A comprehensive guide to Standard Operating Procedures
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Business process management (BPM) is all about studying the processes that exist in an organization and putting actions in place to manage them at scale, as well as improving or simplifying them where needed. After identifying a company process, business process management works in iterations, where the process is analyzed in order to find areas for improvement; once those areas are isolated, improvements are put in place to make the process more effective and/or efficient. Lastly, the results are reviewed and measured to assess whether the improvements have been successful.
The benefits of business process management for large organizations are obvious. Having a system in place to manage and document internal processes ensures that standards are maintained across the organization and company operations can scale easily with the organization. On the contrary, process documentation and optimization is often overlooked by smaller organizations.
Startups and small organizations usually have some sort of documentation for those processes that are business critical and allow them to deliver their product or service, but usually don’t have a structured and comprehensive way of mapping, documenting and iteratively improving their processes.
This shortfall becomes especially obvious as such companies try to scale. As the organization grows and more people join to sustain the scaling, the lack of comprehensive process mapping often leads to drops in outcome standards, things falling through the cracks, incomplete onboarding of new team members, and so on. Ultimately, this can lead to mistakes that can cost the business real money.
It comes without saying that those companies that see the benefit of mapping and optimizing their processes and invest in it will have a considerable competitive advantage over those that don’t. The reason is simple: having a business process management in place will allow those companies to deliver what clients expect from them in a faster and more efficient way, with high quality standards, and with less cost. It is essentially a win-win for both the client and the company.
Business process management has several benefits that apply to businesses of all sizes:
Identifying, mapping and documenting business processes grants a clear picture of how the organization operates as a whole. More often than not, as companies grow and scale, some parts of the organization become increasingly more blurred. It’s common to have even entire business processes which are visible to only a reduced part of the organization - sometimes even one single person. The risk of having a “single-point dependency” in a company is clear - when that person or group of people leave, entire areas of the business are left blind to how things were done before, leading to considerable disruption and wastage of time.
With optimized processes and workflows, companies can minimize inefficiencies and bottlenecks in any part of the business. The iterative nature of business process management is particularly effective in spotting new bottlenecks early on to avoid disruption down the line. When there is a company culture of documenting and analysing business processes, the improvements in efficiency are exponential over time.
Being able to spot inefficiencies and solve them has a direct impact on the cost that businesses have to undertake to perform an operation. We are not talking only about monetary costs, but also cost in terms of time and workforce. Being able to reduce the steps needed to perform a process will free up resources that can be then utilized elsewhere. Removing back-and-forths and redundant actions in a process will save precious time, reducing time to market for products or services and improving margins.
Having processes clearly documented and having the company knowledge base accessible to different levels of the organization will also play a crucial role in enhancing stakeholders’ accountability. The reason for that is that processes will now be clearly mapped, with a team or single owner assigned to each of them. Everyone in the organization knows which team is responsible for a particular process, avoiding overlaps in accountability that often occur in organizations that don’t have a strong process management in place. With clear accountabilities, performance evaluations and reviews will be more effective; at the same time, process owners will be empowered to iteratively analyze and improve those workflows they are overseeing, ensuring the whole organization contributes to process improvements.
As companies grow and scale, maintaining standards becomes more and more challenging. Scale is usually followed by varying degrees of “mess” in processes and outcomes. Expanding teams and workforce requires solid processes to minimize such risks, and having Standard Operating Procedures (SOPs) and workflows clearly defined and documented becomes increasingly important. With a solid process management in place, the likelihood of steep quality and consistency drops is vastly reduced.
Messy and undocumented processes create inconsistencies and confusion. Without proper process management, errors will happen, and they can cost companies a fortune. Not only having a well-defined process helps reduce errors, but it also enables businesses to identify potential risks early and implement corrective actions before they escalate.
Whilst the theory of business process management might seem pretty straightforward and common sense, in practice implementing an effective system in an organization can often be challenging.
The process of mapping, reviewing and optimizing business workflows often requires changing the status quo or - in other words - changing the “we’ve always done it this way” mentality that can permeate long-standing businesses. Some people might be reluctant to change, especially when it directly impacts their team or function.
In order to successfully implement a BPM process in a company, the following should be in place:
Making changes to systems and processes in a company means implementing changes that run across all levels of the organization. Without support from the senior management team, chances are that BPM implementation will most likely be unsuccessful.
What is needed is the leadership team being onboard with the project and advocating for it company wide. When this comes from the top and as a company direction, applying business process management becomes incredibly easier. Without this, we will need to get the buy-in from every single stakeholder or team manager, resulting in lots of back and forths and eventually the stop of the project altogether.
One thing is getting the buy-in initially, another thing is keeping the project at the top of the list of priorities for the long term. Without a proper direction, this will be a very tough challenge for whoever is working on business process management initiatives.
Before anything else, it’s fundamental to put together a comprehensive roadmap that illustrates how the business process management plan will roll out and how it will support the wider set of company goals.
A roadmap will provide a clear overview to the senior management on what we intend to accomplish, as well as will keep everyone accountable over time.
This is another fundamental component of a successful BPM process. Key Performance Indicators (KPIs) allow the company to understand if the optimizations that are put in place in systems and workflows are effective or not.
A well-defined and measurable set of KPIs will make the results of the optimization efforts visible to the senior management, ensuring long-term buy-in for business process management activities.
It is essential to define KPIs before starting the process. Even more important is defining baselines, meaning what is the initial starting point from where we are going to iteratively improve. Having baselines for any KPI will allow for comparison and understanding of the impact of the changes being rolled out.
For the business process initiatives to work, constant communication and updates are fundamental. Not only regular communication will keep the senior leadership engaged and motivated, but it will also keep the teams in the loop with what’s going on.
Overall, we should have BPM front and center in company conversations, so that it is top of mind and becomes part of the company culture.
There are different strategies that can be put in place, including but not limited to weekly updates, to project dashboards, an update section on the company’s “all hands” meetings, regular emails, etc.