Effective Solutions Through Partnership

Why you Should Document Business Processes

Best Practices, Business Analysis, Documentation, Organizational Change Management (OCM), Project Management, Small Business

By Denise Larcade

One thing I’ve seen in my 25+ years working in change management and business analysis is that documenting Business Processes and supporting documents like Standard Operating Procedures (SOPs) adds value to a business in a variety of ways.

Unfortunately, some believe that documenting processes and procedures is not always the most exciting of tasks, and it’s often put off from one person to the next. Before you know it, the documented process for a task may be severely outdated—or nonexistent.

A lack of documentation can reduce efficiency of your business if, for example, someone goes on vacation. The back-up who’s covering for them should have access to the Business Process Diagram (BPD) and accompanying SOPs so they can do the job of the person who’s out. If there’s no documentation, the back-up has no idea what to do. The impact to the business is that while the process may be well-defined and streamlined, if it’s not documented, then time and labor is not utilized efficiently.

A complete lack of documentation can be a major problem if an employee leaves. Without knowing their day-to-day processes, it will be difficult to hire a qualified person to take over for them, not to mention keeping business running in the interim.

Luckily, documenting processes and procedures is not a daunting task. Businesses of any size can and should document their process. KAI Partners, a certified small business with fewer than 100 employees, regularly documents its processes and procedures.

When starting out, a good rule of thumb is that each WHAT documented in the BPD should be supported by some documentation on HOW (oftentimes an SOP). Further, when the Business Processes are updated, the accompanying SOP should be updated at the same time.

For example, if the diagram step in the BPD states, “Create Invoice,” there should be a manual/guide, SOP, or job aid detailing how to create the invoice. If today the invoice is created on a Mac and tomorrow it’s changed to a PC, the step in the BPD may not change, but the supporting documents will.

So, what do you do once you’ve documented your Business Processes? Stick them in a drawer and forget about them? No!

Depending on your current business state, you should look at your Business Processes quarterly, semi-annually, or annually. For mergers and acquisitions, I recommending looking at your processes quarterly. If your business is not going through a major change, you should check in with your Business Processes every six months or every year.

When you do regular audits of your business process, you’re checking for:

  1. Accuracy.Is everything the same, or have you made any business changes that should be updated? Think about the scenario above—if the software used to create the invoice is inaccessible due to a licensing issue, a work around may need to be created to keep the BPD current. If the work around does not have a solution date and may be a long-term work around, you should consider updating the BPD to reflect that. (Another reason why regularly-scheduled reviews are valuable—it forces the business owner to address something that was supposed to have been fixed by a certain date.)
  2. Improvements. Is there a way you can improve or streamline the process? What steps no longer need to be done or how can we automate? Perform a cost analysis to determine which step is most efficient.
  3. Future state. What may the future of this process look like? Look at how is the industry shifting or how have other organizations changed. If there’s a new system the industry is using, assess the initial cost to stand up using a new system, as well as the cost over time to change to the new process. This information will be helpful in the future, as changes start making their way down the pike.

I recommend every business—large or small—regularly document and update their processes and procedures. For those who are on the fence, just remember that while eliminating processes may eliminate roles, streamlining a business process means you can now put people in roles that need more attention. This will help your business running at its most efficient.

About the Author: Denise Larcade is an Organizational Development Consultant and Merger and Acquisitions Expert. She has over 25 years of experience in training, development, and leading companies through organizational change management. Denise has worked in corporate retail, technology, and government healthcare and most recently has experience with large-scale implementations nationwide. She currently works as an Executive Consultant with KAI Partners, Inc., providing client support to one of KAI Partners’ state clients. Denise grew up in the Silicon Valley and relocated to Utah and Idaho before recently returning to her native California roots.

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