Effectively Managing Change
For organizations of all sizes, public or private, processes and systems have adapted to their business environment and culture for many years, but often these processes are not efficient, effective, nor do they provide the necessary reliability and control needed to manage a company’s operations. Given the ever-changing demands of executive teams and the constant need for information to allow for quick and educated decisions, can you afford not to pursue improvements on your company’s performance?
What Is Business Process Improvement?
Before we discuss improving business processes, we must first understand what it means. Business Process Improvement (“BPI”) starts with analyzing a series of tasks that a team routinely performs with the goal to improve accuracy, efficiency, and effectiveness. The company is ultimately striving to decrease time, reduce errors, and produce a high-quality product or service for its stakeholders and sponsors. BPI can take its shape and form in various methodologies, and each is a matter of preference. Also, BPI can be modeled using ﬂowcharts (current state vs. future state) to show the steps and tasks necessary to meet a particular business goal. Process improvements start with an outlined objective and end with the achievement of that goal, which will ultimately provide tremendous value for the company.
Key indicators and Red Flags There is a Need to Improve Your Process(es):
Every business has unique processes, yet they all start with one common goal–to deliver insightful and impactful results on a consistent basis. In spite of changes to policies, resources, and technologies, existing business processes are overlooked if still working, while the need to be updated is greater than ever. A process may be exacerbating human effort and/or contributing to technological misuse that goes undetected if not periodically reviewed. Achieving and maintaining performance from your business processes requires continuous attention and awareness, which may be overlooked in certain instances. With that in mind,
Have you ever taken a step back to analyze your critical business processes? Do you have the bandwidth and desire to measure your team’s output?
How do you currently measure your team’s output? What type of key performance indicators (KPI’s) do you use to measure performance?
Tired of inefﬁciencies plaguing your team’s everyday routine? Have you identiﬁed areas for improvement, butare unable to resolve the issues due to time or resource constraints?
If your company has not had the desire to take-on process improvement initiatives, or you haven’t spent any time analyzing and identifying areas in need of improvement, the following are a few key indicators and warning signs that may clearly illustrate it’s time to improve your business processes:
Outdated or lack of desktop procedures, documentation, training manuals and company directives.
Manual processes, lack of automation or standardized procedures.
Recurring late journal entries or balance adjustments, delays in closing the books or reporting.
Heavy reliance on spreadsheets versus ERP or other comparable systems.
Management reporting / dashboards need a facelift.
Opportunities that Facilitate Improvement
Although process improvement plans may not be at the top-of-the-list of initiatives for the company, the following are examples that will provide the unique opportunity for the company to strongly consider process improvement initiatives to enhance the overall performance of the business:
System Upgrade or Implementation – Newly acquired systems and migration from existing on-premise to cloud-based software can signiﬁcantly change processes and controls for processing revenue and expense transactions, and the activities supporting the ﬁnancial close (to name a few).
Mergers and Acquisitions – M&A requires reﬁnement of policies and procedures, adjustments to job roles and responsibilities, uniﬁcation of redundancies in processes, and elimination of overlapping or duplicative efforts.
Divestitures and Startups – Carving out portions of an existing businesses or starting a new business requires the setup of new entities, processes, and procedures; not to mention training and handbooks for onboarding, etc.
Creation of New Jobs & Corresponding Roles And Responsibilities – Creating a new role, or combining roles / process responsibilities, or updating inherited responsibilities for your team.
Audit / SOX Deﬁciencies – Repetitive deﬁciencies identiﬁed and manual workarounds for ineffective processes and systems drive repeated remediation activities that are identiﬁed by internal or external compliance reviews.
Management / Board Recommendations – Mandated changes required from management or the board to ensure assets are safeguarded, management and ﬁnancial reports are reliable, and legal and regulatory compliance requirements are satisﬁed.
WHERE DO I START?
Our methodology (depicted below) will support Business Process Improvement efforts and is designed to efﬁciently gather organizational viewpoints on current state strengths and issues, desired improvements, and alignment with strategic objectives. The result is business needs and solutions that are actionable and measurable. Below is a high-level overview of Horn’s Business Process Improvement methodology.
Conﬁrm project scope, approach, timeline, and participants
Document Current State and Analyze Processing Steps
Process Redesign, Remediate Identiﬁed Issues
Build Project Plan, Assign Necessary Resources
Communicate Plan and Execute
Monitor and Optimize
As all efforts begin, the organization must prioritize needs and select a process or activity that’s in need of improvement. Then, a project team must be initially selected to carry out the project efforts and determine the end goal of the work. The first assignment of the team is to visually map out all the steps in the project effort and build an initial plan. There may be numerous areas ripe for improvement, so prioritize your efforts to identify the tactical versus strategic efforts to bring some quick wins to the company.
After you’ve identified which parts of your processes need improvement, it’s time to analyze them fully to understand what’s happening and how to realistically make improvements. This will help discover the source of the problems occurring in the process. To further your understanding of where the process is breaking down, you’ll want input from those people who are directly involved in it on a day-to-day basis. Get their perspective on what’s going wrong and what they think can be done to improve the process.
Once you’ve identiﬁed and analyzed the issues, you’re going to need support from senior management to approve your plans for improvement. These improvements will expend time and pull resources away from current job responsibilities, so without this commitment from senior management you won’t have the power to proceed.
Execution consumes resources from the organization and time management is a key aspect of the project work. Every member of the project team should know their roles and responsibilities. There should be effective communication ﬂow amongst team members. The team follows the process improvement plan as a guide to execute improvements within the process.
Process improvement is not a one-off project, it’s the start of the process for continuous improvement. After the company has made necessary improvements, they need to put measures in place to monitor operations and make sure that employees are adopting new standards of work. As revisions are needed to improve or optimize new changes, the team makes necessary adjustments. Continuous improvements and adjustments help solidify the changes that have already been made.
Navigating a Successful Journey - How Horn Can Help?
Organizations look for leadership and experience to control the mechanics of any transformation to help align the new and improved processes with an overall business strategy. Our team has assisted organizations of all sizes manage various business process improvements and provide the right leadership and advice along the way.
We provide the tools and methodology from start to ﬁnish, that will bring the expertise needed to ensure your business processes align with the company’s needs. Our methodology is proven, track-tested, and designed to keep each project on-track in terms of the timeline, goals met, transparency to the process, and will address other issues head-on that arise within the overall improvement process. Our team can provide the following to assist your organization successfully navigate process improvements to support key business functions:
Evaluate current business processes to establish a baseline to measureneeds and requirements for the transformation through interviews, surveys, or facilitated group sessions.
Document the results of the gathering process, including businessneeds, procedural needs and enhancements, to perform a gap analysis.
Establish and develop project plans, resource needs, budgets, timelines, and introduce project business rules and expectations.
Provide resources for the Project Management Office (PMO) to facilitate project direction, manage plan execution, and periodically report onproject status.
Provide additional resources for the project team or back-ﬁll roles and responsibilities while process improvements are being implemented.
Complete documentation of the newly developed processes and embedded risks and controls to satisfy the needs of the company and external third-party audit ﬁrm.
Prepare and deliver training for company employees for the newlydeveloped processes.
Identify continuous improvement opportunities and KPI’s to measure performance.