84% of business leaders from different industries believe that process innovation is crucial for growth.1 The leaders invest in innovating their products and processes to reduce time and monetary waste, gain competitive advantage in the market and increase their market share. However, it is often not clear how process innovation differ from process improvement. The confusion makes it a challenge to implement process innovation.
This research provides a brief explanation of process innovation, its differences to process improvement, and the best practices to implement process innovation in your business processes.
Process innovation refers to new technology or method adoption in a process, or redefining the entire process model, to help companies remain competitive and to respond to customer demands. Business leaders look for process innovation when they notice bottlenecks, errors, lower process performance across years, or changing market dynamics.
The leaders can implement innovation by applying new manufacturing tools or developing new methodologies for product delivery. The scene below from the movie, “The Founder,” shows how McDonald’s changed the fast food preparation process in the 40’s. The company simply re-organized the operational flow and managed to prepare the same food wile while making customers wait less.
Process innovation vs. process improvement
Process improvement and innovation differs because of the way they approach the existing processes. Process improvement identifies and eliminates bottlenecks, discovers automation opportunities, and standardizes processes across the entire organization in the existing processes. Process innovation transforms the existing process by introducing new approach, methodology or platform.
For example, a firm suffers from inefficiency in their subcontracting process and analyzes the process. The firm finds out that the inefficiency is caused by prolonging documents upload. In such situation, the firm can overcome the problem by changing the documents request procedure and speed up the process. This is an example of process improvement. If the reason is related to customers taking long time to fill the large documents, then the firm should start reviewing new methodologies or solutions, such as automation, to innovate their subcontracting process.
3 Best practices to achieve process innovation
1. Adopt new technology to increase efficiency and effectiveness
Process innovation teams can recommend obtaining technology, such as automation tools, that automates the manual tasks in a given process. As a result, the new processes reduce human errors in execution of manual processes and save the staff’s time for more valuable tasks, increasing efficiency and employee productivity in the organization.
For example, logistics companies often complain on loading tracks with goods they transport because the process takes too long and is vulnerable to manual scheduling and execution errors. They can innovate the process by adopting new technology, such as automated lifts and IoT sensors to fasten the process and eliminate the errors while unloading the tracks.
The sensors could help the lifts to calculate the distance, and to inform them on the empty storage space so that the lifts can place the goods with the lowest human intervention. Consequently, the company completes the transportation of goods in a shorter time with less mistakes, thus improving customer satisfaction and increasing its clientele.
2. Develop customer-centric approaches to improve customer experience
By evaluating customer and end-user feedback and surveys, business leaders and sales teams can modify existing processes or new innovate new ones. They can improve the quality of service which leads to improved customer satisfaction and lower churn rates.
For example, it was a tiring process when banks’ clients had to fill a lot of information on their phone before connecting/contacting with sales reps. By adopting technologies such as voice recognition or image recognition, the banks can now detect the clients’ identities without the need to ask for further identity verification.
3. Enable both data-driven and intuitive decision-making
Business leaders and strategists design new processes or services after a long decision-making process. This process can be qualitative, where a group of senior executives and strategists interview employees and rely on their intuition and experience to innovate.
It can also be a quantitative process, where business analysts leverage data to drive descriptive information and hypothesis testing.
However, businesses that leverage both approaches can design creative ideas and evaluate them against facts. Process mining can enable both qualitative and quantitative decision-making approaches through conformance checking and process discovery. Process mining leverages process data, discovers your actual processes, and compares the given results against the models developed that had been based on intuitions.
Read more on process improvement technologies and methodologies:
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