Business process analysis: How to identify the processes costing your business time and money

Your business may be losing more time and money to inefficient processes than you realise.

The problem is that inefficient processes are not always obvious. A process can use modern software, have capable employees and appear to work well while still creating unnecessary work through delays, rework, handoffs, duplicate data entry and manual intervention.

Business process analysis helps identify where that inefficiency is actually occurring, what it is costing the business and which processes are worth improving first.

Start with the symptoms, not the process

You do not need to analyse every process in the business.

Start by looking for areas where the business is consistently experiencing friction.

What you are seeing	What it could indicate
Work regularly misses deadlines	Bottlenecks or approval delays
Employees repeatedly check or correct work	Rework or poor inputs
Several people handle the same request	Excessive handoffs
Information is entered into multiple systems	Poor integration or duplicate data
Highly skilled employees spend significant time on administration	Poor allocation of work
Customer response times vary	Process inconsistency
Employees rely on spreadsheets outside core systems	System or workflow gaps
One person is relied on to keep a process moving	Dependency or undocumented knowledge
Headcount increases as transaction volume increases	A process that does not scale

These symptoms do not tell you exactly what is wrong. They tell you where to look.

The next step is to understand what is happening inside the process.

Measure where time is actually being spent

A common mistake in process analysis is to measure only how long a process takes from beginning to end.

That does not tell you how much work is actually being performed.

Consider a process that takes three days to complete.

It might contain:

• 45 minutes of actual work
• 2 days of waiting for approvals or information
• 30 minutes of rework
• another period of waiting before completion

The process takes three days, but only part of that time is productive work.

Measure five things

1. Volume
How often does the process occur?

2. Cycle time
How long does it take from start to finish?

3. Touch time
How much actual employee time is spent working on it?

4. Rework
How often does work have to be corrected, repeated or returned?

5. Waiting time
How much time is spent waiting for information, approvals, people or systems?

This distinction is important because a process with a long cycle time is not necessarily inefficient. Likewise, a process with a short cycle time can still consume significant resources if it happens thousands of times.

Map the process from start to finish

Once you have identified a process worth investigating, map how the work actually moves through the business.

Start with:

Trigger → Inputs → Activities → Handoffs → Decisions → Systems → Output

Do not map how the process is supposed to work. Map what actually happens.

For each step, ask:

• Does this step add value?
• Is it necessary?
• Who owns it?
• What information is required?
• Is information entered more than once?
• Does work wait here?
• Does work frequently come back here?
• Does another person have to check it?
• Which systems are involved?
• What happens when something falls outside the normal workflow?

This is where process analysis starts revealing problems that are difficult to see from performance metrics alone.

A process may look efficient at a high level but contain several small inefficiencies that compound across hundreds or thousands of transactions.

Find the cause, not just the inefficient step

Identifying an inefficient process is only the beginning.

The next question is why it is inefficient.

For example:

What you see	Possible underlying problem
Too many process steps	Poor process design
Repeated data entry	Disconnected systems
Frequent corrections	Poor inputs or controls
Long approval times	Unclear decision rights
Work sitting in inboxes	Ownership or handoff problems
Employees maintaining spreadsheets	System limitations
Different employees following different methods	Lack of standardisation
Process performance deteriorates as volume increases	Scalability problem
Automation would only remove one manual task	The underlying process has not been addressed

The most visible manual task is not necessarily the biggest problem.

For example, an employee spending 10 minutes entering information into a system may look like an obvious automation opportunity. But if the real bottleneck is a two-day approval process later in the workflow, automating the data entry will have little effect on the overall outcome.

That is why process improvement should begin with understanding the whole workflow, rather than immediately looking for tasks to automate.

Quantify what the process is costing you

Once the workflow is understood, estimate the resources it consumes.

A simple starting point is:

Annual process cost = transaction volume × time per transaction × loaded labour cost

For example:

• 2,000 transactions per year
• 20 minutes of employee time per transaction
• $50 loaded labour cost per hour

That represents approximately $33,333 of employee capacity per year.

And that is only the direct labour component.

You may also need to consider:

• rework
• errors
• overtime
• delays
• customer service impacts
• missed opportunities
• additional administration
• unnecessary software or system costs

The objective is to understand the scale of the problem well enough to make a sensible improvement decision.

A process consuming $5,000 of capacity a year may not justify a major transformation.

A process consuming $100,000 of capacity, creating customer delays and becoming more expensive as the business grows is a different proposition.

Prioritise the processes worth fixing

Not every inefficient process deserves the same level of attention.

Once you have analysed several processes, compare them using a consistent set of criteria.

Consider:

• Time consumed: how much employee capacity does it use?
• Cost: what resources does it consume?
• Frequency: how often does it occur?
• Customer impact: does it affect customer experience or service levels?
• Rework and errors: how much avoidable work does it create?
• Scalability: does the problem increase as the business grows?
• Ease of improvement: how difficult would it be to change?

A useful way to prioritise is to compare business impact against ease of improvement.

This prevents the business from spending its improvement effort on processes that are easy to change but have little meaningful impact.

Decide whether the answer is process, technology or both

Once the problem has been identified and quantified, determine what needs to change.

There are several possible interventions:

1. Eliminate unnecessary steps.
2. Simplify the workflow.
3. Standardise how work is performed.
4. Improve system integration so information moves automatically between systems.
5. Automate repetitive tasks.
6. Redesign the process where the existing workflow no longer fits the business.

The right solution may involve technology, but it does not always start with technology.

Is an inefficient process consuming more capacity than it should?

Maytech helps businesses analyse workflows, identify operational inefficiencies and determine whether the right solution is process improvement, systems modernisation, workflow improvement or automation.

For a deeper look at when automation is the right call, see our guide on whether to automate or improve first.

If one of your processes is costing more than it should, book a free discovery call and we’ll help you find out where.

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