Businesses nowadays have the resources for cutting-edge technology and top-notch talent, but are every giant-funded business operating at peak efficiency?
It seems there is something very important that hinders the performance of a business. Even a small-sized organization can have hundreds of entangled processes, and even a single process performing poorly can be a tedious bottleneck in the grand scheme of things.
Standardized processes aim at preventing confusion among teams, making processes more efficient, and making sure that each activity is simplified to the point that the staff knows exactly what it is that needs to be done.
Before we get into the benefits of standardization and learn about the steps to create standardized processes, let’s first talk about what it means.
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What Is a Standardized Process?
In simple terms, a standardized process just means simplifying internal processes for employees to the point where there’s no confusion and any inefficiencies and hurdles in the process can be dealt with.
As there are diverse processes in an organization, this can lead to a chaotic workflow over time. A standardized business process is both clearly-defined (well documented) and adaptive, so it can be easily adjusted if the need arises. This flexibility helps the staff deal with new problems and assists the management in identifying bottlenecks.
The key reason behind implementing standardized processes is to eliminate confusion and help the business run smoothly. Companies can also utilize standard methods to reduce operating costs, and seamlessly integrate a bunch of departments.
Ensuring processes are run consistently is the starting point in streamlining business workflow for maximum efficiency. Businesses need to spend some time in process modeling before they pour their resources into streamlining or standardizing processes.
Let’s consider the task of handling billing, for example – the staff needs to process client billing after services are delivered. Standardizing administrative processes like billing can not only help reduce unnecessary costs but also free up time and resources to address customer demands.
Not only does creating standardized processes help bring uniformity to the activities in an organization but it also helps employees make fewer mistakes, enables the higher-ups to meet deadlines faster, and makes sure regulatory compliance is met.
Once the processes requiring standardization are identified, a mix of automation and software solutions can be employed to formulate efficient standard procedures.
Why Standardized Processes Are Important To Business Success
Standardizing may sound tricky but at its core, standardizing is just a means to establish time-tested processes that are consistent and easy to monitor.
Not only does this help productivity by getting rid of iterative tasks, but it also helps clarify individual steps and increase satisfaction rates among both the employees and the clients. The difference is apparent when you compare a regular process like onboarding to a well-documented onboarding process. A good example of a standardized process is the offboarding process where the employees may have valuable information to pass to the new hires or feedback to the management; without a standardized offboarding, knowledge loss in this way is inevitable.
These are some of the key benefits of having standardized processes for businesses:
Increase Productivity and Reduce Costs
A 2010 study conducted on billing in health care services pointed out that standardizing billing practices could save up to five hours of staff time and four hours of physicians’ time per week. Over a year, this means over $7 billion saved by changing billing processes!
This finding isn’t surprising as business processes often tend to be chaotic and involve lots of variables. Employees may also come up with their own methods of performing their tasks – and this can easily lead to inconsistencies and bottlenecks.
A simple example is task scheduling – an employee might use a sticky note or something convenient to remind themselves of an important task but another employee might not know about it. Standardizing helps avoid friction, and lets the employees focus on priorities without asking them to do routine administrative tasks like billing and processing payments.
One hurdle to streamlining processes and standardizing them is that in any organization that’s been running for some time, there are bound to be entangled processes. It can be tricky to separate concerns and dependency decoupling could be half the way to increasing productivity.
Suppose it’s the first day for a new employee at her workplace. If there aren’t any standard procedures to brief her about her roles and get her started right away on something she can do, the business isn’t going to be able to be as productive as it would if they had implemented onboarding processes in place.
Standardized processes can lead to happier employees and a satisfied customer base, and as we discussed above, increased productivity and reduced costs are just some of the perks that come along with optimizing processes for efficiency.
Prevent Errors Due To Human Element
Cloud Carib estimates that the true cost of human error was $12.83 million in 2021 alone.
When tasks become monotonous, people are prone to making mistakes, and this costs industries billions of dollars every year. According to an article by Forbes, a similar situation arose when the staff at Citigroup sent a billion to Revlon and this led to a complicated (and expensive) lawsuit.
One of the ways businesses may become susceptible to data breaches is through stolen credentials – more often than not, naive employees enter sensitive information and leading to a compromised system. Practices like biometric authentication and mandatory 2FA can lead to better security and protect business insights.
As insiders, employees also have access to industry secrets and things that may give competitors an unfair advantage if the employees were to divulge that information. Standardized processes to protect a company’s best interests can help prevent sensitive information and business insights from getting into the wrong hands.
Consistency In Quality
According to a Stanford study, employees don’t produce high-quality work if they’re working more than 50 working hours per week.
The benefits of replacing an existing inefficient process with an efficient standard process are two-fold. First, it helps reduce the chances of messing up quality control and customers receiving products/ services riddled with bugs. The second perk is customer satisfaction!
As the services are made to ensure compliance and the processes are consistent every time, clients can expect to receive similar quality every time.
Retaining Crucial Work Knowledge When Employees Leave
When employees join companies, they learn a lot about the internal workflow and gain valuable insights. Organizations also invest significant time and resources in training them for the position.
According to the Society for Human Research Management, losing an employee can cost companies anywhere from one-half to three-fourths of the employee’s salary, and sometimes as high as twice the salary.
Every offboarding process is a bit different but interacting with the ex-employee to find out what they didn’t like and what could be improved is an easy way to figure out inefficiencies in existing systems. It could be something as easy as fixing the wall socket or something as complex as team dynamics or the chaotic floor plan.
Either way, a standardized offboarding process can help prevent knowledge loss as well as make the transition for new hires easier. This doesn’t just relate to off-boarding, the same approach can be applied to any process within the organization.
Having standardized processes that facilitate communication can also bridge gaps between employees – employers, and reduce attrition rates/ chances of employees leaving in the first place.
Types of Standardization
A standardized process processes is essential for improving profits and cutting costs in an organization, but it’s also necessary to determine what kind of standardization is necessary for a particular process.
Depending on the operations, there are usually three types of standardization in a company – these deal with the business, manufacturing, and marketing. Well-planned and constantly monitored processes add value to the business while activities that are inconsistent and not adaptable to change are considered bottlenecks.
These processes include daily activities like product design, quality control, meeting safety guidelines, adhering to compliance, and working on an effective marketing tactic.
Here are the primary categories of standards:
Business Standards
A quick look at any process map will reveal that business processes are the most common processes in the entire organization. It’s not surprising that whether you’re talking about workflow automation or bringing down operating costs, business processes are the ones we are usually talking about when dealing with standard operating procedures.
Documenting individual steps and automating repetitive tasks in business activities is a must if you need to standardize key business processes.
Manufacturing Standards
Product manufacturing departments not only need to make sure they are avoiding preventable waste but they also need to take steps to reduce inconsistencies from one product to another. The manufacturing processes also need to be standardized, meaning that they need to be the same regardless of who is performing the operation.
These requirements need to be considered and implemented well before the product is passed on to the testers and end consumers. Integrating approval workflows and adopting competitive workflow solutions in manufacturing can help cut down costs while meeting customer expectations.
One thing that many businesses get wrong is that they try to make processes more consistent by shying away from change. While consistency is important, it’s also necessary for an organization to be innovative to cater to the growing needs of its prospective clients.
Product Marketing
You may have the most detailed business process maps and sophisticated automated processes for manufacturing in place but if you haven’t put any thought into marketing and building brand reputation, people aren’t going to hear about how revolutionary your product is. Well-planned marketing strategies can go a long way, especially if your product offers a certain value that the competitors aren’t providing.
Not only does standardizing marketing strategies help utilize resources optimally and orient the organization towards a productive path, but it also helps ensure consistency across different geographical regions.
Let’s take an example, Apple purchases most of its electronic devices including iPhones and Macbooks from countries like Vietnam, China, Taiwan, Thailand, Malaysia, and South Korea where labor is cheaper. This allows them to produce cutting-edge products at a competitive price. Of course, there’s brand value included in the product cost but had these products been manufactured in the United States, it would drive prices even higher.
The point is- though most Apple devices are outsourced from other companies, they have a strict quality control process so their devices, delivery, and processes under the hood are always consistent and well-monitored.
Similar approaches have been widely adopted by businesses, and most franchises make sure to maintain the brand image at all of their original locations.
How to Go About Process Standardization?
Standardization can provide many advantages to your company but there are some things you may need to think about first.
There may be friction in implementation if the employees feel like the processes aren’t made aware of the decisions and weren’t included in the process. Uniformity in action can be difficult to achieve and employees may feel restricted.
Identifying bottlenecks in process flows and trying to improve process efficiency by employing standard processes is certainly a good thing but the drastic change in existing processes is a bad idea. Employees won’t like it, customers will be thrown off, and getting used to the changes can take some time.
The best approach to standardized processes is gradual adoption – and making the employees a part of the decision. Since the employees may have valuable insights on the issues at hand and are going to be the ones to be involved actively, it makes sense to incorporate their ideas and embrace innovation.
Customer feedback should also be duly obtained and considered while designing standardized procedures so the process configurations are not only aimed at business growth but also serve the customers better.
Choosing Which Processes To Standardize
Standardized processes offer promising rewards but choosing what processes to streamline can be tricky. The first step in standardizing is process mapping – before making any changes to as-is processes, the ongoing activities need to be understood well, and inefficiencies, if any, should be diagnosed thoroughly.
Choosing which processes to standardize is just as important as process automation and optimizing manual processes for efficiency.
A good rule of thumb is- if something is repetitive and time-consuming for the employees or the consumers, it’s a good idea to look for alternative procedures.
These are some processes that can be standardized:
Payroll Processing
According to the American Payroll Association, standardizing payroll processing by automating the entire process can lead to an 80% reduction in cost. Careful documentation of complex tasks involved in the payroll process inevitably makes it easier for businesses to focus on company growth.
Checkout or expense approval process guide.
This is also a good idea to ensure compliance with tax regulations and ensure consistency in payouts while keeping records somewhere safe.
Answering Calls
A big part of running a successful business is listening to customers and answering their queries. Phone calls are the sole point of contact for many businesses and a warm comforting voice can help make the interaction a pleasant experience for the customers.
Marketers are probably already familiar with cold-calling, it may have a low success rate of 2% but it does let you know a lot about customer behavior and what people are expecting. Even if you don’t think it’s profitable to cold-call random people, responding to your clients with enthusiasm will certainly add to your brand’s reputation.
Recording Client’s Data
In addition to making sure that retrieval and access to information are convenient, the business should also make sure to keep backups so the data isn’t lost. Aside from just asking them, proper documentation is one of the key steps to learning what the customers might be struggling with.
Well-organized records can help make predictions about customer behavior as well as make data-driven decisions. Automating this process can help with data analysis as well as cost reduction.
Approvals Process
Other processes that could definitely be standardized are the approval workflows. For international organizations, it’s even more important to embrace continual improvement followed by rigorous testing.
Standard operating procedures can be tricky and painful for employees to navigate through. Implementing a standardized process for obtaining approvals can help employees perform their tasks smoothly and reduce time wasted. Efficient approval processes can also help teams reach deadlines quicker, and resources can be optimally utilized to focus on making the product better.
Build a business process standardization framework in Jetdocs
Build a business process standardization framework in 3 steps
– Step 1: Identify and document existing processes
– Step 2: Analyze and optimize processes for efficiency
– Step 3: Integrate relevant data sources to standardize processes
Conclusion
In conclusion, standardized processes within an organization are crucial for achieving peak efficiency and maintaining a competitive edge in today’s dynamic business landscape. Implementing standardized processes helps eliminate confusion, streamlines workflows, and promotes a culture of consistency and adaptability. It also aids in reducing operational costs, preventing errors, maintaining quality, and retaining crucial knowledge when employees leave.
Standardization can be applied to various aspects of a business, including business processes, manufacturing, and marketing. By carefully identifying and addressing bottlenecks, gradually adopting new practices, and involving employees and customers in decision-making, businesses can successfully standardize their processes and unlock their full potential.
However, it is essential to approach standardization with care, ensuring that it doesn’t hinder innovation or alienate employees. A balanced approach that prioritizes both consistency and adaptability will lead to increased productivity, reduced costs, and a thriving organization that is poised for long-term success.
