How to run your small business like a BPO
By Roy Figueroa – Site Director, hammerjack
Originally published on LinkedIn
Small businesses can apply BPO techniques to their processes.
BPOs (Business Process Outsourcing), and the people that work in them, are experts at driving the kind of performance, efficiency and quality that every business dream of. They do this by applying proven methods and techniques, and by having an army of skilled, focused and dedicated experts to throw at any problem. They can move fast, scale quickly, and flex when needed.
You don’t need to be a BPO, however, to apply BPO methods and techniques to your processes.
Processes in small and midsize businesses are generally created as a means to an end, or as a work around. That’s ok, it’s the same in large businesses too. Having worked with a few global corporations, we can tell you that their processes are just as messy as yours, and they have more of them.
BPOs understand why the process exists, what function the process plays, and what the desired outcome should be. They look at how the process is connected or dependent on other processes or internal/external parties. They map every possible scenario to understand different trigger points and what impact getting it wrong will have on the business, the customer, internal teams, and the like. They measure the speed to complete the process end to end, and at each stage.
So, why so much effort? Well, learning, performing, and improving processes is what a BPO does, it’s how they get paid.
BPOs have specialist teams that review and improve processes. That said, there are some simple steps that you can apply in your business to drive improvements in efficiency and quality, reducing costs across your business.
1. Map and document the different processes in your business, however simple.
Firstly, documenting and reviewing your processes is good practice. It’s not hard and it’s the best place to start if you are serious about improving efficiency and removing costs from your business. When your processes are documented, the speed to competency for new team members will be faster. This will allow you to scale quickly, or back fill if you lose people.
You can start by listing your most important processes along with each of its objectives and expected outcomes.
Then create high-level process flow charts for each. You don’t need any fancy software to do this. You can start by drawing on a piece of paper, outlining first what the ideal scenario looks like e.g. all leads turn into sales in your Sales Process Flow Chart. Then incorporate the what-ifs and what you expect to be done when the hoped for turn into the expected.
This is a great exercise to perform with your team. You might discover some inconsistencies in understanding and approaches, but you can expect as an outcome a process that’s effective, realistic, and has your team’s buy-in.
2. Identify and remove single points of failure, such as dependency on individuals within your business.
One thing that stands out when dealing with small businesses is the reliance of knowledge in people’s heads. Having these single points of failure or dependencies is risky and is slowing you down. Removing single points of failure will enable you to react, flex and scale faster, as you grow. As noted earlier on, having your processes documented will help you get around this. Even better if you can add step by step work instructions for the process and systems used.
Save your documented processes and work instructions in a central location, and make sure that everyone knows where and how to access them.
3. Measure and benchmark the time your process takes from start to finish.
To measure savings and improvements, you need to measure processing times. You can measure the time it takes for the processes to travel from start to finish, but much better if you can measure the time taken at each step, including “if” scenarios. Be sure to make notes on delays and hold up points. You can benchmark processing times by having your team keep a track of how long it takes across a sample set of transactions. Once you have the data, take the average across all transactions. You will need to factor the different “if” scenarios to get a real picture of handling times.
Once you translate the processing time in to a cost, you can then measure the savings from making improvements, or removing steps.
These measures may also be used to manage the workforce toward a benchmarked handling time, and to accurately forecast headcount costs/requirements. No reason why you cannot apply this in your business. You can also use this data to manage third-party suppliers.
Probably one of the biggest strengths of a BPO is their ability to measure performance and quality of their workforce and manage their people to strict key performance indicators (KPIs). They set very clear expectations with their employees upfront and manage performance by the book. These guys measure performance in minutes and seconds. These wouldn’t be possible unless the processes are documented and measures are in place.
Again, this is how BPOs make money. By learning processes and improving them. So many businesses don’t even have documented processes. It’s easy to get ahead of your competition by applying the three key points above.