April 1, 2019

Lecture #4 Part #1


We have already discussed the benefits of having a company's business processes automated. We learnt that it reduces time, saves cost, improves quality and efficiency in the working of an Organization. In this lecture we shall see how to automate the process of a company, if it is already relying more and more on manual procedures, and this is called Implementation of Business Process Automation.


Not all processes can be automated at a time. The automation is actually carried out in a phased manner. Companies, usually engage outside consultants, who are trained in implementing the automation for various other companies. They do the job of automation in a phased manner, after thoroughly studying the existing system in a particular company which requires automation. Hence, few critical processes in the business are taken by the consultants to automate them at the beginning.


There are few steps that are generally followed by companies before automating the business processes. They are listed below. We shall discuss every step in detail in digestible chunks.


STEP 1 - Define why we plan to implement BPA?


STEP 2 - Understand rules or regulations under which enterprise needs to comply with?


STEP 3 - Document the process, we wish to automate


STEP 4 - Define the objectives or goals to be achieved by implementing BPA


STEP 5 - Engage the Business Process Consultant


STEP 6 - Calculate the RoI for Project


STEP 7 - Developing the BPA


STEP 8 - Testing the BPA





A company wanting to implement BPA has to first identify the pain areas in their current business processes and should be able to state solid reasons to implement BPA, as the implementation involves huge amount of time, money and effort. Some of the common reasons that calls for an implementation are listed below. It is to be noted that the reasons vary from company to company and is not the same for all companies.


a) Errors in manual processes leading to higher costs: Errors are not only time consuming, but are costly too. A mistake or an error in any one of the important aspect can double the costs incurred by the company.


b) Payment Processes: A payment process to suppliers or vendors, which is not streamlined may lead to late payments, non-payments and the company may not be able to benefit from the discounts by the supplier. In worst case, companies also end up paying unnecessary interest or penalties on late payment.


c) Paying for Goods and Services not received: Think of a situation in which a company returns  a certain batch of goods to a supplier or does not avail their service, but ends up paying for them? These kind of scenarios are usually common in companies which operates manually. This happens because, the team procuring the goods will be different from the team making the payment in all companies. Thus the team making the payment would not be aware of the details of the goods returned or services not availed if the procurement team has not communicated the details of the goods returned to the team responsible for making payments.


d) Poor Debtor Management: If a company does not classify the age of its debtors properly, then it would affect the cash flow of the company, as the company would not have taken steps to receive cash from aged debtors. It is very important for a company to manage its cash inflows and outflows to carry out its business operations smoothly.


e) Poor Documents Management: Paper documents are always difficult to maintain and access if a company maintains a hard copy of all the documents and maintains a manual log about the documents. This especially becomes challenging during an audit or during a law suit. If a company faces great trouble during such time, it should think of Implementing Information Systems or Automating the Business Process soon.


f) Difficulty in Employee On-Boarding Process: Process Automation is given a thought when the process of on-boarding new employees becomes very lengthy or incomplete. This is especially important for companies which recruits a large number of people on periodical basis.


g) Difficulty in Employee Recruitment and Training: When an employee resigns from a company, he has to be appropriately replaced on time with a new employee possessing same skill set qualification and experience. Many a time, with the manual processes, the position remains vacant for a long time, which affects the day to day operations of the business and sometimes, if the position is very critical to the company, it goes to the extent that the company will start losing its customers and revenue.


h) Lack of Management Awareness: In many organizations, top level managers are often not aware of the processes, problems, challenges of its business at much lower levels. This poses a problem for the growth of the business. Hence any management has to be fully aware of all the business processes, problems and challenges to take appropriate decisions. In order to achieve this, they would need information at the click of a button, and this can be made possible only if the business processes are automated.


i) Poor Customer Service: Poor Customer Service is one of the major contributors to the decline in business of a company. If the customers are not sent goods in time or if they are goods are not according to their specifications and quality or if the goods sent are less than the quantity ordered, the company would soon lose its credibility among its customers and will very quickly lose its business. This happens when the process is lengthy and the staffs are not adequately trained. Automating such processes resolves this problem to a great extent, as they are done on time and almost error free.


Continued in Lecture #4 Part #2


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