Business leaders are often looking for ways to drive more dollars to the bottom line, improve the efficiency of their operations, enable new technologies and achieve growth targets. The tactical answers of how these things get done vary by organization, but, before those decisions can be made, it helps if business leaders take a step back and understand the business processes they are addressing. Enter: process modeling and optimization.
Process modeling and optimization is a great tool that can impact organizations in a couple of key ways:
- Increase efficiencies to enable organic growth. Process modeling and optimization can identify and address unnecessary costs (direct, indirect and opportunity costs). Once processes are streamlined and consistent, organizations are better equipped to enable new technologies and automate time-consuming, repeatable tasks. With more efficient processes, the business is also more scalable, meaning that top-line revenue growth is not eroded by proportional growth in operating costs.
- Realize value from mergers or acquisitions. Too often, successful transactions are hindered by the complexities of joining disparate people, processes and technology. Process modeling and optimization, in both the acquiring and target organizations, can serve as a blueprint for how the two companies can come together, capture synergies, reduce redundancies, and merge labor and technology landscapes. Process modeling and optimization thus provides a roadmap for the organizational design of the future merged entity.
How Does It Work?
Business process modeling and optimization is based on understanding how business gets done and how to make it better. The process starts with looking at the highest level and drilling down to greater and greater levels of detail. Begin by building a simple “strawman” of certain business processes to understand:
- The function the process serves (Why are we doing this?);
- All the tasks, inputs and outputs to accomplish that function (What do we need to do?); and
- The people and technology that play a role in the process (How does this get done?).
The process includes:
- Working with leadership to develop a comprehensive scope of the activities and people driving the business;
- Creating a process diagram aligning steps to people and systems;
- Documenting the optimal future state process model;
- Reviewing the process model and asking questions to further revise and finalize the desired outcome; and
- Deploying and refining the business process.
Whether your organization is trying to drive more cost savings to the bottom line; achieve organic growth targets; or successfully integrate the people, process and technology of a merger or acquisition; business process modeling and optimization is a powerful tool. Taking the time to document current-state processes alone is a great first step. However, often the rewards are well worth the effort to redesign these processes altogether, removing inefficiencies and leveraging technology wherever possible.
Cohen & Company is not rendering legal, accounting or other professional advice. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts and circumstances.