The Costs of a Broken Process: Measuring the Toll on Your Business

How to identify a broken process

You can’t fix what you haven’t identified. And sometimes that means spinning the word “broken” on its head. With a business process that has been in place for so long, it isn’t always perceived to be broken. After all, the work gets done – even if the process to complete it may be causing lots of unnecessary work and friction along the way. We have identified 14 symptoms of a broken process. It’s a great reference list for uncovering areas of opportunity. Chances are, if you review the list and give some thought as to what is and isn’t working in your business, you can probably identify a process area that could use some attention. Most often, we hear from businesses who can relate to #6 with having a high ratio of checking and reviewing or #13 with throwing more people or money at the problem. For many, this stands out the most with their human resources and accounts payable processes, but it could apply to any area of your business.

What are the costs of a broken process?

Now that you have identified a business process that is broken, the question that often gets asked next is “what is this costing me?” or “what is the return I will see by fixing it?” These are good questions to ask, and there are multiple data points to consider.

• The hard numbers. These data points can typically be more easily measured.
  • Count – how many times a day is this being done?
  • Touches – how many times does something need to be touched in this process?
  • Time – how long does the process take from start to finish currently?
  • Expenses – things like how much paper are we using or what are the salaries of the people completing the process.

• The soft numbers. The soft numbers may not be as obvious. These are the things that you may not have thought about and are sometimes harder to measure. But these are critical factors for evaluating the costs of working with a broken process.
  • Resources – consider how many people are working within this process currently and how would it help your labor shortage if you could move one of them to a different task. Or consider the salary of the person you DIDN’T need to hire because you now have a more efficient process.
  • Compliance – consider the cost to your business and customers if you are using a broken process that isn’t in-line with your industry’s compliance standards.
  • Attrition – consider the hiring and training costs for employees who work in a department with a high turnover rate because of a frustrating broken process.
  • Space – consider the renovation or addition you DIDN’T need to complete to gain more desk and file cabinet space since you were able to reduce manual processes and labor.
  • Meetings – consider the time wasted in meetings to discuss the issues that arise from a broken process.
  • Continuity – consider the cost to your business if there were a disaster that disrupted your current manual paper-based process.
  • Backburner – consider what ISN’T getting done and the projects you have put on hold because your employees are tied up working in broken and time-consuming processes.

Often, business processes deteriorate over time as workarounds become permanent or people give up trying to fight the system and improve. It’s also common for outdated processes like relying on spreadsheets and paper-based systems to outlast their useful years simply out of habit. It can be an uphill battle to convince people to change but considering all the costs of doing business the same way you’ve always done it can help illustrate the need for a better business process.

Mapping it out

The most important piece of truly understanding a broken process is to map it out. That’s where we come in. EO Johnson’s Digital Transformation Consulting Team are experts at evaluating and mapping business processes, helping you understand the associated data points and costs, and then incorporating technology to customize a solution that improves your business. Contact us today to start mapping out your digital transformation.