Why business owners should care about process improvement
As a business owner you may be thinking ‘why should I care about process improvement’ and for that matter, ‘why should I care about processes at all’?
In truth, you may be leaving significant dollars on the table if you fail to adequately define, measure and improve your core business processes.
What is process improvement?
The demand to improve your business continues to increase as the business expands, cashflow needs increase, compliance requirements are amplified, new technologies emerge and competition grows.
At some point the finance and operational functions may no longer align with the stage of the business and will need attention to support the current operations of the business, as well as your strategic objectives. This becomes especially important should you plan to strategically exit the business.
This is where regular business process improvements become crucial to establish continual improvement within your organisation.
Why does it matter?
If you run an operation, you are reliant on two things:
- The people you employ, their skills and capabilities;
- The processes that you use, the way you do things.
So the only way an operation can perform better is to either improve its processes or its people. Business processes can be informal or formal and touch a variety of company functions — not just the finance department.
When processes work well, they can significantly improve timeliness and relevance of financial information, operational efficiency, productivity, and customer satisfaction. However, processes that don’t work can cause frustration, delays, and financial loss.
While many companies have successfully embraced process improvement on their own, others have found the process much tougher than it looks. This is where a skilled consultant can add significant value by identifying the need for change. A useful way to discover improvement opportunities is by conducting a process audit. This will identify current issues or potential risks for your company so you can prioritise areas for business improvement.
If it has been a while since your business has reviewed its processes, it might be time to address this.
This article originally appeared on the website of ESV Group.
Lisa Brink is an Assurance Manager at ESV Accounting and Business Advisors. She has more than 11 years of audit and assurance experience, managing the delivery of both public and private company audits, internal controls evaluation and procedural recommendations. Lisa also conducts diagnostic reviews of organisations and risk-based internal audits. Contact ESV to find out how your business processes can be improved.
