Improving business processes – what is it?

Business process improvement is the systematic enhancement of how processes are carried out within an organization so that they run faster, at a lower cost, with fewer errors, or with better results for the customer. It involves examining how a process works today, identifying areas that slow it down or reduce its quality, and implementing changes that eliminate these problems.

Process improvement can apply to a single, simple process, such as approving a vacation request, or a complex one, such as fulfilling an order that involves several departments. It can take the form of a one-time fix or an ongoing practice in which the organization regularly reviews and refines its processes.

How does business process improvement work?

It usually begins with selecting a process and describing its current flow: who performs each step, in what order, and where the process is held up. Next, the process is measured—most often by completion time, number of errors, cost, and the number of hand-offs between people. Based on this data, the team identifies where the problems lie and what causes them. Then, changes are designed, implemented, and tested to see if the metrics have actually improved. If so, the change is adopted; if not, another solution is sought.

It is important to base decisions on data rather than on impressions, because the area that appears to be the problem is often not the one that is actually causing the delay.

Methods and approaches to process improvement

There are several recognized methods that differ in the purpose and scale of the changes:

  • Lean – eliminating waste, i.e., activities that do not add value from the customer’s perspective, such as waiting, unnecessary steps, correcting errors, or excessive document transfer,
  • Six Sigma – reducing variation and the number of errors based on data analysis, typically following the DMAIC cycle (define, measure, analyze, improve, control),
  • Kaizen – continuous, small improvements suggested and implemented on a daily basis by employees,
  • PDCA (Deming Cycle) – a repetitive cycle of planning, doing, checking, and acting,
  • Business Process Reengineering (BPR) – radically redesigning a process from scratch, rather than improving the existing workflow.

In practice, these methods are often combined—for example, Lean to eliminate unnecessary steps and Six Sigma to reduce errors.

Examples of business process improvements

A typical example is the purchasing process, in which a request goes through several approval steps, some of which make no difference because the approvers approve it automatically. Eliminating unnecessary approvals and setting spending thresholds shortens turnaround time without compromising control. Another example is request handling, where some requests are routed to the wrong department and get sent back. Implementing rules for routing requests to the right people reduces the number of such back-and-forth transfers.

Improvements can also involve standardizing a process that varies across different branches, or replacing manual data entry with an electronic form and automatically transferring information to the next system.

Streamlining vs. optimization, automation, and reengineering

In practice, process optimization often means the same thing, although it implies striving for the best possible result according to a specific criterion, such as the shortest time or the lowest cost. Improvement is a broader concept and  includes changes that simply make the situation better.

Business process automation is one of the tools for improvement: the system takes over repetitive tasks, but improvement itself can also involve simplifying a process without any automation. Reengineering is an extreme form of improvement in which a process is redesigned from scratch rather than merely improved. BPM, on the other hand, is a broader approach to process management in which improvement is one of several stages, alongside modeling, implementation, and monitoring.