How can a company like KFC maintain consistency and high standards across all its franchises? How are micro to small businesses able to effectively scale and sustain their operations without their owner’s daily involvement? If you answered business process documentation, then you were spot on and deserve a gold star.
Throughout my professional career, I have seen many small and large businesses fail to meet their objectives and incur unnecessary business losses, simply because they did not have adequate and up-to-date process documentation in place.
Business process documentation is a step-by-step guide that outlines all the tasks required to execute and complete a particular business function. It is imperative, especially as an organisation grows (as does its complexity), because there are more steps, people, and things involved that may not always be arranged in the most efficient manner.
Furthermore, business process documentation is vital due to the fact that, among other things, it helps define process boundaries, process ownership, process responsibilities, and effectiveness measures (process metrics). In essence these benefits lead to an increased sense of accountability and ownership for all stakeholders involved in a given process. Therefore, there is no room left for ambiguity when it comes to holding individuals responsible for activities and performance. This contributes to an increasing level of responsibility and efficiency, leading to improved employee engagement and satisfaction, which ultimately results in better business performance and profits.
In addition, the other key benefits of process documentation are:
Process Improvement. Bottlenecks, repetition, delays and inefficiencies can be highlighted. As a result, processes that need improvement or elimination can be addressed. It also aids with business process automation.
Training and Development. New employees can learn their new roles and responsibilities more effectively. Experienced employees can refer to these documents to refresh their knowledge and understanding. It generally helps with increasing employee productivity and satisfaction.
Business Continuity. A business can ensure that when it loses skilled and experienced employees, it does not suffer from significant institutional knowledge losses and business continuity issues. Thus, newcomers can effectively and efficiently jump right into a role.
Risk Management. Through understanding a business process, its risks can be effectively mitigated, through the insertion of control points and measures.
Quality Control. Business process documentation helps get everyone on the same page, by providing a common view of process steps, which is necessary for consistency. It also improves the overall quality of process executions and their outcomes.
Change Management. With clear and adequate process documentation, changes to processes can be made in a timely, straightforward manner.
Besides the benefits, it is also necessary to consider the negative consequences related to not having business process documentation. I have experienced firsthand how the lack of adequate and updated documentation adversely impacted the operations of a large financial institution. Employee morale was low due to the lack of clarity surrounding roles and responsibilities. This in turn had a negative impact on customer satisfaction in those cases when customers’ communication was characterised by misinformation and inaccurate business documents.
Fraud would sometimes go unpunished as perpetuators could not be held accountable for their action due to ambiguity and lack of clear guidelines. Thus, it was easy for them to feign ignorance, knowing that labour laws and courts would rule in favour, should the matter be escalated.
Therefore, considering the pros and cons of business process documentation, I recommend that all organisations should invest in theirs today as it will pay significant dividends in the long run. As consultants, we are particularly well placed to encourage its adoption and, as a result, foster higher levels of clarity, transparency and accountability across our clients’ organisations.
Written by Nicholas King FCCA, CA, CIA, MBA, Founder & CEO of Royal Consulting Services Inc.