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Process Improvement in 2024: Comprehensive guide for businesses

Business leaders and analysts acknowledge the impact of process performance on their success. Therefore, they constantly look for ways to improve or innovate their processes. Process improvement also referred to as business process management is a field that assists business analysts to understand the business processes and identifying areas for improvement. However, excessive focus on process excellence can hold back innovation and is unsuitable for companies or divisions exploring a new market.

This article explains process improvement briefly, provides recommendations to implement and discusses if it prevents innovation.  

What is process improvement?

Process improvement (also called continuous process improvement and abbreviated as CIP or CI) refers to defining, analyzing, and improving business processes to improve the overall quality and customer experience.

Process improvement helps business leaders to detect and eliminate errors and bottlenecks in their processes. Business leaders can modify their operations to increase profit margins, improve employee satisfaction, and accelerate operational timelines.

Why is process improvement important?

There have been different process improvement approaches since the 1940s, as this field has emerged from the automotive industry to efficiently use resources in the scarce economic environment. Since then, businesses have been looking for ways to increase their quality and reduce costs. Compared to the past, process improvement is more important today due to the following reasons:

  • Today’s customers have higher expectations of the quality
  • Higher competition in the market 
  • Unpredictable economic environment

However, the importance of process improvement depends on the company’s strategy. A new division aiming to build an innovative product needs to focus on innovation and can delay improving processes to a future date. Since their operations are likely to change fast, spending significant effort to change and improve them would not be efficient.

On the other hand, a business in a stable market can focus on process improvement to delight customers and increase its margins.

What are the different types of process improvement solutions?

We observe that some companies use different technologies like process mining, task mining and RPA to improve their processes or BPM software, workflow management software and low-code/No-code development platform to manage their processes better. Some others implement process improvement methodologies such as Lean and Six Sigma. We grouped these solutions into two main categories: Technology-based and methodology-based. 

Notice that Google searches for technology-based solutions, such as process mining, process discovery and process intelligence, has increased since 2015 (See Figure 1). Also, interest in business process management (BPM) follow the same path, implying that technology-based process improvement tools have become central for BPM and process improvement.

Interest in technology-based solutions for process improvement.
Figure 1: Google searches for process intelligence, process mining, process discovery and business process management, Source: Google trends

On the other hand, methodology-based approach, such as Kaizen, six sigma and total quality management, has slightly decreased, although they still hold significant traffic (See Figure 2).

Interest in methodology-based solutions for process improvement.
Figure 2: Google interest in Kaizen, six sigma and total quality management, Source: Google trends

Moreover, we identified that process mining and RPA are the top tools by 31% in process improvement case studies we gathered from different sources. Firms that applied process improvement methodologies which includes Six sigma and Kaizen to improve their processes occupy 22% of the entire real-life examples.

Process improvement tools include RPA and process mining by 31%, process improvement methodologies by 22% and BPM tools by 16% as number of case studies AIM gathers.
Figure 3: Process improvement tools categorized based on the number of case studies.

On the other hand, we consider these both approaches as complementary so companies can leverage both techniques in their process improvement effort. 

Can too much process improvement hinder innovation?

Focusing on process improvement too much can prevent businesses from innovation.1 This situation may cause process improvement efforts not to deliver the desired outcomes, or companies can miss more significant benefits. Thus, it is also essential to keep an eye on innovation opportunities and evaluate your options for better performance.

Process improvement refers to looking for ways to improve processes that exist. These ways can include the elimination of bottlenecks, upgrading systems, or other actions that enhance process efficiency. On the other hand, innovation focuses on solving the problem most effectively. It consists of more radical and disruptive changes. 

Companies and individuals tend to focus on improvement rather than dramatic change. That is why Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses”.

In the end, companies should focus on their customer demands and satisfy those with the latest technology. That can involve both process improvement (i.e. improving what’s already in place) and innovation (i.e. using the newest technology to solve problems via dramatic change and new products).

Recommendations

1. Keep an eye on innovation opportunities

As indicated in this article, focusing on process improvement too much can prevent businesses from innovation. This situation may cause process improvement efforts to not deliver the desired outcomes, or companies can miss more significant benefits. Therefore, it is essential to consider innovation opportunities and evaluate new options for better performance.

2. Solve the problems effectively

Process improvement refers to looking for ways to improve processes that exist. These ways can include the elimination of bottlenecks, upgrading systems, or other actions that enhance process efficiency. On the other hand, innovation focuses on solving the problem in the most effective way. It consists of more radical and disruptive changes. 

3. Satisfy customer demands

Companies and individuals tend to focus on improvement rather than dramatic change. This is why Henry Ford famously said “If I had asked people what they wanted, they would have said faster horses”. In the end, companies should focus on their customer demands and how they can satisfy those with the latest technology. This can involve both process improvement (i.e. improving what’s already in place) and innovation (i.e. using the latest technology to solve problems via dramatic change and new products).

Further Reading

You can learn more on process improvement by reading our relevant articles:

If you still have questions about process improvement, we would like to help:

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Cem Dilmegani
Principal Analyst
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Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

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