How to Get Process Improvement to Save you Money and Improve Productivity
Business process improvement is about finding efficiencies (ways to save money, reduce time or use of resources to achieve the same or better services) or improving effectiveness (ways to improve the quality, outcomes and outputs).
Process improvement contributes to cost savings when better-articulated, higher quality, well-documented, and more standard policies, approaches and practices lead to a reduction in the amount of time required for a person or unit to deliver a service, accomplish a goal or complete an activity.
This has been proven by experience and research studies time and again for private sector, healthcare, community sector and broader public sector organizations.
Typical benefits for community, healthcare and broader public sector organizations from business process improvement projects include:
Better alignment of processes with strategic goals;
Improved alignment of resources, budget, structure and processes;
Improved standardization and reduced variability of processes;
Increased quality of outcomes;
Reduced time to deliver services; and,
Reduced costs to delivery the same or improved services.
A 2017 study by the American Society for Quality found that process improvement (particularly Lean process improvement) is capable of producing substantial positive improvement in the efficiency and effectiveness of government. Benefits reported
by the participating government agencies surveyed included:
A 61% reduction in process steps;
A 60% reduction in process time; and,
A 19% improvement in error-free work.
Research by one major firm found the following opportunities for cost savings from business process improvement projects:
Reduced need for methodology and skills training Increased product quality due to use of best practice standards -- more appropriate requirements, design, and code reviews; more effective testing;
More effective governance, portfolio management, time tracking, project management, cost management, and resource allocation;
More upfront involvement of key stakeholders who can provide earlier feedback;
Improved scheduling and forecasting as part of capacity and demand management;
Improved service support and service delivery to end-users;
Better vendor management;
Faster on-boarding of new personnel;
Reduced time spent in meetings;
Reduced design and code re-work;
Fewer process disputes between in-house staff and third-party vendors;
Less time spent finding templates and researching how to do things;
Fewer misunderstandings between different teams, sites, cultures, and languages; and,
for in-house staff.
So...How Can I Really Get Those Benefits
Those benefits sound nice, but how do you actually get them in your organization?
Let me be clear that there is no perfect template that can be used in every organization. You cannot have a simple structure that works every time across all types of organizations. That being said, there are beginning to be some fairly consistent results from studies on the benefits, roadblacks and strategies for using Lean Six Sigma and other process improvement methods for public sector organizations.
In a previous blog I wrote that A recent study of over 200 Lean Six Sigma projects found that the most important factors for achieving sustained success include:
Senior management commitment and involvement;
Focusing on critical processes for improvement;
Establishing a culture for continuous improvement;
Focusing on the needs of patients; and,
Establishing measurement and feedback systems.
The same study found the following as the least important factors for achieving success:
Linking Lean/Six Sigma to business strategy, Government targets, etc.;
Training in Lean/Six Sigma;
Including best practice/gold standard achievements in a documented quality management system;
Organizational infrastructure for Lean/Six Sigma program (e.g. project champions); and,
Understanding methods, tools, techniques, etc. within Lean/Six Sigma.
I will write more on the benefits of implementing process improvement projects in future blogs, but in the meantime if you want to hear more, or talk about whether your organization could benefit then send me an email or sign up for my regular email blasts.