How Quality Business Process Documentation Benefits Your Company

In our prior business process post we defined what a business process is, and outlined some simple methods you can use to build an effective process library. To review that post, see: Building and Enhancing Business Process Documentation

During lunch with a colleague of mine, we were discussing some networking opportunities he was engaged in as a part of a job search. Through his search he came across a company which specializes in building business process documentation.

He made an introduction, and I was able to speak with the company’s owner. I learned a lot in terms of company benefits which can be realized from detailed process documentation, and I thought I’d share what I think are five of the most important.

Business Benefits of Process Documentation

Better on boarding

One of the most frustrating things a new hire can experience is being selected for a position, escorted to a desk and then left to their own devices when it comes to learning the job and its associated processes.

While there may be application user guides and system help for your new hires to review, remember that these resources will not be aligned with your processes, so use them carefully. There may also be some “over the shoulder” type training by other employees. However, if the employee doing the training is not up to speed in terms of the process, their weaknesses get transferred to the new hire via the training.

A better way of improving the on-boarding process, in terms of learning the job, is by providing a set of well documented, current and approved procedures to be used in conjunction with user guides and informal instruction.

New employee evaluation

Have you noticed that many job placements made today are based on a temporary to permanent hire strategy? The reason for this is that employees are expensive and once hired on a permanent basis can be difficult to terminate. If an employee cannot function effectively in their current position, tasks such as performance improvement programs, mentoring and a lengthy termination process may need to be completed. These tasks take a lot of time and effort by the HR department and the employee’s manager.

Benefit from a temporary to permanent hiring strategy by evaluating the new hire using a set of well prepared and thorough business process documents. For example, combining an application user guide with company process documentation can be used as both a training and process document.

Meet with the new hire and provide a basic process document review. Have them use the process documentation in conjunction with the application user guide as a training resource. Follow up on a regular basis to answer any questions and/or provide additional guidance as needed. Don’t get over involved here, let the new hire take the initiative.

After an agreed to period (1 week), have the new hire process a set of transactions in the “test” system using the process document. If they can reasonably complete the task, then you know they’ve been busy learning both the system and the associated process.

If they look at you like you have three heads, and can’t complete the task without detailed instruction, it’s a pretty safe bet that they haven’t been serious about learning the new system and process, or they don’t have the necessary skills or experience.  At that point you can make a less costly and more effective hiring decision.

Improved position replacement

In a lot of companies, I’ve worked with, process documentation was incomplete or lacking. In that environment, when a direct report comes in on a Friday at 5pm and gives notice, a high level of anxiety usually presents itself to the manager.

The manager already has full time job, and often has had little time to effectively assimilate all their subordinate’s job responsibilities and the associated processes. This problem is particularly acute at the middle management level, as direct reporting relationships may not be one-to-one. A middle manager may have two, three or more direct reports, so their time is split.

If the manager “came up through the company ranks” so to speak, or if there are others in the company who have experience in the vacated position, then the level of stress may be mitigated a bit. In either case, a strong set of business process documents can help ease position replacement anxiety. Again, combining application user guides and company process documentation can be especially useful as a resource.

Process documentation can also be key in the new hire search. Knowing exactly what the job responsibilities and associated tasks entail can help the manager focus the new hire search on those candidates which best meet those needs. Use the process to ask pointed questions during the interview to gauge experience and to ask the candidate how they might handle a specific issue to test their resourcefulness.

Remember once a new hire is made, use a new employee evaluation process, like the one described above, to increase the likelihood of on-going success.

Support best practices and internal control consistency

A best practice can be defined as “a method or technique that results in superior performance”. Best practices are often used as benchmarks to compare against other methods or techniques. Internal controls help a company operate more efficiently, safeguard assets, detect fraud and ensure accounting accuracy.

Committing to using best practices and internal controls consistently is a lofty goal. It’s easy to say, yet hard to do. In companies with several employees and offices, getting everyone to complete the same task in the same manner is like herding cats. Add in other factors such as multiple owners, competing egos and the other aspects of the business environment, and maintaining consistency, efficiency and control becomes a real challenge.

Don’t believe me? Here are some real-life examples I’ve experienced.

• A retailer spends thousands of dollars on merchandise planning systems then continues to use manual paper-based product ordering due to owner in-fighting.
• Accounts Payable pays vendor invoices for items shipped to non-company locations because an executive told them to circumvent an additional approval requirement (they were being stolen and resold by the executive).
• Companies paying the same invoice not twice, but multiple times (each time approved by a different manager, and AP modifying the invoice number to allow the system to process the invoice and circumvent duplicate payment controls.

Support best practices, internal controls and processing consistency with a set of approved business processes. Build the processes considering company capabilities and culture. Get the management team on board and gain approval. Get them to agree not to “bully” subordinates when they want to circumvent the rules. If they need to circumvent the rules, have them manually approve the invoice via signature, and an explanation of why they’re circumventing the rule.

Once you build the processes, stick to them. In the AP example above, the AP clerk was terminated for not following the company process as it related to shipping items to non-company locations. While that practice was allowed, an additional review and approval were required to prevent exactly what happened. The AP clerk got bullied by the executive and circumvented the process. I guess the clerk was afraid of getting disciplined or a bad review.

Document the completed processes and make them available. If you have an intranet, build a processes portal and put the documents out there for everyone to reference. Otherwise use a shared drive and store the processes in a public folder.

Business continuation planning

A business continuation plan (BCP) works in conjunction with a disaster recovery plan and allows the company to continue to operate during some type of failure or disaster.

A disaster recovery plan is a component of a BCP. Disaster recovery focuses on the restoration of data, software and IT infrastructure. These topics are not discussed here.

A BCP is a plan to restore infrastructure, equipment, and any manual processes (e.g., cash receipts, receiving and sending mail, setting up new vendors or customers).

BCP’s are process driven. So, as you might guess, building a plan to recover company processes is streamlined if a strong and accurate set of processes has been developed and are consistently applied.

The examples below are excerpts from an actual BCP. By knowing the processes to be recovered (circled), personnel building the BCP can identify the support resources required and determine how quickly they need to be recovered.

In this example, it’s pretty easy to see how processes are used to develop the recovery plan.

Conclusion

In researching this post, I learned a lot about how process documentation can benefit a company.

Many direct and indirect benefits can be realized using the processes and techniques described here. Remember, an effective process documentation project does not have to be exceedingly complicated or expensive.

A complete set of approved business processes can go a long way towards helping your company to complete daily tasks in a consistent manner, improving efficiency, control and accuracy while substantially reducing risk.