Why You Should Innovate Your Business Processes

Businesses usually face a dynamic environment and competitive scenario which in turn leads to constant challenges that need to be tackled aiming at allowing business growth and survival. This requires, additionally to other factors, that business processes are efficient and consistent. Very often this situation can only be achieved by innovating the way work is carried out as usually done. Business process innovation is therefore required in order to help your company to succeed in such a fierce environment.

In this article, you will learn what is business process innovation and why you should innovate your business processes. Firstly, let’s start by understanding the concept behind innovation.

What is Innovation?

Put simply, the term innovation can be defined as the act or effect of innovating. It refers to everything that is new. In the context of businesses, innovation often is associated with new concepts, devices or even original methods. Additionally, innovation can also characterize new ways of carrying out a particular process.

Despite being sometimes misunderstood as something that needs to be really revolutionary or highly sophisticated, an innovation can also exist in the realm of localized advancements. For example, adding a feature to an existing product or maybe improving a particular service to the customer.

In order to afford innovation that positively impacts the business performance, it is important to define the goals and purpose of innovation practices in your business.

Innovation can be found in many different forms and depends upon the nature of each business. One particular type of innovation commonly noticed is the so-called business process innovation, which you can learn more about in the next section.

What is Business Process Innovation?

Before getting into more details about what business process innovation consists of, it is important to recap the concept behind the business process. A business process is a series of stages designed to produce a product and/or a service as required by the customer.

In other words, a business process shows the way in which work is carried out within an organization. Figure 1 schematically shows a business process model.

In general, a business process is mainly composed of three parts: Inputs (x), process stages f(x) and output (y). In our example shown in Figure 1, we have four process inputs (x1, x2, x3 and x4), one process output (y) and two process stages (Stage-1 and Stage-2). In this particular case, process Stage-1 needs to be finished before starting the process Stage-2.

The process inputs can be understood as the resources (e.g. machines, materials, devices, working team, etc.) we put into the process aiming at achieving a specific output (y) which represents, for example, the final outcome delivered to the client as a product or service. It is easy to realize that any change in the inputs of the business process causes variation in its output (y). Therefore, the process output (y) is dependent upon the process inputs (x).

Usually, if the inputs of the process are kept constant, then the process output is also expected to be the same and presents just small output variations over time. Process control is supported by getting feedback information from the process output.

Let’s assume now that the overall outcome of the business process is not performing as the previous goals of the organization and certain aspects of the process should be fixed and changed. For example, a specific stage of the process is delivering slower than the other stages of the process and needs to be optimized.  In such complex situations you should consider analyzing and innovating the process where needed.

In this sense, business process innovation can be understood as the development of new and substantially enhanced business processes, including in fields such as medical software development, artificial intelligence, renewable energy technologies, and e-commerce solutions, so that the performance of the organization can also be improved as a whole.

Why Should You Innovate Your Business Processes?

 Among the many reasons why you should innovate and improve your business processes, some important ones must be considered, as follows:

1. Throughput. Process innovation when implemented correctly leads businesses to increase their productivity over time. This can be achieved through innovative methods or methodologies which allow for example to reduce the required time to accomplish critical tasks.
2. Quality. Process innovation is also very often linked to the need of optimizing processes which are not performing right and whose output presents errors or non-conformities. By optimizing business processes through innovative procedures, methods or techniques it is possible to get rid of defects and increase process quality.
3. Customer Satisfaction. As a result of enhanced throughput and quality, customer expectations are fulfilled and the level of satisfaction is also increased when process innovation is appropriately implemented. Satisfied customers are key to maintaining any business running healthy.
4. Credibility. Process innovation can provide different products or services within a business which in turn helps differentiating it from its top market competitors.
5. Adaptability. The constant challenges that businesses face often requires the capacity to adapt to new circumstances and to solve issues arising in specific fields of work. By promoting process innovation businesses can overcome these difficulties and become more flexible and even ready to adapt.
6. Growth. The combination of the previously mentioned reasons to adopt process innovation leads to the possibility of consistent business growth which is essential to survive in a highly demanded business environment.

Business process innovation often requires tools in order to afford good results. The Kanban method is a powerful tool which can be used to help business teams better understand how their processes perform in its entirety.

One possible alternative available through the Kanban method is to make use of digital Kanban boards which allow inferring process metrics related to business processes currently in use within your organization. Such metrics include lead time, cycle time and throughput, which will allow teams to not only advance their knowledge about how their workflow is performing, but also to innovate where needed and continuously improve the overall business process.