How processes can make or break your business

How processes can make or break your business

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    Whether you are starting a new business or trying to grow your established business, you are likely to be faced with various pain points – specific, often recurring, problems that your business will experience/is already experiencing. If you are operating on a small scale, the pain point may still be relatively small – you know it's there but you think you can live with it. But what if you scale up? If left unchecked, these seemingly small issues can become major roadblocks to the success and sustainability of your business in the longer term.

    How processes can make or break your business

    One approach to countering pain points is to ensure that you have properly documented and efficient policies, processes and procedures in place. 

    Covered In This Article

    The difference between policies, processes and procedures
    Understanding pain points in business
    Benefits of analysing your business processes 
    Moving from as-is to to-be

    The difference between policies, processes and procedures 

    A policy can be defined as a “definite course or method of action selected from among alternatives and in light of given conditions to guide and determine present and future decisions” or “a high-level overall plan embracing the general goals and acceptable procedures, especially of a governmental body”. In simpler terms, a policy is the business guideline or framework that helps ensure consistency and compliance with the overall company vision, mission and strategic objectives. Policies are there to guide the decisions made in the business and are usually drafted at a strategic management level. In a policy document, the business would state what is being addressed, why it is required, which division it falls under and who is responsible for executing and enforcing the policy. 

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    In contrast, a process is a series of actions or operations that are intended to bring about a specific end or outcome i.e. it basically explains how to produce a product or service. A process follows a company policy while giving a high-level view of how things should work. A process description usually covers what tasks should be performed, and when these tasks should be done. 

    A procedure can be defined as a particular way of doing something, or a specific series of steps or actions following a certain order or manner. Compared to a process which offers a broad view, a procedure focuses on the specifics, offering step-by-step instructions on how to perform a specific process or task within a process. Since employees are the ones that need to perform the detailed steps in a process, it makes sense to get their input when drafting procedures - they are at the coalface of operations and can highlight whether a particular procedure is practical to implement. Procedures provide details of what must be done, by whom it must be done, as well as how, when and where. Procedures are essentially the practical applications of the policies drafted by senior management. 

    Understanding how policies, processes and procedures operate together as a system to support your business is key to uncovering areas of risk and opportunities for improvement. Having all three of these system elements in place will help improve the probability of your business being sustainable and successful in the long term.

    The following serves to illustrate the elements of a basic system: 

    Running a restaurant requires policies, processes and procedures. For example, a policy will establish that the restaurant has to follow certain rules, such as utilising proper equipment and appliances for health and safety purposes. A process will describe what the restaurant offers (i.e. does it offer fast food or fine dining) and what is involved at each level, e.g. from chefs to waiters to cashiers. A procedure will be the recipe used to produce each meal on offer – it stipulates exact ingredients, quantities and how to make the specific meal. 

    As seen from the above, all three elements are required to properly run a restaurant. This is because having all three help determine the most efficient way to complete the various tasks required in the daily running of the restaurant. Having all three elements in place will help guide employees on how to perform their duties and ensure that quality standards are met. 

    It may take a lot of time to set up systems of policies, processes and procedures but this can ultimately make or break your business. Establishing proper systems in the form of policies, processes and procedures is the first step towards being able to grow your business.

    How processes can make or break your business

    Understanding pain points in business

    Whether you are new to the business, just starting to scale or established over many years, you will or most likely have already faced various pain points along the way. At first, these pain points can be relatively small annoyances but left uncontrolled, these very same annoyances can transform into significant risks that could ultimately severely disrupt or even derail your business. 

    Types of pain points include: 

    • Financial pain points – these include not being able to access sufficient capital when required; not getting a sufficient return on investment already made; spending too much on your current processes, or even on attempts to solve the original pain point without getting any value in return. On the other hand, anything causing you to lose revenue could also be a financial pain point. 
    • Process pain points – such as misallocation of resources; experiencing issues, delays, and misunderstandings amongst staff about the current systems and processes in place; infrastructure problems in a rapidly growing business – working with a team of 10 staff is very different to working with a team of 50 or more staff members; not being prepared for a disaster and knowing how to recover operations in the event of a disaster, whether natural or otherwise. 
    • Productivity pain points – for example, processes currently done manually which take hours to complete (consuming more resources which you could potentially apply better elsewhere); lack of innovation resulting in stagnation, reduced enthusiasm from your team and the threat of new competitors taking over your market share. 
    • Support pain points – this may include not getting the support you need in developing your business, or not knowing who to ask for help; it could also impact your customers, for example, your customers not receiving the proper support or after-sales service that they need, which could result in them going elsewhere where service is perceived to be better. According to the Gartner Sales Glossary, a pain point is regarded as “...specific problems faced by current or prospective customers in the marketplace” and includes “any problems the customer may experience along their journey”.

    To address your pain points you first need to get a clear understanding of what they are and where they are occurring in your business. A good starting point is to get your as-is processes documented and analysed in detail.  

    How processes can make or break your business

    Benefits of analysing your business processes 

    Having an independent business analyst capture the process described in a structured format can shed light on the following:   

    • What is supposed to happen during the process
    • Who is supposed to perform the various steps, and 
    • When these steps are supposed to be performed. 

    Analysing the as-is process helps to identify dependencies and where process steps require manual inputs. This analysis also helps to identify opportunities for the automation of routine, repetitive tasks, which ultimately can reduce the risk of human error and free up resources for other more valuable tasks.  

    Another benefit to formally documenting the business processes is that all role-players can improve their understanding of what is required. Employees (including new starters) involved in the process will have a formal process description available, explaining to them how the process should operate.  Defining the roles and responsibilities of the team at each stage in a process also leads to improved teamwork and collaboration. 

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    Quite often, an engagement with all stakeholders to analyse a specific process uncovers where there are misunderstandings of what must be done, and how the business practically operates - which may be different to that which was originally documented when the business started. Understanding the gaps in a process helps clarify where management should direct resources and energy to mitigate against risks materialising, and where there are opportunities for business process improvement. Risks left unchecked could result in delays, inefficiencies and/or non-compliance with relevant regulations and standards. This exposes the business to potential financial losses and reputational issues. Not making use of opportunities in itself represents a risk to the competitiveness and long-term sustainability of the business.

    Understanding the basics of how your business processes operate can also help you identify what is required to fix broken processes. Without a proper working foundation of policies, processes and procedures, any attempts at automation could result in large investments and expenses without yielding the desired results. 

    How processes can make or break your business

    Moving from as-is to to-be

    Once the basic processes have been established and analysed, it becomes easier to identify where changes can be made that will aid in streamlining those processes, increasing efficiency and agility. In today’s business environment, agility implies that the organisation can continuously re-invent itself, adapting to change in a disruptive environment with speed. To be agile, the organisation must have some basis of stability. Having solid processes in place contributes to this stability.

    Moving from the as-is state to the to-be state in terms of your processes takes a collaborative approach. Workshopping the process with your team can build employee engagement and even lead to innovation. Having a team of business process analysts providing an independent point of view brings fresh perspectives. Processes can then be standardised leading to greater efficiency. This also comes in handy when you need to start with succession planning and scaling your business.

    Using CRM technology to automate and align your processes enables your business to reach its maximum potential, all while providing visibility of key business areas to relevant stakeholders and decision-makers.

    At Velocity, our team of chartered accountants, internal auditors and business process engineers work in collaboration with your business to assess processes, risks and opportunities, We help you document and analyse your existing processes, and then build your ideal processes, focusing on a firm foundation, before applying technology to optimise efficiencies, giving your business an agile edge when it comes to guiding customers on their journey. 

    Learn More About Business Process  Review & Automation

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