Are you feeling frustrated about complicated processes that feel cumbersome, manual, and slow? Want to speed up your return on investment from digital initiatives?
Business process mapping is an important first step in your enterprise digital transformation objectives.
I’ve seen change initiatives involving digital transformation succeed and fail. Let’s talk about why process mapping is an important step to avoid failure, how it influences budgets, and how to begin building your first process map.
In the U.S. we have a saying, “if it ain’t broke, don’t fix it.” Truth is, you likely have many processes in your organization that aren’t literally broken, but are wholly inefficient and holding your company back from higher revenue, profits, customer satisfaction, and employee happiness.
What is Business Process Mapping? Why is it Important?
Business process mapping involves making your team or organization workflows visual to streamline an overall process and dramatically reduce cycle times or remove minor efficiencies and redundant steps.
The most common business process mapping examples are flowcharts or workflow diagrams, with everything included, from inputs and outputs to approval points and conditional decisions, to documents being introduced or modified, to stakeholder reminders, and more.
The level of detail you put into a process map depends upon the amount of inefficiency and costs you want to take out.
One reason it’s important to map your processes before even implementing quick-win changes that are obvious to you is that the very process of sketching your workflow brings multiple stakeholders together. When you bring other team members into the process-mapping, you’re more likely to ensure every step is covered, every cost is captured, and every decision is outlined as well. Everyone is on board.
Another reason process mapping is important is that doing so enables you to identify all of the costs of your current state, so you can identify the costs associated with getting to your desired state.
How Process Mapping Influences Budgets
There may be hard costs associated with performing work the way you do it currently — for example, labor costs, printing costs, or shipping costs — and there are always soft costs associated — for example, time spent performing individual tasks, time spent re-entering data from work completed, time spent evaluating data and making decisions, and more. Finally, there are opportunity costs — for example, the ability (or lack of ability) to make real-time decisions while waiting for completed work to be reported.
Enterprise resource planning (ERP) software can help with identifying hard costs in production and manufacturing environments. Soft costs are harder to identify in this manner, however, and yet they’re a crucial part of influencing budget dollars to be allocated for digital transformation initiatives where processes will be dramatically streamlined.
Imagine sharing with a department leader or executive sponsor that you’ve identified each step in a process, and the current cost of performing that entire process one time costs USD 17,000. And let’s say that process is performed 100 times each year. That process costs the organization USD 1,700,000 annually.
Now imagine being able to present an alternative approach that may cost 80,000 USD to implement but will remove 4,000 USD from that process each time it’s performed. That’s an 80,000 USD investment to save 400,000 USD, or a 5x return.
This is how process mapping influences budgets.
How to Build Your First Process Map
- Identify a specific workflow that is manual, maybe paper-based, or involves numerous steps before completion (for example, extensive work or documents needing to be reviewed and/or approved). Give this process a simple name.
- With your team, brainstorm each step of the process involved:
- What initiates the process? Who is involved in the process? Who makes a decision? Who reviews work for quality? Who enters data from the work? Who marks the work as complete? Who archives or touches documents related to the work?
- Include value-added and non-value-added steps that require time and/or a decision.
- Place each step in proper order.
- Highlight “breakpoints” or bottlenecks in the process:
- Steps where the process is paused due to others waiting for the process to be reported as complete or a document is completed.
- Steps where the process is stalled due to one person needing to review the quality of work performed.
- Steps where duplicate work occurs — data is re-entered, documents are re-scanned.
- Calculate the cost of each step in hard costs or soft/labor costs.
- Project the annual costs based on the frequency of the process over the course of one fiscal year.
Process mapping is an important first step in digital transformation efforts. It doesn’t require expensive software or commit you to overhaul a process, but it can provide crucial financial insight. You will need to gain team commitment, secure budget dollars, executive sponsorship, and to fulfill your goals for turning manual processes into digital ones for a more streamlined, efficient business.