Business Automation and Software Blog

How Business Process Optimization Improves Your Bottom Line

Posted by Robert Baran on Wed, Dec 19, 2018 @ 11:00 AM

They say that the definition of insanity is doing the same thing over and over while expecting different results. That rings true in individuals as well as businesses. If your processes are not working, continuing to practice them hoping that this time you’ll get a different result, certainly is insanity. It’s time to stop doing things the way you’ve always done them, especially when it comes to processes for meeting customer expectations.

One of the better ways to ensure you are meeting client expectations is business process optimization. According to Business Enterprise Mapping, improving processes can lead to higher levels of customer satisfaction. The more customers are satisfied, the higher the customer retention rates and the lower the levels of attrition. By working on business process optimization, you might even improve your revenue.

Poor Processes = Lost Revenue

According to IDC Research, companies lose 20 – 30 percent of their revenue due to poor processes. Yet, many companies don’t even realize that it’s a lack of process that is hurting productivity and revenue. If a manufacturer doesn’t have tight controls on the manufacturing process from start to finish, they may lose revenue because:

  • They have miscalculated the amount of time required to fulfill the order, delaying shipment and causing the customer embarrassment or lost revenues;
  • They lack raw materials needed to fulfill the order because they have poor reordering and supply chain management processes;
  • Critical personnel are missing due to open jobs, vacations, or other reasons, leaving gaps in the human capital needed to complete the order; or
  • There are few or no quality controls in place, leading to poor products and high returns.

ERP Software: The Missing Link in the Process

Customers expect manufacturers to have processes in place to prevent missed deadlines, poor quality, and lack of information about their orders. One of the best ways to improve processes is by adding tools such as enterprise resource planning (ERP) software to your company.

Companies with well-integrated ERP software find themselves using data to drive innovation and decision-making. An ERP gives all members of the organization insight into the company’s business, providing transparency to ensure that process gaps are brought to light. Once those gaps are discovered, it’s up to your team to close them.

An ERP system itself cannot build a process; however, it does provide a framework in which a process can run. Take a look at supply chain management: Companies lacking an ERP system may need to manually check and manage aspects of their supply chain. Records could be on spreadsheets, and information shared via phone calls, emails, or texts. It may take days to get information from a vendor into the spreadsheet and back into a manager’s hands. By then, the order may be delayed.

Contrast this with a company using an ERP system to manage its supply chain. Managers can see the inventory status of all the parts, equipment, and raw materials they need to manufacture orders. If anything is lacking, they can request reorders immediately or transfer stock from one location to another. If an order is delayed, they can see quickly when the revised delivery date is expected and alert customers without waiting for spreadsheets to be updated or phone calls to be returned.

Make the Move to ERP

You can optimize and streamline business processes now by reviewing areas that demonstrate persistent problems, gaps, or customer complaints. Use customer complaints to help you pinpoint areas in your processes that could benefit from improvement. Once those issues have been addressed, you can move on to other systems that need to be updated.

Not sure where to start? Let PositiveVision’s Business Management Systems Optimization service review your current software in relationship to your goals and see where there’s room to optimize and improve. We’ll help you identify and configure your business management software to work with your procedures, not against them. Ready to get started? Get your FREE consultation now.

Topics: Business Process Optimization