Getting started with process improvement.

• Author: Melbye, David

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One of the key functions of the finance officer can be summed up rather neatly: Make sure the organization is using its available resources as efficiently as possible.This applies not only to funding sources and expenditures, but to the time and energy of government staff, efficient use of assets, and effective relationships with business partners.

A key strategy in making more efficient use of resources is maximizing the value generated by internal business processes. Processes that maximize value by simultaneously delivering quality outcomes and eliminating wasteful activity will use resources more efficiently than ones that do not. This is not exactly a revolutionary insight, yet many governments struggle to understand process improvement projects, how to start them, what the risks are, and how to instill process improvement into organizational culture.

Here, we define business process improvement or business process management as a program of clearly defined steps to reduce the costs of everyday operations and services, while improving quality at the same time. From processing purchase orders to applicant tracking to online picnic area reservations, governments are finding that they can make process improvements with both lasting cost savings and improved service.

Getting started on process improvement can be a bit daunting. Conducting an Internet search on "process improvement" will yield about 32 million Web sites, and adding the phrase "public sector" only reduces that to about 7 million. Clearly, there is a bewildering array of information on process improvement, much of it conflicting.

This article focuses on helping the finance officer understand where to look for process inefficiencies, what some of the approaches to process improvement look like, risks and barriers, and the keys to success for a process improvement program.

WHERE ARE THE INEFFICIENCIES?

Some finance officers are a bit mystified as to where to look for inefficiencies in a given process. This can be especially difficult in areas where processes and the supporting technology have not changed over a long period of time. Here are some common examples:

* Wait Time. Many government processes spend a significant amount of time waiting--the process is not moving forward because a signature is needed or a paper form needs to be copied and forwarded. This type of waste is generally easy to spot, and eliminating wait time is often the first place governments look when beginning process improvement work.

* Multiple Hand-Offs and Motion. When a process moves from one work group or department to another, time is taken up in making sure the right information moves to the right place at the right time. If a given process includes many such steps (especially when a process moves back and forth between the same two departments), that can be a significant source of wasted time and effort.

* Timing. Processes are really intended to move information from one part of the government to another, and processes work best when that information is prepared and validated to minimize time and wasted motion. If personnel need to chase data around the organization because of poor timing of transactions and report preparation, this can be another source of waste and inefficiency.

Once a process improvement team starts to observe processes and find these areas of waste, a snowball effect often begins as the team uncovers and seeks to change additional areas of inefficiency. Over time, such waste identification and process improvement can (and hopefully will) become part of the organizational culture.

A SPECTRUM OF CHANGE

Not all process changes create equal levels of impact, and some act only as precursors to future changes. Broadly speaking, process changes will tend to fit along the spectrum shown in Exhibit 1. The steps are presented by order of magnitude, from least to greatest.

Transactional Automation. These are process changes that result from...