Are your business processes creating value or waste?

- Trinidad Wiseman business analyst Mihkel Lauk

The evaluation phase also involves setting metrics. Once we understand where the problem is, we attach adequate metrics to the problem. This helps to characterize the magnitude of the challenge and later understand whether the problem has been solved or not or if other risks have materialized.

4. Creating a new business process or modifying an existing one
The fourth stage is creating or redesigning a new (to-be) process.

When designing the to-be process, it is necessary to come up with the considerations needed for making the final decision. For example, how many new risks to take, how many resources to use and how it relates to the projected benefits. Creating a vision of the future can also end with the opposite realization that the planned investment and changes are not worth making.

Service design, prototyping, and usability testing also occur in this phase. With service design, it is possible to maximize results - if you don't know the customer and don't know how to design customer-centred value, then things will not succeed. As a result of the fourth stage, we have created new business processes that are validated with end customers.

5. Change management and implementation
The fifth stage is the implementation of changes, i.e. creating a strategy to implement what has been planned. Often this stage is the most difficult. A new or changed business process can change someone's daily life: new competence needs are added, and people must work in a new way or acquire new skills. As a result of the fifth stage, new business processes start to work in the organization.

6. Analysis and control
The last step is to measure and control the change. The metrics set in the third step can be applied to the analysis. Planning a change is only possible if we can measure its success - it is necessary to know whether the change took place and whether the desired success occurred.
We must also check the side processes because risks may manifest elsewhere or in a different form than expected. As a result of the last stage, it becomes clear whether the change worked, to what extent it was successful, and whether the risks caused by the change have secretly manifested themselves in other business processes.

During the business analysis project, we also define the business value. Some values may not be necessary for the end customer but are vital for the operation of the business. The business value needs to be compliant with the law.

For example, the activity must comply with the Personal Data Protection Act. Business value can also be risk mitigation. For example, you check a new customer's financial background and ability to pay before accepting an order.

Value can be assessed both quantitatively and qualitatively. The quantitative evaluation method analyzes voluminous data, such as website visits, purchase statistics, financial data, delivery speed, market demand, etc.

Qualitative assessment of value creation is an art in itself - a business analyst provides an expert assessment that is designed precisely based on the project's goal and the selected business analysis methodologies.

Process activities can be evaluated from the point of view of both end-customer value and business value. The goal is to understand which steps within the process do not create value. For this, we can ask simple questions about each process.

Can this step be taken out? How much value does this movement create? Does the value change in the end client point of view  when the activity is removed? Does the end customer even feel the difference? If the step cannot be taken out, then it is clear that the action creates value.

The first example is the waste that occurs through transfer. Information is usually transferred. Therefore, it is worth analyzing what information is transmitted and how. For example, sending a document on paper means a trivial expenditure of time and money.

At the same time, moving an electronic document can also be wasteful if someone has to manually retype the PDF data in the information system; the solution that eliminates waste is a machine-readable document instead.

Another waste is waiting. We should treat business process waiting times similarly to inventory that sits in a warehouse until it is cashed.

Waiting can also arise from the participants' roles and responsibilities in the processes. When analyzing the roles, it is worth considering whether the right people have the right responsibilities - only in this case will they have the ability to control the process and create value as quickly as possible.

We can reduce waiting time by discovering that the activities of a business process do not have to be linear but can also be parallel - thus saving time and creating value faster.

The third category is the waste that results from rework. Such wastes can, in turn, be divided into three.

First, error-related waste caused by a process failure. The consequence is the repetition, re-making  or re-doing of actions. This leads to wasted resources, delayed delivery, lost revenue and reputation damage. The solution is to identify errors and nip them in the bud.

Another subcategory is waste due to overwork, which results from processes that have competence gaps or involve perfectionists who over-finish all the details. When people are uncertain, they may seek reassurance and coordination through time-consuming meetings. The solution is to refer to the necessary training, review the meeting rules and give specific decision-making rights.

The third is waste due to overproduction, which consists of activities that do not contribute to the final value. For example, if a customer cancels an order halfway through, it should be analyzed whether it could have been foreseen and what is the reason for the cancellation.

In the second scenario, the result of the process is delivered to the customer, but the customer no longer needs it. In this case, it is worth investigating why the deliverable no longer offers value to the customer. If delivery is time critical, can we deliver value at the right time?