There are two major time considerations associated with business processes – elapsed time and execution time.
In many situations, people confuse these two factors and in more cases, organisations simply don’t understand what these time considerations are and how they impact on business operations and profitability.
- Elapsed time is the time from the start of a process to its completion. Elapsed time is often measured in minutes, hours, days and months.
- Execution time is the amount of ‘hands-on’ time it takes a person to complete a process, ie. time directly spent undertaking a task, making decisions or dealing with a customer etc. Execution time is usually measured in seconds and minutes.
For complex processes the elapsed time is usually much greater than the execution time. This is because the process could involve multiple parties, correspondence, decision making and notification periods etc.
In some cases it is necessary or even desirable to have long elapsed times for certain processes. For example, there may be statutory schedules which need to be met or positive cash flow implications associated with the process. However in most cases long elapsed times are experienced as a result of inefficiencies or resource issues.
In these situations reducing the elapsed time associated with a process can have a positive impact on the execution time, cash flow and customer satisfaction levels.
As with any improvement plan, it is essential to begin by understanding what the existing level is. The elapsed time of a process is normally relatively easy to identify by asking at what time or date the process began and at what time did it end.
It will then be necessary to look at the entire end to end process and break it down into stages. The amount of stages will vary according to the complexity of the process. Factors which can help to identify logical breaks between stages are:
- Hand-offs between staff
- Correspondence (inbound and outbound)
- Decision making
- Skill levels
- Third party involvement
A traditional approach to business processing is for one person to handle an activity from start to finish. This might be seen in a claims handling environment where a handler will ‘open a file’ upon receipt of a claim and then carry out all of the associated administration and decision making until the claim is met and the file is closed.
This approach is inefficient for a number of reasons such as:
- The handler needs to have the skills to handle all aspects of the claim, despite the fact that a significant proportion of the tasks are likely to be unskilled administration tasks that could be undertaken by less costly resource.
- Different handlers will work in different ways which will lead to inconsistencies in standards, quality and ultimately customer satisfaction.
- The individual handler owns most of the background knowledge about that specific claim.
A much better approach is to identify the relevant stages associated with the entire process and allocate each activity to the most appropriately skilled individual or group. To do this efficiently it will be necessary to have a flexible and easily accessible business process management tool, such as LEAP in place.
A key consideration when it comes to breaking down an entire end to end process is granularity i.e. how many different stages are there, who is best placed to do them and when is the best time for them to happen.
Once you have identified these stages – the question is what you can do to reduce the time for each individual stage.
Simple activities such as follow up phone calls and escalation procedures, instant access to data and documentation and clearly identified deadlines can help here.
LEAP has the flexibility and reporting capabilities to first of all accommodate an infinite variety of processes and secondly report on them. Once the system is in place the necessary management information is available to help you make strategic decisions about your processing.
If you’d like to find out more about how our clients are using LEAP to make big efficiency savings, get in touch or request a demo HERE.