A 5-point test for designing effective business processes

So you’ve realized your business activities need defined processes. And you’ve gone on ahead to do just that. But just before you roll your defined processes out and start training employees on them, here are five questions to ask when designing an effective business process:

1. Is it standardized? Are there templates and checklists to minimize variability of process outcomes? In addition to listing out the procedural steps and confirming task owners and task timelines, have you included guidelines that help task owners confirm if they have completed or conducted the task correctly? These guidelines can be templates or checklists.

2. Is it waste free? Is this process as efficient as possible? Are non value-adding activities minimized to the barest extent possible? A helpful framework for checking for process waste is the TIMWOOD framework. TIMWOOD is an acronym from the Lean methodology that stands for seven types of process waste: Transport, Inventory, Motion, Waiting, Over production, Over processing, and Defects. Have you reviewed the process to ensure opportunities for these process wastes are eliminated or minimized? 

3. Is it risk free? Is the governance – roles, responsibilities and accountabilities – for this process clear to all involved? Are there adequate controls in place to eliminate opportunities for abuse? Is it compliant with applicable regulations? Is it fraud-proof – are the right levels of approvals, maker-checker controls, reconciliation checks, etc. – in place?

4. Is it scalable? If we increased the frequency of this activity, and replicated it across multiple business locations, will we need to increase input resources at an equivalent scale to match …? Will resources need to balloon to match.

5. Is it automated? Have all the opportunities to leverage digital to drive efficiency in transaction processing and workflows on this process been utilized? Digitizing processes can take many forms – swapping paper-based reports and requests to online reports and requests, using software apps to perform approvals, checks, analyze data, the list goes on.