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Business Process Mapping

Business Process Mapping

Business Process Mapping – Getting the Big Picture

Business Process Mapping (BPM) is a tool used to provide a company with a clear picture of how it does what is does.  BPM is applicable no matter what type of company, its product or service.  Every company is comprised of business processes.  These processes address every area and function that exist within an organization.  A business process is defined as a series of activities that occur to deliver a specific business value or goal.  While this sounds simple enough, the act of mapping out these processes requires a skilled and systematic approach; if the results are to have any real management value.

Understanding how you do what you do is a key component of strategic management. Too often as an organization grows, delineation occurs between departments and these business areas begin functioning as separate business entities. Often a by-product of this occurrence is that growth and development occur in a silo fashion. Departmental team members are very knowledgeable about their own business areas but have only a limited understanding of the processes that occur in others and how these processes relate to and impact on theirs.

BPM maps out all of the business processes and clearly identifies the activities that are required to carry out these processes and the resources required to complete these activities, thereby providing a detailed and accurate ‘as-is’ organization-wide snapshot of all the business processes that occur within a company. It is very often the first time that management is able to obtain a crisp awareness of the processes that occur in all areas of the organization.  This holistic view facilitates the identification of gaps and overlaps that exist within these processes, both within and between departments.

This information can then be used to optimize and streamline existing business processes; which should always be the first step in any growth initiative.  Before introducing the added volume and strains of growth, a company should ensure that it does a complete ‘tune up’ to ensure that the existing infrastructure can support these increased demands.

Another benefit of BPM is the knowledge that is obtained by detailing business processes component by component.  The crisp identification of activities and resources can also be used for strategic financial management.  BPM creates a framework that supports the implementation of Activity-Based Costing (ABC).  By utilizing the strategic management tool of ABC, it is possible to attribute exact costs to each activity and required resource.  These costs can then be rolled up to the related business processes to ascertain the total costs of providing these business processes.  This information can be used in a variety of ways such as budget setting, quoting and efficiencies targeting.

By knowing the components of how you do what you do, it is possible to begin practicing meaningful performance measurement.  Strategic managers are now able to define and create clear, consistent and measurable performance metrics for each resource, activity and business processes.  With clearly defined performance metrics defined and communicated to stakeholders within the organization, these metrics can be tracked to ensure that each component is functioning at desired criteria levels.  This information can be used in a variety of managerial functions from efficiency tracking and reporting to employee performance reviews.  The practice of measuring organizational functions provides meaningful feedback to stakeholders to assist in determining required adjustments and how these can be conducted in a timely manner.

BPM can also assist in the strategic assessment of information systems.  The ability to view an organization component by component allows management to determine which information is required by which resource, activity and process, as well as the directional flows of that information to facilitate and manage business processes.  By mapping out this information, management can conduct meaningful information systems assessments of legacy systems, and strategically identify the functionally requirements of future systems.

While Business Process Mapping may seem like an obvious approach, it is surprising how many organizations do not have a true and detailed understanding of their own ‘big picture’.  It is the strategic manager who fully understands that breaking things down to their most basic components is the best way to see the whole picture.

 Regards,

Kelly

Kelly Melanson, CPA, CMA is the founder and owner of Kelly Melanson Professional Corporation. She and her team specialize in helping companies grow via strategic financial management practices. For almost 25 years, Kelly Melanson, Chartered Professional Accountant (CPA, CMA) has been helping businesses in Whitby, Oshawa, Ajax, Durham Region and the Greater Toronto Area (GTA) to reach and surpass their profit goals.

If you would like to speak to us regarding your retirement or tax planning, tax returns, bookkeeping or any of your other accounting or financial planning needs, please contact us anytime – we’d love to chat with you.

Kelly Melanson Professional Corporation – Chartered Professional Accountant, CPA 11 Stanley Ct, #13 Whitby, ON L1N 8P9 – Local: (905) 666-5071 Toll-free: 1-800-942-5558 – Email: admin@kmpc.ca  Web: https://kmpc.ca

 

The 3 Angles to Growth

The 3 Angles to Growth

Are You Struggling to Grow Your Business?

Does it feel like you have hit a wall in your growth efforts? Do your growth strategies feel like they are falling short of the mark? If so, then your company has likely reached a fork in the road and it’s time to give your operations a refresh so that they are relevant to where you are now, and where you want to go.

Often in the struggle to survive those early entrepreneurial days it was necessary for you to adopt band aid solutions for issues that confronted your organization. While these ‘solutions’ made good business sense at the time, the impact of these decisions can begin to hamper the continued growth of your organization.

To give your company a proper “growth tune-up” you will need to see the big picture of your operations in relation to where you want to go and then examine each component’s ability in assisting you to reach those goals.

First, reflect to when you first started your business, what was your reason or goal?  Has this changed?  If so, how? You need to make sure you have relevant and defined goals because they will guide you in your assessment of your operations. As you review each area of your company you need to assess: Does this assist the company to reach our growth goals?  Why/why not? If it doesn’t, can it be refined so it does contribute? Your assessment needs to determine which elements should continue to exist in your company and which ones you should cut from your operations.

Impediments to Your Growth Success?

These legacy issues most often occur in the areas of Human Resources, Financial Management or Operations.  Many companies find they must make changes in a least two of these areas to before they are able to experience real growth.  While this process may be challenging, it is imperative that you do it or you will be drastically hampering your ability to grow the company.

Financial Management: It is surprising how long companies can exist without having a handle on their true bottom line. This understanding is critical because you need to be able to have an up-to-date financial picture because the added strains of growth can appear quickly and you need to know what resources you have at hand to support the demands of the expanding requirements. To be ready and able to do this you need to ensure that you have implemented a financial management system that can provide you with the data you need and be able to grow with you. By implementing a good financial management system, you will be able to better optimize growth opportunities because you will be able to be proactive due to your quick access to pertinent information for making strategic decisions.  All aspects of a company’s infrastructure benefit from a financial management system.

Human Resources: As your company evolves, so should your employees.  Too often this isn’t the case, and it can cause real problems in a small company that wants to grow.  While not always pleasant it’s essential that you objectively assess your employees to determine who is performing at expected quality or productivity levels. For those that are not performing at expected levels you need to create a plan to help them improve. If they don’t or can’t improve to meet the growth requirements of your organization then you need to have another plan to get rid of them as quickly as possible. While this may be difficult, keeping them on is not good for them and will hamper the efforts of those employees who are performing well.

Operations: Regardless of what line of business you’re in, it is imperative to really understand how you do what you do if you want to grow your business.  While this may sound easy, you would be surprised how quickly this knowledge can become diluted or segmented within a company as it grows.  Too often employees become very knowledgeable about their own areas but have only a limited understanding of the processes that occur in other areas and how these processes relate to and impact on their areas/functions because the daily functions have move further away from their daily duties and functions. To sustain growth in your company you need to ensure that you and your team remain current on knowing the components of how the company does what it does. Without this clear understanding of process and functions it will be impossible to practice meaningful performance management – tracking and measuring how well you do what you do in relation to the business goals.  The practice of operational performance measurement provides meaningful feedback that assists management in determining any necessary adjustments required to meet target operational performance goals. Without this data you will not be able to determine if you are meeting your growth goals, and if not, why not?

You don’t have to wait until your company reaches a certain point to begin implementing these strategic growth/management strategies. Manage your company like the big guys, even if your company is running its operations from your basement. Get a clear picture of where you want your company to go and start charting a course to take you there.  Strategic management is the true key to your success.

Regards,

Kelly

Kelly Melanson, CPA, CMA is the founder and owner of Kelly Melanson Professional Corporation. She and her team specialize in helping companies grow via strategic financial management practices. For almost 25 years, Kelly Melanson, Chartered Professional Accountant (CPA, CMA) has been helping businesses in Whitby, Oshawa, Ajax, Durham Region and the Greater Toronto Area (GTA) to reach and surpass their profit goals.

If you would like to speak to us regarding your retirement or tax planning, tax returns, bookkeeping or any of your other accounting or financial planning needs, please contact us anytime – we’d love to chat with you.

Kelly Melanson Professional Corporation – Chartered Professional Accountant, CPA 11 Stanley Ct, #13 Whitby, ON L1N 8P9 – Local: (905) 666-5071 Toll-free: 1-800-942-5558 – Email: admin@kmpc.ca  Web: https://kmpc.ca

 

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