Do you ever wonder if your business runs efficiently? Are you getting the most out of the time and effort you put into your company? Or could you be bringing in more revenue with just a few simple improvements?
There’s a single, straightforward step you can take to figure it out: process documentation. It’s a simple idea. But it has a huge amount of power.
And it works. Read on to see how one company made a 71% improvement in the efficiency of an employee group through process documentation and optimization—and how you can use the same technique for your business.
Why You Need to Start Documenting Business Processes (Today)
In short, you need to document your business processes because the stakes are high.
Planview estimates that poor processes cause 44% of business inefficiencies. And those inefficiencies cost money. It’s commonly stated that businesses lose 20–30% of their annual revenue to inefficiencies. Process documentation is the first step in fixing that problem. And it works. Elevations Credit Union underwent a regimen of process documentation and improvement that resulted in underwriters handling 71% more loans. That’s a huge increase in productivity.
(Elevations has made their business process workbook public, if you’re interested in seeing how they did it. Be forewarned: it’s a huge document.)Of course, you’ll need to do more than just document your processes to get this sort of ROI. You’ll need to optimize as well. We’ll talk about that a bit later.
But the act of process documentation itself can save you time, too. It makes onboarding new employees easier, aids interdepartmental communication, and helps you measure the effectiveness of changes.
Let’s jump into our process documentation guide to look at how you might go about document a process.
What Is Process Documentation?
A process document outlines the steps needed to take some sort of action or complete a task.
Every step that takes place during the process is documented, often along with the responsible parties and the tools they need to use to complete the task.
Your entire business is made up of processes, and each process document details a single one.
How to Create Business Process Documentation
You might think that process documentation is as simple as writing a checklist for employees to follow. The truth is that it’s more complicated.
Effective process documentation includes a wide variety of actions, steps, feedback loops, and other factors. And it requires the input of many different employees.
Here are the steps you’ll need to take to effectively document processes at your business:
1. Figure out which processes to optimize
You can’t document every business process. Managers know which processes are most inefficient, and they’ll tell you where they’re losing time.
You may also need to determine which processes cost the most money, as those are good clues as to where you can get the greatest ROI. How long does the project take? How many labor hours? What costs are associated with the process?
After getting a good grasp on these details, compare them with the expected return of a successful process. In a perfect world, what do you, your team, or your company get out of the process? How, and in what measure, does the process serve your business goals?If the tangible benefits of a process greatly outweigh everything that you pour into it, you can probably leave the process alone. If the benefits are about even with the costs or less, then you’ve found a process that needs optimization.
As an example, we’ll break down a sales outreach workflow.
2. Outline the process
In the following steps, we’re going to create a very detailed breakdown of how the process works. Before we start, though, we need a general understanding of the process. If you already have a good idea of what happens, you can create this outline yourself.
If you have no idea of how it works, you’ll need to ask the people who do. Here are some questions to keep in mind:
- What is the point of the process? What is its goal?
- When does the process start, and when does it end? Are all the steps outlined in a centralized location or is the process undertaken in an ad hoc fashion?
- What tasks underlie the broader process, and which ones are critical to moving the process from one step to the next?
- Which teams and employees are involved with the process? Which ones perform essential tasks and which ones oversee the process’s progression?
- Are there team members or pieces of information that carry over from step to step throughout the process? Are procedures in place to facilitate these transitions?
For our example process, we’ll say that we have a general idea of how our sales outreach process works:
- A lead is documented in your company’s CRM software.
- Sales sends a personal email to the lead.
- Sales schedules a CRM task for a follow-up call.
- Sales qualifies the lead.
- Repeated contact builds a relationship.
- Sales verbalizes a deal proposition.
- Sales creates a written deal proposition.
- Customer agrees to proposition.
- Customer is passed to the implementation team.
As you can see, we’re going to need to coordinate at least three groups: the team that adds leads to the CRM software, the sales team, and the implementation team. And this is a simple process. You may have many more groups involved at your own company.
Still, though, the process itself seems fairly simple. In the next step, we’ll see how misleading that thought can be.
3. Identify the component parts
Every process has a number of tasks, transitions, and sub-processes that you’ll need to document.
It’s important to note that many business processes require the cooperation of multiple people, often spread across multiple departments. You’ll need to take a close look at how the process works. If you’re missing steps, you won’t be eliminating inefficiencies—and you might be making them worse.
For our example process, imagine that we talked to people involved in the outreach process. And we found that the process is much more complicated. For example, it needs to include follow-up emails, CRM notifications, a sub-process for lead qualification, guidelines for creating a deal proposition, and so on.
During this phase, talk to as many people as possible who are familiar with the process. And take lots of notes.
4. Lay out the process document
Now that you have a clear picture of what the process entails, it’s time to create the actual process document. There are plenty of business process documentation tools you can use.Process documentation software like Heflo and Process Street are built for the task. But there are free options as well. If you want to use process mapping software for free, I highly recommend Lucidchart, which I used to create the image below.
List all of the tasks necessary, then connect them based on chronology and responsibility. We might come up with something like this for our sales outreach process:
As you can see, this is significantly more complicated than our original nine-step checklist. But it also includes a number of steps that are crucial and could have been overlooked without the full documentation.
There are many decisions, pre-defined processes (“Is lead qualified?” and “Propose sales deal” are defined elsewhere), and loops that are required for the process to work effectively.
Now we can move onto process optimization, where the real increases in efficiency start. First, though, let’s talk about some best practices for documenting business processes.