To achieve continuous improvement in your organization‘s processes, you need to be able to measure the effectiveness, efficiency, and adaptability of your processes.

Business processes are the means by which your business delivers products or services—the means by which work gets done. Process improvement should be constant because business conditions are constantly changing.

Measurement is essential to process improvement. How else can you know what to change, how to change it, and if your changes have produced the desired results? Consistent measurement provides you with a systematic and dependable view of process development and change—and lets you make informed decisions.

The measurement of process performance gives you:

• an understanding of what is occurring in the process. Is the process still delivering the services it was meant to in a time acceptable to your client and at a cost acceptable to you?
• a determination of the amount of rework in the process. What tasks are being repeated because they were done incorrectly the first time?
• realistic schedules for work assignment.

Each of these process measures is important; each contributes to the viability of your organization and to the bottom line. To do justice to their value, we will examine the measurement of efficiency in some detail in this issue, reserving the study of effectiveness and adaptability for future issues.

Measuring efficiency
Improving the efficiency of your business processes will reduce operating costs. Savings are an opportunity to improve the bottom line, reinvest in future development, or to meet your clients’ expectations and needs with price reductions or increased service.

Poor efficiency can be hard to recognize. It tends to creep into processes in small increments so organizations learn to live with inefficiencies, slowly permitting the problem to get worse.

To improve efficiency you need to minimize the resources required to do each task, and to eliminate waste and unproductive activities.

You need to measure the efficiency of your processes to get a baseline and collect data, refine or redesign the process, measure again to assess improvements and reset your baseline, and then continue to take spot measurements to ensure your improvements stick.

Typical measures of efficiency are:
process time—the time required to perform the tasks and activities associated with each process step.
cycle time—the total time required to produce a product or service from input to output.
output vs. input—the actual work time required to perform process tasks (aggregate process time) vs. the total time required to produce a product or service from input to output (cycle time). This gives you a clear indication of time lost to unproductive process steps or delays.
rework—performing tasks more than once.

Output vs. input
For many business processes, cycle time is unduly long when compared to process time. MCC Workplace Solutions worked with a large Canadian insurance company to redesign their document imaging process. We compared their three-day cycle time to scan and index documents as an image file to their process time of just 15 minutes. This indicated an efficiency improvement opportunity.
The process time is typically about 5% of the total cycle time. In this case it was less than 1%. Each process task was performed by a different person with a defined role and function, and work waited as it moved from function to function. To reduce the unproductive time we needed to eliminate waiting periods between process steps.

The process was redesigned to have one person perform most of the tasks, eliminating function separation and waiting. A little reassignment, a little training, and documents can now be imaged in six hours. The process time is now 24% of the total cycle time; a significant improvement in efficiency for our client.

Rework
Error-free performance of process tasks will also improve efficiency. Processes should be designed to prevent errors without slowing work flow to check or redo tasks. When errors do occur, you'll want to analyze the problem and readjust your process to prevent a recurrence.

We assisted a company experiencing delays in getting new customer records into a computer system. Staff interviews quickly identified one of the problems: the source documents submitted were often incomplete. Obtaining the missing information was unproductive rework.

We created a checksheet, a matrix showing the frequency of particular errors, to measure the types and causes of missing information. After two weeks, we determined that two specific pieces of missing information were creating 75% of the problem.

We tracked the source of the two most common errors, retrained the sales representatives (who complete the source documents), and created an application overlay that helped sales reps compile and file the required information correctly. The errors were reduced by 40%, resulting in a significant decrease in rework, and a corresponding increase in efficiency.

The Bottom Line
If your goal is to meet or exceed client expectations, efficiency improvements will allow you to free up the resources required to implement needed changes in effectiveness and adaptability. Efficiency translates directly to the bottom line, and indirectly to client satisfaction.

Effectively measuring and managing the processes that increase your clients‘ satisfaction and reduce your costs can only show positive financial results.

Meaningful measurement is the starting point from which you can improve your organization’s processes, from mail handling to file management and from supplies purchasing to client service.