Business Process Analysis and Design: 2 Ways to Optimize Operations

With over 70% of Vietnamese businesses undergoing digital transformation and operational optimization, the need for business process analysis and design is becoming increasingly urgent. Many businesses face overlapping tasks, time-consuming processes, and high operating costs without knowing the root cause.

In reality, by simply improving one business process, businesses can shorten work processing time by 20–40%, significantly reduce errors, and enhance customer experience. However, to achieve this, managers need to clearly understand how to analyze processes, assess current effectiveness, and redesign workflows for optimal results.

This article will help you understand:

• What a business process is and why it determines business performance

• How to analyze business processes systematically

• How to design and improve processes to save time, reduce costs, and create real value for customers

If you are looking for solutions to optimize operations, improve work efficiency, or standardize business activities, the content below will give you a clear overview and specific action guidance.

Method 1: Building business processes from scratch

Step 1: How to identify business processes

1. Understand what a business process is

• A business process is a set of activities that employees perform daily to achieve a specific business goal.

• Every workflow must answer 3 questions: What is done? Who does it? What is the final result?

• A good process not only describes the usual way of doing things but also includes contingencies.

Real-world example: The invoice sending process is not just "issue invoice and send to customer," but also includes verifying information, storing data, handling errors, and tracking payments.

2. Define the process scope
Before analyzing, it is necessary to clarify how broad the process is.

• Define the start and end points.

• Measure the actual workload (e.g., 200 invoices/month).

• Clarify which departments this process affects.

Defining the scope helps avoid overly broad analysis or missing important steps in business process analysis.

3. Clarify the desired outcomes
Every business process design must be tied to a specific result.

• What results need to be achieved?

• Are there clear measurement criteria? (correct, complete, fast, cost-effective)

• What do customers or receiving departments expect?

For example:

• 100% accurate invoices

• Sent immediately after delivery

• Both paper and email versions available

If outcomes are not clearly defined, processes are difficult to optimize.

4. Break down the process into specific steps
This is an important step to easily include in Featured Snippets when users search for “steps to build a business process.”

Follow this sequence:

1. List all steps in chronological order.

2. Identify which steps are mandatory and which can be automated.

3. Identify redundant or non-value-adding steps.

4. Drawing a flowchart can help visualize the workflow.

Practical principle: The more specific, the easier to improve.

5. Identify participating departments and information flow (Input – Output)
A business process often involves multiple departments.

It is necessary to clarify:

• Which departments participate?

• What are the inputs for each department?

• Who receives the output?

Example of a payroll process:

• Production department provides working hours.

• HR department provides salary rates and deductions.

• Accounting performs payment and record-keeping.

By clearly visualizing the input-output flow, you will discover bottlenecks in business process management.

6. Document exceptions and variations in the process
Many businesses fail when designing processes because they only build for “ideal scenarios.”

It is necessary to identify:

• Special customers (e.g., large quantity orders).

• Emergency situations.

• Data errors.

• Policy changes.

A standardized process must have a plan for handling exceptions; otherwise, manual processing will arise, increasing operating costs.

Step 2: Classify business processes

1. Operating process
These are core activities that produce products or services and directly generate revenue.

Key characteristics:

• Occur daily.

• Create direct value for customers.

• Directly impact customer experience and satisfaction.

For example:

• Goods manufacturing process.

• Service delivery process.

• Process for issuing and sending invoices to customers.

If the process you are analyzing involves product delivery, customer service, or order processing, it is almost certainly an operating process.

2. Support process
These are activities that help the business run smoothly but do not directly generate revenue.

Key characteristics:

• Support operating processes.

• Less direct customer contact.

• Indirectly impact operational efficiency and costs.

For example:

• Recruitment and human resource management.

• IT system management.

• Internal accounting.

The human resources (HR) department is a typical example of a support process, as they don't sell but ensure the business has enough personnel to operate.

3. Management process
These are activities related to strategic direction, control, and decision-making.

Key characteristics:

• Focus on planning and monitoring.

• Shape development strategy.

• Affect the entire organization.

For example:

• Budget planning and implementation.

• Developing business plans.

• Evaluating company-wide performance.

If the process involves long-term goals, resource allocation, or strategic decision-making, it is a management process.

Step 3: Compare inputs and outputs to identify waste

1. Clearly define Inputs
Inputs are all resources a business uses to generate revenue and profit.

Including:

• Personnel (labor, man-hours).

• Raw materials.

• Energy.

• Equipment, machinery.

• Capital and operating costs.

If inputs cannot be measured, you cannot accurately assess the efficiency of the business process.

2. Clarify Outputs

Outputs are the products or services generated by the process.

For example:

• A finished product.

• A completed service.

• An order processed.

• A fully repaired vehicle.

The goal of every operating process is to use the fewest inputs while producing the highest quality output.

3. Compare input – output to detect abnormalities

Below are signs that a process has problems:

• Unusually long processing times.

• Accumulated backlog increasing.

• Over-budget costs.

• High error rates or frequent reworks.

Real-world examples:
If you manage a car repair garage:

• Inputs: technicians, equipment, spare parts.

• Outputs: repaired cars delivered to customers.

If repair times are extended or customers have to wait a long time, it could be due to:

• Overbooked repair schedule.

• Staff shortage during peak hours.

• Inefficient assignment process.

4. Root Cause Analysis for High Costs

If spare parts costs significantly exceed estimates, you need to check:

1. Is the purchasing department selecting the optimal supplier?

2. Have import prices fluctuated but the budget hasn't been updated?

3. Is there any loss or incorrect ordering of parts?

4. Has the supplier unusually increased prices?

This helps improve not only the operational process, but also supporting processes such as purchasing and accounting.

5. Principles for Process Optimization Based on Input – Output

• Regular measurement (time, cost, productivity).

• Comparison with set goals.

• Identify the biggest waste points.

• Adjust step by step instead of changing the entire system.

In management, businesses don't fail due to lack of revenue, but often due to waste in processes. When you effectively control the relationship between inputs and outputs, business process improvement will have a clear, measurable basis and achieve sustainable effectiveness.

Method 2: Detailed Business Process Analysis

Step 1: Consult key personnel to improve the process

1. Interview the people directly performing the work

Conduct one-on-one or small group discussions with relevant positions.

You should ask:

• What steps do you take in your daily work?

• Why must it be done in that order?

• Which step takes the most time?

• Which step often leads to errors?

This information helps you understand the actual operations rather than the "on-paper" process.

2. Identify the inputs for each stage

In business process analysis, every task requires clear inputs.

Clarify:

• What information, documents, or raw materials are needed for each step?

• Which department provides the inputs?

• Are there frequent shortages, delays, or incorrect information?

For example:
If you produce jeans:

• Which supplier delivers the denim?

• How often are deliveries made?

• Are there often late deliveries that halt production?

If inputs are unstable, the entire operational process will be affected.

3. Identify the outputs of each step

Each stage must produce a specific outcome.

Determine:

• What product or information is generated after this step?

• Who receives the output?

• Is the output often returned for corrections?

When a step produces substandard output, rework costs will increase, affecting process efficiency.

4. Gather improvement suggestions from employees

Employees directly involved in the work often see problems more clearly than management.

Also ask:

• If you could change one thing in the process, what would it be?

• Can any steps be shortened or automated?

• Are there any tools that would make the work faster and more accurate?

This is a practical way to build a business process design based on real-world experience, rather than imposing it from above.

5. Notes for effective discussion

• Create an open environment, without assigning blame.

• Focus on system improvement, not individual assessment.

• Record every issue raised in detail.

In many business process improvement projects, over 60% of problems are discovered through direct discussions with operational staff. By combining management and executor perspectives, you will have a solid foundation to optimize workflows, reduce waste, and sustainably improve productivity.

Step 2: Draw a business process flowchart

1. Why is a process flowchart needed?

A flowchart helps to:

• Clearly see all steps in the workflow.

• Identify start and end points.

• Detect redundant, illogical, or delaying steps.

• Easily train new employees and standardize operations.

In actual management, businesses without process flowcharts often face a situation where "everyone does it their own way."

2. Principles for building a process flowchart

When creating a business process flowchart, ensure:

• Only officially defined steps are included.

• No personal habits or spontaneous practices are added.

• The correct execution order is displayed.

• Decision points are included (if there are branching conditions).

A good flowchart should help the viewer understand the process in just 1–2 minutes.

3. Steps to create a business process flowchart

Follow this sequence:

1. List all previously identified steps.

2. Arrange them in chronological order or processing flow.

3. Identify decision points (Yes/No, Pass/Fail).

4. Add clear start and end points.

5. Review with the staff performing the work to ensure accuracy.

This is a crucial step in standardizing business processes.

4. Process flowchart tools

You can do this in several ways:

• Draw by hand on paper (suitable for group discussions).

• Use Word or Google Docs with Shapes feature.

• Use Excel or Google Sheets with charting functions.

• Use specialized software such as process flowchart design tools.

As a business scales, specialized software should be used for easy updates and internal sharing.

5. Review and improve after completion

After creating the flowchart:

• Compare it with actual operations.

• Identify steps that cause delays or are redundant.

• Assess automation potential.

• Update periodically when changes occur.

In business process management, a flowchart is not a static document but a tool for continuous improvement. When properly constructed, a flowchart becomes a vital foundation to help businesses optimize operations, reduce errors, and sustainably improve efficiency.

Step 3: Organize a brainstorming session to improve the process

1. Assemble relevant departments

Many business processes involve multiple departments. If analyzed in isolation, you might miss root causes.

You need to:

• Invite representatives from departments involved in the process.

• Include both direct performers and managers.

• Ensure everyone understands the goal is system improvement, not individual assessment.

Group discussions often help uncover inter-departmental bottlenecks that individual interviews might miss.

2. Summarize and share data before discussion

Before the meeting, you should:

• Compile information gathered from interviews.

• Prepare the current process flowchart.

• Highlight issues: high costs, delays, backlogs, errors.

This helps the brainstorming session focus on solutions rather than emotional arguments.

3. Gather feedback and improvement suggestions

During the discussion session:

• Ask each department where they encounter difficulties.

• Identify steps causing delays between departments.

• Look for steps that can be shortened or automated.

• Record all suggested process improvements.

This is an important foundation for effective and practical business process improvement.

4. Implement changes with clear objectives

Changes in business process design typically aim to:

• Reduce operating costs.

• Shorten processing time (cycle time).

• Simplify operations.

• Improve customer service quality.

Avoid making too many changes at once. Prioritize improvements that have a big impact and are easy to implement.

5. Measure results after adjustment

After implementing improvements:

• Compare costs before and after.

• Measure processing time.

• Evaluate customer satisfaction.

• Check error rates.

If the results do not meet expectations, continue to analyze business processes and make adjustments.

6. Maintain continuous improvement

A common mistake is to view process analysis as a short-term project. In reality, it should be an ongoing activity.

Important principles:

• Periodically review processes.

• Update when there are changes in personnel, technology, or the market.

• Build a culture of improvement within the enterprise.

When business process management is seen as a long-term task, businesses will maintain a competitive advantage, better control costs, and sustainably improve efficiency.

References

1. Interfacing Technologies Corporation. (n.d.). What is business process management (BPM)? Retrieved from http://www.interfacing.com/Literature/what-is-bpm
2. Mind Tools. (n.d.). Improving business processes. Retrieved from https://www.mindtools.com/pages/article/improving-business-processes.htm
3. CIO. (n.d.). How to create an effective business continuity plan. Retrieved from http://www.cio.com/article/2381021/best-practices/how-to-create-an-effective-business-continuity-plan.html

Translated by: Lesley Collins Tran.