Business Process Improvement (BPI) - Definition, Steps & Methodologies (2022)

Business processes are rarely as efficientas they could be. Most businesses never stop to re-evaluate their processes – they just stick to what they started out with. While this isn’t necessarily bad, it leaves room for mistakes. And that’s where business process improvement comes in.

What is Business Process Improvement (BPI)?

Business Process Improvement (BPI), while it doesn’t really have a universally-accepted definition, can be seen as the analysis, review, and improvement of existing business processes. This is done by mapping out the business process, identifying inefficiencies, redesigning the process & benchmarking to initial metrics.

Typically, the main goal of BPI is either, or all 3, of the following:

Goal #1: Reducing Process Time – Finding ways of carrying out the process faster or more efficiently. There are a lot of different ways this could be done, from eliminating useless steps to adopting new technology.

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Goal #2: Improving Output Quality – Creating a better product with the same input of resources. This usually means finding steps within the process that negatively influence the end-product, resulting in defects and errors.

Goal #3: Cutting Out Waste – Discovering wasteful processes & cutting them out of the workflow. This may either help achieve the first 2 goals or simply just improve overall productivity. If your team doesn’t have to do useless work, they can spend more time on the work that creates value for the company.

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Business Process Improvement (BPI) Steps

There are a lot of different business process improvement methodologies, but the general idea is usually the same – taking your old processes & finding ways to improve them.

The following is typical steps you’d have to take to carry out a BPI initiative

Step #1: Mapping

If you don’t know what your processesare, how can you analyze their efficiency and improve them?

(Video) Business Process Improvement(BPI) | BPI Steps & Methodologies | BPI Tools | Case Study | Amol Borkar

So, you’d want to map them out to get a birds-eye view of your business. Business process mapping is a good way to understand how your business works & find anything that might seem weak or inefficient.

The most basic way you could do this is through pen and paper, by drawing a flowchart of the steps included in a process. This, however, is a bit outdated – the best way to map out processes is through software.

Graphing software does just that, lets you draw aprocess flowchart digitally.

Workflow applications, on the other hand, are much more powerful. The software allows you to track your processes in real-time, as opposed to just put them down on a graph. This has several potential benefits for your business…

  • Complete Process Tracking – With a graphing tool, you have a simple document with a flowchart of your processes. With workflow software, on the other hand, you have the processes running in real time. You can see who’s working on what, whether someone is being late with a deadline, etc. This leads to…
  • Accountability & Productivity – Since the entire process is being tracked by software, everyone knows whenever what they’re supposed to be working on, and are in turn more accountable for their own work. This, in turn, leads to higher overall productivity & product output.
  • Automation – Workflow software usually comes with integration with different task automation tools, such as Zapier. This allows you to cut out any useless, menial processes (for example, sending out an automatic email), allowing your employees to focus on work that matters.

Want to start using the workflow software, but not sure which one to pick? We don’t blame you – there’s more than a handful on the market. To figure out which workflow management system is right for you, check out our comparison guide.

Step #2: Analysis

Once you have your process mapped out, you can start analyzing it. You can do this by asking yourself…

  • Are there any steps in the process that are taking longer than they should?
  • In case there are delays or missed deadlines, what is the primary factor for that?
  • What are the steps that have the highest impact on product quality, and is there any way to make them more efficient?
  • Are some of the steps more financially straining than the rest? Why & how?

You can also use different types of business process improvement tools, such as the 5 Whys, for example, as a framework for finding inefficiencies or problems.

The gist of 5 Whys is, you keep asking the question “why” until you discover the root cause of an issue. So for example, let’s say the problem is that the sales are down compared to the previous 3 months…

  1. Why are the sales down?
    Because the sales team isn’t closing as many clients as usual.
  2. Why?
    Because the leads are weaker than usual (yeah, sure, blame the leads!).
  3. Why?
    Because the marketing team has been trying out new lead generation partners.
  4. Why?
    Because they can no longer afford the older partner.
  5. Why?
    Because the partner upped their rates by 20%.

Once you get to the root cause of the problem, it’s much easier to come up with a solution. In this case, you’d compare the new sales number with the old ones, and if the profit difference is higher than the 20% expense for the old partner, you’d want to consider switching back.

(Video) Six Basic Steps involved in any Business Process Improvement (BPI)

Did the analysis, but still not sure about what adjustments to make? These 8+ business process improvement ideas might help.

Step #3: Redesign

Once you’ve identified the inefficiencies in your old process, you’ll need to figure out how to change it. This is, of course, very much dependant on your specific situation, and there’s isn’t a one-size fit all solution.

There are, however, several best-practices you could follow…

  • Pick the right metrics for comparison – you’d want to compare your new process to the old one in terms of efficiency, so you can empirically know whether it’s better or not.
  • Work with the field-level employees. Chances are, they might have some input on what you could improve on.
  • Think long-term & account for error. In some cases, your solution works wonders in the short-term, but prove to be inefficient or costly long-term.
  • Define the exact scope of changes. You should know exactly what impact your solution will have, or you’ll be opening up to risk you could have avoided.
  • Perform risk analysis. You can never predict the outcome at a 100% accuracy. You’d want to account for anything that can go wrong. The manufacturing methodology, for example, might seem to work wonders initially – right up to the point when it completely breaks down due to some minor oversight.

Step #4: Implementation

Implementation is a very critical step for the success of a business process improvement initiative – if something goes wrong, you might end up losing more than whatever the inefficient process was costing you.

The steps for successful implementation are as follows…

  1. Implement the changes at a small scale to mitigate risk. Before carrying out the changes throughout the entire organization, you’re better off testing it at a small scale & benchmarking it to the original process.
  2. Acquire the right resources & define the steps.
  3. Let all the shareholders know of the changes & start implementing it.

Step #5: Reflection & Benchmarking

Things don’t usually go exactly the way you plan them. Once you roll out the changes, you still want to monitor everything, making sure everything is as it should be.

Let’s say, for example, you’re optimizing your manufacturing process to increase output per hour. While you may succeed with this, it might turn out that while the output is better, so is the defect rate, leaving you with a new problem to work on (and back to square one, in terms of profits).

Even if that is not the case, BPI is a continuous process – there’s always something new changes you could test and implement.

(Video) Business Process Improvement (BPI) - To improve is to change

Business Process Improvement (BPI) Methodologies

BPI methodologies help you apply a framework to your initiative, as opposed to just going with the flow. Some of the most famous BPI methodologies include…

Six Sigma

Six Sigma was first developed by the engineers at Motorola and is used to measure defects or inconsistencies in a process. This, in turn, can be used to perfect the end-product.

Six Sigma is also used as an indicator for the level of efficiency for a process. A “Six Sigma Process” is a process that, out of a million output, doesn’t produce more than 3.4 defects.

For process improvement, specifically, DMAIC is one of the core tools under the Six Sigma umbrella. It consists of 5 parts…

  • Define – Find the opportunity for improvement.
  • Measure – Identify the metrics you’re going to benchmark new processes to.
  • Analyze – Uncover any defects or inconsistencies in the process.
  • Improve – Get rid of the aforementioned problems
  • Control – Monitor the new process, making sure that there aren’t any new problems.

Lean

While Six Sigma focuses on eliminating defects to better the product quality, Lean aims at optimizing the process itself as much as possible. It means, for example, finding a low-value step in a process and cutting it out completely – something that would improve employee productivity, but not have much of an effect on the end-product.

The system was developed by Toyota as a means of shortening the order-to-cash cycle. Typically, the steps for lean process improvement would include…

  1. Defining what value is for the end-customer
  2. Mapping out the process and identifying which steps aren’t creating any value
  3. Cutting out the steps that don’t add value, or modify them in a way that they do
  4. Repeat the steps 1 through 3 for other business processes, repeat until the organization is sufficiently more efficient

Total Quality Management (TQM)

Total Quality Management (TQM) is a methodology that originated in the 1950s, but only becoming popular in the early 1980s.

As with the Lean methodology, it’s mainpriority is delivering value to the end-customer. The difference is, however, that TQM focuses on the organization as a whole, rather than individual processes. The key idea here is that every department (anything from engineering to marketing) within the company should be optimized with customer values in mind.

What really makes TQM shine, however, is that it involves the alignment of an entire organization. It’s not just the responsibility of the senior management to carry out change – rather, it’s a company-wide initiative, all the way down to the lowest level employees.

(Video) BUSINESS PROCESS IMPROVEMENT(BPI) - WHAT, WHY, AND HOW? | THE YASWANTH PALAGHAT SHOW #11

Conclusion

Now that you have a good grip on how BPI works, it might be time to start carrying it out. Theorizing, after all, doesn’t have much of an impact on your company’s bottom line.

To help you get a good start, you might want to give Tallyfy a try. Business process improvement and workflow management software tend to go hand-in-hand, after all.

Map, optimize, and streamline your processes with Tallyfy – simply by adopting software, you’re already taking the first step in making your processes more efficient. Or, learn why everyone else loves Tallyfy here.

FAQs

What is business process improvement methodologies? ›

Business process improvements are methodologies in which a team evaluates their current processes and adapts them with the intent to increase productivity, streamline workflows, adapt to changing business needs, or increase profitability.

Which of the following steps in the business process improvement BPI model would come first? ›

The first step in the BPI process is to identify the need for change. A useful way to discover improvement opportunities is by conducting a process audit.

What are the five steps in business process improvement? ›

Five Steps for Business Process Improvement
  • 1. “ AS-IS” Process Mapping. ...
  • Process Map Data Gathering. Gather data to supply a basis for process quality, timeliness and customer satisfaction. ...
  • Stakeholder Focus Groups. ...
  • Compile Opportunities for Improvement. ...
  • Develop Recommendations.

What is BPI model? ›

A BPI plan is a master plan or a road map that details the entire scope of the program, the areas and processes covered, the methodology to be adopted as well as the implementation timelines and the costs and budgets involved with the entire plan.

What is process methodology? ›

Process is a step-by-step structure, with milestones and stages, while methodology is a way of interacting with the customer to move them from stage to stage. Process as the “what” and methodology as the “how.” A third category of “skills and activities” is separate from the methodology.

What is the first step of the 7 step improvement process? ›

The Seven-Step Improvement Process

Let us start with the Purpose or Goal of the process. The goal is to define and manage the steps needed to identify, define, gather process, analyze, present and implement improvements.

What are the phases of BPI? ›

If your team doesn't have to do useless work, they can spend more time on the work that creates value for the company.
  • What is Tallyfy? ...
  • Step #1: Mapping. ...
  • Step #2: Analysis. ...
  • Step #3: Redesign. ...
  • Step #4: Implementation. ...
  • Step #5: Reflection & Benchmarking. ...
  • Six Sigma. ...
  • Lean.

How many stages are there in process improvement? ›

How many stages are there in process improvement? Explanation: Process measurement, analysis and change are the three stages.

What are BPI tools? ›

The BPI is a powerful tool that has been adopted worldwide for clinical pain assessment, epidemiological studies, and studies of the effectiveness of pain treatment.

How does BPI work? ›

BPI accounts for outlier performances by down-weighting a team's most extreme results. As a team plays better or worse than expected, or when its past opponents appear stronger or weaker, its BPI rating moves up or down.

What is BPI Six Sigma? ›

Five phases comprise Six Sigma: define, measure, analyze, improve, and control (DMAIC). This approach helps figure out the defects in the processes and how they are caused and classified. Then practitioners review ways to improve them.

What is the third phase of a business process improvement BPI effort? ›

1) Plan - an existing business process you want to improve, define its scope, and assemble your team. 2) Analyze: Closely examine the process you've identified as a candidate for improvement. 3) Redesign: Determine what changes you want to make to the target process.

Which of the following are the six steps of business process improvement? ›

The Six Key Steps of Business Process Reengineering
  • Define Business Processes. ...
  • Analyze Business Processes. ...
  • Identify and Analyze Improvement Opportunities. ...
  • Design Future State Processes. ...
  • Develop Future State Changes. ...
  • Implement Future State Changes.
11 Oct 2021

What is one of the steps in process improvement? ›

You first identify the problem (plan), create and implement a solution (do), evaluate data for effectiveness (check) then document the final results and implement the plan if it's successful (act).

What is Six Sigma process improvement? ›

Six Sigma is a measurement-based strategy for process improvement. It's a methodology, which aims at improving process and increasing customer satisfaction (Both internal & external). The concept behind this approach is to reduce the variation in processes.

Why is process improvement methodologies important? ›

It allows you to easily spot improvement opportunities and seamlessly roll out changes. You'll find that most process improvement methodologies give you a framework to analyze the issues, make small changes, and track improvements.

What is the purpose of a methodology? ›

The purpose of a research methodology is to explain the reasoning behind your approach to your research - you'll need to support your collection methods, methods of analysis, and other key points of your work. Think of it like writing a plan or an outline for you what you intend to do.

Which of these is a use of the seven step improvement process? ›

The main purpose of this process is to define and manage the steps required to identify, define, gather, process, analyze, present, and implement the improvements which have been made over a period of time. The 7 step improvement process is essential in supporting CSI and operates across the entire service lifecycle.

What is the first step of a continual process improvement? ›

The Six (6) Steps of the Continuous Improvement Process (CIP) Step 1: Identify Improvement Opportunity: Select the appropriate process for improvement. Step 2: Analyze: Identify and verify the root cause(s). Step 3: Take Action: Plan and implement actions that correct the root cause(s).

What are the methods used to apply continuous improvement process on the organization? ›

Other widely used methods of continuous improvement, such as Six Sigma, lean, and total quality management, emphasize employee involvement and teamwork, work to measure and systematize processes, and reduce variation, defects, and cycle times.

What is the difference between BPI and BPR? ›

BPI is a tool to streamline your existing business processes within your current organizational structure. BPR is done to dramatically improve your business processes and potentially change the structure of your organization as a result. BPI is often used to refine existing processes and prevent future issues.

Why is process improvement methodology so important in BPO companies? ›

BPI can help to enable a wide range of efficient and effective scripts by applying measurement and analysis techniques in both their initial design and subsequent improvement. For example, any pain points during a customer interaction can be identified and corrected using Voice of the Customer (VoC) analysis.

What are the 7 wastes in Six Sigma? ›

According to Lean Six Sigma, the 7 Wastes are Inventory, Motion, Over-Processing, Overproduction, Waiting, Transport, and Defects. We'll use the bakery example to demonstrate these wastes in practice. Inventory – Pies, cakes, doughnuts, cupcakes, cookies – so much variety and so many of each product.

What are 6 Sigma tools? ›

Six Sigma tools are defined as the problem-solving tools used to support Six Sigma and other process improvement efforts. The Six Sigma expert uses qualitative and quantitative techniques to drive process improvement.

What are the basic steps in Six Sigma explain? ›

What Are the Steps of Six Sigma? The five steps of Six Sigma follow an approach that industry professionals call DMAIC. This is an acronym that stands for define, measure, analyze, improve, and control.

What is an example of business process improvement? ›

Business process change examples cover a wide range of operational improvements, such as: Speeding up cycle time. Improving product quality. Reducing costs.

What are 4 principles of continuous improvement? ›

Four Principles of Continuous Improvement are as follows:

Principle 1: Stop fixing and start improving. Principle 2: The best practices are the ones you already have. Principle 3: Changing behaviour is more important than changing processes. Principle 4: If you aren't failing, you aren't trying.

What are the benefits of business process improvements? ›

Benefits of business process improvement
  • Productivity. Do everyday tasks like filling out forms and running reports confuse and frustrate your employees? ...
  • Employee satisfaction. ...
  • Reduced risk. ...
  • Compliance. ...
  • Customer satisfaction. ...
  • Agility. ...
  • Technology integration.
23 Apr 2018

What is BPI construction? ›

The Building Performance Institute (BPI) offers a variety of certifications, organized by skill level and desired building structure.

What does BPI stand for in business? ›

The brand potential index (BPI) measures how many potential customers a brand may reach within a certain market or region.

What is the mission and vision of BPI? ›

BPI's mission is to contribute to the financial well-being of its Clients and to the progress of society as a whole. Its Vision is to be a leading and innovative financial group with the best customer service and to serve as a benchmark for socially responsible banking.

How is BPI rank calculated? ›

The index uses two measurements to do this: BPI Offense (measure of a team's offensive strength compared to an average offense) and BPI Defense (measure of a team's defensive strength compared to an average defense). BPI is calculated by finding the difference between these two measurements.

What a business process describes? ›

A business process is an activity or set of activities that accomplish a specific organizational goal. Business processes should have purposeful goals, be as specific as possible and produce consistent outcomes.

What is business process integration? ›

Business process integration (BPI) allows companies to connect their people, data, and applications. With BPI, organizations can better coordinate both internally and with partners, customers, and vendors to achieve better results. Processes become more complex as a company scales its operations.

What is the best way to approach the review of business processes? ›

5 Key Business Process Review Steps
  1. Build an overview of the process flow. Make a flow chart that depicts the entire business from a high-level perspective. ...
  2. Create the process flow detail. ...
  3. Write the operating procedure. ...
  4. Develop a detailed work instruction. ...
  5. Have a Plan for Continuous Process Improvement.
14 Oct 2021

What is an example of business process improvement? ›

Business process change examples cover a wide range of operational improvements, such as: Speeding up cycle time. Improving product quality. Reducing costs.

What are the 4 main Kaizen principles? ›

The 4 Types of Kaizen
  • What you will learn:
  • Kaizen Teian: Bottom-Up Improvement.
  • Kaizen Events: Defined Improvements.
  • Kaikaku: Radical Change.
  • Kakushin: Break-through Innovation.
  • Finding The Right Tool.

What are the 5 principles of Lean? ›

According to Womack and Jones, there are five key lean principles: value, value stream, flow, pull, and perfection.

What is the methodology of Six Sigma? ›

Six Sigma is a set of management tools and techniques designed to improve the capability of the business process by reducing the likelihood of error. Six sigma is a data-driven approach that uses a statistical methodology for eliminating defects, defect reduction and profits improvement.

What are the common process improvement methodologies? ›

There are a lot of different ways to approach process improvement. In this guide, we're going to explain 3 of the most well-known process improvement methodologies – Six Sigma, Lean Manufacturing, and Business Process Management – and arm you with the right tools to get started with each approach.

What is a process improvement plan? ›

Put another way, the process improvement plan is a documented, deliberate method for analyzing current processes and procedures, identifying weaknesses and bottlenecks, and creating ways to improve quality and efficiency.

Why process improvement is important? ›

Process Improvement Underpins Successful Execution

And because organizations are constantly changing as they respond to internal and external pressures, continual process improvement can enable team engagement and lead to growth. Growth will not occur without effective strategy execution.

What are the 3 pillars of Kaizen? ›

The 3 Pillars of Kaizen
  • Housekeeping. Housekeeping is the first pillar of Kaizen. ...
  • Elimination of Waste. Eliminating waste is the second main pillar of Kaizen. ...
  • Standardization. Standardization is the process of developing standards to which production is performed.
18 Jan 2021

Is Kaizen a Six Sigma tool? ›

The main difference between Six Sigma and Kaizen is that Six Sigma uses technical data that are oriented to solve product deviations. In contrast, Kaizen focuses on making work environments better, which has a positive impact on overall performance.

What is the difference between Kaizen and 5S? ›

While Kaizen is a general approach to improvement, 5S is a way to lay the groundwork for improvement. The two go hand in hand with 5S being part of the Kaizen system and lean manufacturing.

What 5S means? ›

By implementing a lean 5S system - sort, set in order, shine, standardize, sustain - organizations can create a clean, well ordered, and disciplined work environment. Many companies implement only the first three steps, hoping the last two will automatically follow.

What is A3 technique? ›

The A3 process allows groups of people to actively collaborate on the purpose, goals, and strategy of a project. It encourages in-depth problem solving throughout the process and adjusting as needed to ensure that the project most accurately meets its intended goal.

Videos

1. Introducing Business Process Improvement
(Business Process Academy)
2. Five Steps to Business Process Management and Improvement [How to Begin Business Process Management]
(Eric Kimberling - Digital Transformation)
3. What is Business Process Management? | Introduction to Process Improvement
(Third Stage Consulting Group)
4. FBPM-1.2.: Fundamentals of Business Process Management (BPM) - Ingredients of a Business Process
(Jan Mendling)
5. Real World Examples - Business Process Improvement
(Ultra Consultants)
6. Business Process Management Course - Lecture 8: Business Process Redesign (part 1)
(Marlon Dumas)

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