What Is Business Process Analysis? (With Types And Steps)

Indeed Editorial Team

Updated 3 February 2023

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Companies of all sizes can use business process analysis (BPA) to review their essential internal processes. This allows them to identify challenges and opportunities for improvement and to ensure every department functions well. Learning about how this process works can help you choose the analysis practices and methods that fit the needs of your company. In this article, we define business process analysis and how it differs from business analysis, explain the benefits of BPA, how to conduct one and when to use it, share tools for BPA and describe the role of professionals who use it.

What Is Business Process Analysis?

Business process analysis is a methodology, which organisations use to evaluate internal procedures and improve the efficiency and effectiveness of operations. BPA is a multi-step examination of each part of a process within an organisation. It identifies what works well in your current process, determines what needs improvement and guides teams in making important changes.

BPA is important because if a company can streamline a process so it more closely aligns with its business goals, it may benefit from increased productivity and revenue growth. This is called strategic alignment, and it involves evaluating input, process and output to ensure its efficiency and develop an improvement plan. BPA is part of a larger framework called business process management (BPM), which is a long-term strategy that seeks to manage an organisation's processes for optimal performance.

Related: What Is A Business Analyst? Definition And Career Advice

BPA Vs. Business Analysis

BPA shares similarities with business analysis (BA), but these related areas of BPM have distinct differences. BPA focuses specifically on collecting data and making recommendations based only on individual processes within an organisation. BA involves a large-scale focus on identifying any problem or need in an organisation, which may involve factors such as:

  • Finance

  • Cost analysis

  • Market research

  • Hiring strategies

  • Employment cuts

Related: 11 In-Demand Certifications For Business Analysts To Consider

Benefits Of BPA

BPA gives companies a better understanding of how processes are running and how teams can change them to make them more efficient. BPA can allow companies to:

  • Gather in-depth data on how processes are performing

  • Clarify policies and rules by properly documenting processes

  • Determine which user actions are hindering processes

  • Improve training programmes and workflow visuals

  • Identify cost savings by revealing redundancies in tasks and labour

  • Expose communication gaps and resolve approval process obstructions

  • Reveal policies that result in low employee engagement

  • Increase engagement by improving websites or the customer service experience

Related: How To Become A Business Analyst (Plus Other Career Info)

How To Conduct A BPA

There are different methods you can use to conduct a BPA. Two common approaches are Six Sigma and Lean Six Sigma. Six Sigma involves taking five to seven steps to evaluate processes and their effectiveness. Lean Six Sigma is similar, but it incorporates Lean philosophy. This philosophy focuses on assessing processes to eliminate steps that do not provide value and collaborating to implement more streamlined processes. Here are some general steps for conducting a BPA you can find in both approaches:

1. Identify purpose, goals and processes

The first step in conducting a BPA is determining the purpose of the analysis so you can identify the goals you want to achieve. This allows you to decide which processes you want to analyse and how the assessment can help you make them more efficient. You may find it helpful to use process diagrams at this stage. Also called process diagrams, these visual tools map each step of the process in its current, or as-is, state. This enables you to evaluate each aspect of the process and establish plans for reaching your goals.

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2. Measure the functions of the process

The next step is to use your current metrics and key performance indicators (KPIs) to measure how the as-is process performs and whether it helps the organisation meet its goals. Areas to measure may include productivity, quality and value. Evaluations often focus on efficiency versus effectiveness, which allows you to determine how whether the process requires minimal time and resources and leads to the optimal outcome. During this stage, you can determine the teams responsible for performing each part of the process, so you know who to share feedback with and ask for insight.

Related: What Is A Key Performance Indicator? Importance And Types

3. Perform an analysis

Once you have identified your goals for conducting a BPA, mapped the as-is process and measured its current functionality, you can perform a BPA by evaluating multiple areas of the process. You can choose which areas you want to analyse based on your goals for the BPA. Here are some common techniques and their purposes:

  • Gap analysis: This method compares the differences between a company's current performance and its performance expectations.

  • Root cause analysis: This approach focuses on identifying a problem's cause so that you can determine the most effective solution.

  • Value-added analysis: The value-added analysis technique is client-focused and seeks to change the product or service to meet the customers' preferences.

  • Experience examination analysis: Performing an experience examination analysis allows you to gather knowledge of the process from senior and long-term employees within a company.

  • Observational analysis: The observational analysis method enables you to gather insights by observing a business process in real-time.

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4. Develop a plan for improvement

After you have completed your analyses, you can determine what you want to improve and how you want to do it by creating a to-be plan. This type of plan allows you to determine how you want the process to function after you make essential changes. You may find it helpful to collaborate with other teams at this stage, as their input about how they manage their steps of the process and suggestions for changing them can lead to significant improvements. Improvements may involve rearranging process steps, revising documentation protocols or reallocating resources.

Related: 5 Continuous Improvement Examples (And How To Incorporate)

5. Implement and control the process

Once you implement the new process, it is critical to manage and control it. This can help you ensure its efficiency and its ability to produce optimal outcomes. Using KPIs and metrics to measure the process continuously allows you to determine how well it functions and identify potential challenges. You may prevent challenges or resolve them before they become larger issues by communicating with the teams responsible for those process elements and implementing their recommendations.

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When To Conduct A BPA

Companies conduct BPAs for many reasons as part of their BPM. You might determine whether to perform a BPA by assessing business goals and measuring how well current processes are helping the organisation achieve them. This can help you conduct BPAs regularly and implement changes quickly, which may boost employee morale, help the company cut costs and increase revenue. Companies may use BPAs when they want to:

  • Ensure hiring and employment processes align with organisational culture

  • Reveal vulnerabilities or inefficiencies in technology adoption processes

  • Evaluate the performance of marketing efforts to determine whether they meet KPI goals

  • Identify potential causes of delays in production or procurement

  • Find opportunities for eliminating manual data entry tasks

  • Reduce the cost of operating a department or the organisation

Related: Business Analyst Vs. Data Analyst: What Is The Difference?

Tools For BPA

Companies can use many tools to help them perform BPAs. One common example is process diagrams, which you can create using workflow software that allows you to map processes and their steps. These tools often incorporate business process model notation (BPMN), a language for modelling business processes, and the supplier, input, process, output, customer (SIPOC) model, which allows teams to identify each part of the process from beginning to end so they can develop an effective BPA plan.

Many companies have adopted automation software for BPAs in recent years to reduce the time required for teams to conduct these analyses. This software also allows companies to create responsive processes through automation. For example, a company may choose to adopt an automated invoicing process to reduce labour budgets and prevent human error.

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Who Performs BPA?

The responsibility of performing a BPA belongs primarily to a business analyst. These are professionals who seek to understand how each area of an organisation operates so they can implement improvement strategies. They also want to make sure new processes are cost-effective and self-sustaining.

Business analysts often work closely with corporate supporters, management teams, information technology (IT) professionals and other relevant departments to identify business goals and best practices. Systems analysts, process analysts, requirements engineers and product managers may also conduct BPAs that pertain to the processes within their departments.

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