What is business process analysis?
Business process analysis is the practice of identifying and evaluating a process or workflow in order to understand how it is organized and determine whether or not it is effective, efficient, and secure.
The goal of business process analysis is to better understand the structure of processes in order to optimize them for efficiency, productivity, and security. Process analysis is one component of business process management, and is also referred to as “process analysis.”
The analysis involves reviewing not only the individual steps of the process, but also the flow of information and the relationships between the stakeholders involved. The analysis may explore any of the different types of business processes but most often focuses on core and support processes.
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Business process analysis vs. business analysis
Business process analysis is sometimes confused with the similar-sounding business analysis, but the two terms are not interchangeable. These two types of analysis differ in their focus and scope.
Business process analysis examines how the activities of the business are organized into tasks and workflows, and how well those processes are performing. Business process analysis looks for common process problems including bottlenecks, problems with handoffs, and data and collaboration silos.
Business process analysis is not primarily concerned with activities that take place beyond the boundaries of the processes.
In contrast, business analysis takes a more generalized view. The goal of business analysis is to evaluate strategy, organization, goals, and performance of the business. Business analysis is informed by data and insights from a wide range of sources, including competitors, finances, human resources, customers, suppliers, technology, regulations, and the market.
Business process analysis may be one part of a comprehensive business analysis.
| Business analysis | Business process analysis |
|---|---|
| Focuses on business goals and strategy | Focuses on tasks, activities, and workflows |
| Scrutinizes competitors, market activity, finances, and regulations | Scrutinizes process silos, bottlenecks, and handoffs |
| Concerned with business as a whole | Concerned with specific processes or workflows |
Examples of process analysis
When you’re ready to start analyzing your processes, it can be helpful to see some examples of what your analysis might look like. Processes that are frequently analyzed include:
- Request management
- Intake
- Reimbursement
- Procurement
- Purchasing
- Vendor approval
- Employee onboarding
- New hire requests
- Contractor management
- Fleet management
Importance of process analysis
The reason why business process analysis is important is that it gives organizations a clear picture of how effective the processes are at achieving their output goals. Some questions the analysis might answer include:
- Is the process delivering the desired results?
- Does the process introduce any unnecessary risks?
- Does the process use the most effective technology?
- Does the process create value or waste?
- What is the impact of the process on customer satisfaction?
- How does the process contribute to or diminish employee experience?
- Is the process slowed by unnecessary friction?
- Does the process encounter silos to data sharing or collaboration?
- What are the KPIs for measuring success?
- Can the process be optimized using existing resources, or are additional tools or systems needed for improvement?
Key benefits
The purpose of business process analysis is to identify problems, opportunities, and inefficiencies in order to create an optimized version of the process. The work of process analysis yields the following benefits:
- Risk reduction. Optimized processes avoid errors and data leakage, two of the primary sources of risk to the business. Process analysis may also identify other security vulnerabilities and determine whether or not the process meets compliance and internal requirements.
- Increased speed, and productivity. By identifying opportunities for automation, resolving bottlenecks, and dissolving silos, process analysis can help teams build faster, more efficient processes with higher output.
- Cost savings. Process analysis can identify sources of waste within the process.
- Stack extensibility. – By exploring how processes are managed with the elements of the current tech stack, process analysis can shed light on the effectiveness of current configurations, identify data silos, new integration opportunities, and help teams maximize stack extensibility.
- Deeper visibility. Process analysis creates a forensic view of tasks, workflows, and handoffs. Stakeholders are identified, and the chain of accountability is established. Analysis also identifies the KPIs and metrics that determine how well a process is meeting its goals.
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Methods of process analysis
There are a couple of different types of process analysis that businesses can choose from, depending on the situation and process that needs to be evaluated. These include PEMM, gap, experimentation, value-added, and root cause analyses.
Process Enterprise Maturity Model (PEMM)
Developed by Michel Hammer, this method focuses on five “process enablers”: design, performers, owner, infrastructure, metrics. In this method, all people, tasks, systems, and information are identified and sorted into one of the process enabler categories. Each category is then analyzed for optimization opportunities.
Gap analysis
A top-down approach that compares the performance and outcomes of an existing process with projected outcomes of the desired process.
Experimentation
A method of making small adjustments to a process to see how each affects the desired outcomes. While this can take many iterations, it may uncover valuable improvements that would be difficult to discover in a top-down analysis.
Value-added analysis
An approach to analysis that evaluates each step of a process to determine its value in the workflow, with the goal of removing unnecessary or redundant steps. Six Sigma and Lean Six Sigma are two types of value-added analysis.
Root cause analysis
A method of analysis that begins with a problem and works backward to discover and understand the root cause. This is useful in cases where there is a known issue that needs to be solved.
Read too: Business Process Redesign (BPR): Definition and How It Works
How to analyze any process in 5 steps
One well-known method for analyzing and optimizing processes comes from Six Sigma. This is the DMAIC method, which is an acronym that stands for define, measure, analyze, improve, and control, and is often employed by business process consultants. The aim of DMAIC is to improve the speed and quality of a process, while also reducing its cost. Below are the five steps:
Step 1: Define
In this initial step, all aspects of the process analysis are defined. This is done to eliminate ambiguity, establish accountability, and set the boundaries of the analysis. The problem the analysis will address must be identified, analysis inputs such as the voice of the customer and the voice of the business should be determined, and the process optimization team needs to be assigned.
Schedules, KPIs, and other elements of the analysis should be clear before moving on.
Step 2: Measure
During the second step of the process, a value stream map is created in order to understand how and when the process adds value to the business. At this point, inputs and outputs are identified, and the data collection methods are determined. Baseline data is collected.
Step 3: Analyze
Using the baseline data, potential root causes of the problem are identified. The effect of each potential cause on the process is determined, and all potential causes are then prioritized for further investigation.
Step 4: Improve
Based on the results of the analysis, an optimized or “to-be” version of the process is created, along with a plan for its implementation.
Step 5: Control
In the final phase, standard operating procedures, or SOPs, and training plans are created to support the new process. Implementation is complete. A system of ongoing measurement is developed and put into place. Control of the process is transitioned to the process owner.
What to look for in your analysis
Although no two analyses will be the same, there are some common elements that are more or less universal. Recognizing these elements will make your analysis easier and more thorough.
For example: where/when does the process begin? At what point does the process end? These two instances are known as your start point and end point. (If you are analyzing a workflow, the workflow components are called the “trigger” and “outcome.” In either case, any activity that happens between the start and stop points should be included in the analysis.
Key elements of business process analysis
- Actors: Any person, tool, or system that takes possession of the ticket, task, or information in the process. Until all actors are identified, you won’t have total visibility into your process.
- Handoffs: Any point in the process where work or information changes hands should be scrutinized. Transitions are notorious for causing bottlenecks, delays, and disruptions.
- Silos: Look for barriers that prevent information or data from flowing easily through the process. This may include reviewing integrations in the stack. Also look for situations where there are barriers to collaboration, such as when a tool doesn’t provide visibility to all stakeholders.
- Output: Review the quality and quantity of the output. Are customers (internal or external) satisfied with the results?
- KPIs: Are the performance metrics for the process or workflow clear? Is the process meeting expectations?
Process analysis: What comes next?
If you’re planning on conducting a process analysis, the next immediate step is to make sure you have the resources and tools you need to understand your as-is process and to create your to-be process. Look for a tool that allows you to visualize processes, easily automate tasks and workflows, and that integrates with your existing tech stack.
Consider whether a low-code automation tool is right for you. Low-code automation features support process analysis as well as process automation and optimization. You may also want to familiarize yourself with flowchart symbols if you need to present your findings to an audience that relies on process notation.
