Guide: What Is An Internal Process? (And How To Improve It)
Updated 29 September 2022
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Internal business processes are a series of steps organisations apply to accomplish specific goals and identify areas that may require improvement. Understanding how to follow such processes can help you clarify your team members' responsibilities. Learning how to improve internal business processes can also help you enhance operations' efficiency and productivity. In this article, we define an internal process, discuss its benefits, share its types of objectives and outline steps to improve them.
What Is An Internal Process?
An internal process is a type of operation that organisations perform without the influence or involvement of external business partners or stakeholders. These processes are often a key aspect of the balanced scorecard approach, which is a performance metric an organisation can use to identify areas that may require improvement. After determining what to improve, the company can take steps to modify these areas, such as by improving communication or increasing efficiency.
6 Benefits Of Having A Well-Defined Internal Process
Well-defined business processes can help an organisation enhance efficiency by eliminating production process overload. Following are a few of the major advantages a business may experience:
Many everyday tasks, such as filling out forms and preparing reports, may take a considerable amount of productive employee hours. Sometimes, many employees spend their time on many repetitive tasks that one can easily automate. Employees can reallocate time to important areas of their jobs by automating or standardising these processes with new software or a customised application.
2. Employee satisfaction
Clearly defined business processes can help motivate professionals to do their work efficiently. It reduces laborious, repetitive tasks that consume valuable working hours and mental capacity. Instead of continually searching for records and manually inputting data, employees can focus on important job duties. Happier staff and streamlined operations often increase employee productivity and business revenue.
3. Reduced risk
Employees often manually share data between systems, leading to errors that may require time to rectify or which may go undetected. To minimise the possibility of fraud and human error, it is important to ensure that professionals who perform data entry tasks are proficient in storage and backup practices. A business process improvement enables you to identify processes to automate to strengthen data security.
A business requires a flexible solution to manage end-to-end regulatory compliance. With well-defined processes, a third-party consultant can easily document all procedures, policies and internal controls related to compliance. By incorporating compliance into the new business processes, you may provide transparency and implement regulatory requirements faster, which helps avoid compliance delays and penalties.
5. Customer satisfaction
With well-defined modern technological solutions, a business can reduce the time spent doing administrative functions, allowing employees to focus more on real-time client interaction. Employees can reply to customer requests, create proposals and customise solutions faster. They may have more time to concentrate on tasks that provide results for clients, which may enhance customer satisfaction.
The ability to maintain a competitive advantage requires agile processes. With well-defined processes, you can consistently enhance procedures to respond to changing business requirements. You can focus on developing adaptable processes that are simple to modify and deploy change management.
Types Of Objectives Of An Internal Business Process
Following are the four major types of objectives of such business processes:
Operation management processes
Operations management processes are the daily activities an organisation engages in to develop and deliver its products and services to customers. For instance, a manufacturer of wooden furniture may obtain oak and mahogany wood from a lumber supplier, turn the lumber into wooden benches and distribute the finished products to furniture stores. In this aspect, the processes may have the following objectives:
Maximising the yield
Minimising marketplace risks
Improving resource productivity
Increasing the material processing rate
Related: What Is Order Processing? (With Definition, Types And Steps)
Customer management processes
The customer management process refers to the set of activities to establish a relationship with the target customers. It is crucial to understand the target group's behaviour to market to them successfully and grow the business. For instance, a business may lower the price of its goods to make them more appealing to the budget consumers who make up its target market. A business can concentrate on the following aspects to execute the client management process:
Customer selection: Based on the organisation's values, you can determine who the target customers are and collect information about them to learn what they are interested in purchasing.
Customer acquisition: This involves attracting target customers through generating leads, selecting ideal entry-level products and communicating with potential customers.
Customer retention: Consider retaining the organisation's customers by providing them with high-quality customer service and responding to their requests.
Customer depth: You can foster meaningful relationships with the target customers by establishing the organisation as a trustworthy service or product provider.
Related: What Is Customer Service? Definition And Career Advice
Innovation processes are the actions an organisation takes to enter new markets through the creation of innovative products, services and processes. This can help them maintain market competitiveness and attract new groups of customers. During the innovation process, businesses can recognise opportunities and determine how to implement novel technologies. After selecting new projects for development, businesses may plan their design, establish sales objectives and expose them to the market. Here are some example objectives for innovation processes:
Create a unique product in the hair care category
Introduce business apparel by offering a diverse set of products
Sell 2,500 new products by the end of the first month after release
Related: What Is Business Innovation? (With Types And Examples)
Regulatory and social processes
Regulatory and social procedures are the business operations that assist in the acceptance of an organisation by the community. This may involve measures, such as complying with industry regulations and enhancing workplace safety for employees. By adhering to these regulations, a corporation can distinguish itself from competitors. Some examples of regulatory and social process objectives include:
Supporting the health and safety of all employees
Maintaining active involvement in the local community
Related: What Is Competitor Analysis? (Plus How To Perform One)
How To Improve Internal Business Process
Consider the following steps to improve the processes for a business:
1. Conduct an audit
To improve business processes, consider conducting an internal audit of the operations. During the audit, you can examine how the business currently delivers products to customers and then create an outline that includes each team member's responsibilities. An audit can also examine how the organisation solves problems and manages risks, such as emergency situations.
Related: What Is An Audit Risk Model? (With Definition And Example)
2. Set an objective
After reviewing the operations, identify the aspects you wish to improve. You can decide which areas require improvement by considering the tasks the employees find challenging and the parts of the production process which may experience congestion. Addressing the unique issues, a business encounters can help it save time and resources effectively.
3. Explain the purpose
When making improvements, communicate with the team why you want to enhance specific business processes. You may explain how the changes can benefit them and the company's objectives. For instance, improving productivity may help employees complete their tasks faster, allowing more time for fun team-building activities. You can also provide your team with tips about how to adjust to the changes successfully and how to solve problems if they experience any issues during the transition process.
Related: Top 10 Management Challenges And How To Overcome Them
4. Automate processes
Locate areas in the business that may benefit from automation. For example, implementing online timekeeping software may help a business conduct work forecasts to determine how many employees to schedule for a shift. While there may be an initial cost for automating procedures, these changes often save companies considerable time and money in the long term.
5. Look at the existing knowledge base
When redefining processes, it is important to highlight the key changes and maintain a central database of all relevant information. This allows the team to get the answers to typical questions easily, which may keep experts available for more valuable work. You may look for a knowledge base tool that facilitates easy modification to keep the resource up-to-date.
Related: What Is A Compliance Audit? (With Definition And Benefits)
6. Get the customers' perspective
Analysing the procedures for producing a product or service from the customer's perspective is one of the most effective ways to evaluate the internal business processes of a business. Examining a process from an external viewpoint can often help identify missing steps. For example, if a customer submits a support ticket for a non-functioning product and you alert them you have received the issue, it is being examined and the team shall contact them soon. This may leave the customer confused about when to expect the resolution.
There are many methods for getting client feedback on business processes, including focus groups and automated monitoring technologies. This typically generates novel ideas and may help develop innovative solutions to accelerate or streamline the process and improve customer service.
7. Revaluate the processes regularly
Review the business process regularly to find additional areas that may require improvement. This can help ensure the organisation makes appropriate adjustments based on current data. You may conduct an audit annually to reassess and improve the process consistently.
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