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Analyzing Process Improvements Supported by IT

This section will explain how the business analyst analyzes and documents the process and identifies the

benefits of applying an IT solution. Keep in mind that the analysis requires both IT and functional expertise

and that both groups work together to identify ways that IT can help improve processes.

Document the As-Is (Current) Process

The first step is to understand how a process is conducted currently; this is often referred to as the “as-is”

process. There are a few approaches that the business analyst can take:

observe the process;

conduct interviews with the stakeholders (executives, managers, end users, or even customers) and the

people performing the process; or

bring together representatives of the process stakeholders to collectively define the current process,

mapping out the process for all to see.

Learning Resource

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The analyst begins with asking the stakeholders about the input, the process, and the output. The input

consists of all the resources (knowledge, skills, materials, information) needed for the process to occur. The

output is the result of the process. The process takes the input and transforms it into the output.

Before dealing with a business, consider an example of something that anyone can relate to—making lunch

for a child to take to school. The inputs consist of the bread, peanut butter, jelly, fruit, dessert, and the

packaging materials (food wrap and paper bag). The process is the assembling of the bread, peanut butter,

and jelly into a sandwich and combining it with the fruit and dessert in the lunch bag. The output will be a

peanut-butter-and-jelly sandwich, an apple, and cookies for dessert, all in a small paper bag to be placed in

the child's backpack.

The supplier is the supermarket.

The inputs are peanut butter, grape jelly, white bread, a piece of fruit, a small pack of cookies, food

wrap, a small paper bag, and a knife.

The process is collecting all of these items, selecting bread slices, spreading on the peanut butter and

jelly, putting the bread together, slicing the sandwich, wrapping it in the food wrap, and placing the

wrapped sandwich, fruit, and cookies into the small paper bag.

The output is the packed lunch in the paper bag, ready to be placed in the child's backpack.

The feedback at this point is that the supply of peanut butter is low and more should be purchased.

The child (the customer) eats lunch and when he gets home, he provides additional feedback when he

says that lunch was great, but his sandwich needed more jelly.

This simple example illustrates the three main components of a process (input, process, and output), the

high-level steps in completing the process (in this case, of making a school lunch), and the importance of

feedback.

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Once listed, the steps in the process are then put into the sequence in which they occur, even though the

interviews and other sources of information may not clearly indicate the order in which the steps are

performed. The analyst documents the current process as it is actually performed.

In the school lunch example, the inputs, process, and output of packing a child's lunch have been defined,

but how is the process carried out? In this scenario, Mom and Dad plan a short vacation away from the kids,

and Grandma comes to visit. When asked to define the process, Dad omits several pieces of information

that are in his head. Assuming Dad is primarily responsible for making school lunches, he knows where all

the necessary supplies are kept, the fact that his son prefers apples and his daughter prefers bananas, and

that beverages are provided at school. Grandma has been left a list of what is to go into the lunch, yet

important information is missing: Where is the peanut butter kept? What kind of fruit should be included?

How do they prefer their sandwiches to be cut: cut the crust off or leave it on? What about drinks?

So, Grandma does her best, and this is what the analyst observes and how he documents the as-is process

that Grandma uses:

She reviews the list.

She goes to the cupboard and gets out a loaf of bread.

She goes to the refrigerator and gets out the jelly.

She opens several cupboards to find and retrieve the peanut butter.

She takes out two slices of bread and makes one peanut butter and jelly sandwich.

She goes to another cupboard and gets the wrap.

She wraps the sandwich.

She goes back to that cupboard and gets the paper lunch bag.

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She puts the sandwich in the bag.

She assembles the second peanut butter and jelly sandwich.

She wraps the second sandwich and puts it in its bag.

She goes to the refrigerator and gets two apples.

She washes the apples, dries them, and puts them in the bag.

She goes back to the cupboard where the bread was stored and gets the cookies.

She wraps two cookies and puts them into each lunch bag.

She goes to the refrigerator and looks to see if there are any drinks that look like they should be packed

in the lunch bags; she finds nothing.

She hands one lunch bag to Bill and one to Maria as they set out for school.

Grandma puts all the supplies away and cleans up the kitchen.

Look for Problem Areas—Process Analysis

The next step is to analyze how the process operates in order to determine possible improvements by

eliminating inefficiencies and duplication of effort. Before the business analyst makes any assumptions

about where the problem areas are, he will talk with the people involved in the process and ask them about

the issues they see. These interviews are documented for future reference.

Returning to the school lunch example, the analyst asks the children and Grandma about how things went:

Billy said he does not like crusts on his sandwich.

Maria said she does not like apples and always has a banana instead.

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Both said that the apple had squished their sandwich, which "never happens when Dad packs my

lunch."

Grandma says that it took her way too long to prepare the lunches and that she felt like she was

running back and forth the whole time. She asks how she could improve this process. Not only does

she want to be more efficient, but she wants to prepare each child's lunch the way each likes it.

Of course, in observing the process, the analyst saw that she really was very inefficient in preparing lunch.

After reviewing the documented list of steps, the analyst came up with the following improved (streamlined)

process:

Gather all ingredients and supplies

Bread, peanut butter, and cookies from food cupboard

Jelly and fruit from refrigerator

Food wrap and paper bag from supplies cupboard

Make two sandwiches at once

Lay out bread

Spread jelly on two slices

Spread peanut butter on two slices

Assemble sandwiches

Cut crust off of one

Wrap sandwiches

Put fruit in bags first (to prevent them from mashing the sandwich)

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Wash and dry apple

Put banana in one bag, apple in the other

Prepare and pack cookies

Take out two cookies, wrap, and place in bag

Repeat for other lunch bag

Place wrapped sandwich into each bag, ensuring the crust-less one goes in with the apple

Put everything away and clean up kitchen

The analyst’s suggestions also include that Dad should tell Grandma where the supplies are located and how

each child likes their lunch (crusts cut off; what kind of fruit). In this case, she now knows all that and is

ready to make lunch the following day, using the steps in the streamlined process.

Now how would this relate to a workplace situation? Everyday employees perform tasks and complete

processes in their organizations that may be duplicating the efforts of others, or they may be doing them

very inefficiently. Each employee may be performing as efficiently as possible, but the order in which they

are performing the tasks or how they interact with each other may introduce significant inefficiencies. All

steps in a process need to be evaluated together to ensure the flow from start to finish is as efficient as

possible.

Improve the Process

Improving the process means that

extra steps are combined or eliminated

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resources (including time and people) are more efficiently used

quality of the information collected and used is improved

Prior to implementing an IT solution, the organization should first ensure their processes are optimized.

Let us look at a business process example of creating an invoice, which consists of many more tasks or steps

than the lunch example required. The tasks involved in creating an invoice may include:

locating a customer's record

confirming that shipment was made

calculating cost (price x quantity)

adding appropriate shipping charges and possibly sales tax

updating the customer's record and the accounts receivable ledger

generating hard copy of the invoice to be mailed

Back in the old (not really so old) days, a clerk manually performed the necessary calculations, inserted a

preprinted invoice (typically a multipart form) into a typewriter and entered the information. Then the

original invoice was mailed to the customer, a copy went to the accounts receivable department to update

the ledger, and another copy was filed in the customer's file folder. This typical manual process provides

numerous opportunities for human error along the way. It is also an ideal situation in which to use

technology to improve the efficiency of the process.

Certainly, having an electronic system that enables all of the parties involved to receive updated information

simultaneously would expedite the process. The current process is cumbersome and inefficient, however,

and automating it would mean only that the invoice is now inefficiently created more quickly.

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This is where business-process reengineering (BPR) comes into play. Instead of taking the existing invoice-

creation process and automating it, one looks at what is trying to be accomplished (the output):

to inform the customer of his obligation to the firm

to update the accounting records so that the firm is aware of a customer debt, update the customer

record to document the sale, and get payment from the customer.

Because the ultimate goal is to get payment from the customer. The question now becomes, "How can this

goal be accomplished more accurately and efficiently?" rather than, "How can an existing process be

automated?"

Automating the process will provide additional benefits to the company. The system can be used to ensure

the correct and immediate flow of the work from one person to the next, improving communication, and

strengthening relationships among everyone involved in the process.

Workflow relates to defining roles and process steps—who is responsible for what—and how

information, documents, and tasks flow from one step to another in a defined process. Information

systems can define this flow of information and tasks, and can include specific rules (who does what,

how, and when) to provide consistency and greater efficiency. An effective technology solution can

automate some of these steps, as well as route information and provide specific timelines. A system

could support the workflow in the invoice example above such that when the clerk entered the invoice

into the system, the accounting department would receive a notification, and an accountant could

approve the invoice, which would update the ledger. The customer support team would be notified by

the system that the invoice had been posted and that an email had been sent to the customer providing

them with the invoice. The customer support team could then follow up with the customer to ensure

their satisfaction. Each person involved in the invoice process would receive their notifications instantly

and be able to efficiently conduct their part of the process. The system provides a consistent structure

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for the invoice process to be performed the same efficient way each time, and all participants can be

certain that they have played their role as expected.

Using the automated system and the workflow capability improves internal and external

communication as well. Each person with a role in the invoice process automatically and instantly

receives notification of a new invoice; there is no time delay from when the invoice is created until the

accountant is notified. Since the accountant is able to update the ledger very soon after the invoice is

posted, the company’s accounts receivable and cash flow situation are kept very current, improving

communication throughout the company of the current financial status. The automated sending of the

invoice in a timely way to the customer provides an improvement in external communication. And, the

customer support team has access to real-time information and is kept informed of events involving the

customer, and is therefore able to communicate in a timely way with the customer.

Automated systems can also improve relationships both within the company, and, importantly, with

customers and suppliers. Using a workflow system to communicate among employees can have a

positive effect on morale since they are not dependent on the other employees to let them know when

an invoice is created. Each person is able to perform their steps in the invoice process and carry out

their responsibilities. When the system automatically sends an invoice to the customer and the

customer support team is able to follow up, the relationship with the customer is strengthened. From

the customer’s viewpoint, the company is functioning as one entity, and the customer support person

knows exactly what is going on, can access the internal files and records, and provide efficient and

effective customer assistance.

As the business process is improved, the additional capabilities that an automated system can provide

should be considered and included. These capabilities may allow the organization to further optimize their

processes and are important considerations in determining whether a system solution is required, or

whether simply improving some manual processes will meet the need.

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The business analyst will document the improved, optimized ("to-be") process for use in determining

whether a system solution is required, and to begin defining requirements for a solution.

Implement or Change the System

The "to-be" process should be defined before seeking a technology solution. Otherwise, it is possible to

implement a technology solution that only succeeds in performing a bad process faster rather than actually

gaining the improvements desired to help achieve the organization’s strategy. If a technology solution is

needed to support the to-be process, there are some questions that should be answered, such as:

What is the work to be done?

What are the tasks or steps?

How is the system going to help with the tasks?

What can the system do to help work get done?

If the process currently involves use of a system, then an evaluation should be done to determine whether

to modify the system to include the optimized process, or build or buy a new system. If a new system is

required and the determination is made to purchase it, then the business analyst will identify areas where

the system can help improve the business process(es), providing a competitive advantage to the

organization. The analyst then documents how the processes will change and how that will benefit the

organization.

Document the New Process

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The new, improved process is documented so that employees know how to perform their parts of the

process and so that IT support personnel can use the document as they make system changes that may be

needed.

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