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What is Business Process Analysis?

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  • Written By: M. McGee
  • Edited By: Lauren Fritsky
  • Last Modified Date: 18 November 2016
  • Copyright Protected:
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    Conjecture Corporation
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Business process analysis is the process of looking over the methods of a business and determining where inefficiencies exist. These processes can be anything from the methods used to hire new workers to the vendors used for raw materials. Any function within the business that has a defined start or input and a defined end or output may be the subject of business process analysis. The majority of analysis procedures focus on completing tasks in fewer steps and in less time.

The majority of business process analysis lies in finding areas where a business can improve. While on the surface this may seem straightforward, it is rarely as simple as it seems. When something enters a business, anything from a new worker to new supplies, that item begins to interact with preexisting parts of the system. These interactions have a ripple effect that begins to transfer through the organization.

The methods of business process analysis require looking at a business as a whole rather than as individual parts. Since processes can start in one place and continue on through several others, each step needs to be analyzed for inefficiencies and areas of improvement. Problems may only be worked out by looking at the whole picture.

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As an example, a manufacturing business may get a required supply from a specific vendor. If another vendor sells the exact same product at a lower price, it seems as though it would be a good idea to switch, but this isn’t always the case. If the second vendor uses packaging that requires additional manpower to unload, unpack and distribute through the company, the cost of that time needs to be weighed against the lower price. If the additional time costs the company more than the price reduction, it is considered a bad idea to change.

In the above example, the true motivating factor for the value of the supply was time. Even though the supply cost less, the time it took to use it was too high. This is one of the main factors in business process analysis. The faster a process happens, the less it costs in the long run.

When something new enters the system, it needs processing and assignment. The wages and benefits workers receive in that time are applied to the cost of the new item. If the system used is altered to use one less worker, then that portion of the cost is removed. This worker is free to then work on a different process, allowing something to get done faster.

The final goal of business process analysis is balancing time against money. Most processes take less time when workers are added and more time when they are removed. By balancing the workers-to-cost ratio, it is possible for a business to improve profits and expand faster.

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