation, and listen to them.

And if in doubt, ask a professional.

This article represents my own experiences and opinions – and isn’t professional advice. If you would like help streamlining your business processes, please contact me for a consultation. If you have had a good or bad experience with a process improvement initiative, or you have any tips to share, please do tell us about them in the comments section below.

About the author

Terry Hopper profile picture

Terry Hopper

Terry is a Director and founder of Middlestone Business Analysis Limited. He is passionate about bringing big-business know-how to small businesses. He is also a Chartered Certified Accountant and Certified Internal Auditor.

Connect with Terry on LinkedIn.

About Middlestone

Middlestone Business Analysis helps small businesses achieve more with their existing resources. We help reorganise operations, automate tasks and install customised processes and systems to keep small businesses organised and to speed up administrative work. To learn more, visit our services page.

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