Definition of standardization of business processes
Business process standardization is a unified, enterprise-authorized way to complete a critical business process. It allows each process to always run the same way.
Standardizing business processes ensures that processes related to accounting or regulatory compliance are always completed in the same way and as efficiently as possible.
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This is how business process standardization works
Process standardization works through the implementation of best practices designed to maximize the efficiency and effectiveness of processes. These best practices typically involve some automation and do not change unless aspects of the process itself change first.
For example, the process of creating customer quotes for car insurance involves collecting a large amount of data and going through several steps. Business process standardization defines how this process is performed so that it is performed in the same way and in the same order every time a customer requests a quote.
Business Process Standardization and Integration: What's the Difference?
Standardization of business processescreates order and consistency within a business process. This provides full accountability of who did what and how, and uncovers any issues that may arise.
business process integrationconnects systems such as processes, applications and software with a business process management platform to optimize business operations.
Together, the two practices connect and consolidate critical information in one place, creating a unified and consistent way of executing process flowsbetter process management.
The importance of standardizing business processes
Process standardization is one of the first steps towards process automation with approaches such as Business Process Automation (BPA) or Business Process Management (BPM). The BPM market is designed for thisexpand to $16 billionby 2026, which illustrates the importance of standardized process automation for organizations.
The automation of standardized processes is essential for transparency and traceability. It is also necessary to explain the outcomes of these processes, such as why an insurer can make a particular decision about a customer's premium. The compound annual growth rate for standardized process automation with BPM is not surprisinggrowing at a rate of 10.5%between 2020 and 2025.
Business process standardization is also necessary to hold employees accountable for their actions by providing them with well-established procedures for completing specific tasks in workflows. Without standardization, employees are free to do tasks as they please, introducing risk and potentially compromising the accuracy of information in workflows.
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Benefits of standardizing business processes
There are several benefits of standardization that increase its value for organizations looking to unify the way they run individual processes. Some of the most attractive benefits are:
|overall efficiency||Users can complete processes with as few resources as possible, optimizing the value they derive from them. This leads to an overall reduction in costs, which is a natural consequence of the increased efficiency. Rely on process standardization to helphyper-automationleads to a30% discountin operating costs by 2023.|
|Higher productivity||When companies streamline business processes using best practices, they can significantly increase their productivity. As one of the first steps in implementing Intelligent Process Automation (IPA), standardizing business processes is essential50-60% discountin the uncomplicated turnaround time that IPA allows.|
|Higher customer satisfaction||Another benefit of process standardization is increased customer satisfaction and better customer service. The increased productivity and efficiency of standardization processes, for example, reduces valuable time for customers waiting for medical care. As one of the prerequisites for adopting Robotic Process Automation (RPA), process standardization has impacted the projected expansion of the RPA marketover 7 billion dollarsfor 2025.|
|standard conformity||Businesses in highly regulated areas like finance or healthcare need to comply with a variety of regulations. Breaching the regulations can result in fines of hundreds of thousands, if not millions of dollars, for violations of regulations like GDPR that may apply during the process4%of annual income. Standardizing processes ensures employees are taking the right steps to stay compliant, so organizations aren't hit by these hefty penalties.|
|verifiability||Unternehmen müssen keine Zeit mehr damit verschwenden, herauszufinden, wie sie zu einer Entscheidung gelangt sind oder wie die Daten einer Person verloren gegangen sind. Die Transparenz standardisierter Prozesse eignet sich perfekt für die Prüfung dieser Probleme, um genau zu veranschaulichen, was für eine bestimmte Geschäftsfunktion passiert ist.|
Build a three-tier standardization framework for business processes
You can start standardizing business processes and integrating relevant data sources by following three key steps. This ensures that processes are not only consistent, but also as efficient and beneficial as possible. The three steps include:
This is the starting point from which organizations explore the different ways they can execute processes and decide which will deliver the most value by reducing the time and resources required to achieve goals. For example, if your goal is to reimburse expenses, you must first look for the different ways to achieve that goal.
In order to implement this step, all relevant data sources must be listed, which forms and fields are required and which downstream sources and people are involved in approving and issuing the refund.
It is important to consider duplicate procedures to choose the best one. This move is beneficial because it is comprehensive, considering all possibilities and offering the best of each to maximize productivity.
2.Creation and implementation of standards.
The second step in process standardization is to consistently repeat the process when necessary. It is not enough to simply create standard procedures for specific jobs, such as staff recruitment; You must also ensure that they are carried out. The best way to complete this step is to consolidate each procedure in this process into onethe workflow.
This could include creating an ad for open positions, placing it on popular platforms such as Indeed, checking responses with some sort of automated resume reader, ensuring that qualified candidates are screened by people, asking specific questions, and sending out invitations to Completing job evaluations. The upside of this move is that the automation capabilities of competing workflow solutions are making these processes progressively faster, allowing organizations to optimize their overall value.
3.continuous improvement processes
The final step is evaluating the processes forchanging points, improvements and additions. There are workflow analytics that show how long each step in a process takes and provide insights into how it can be improved. By continually reviewing processes, organizations ensure they remain functional and as useful as possible. For example, it's a good idea to see where aspects of machine learning and artificial intelligence can be used to make customer onboarding a faster process, so you can deliver insurance policies faster than your competitors.
Standardize business practices with Pipefy
Pipefy helps teams increase efficiency and secure and integrate end-to-end operationsLow-CodeWorkflow and BPM platform. Organizations use Pipefy to create and streamline sophisticated business processes and workflows that are repeatable, collaborative, and error-free.
With Pipefy, you can expand your business process catalog to meet the new complexity and securely include suppliers and partners through customizable workflows.
See how Pipefy's low-code BPA software builds better processes through standardizationLearn more
What is business process standardization? ›
Business process standardization refers to creating company-wide standard procedures that improve operational performance, facilitate communication within the company, reduce errors and associated costs, eliminate unneeded work and sustain quality manufacturing operations.What is standardization short answer? ›
Standardization or standardisation is the process of implementing and developing technical standards based on the consensus of different parties that include firms, users, interest groups, standards organizations and governments Standardization can help to maximize compatibility, interoperability, safety, repeatability ...What is the definition of process standardization? ›
Process standardization refers to the organization of different tasks, approaches, and administrative steps in a business, as well as their formalization and documentation. A process consists of input, transformation steps, and output (delivery).What is standardized process and why is it important for business success? ›
A standardized business process is a clearly defined and documented process that remains the same throughout the entire company, regardless of department or team. It might sound easy in theory — just write it down — but in practice, setting up standardized processes throughout your organization is a challenging task.What is an example of process standardization? ›
Process standardization is a set of rules for how to complete a task or series of tasks. This helps those involved in the task to understand the best way to complete it. An example of process standardization is the procedures baristas follow for making lattes in a coffee shop.What is an example of standardization in business? ›
One example of standardization is the Generally Accepted Accounting Principles (GAAP) that companies must follow when preparing or reporting their annual financial statements. They ensure uniformity in how financial reports are prepared and improve the clarity of the financial information presented to the public.Why is process standardization important? ›
Provide a consistent service
If your firm's processes aren't standardized, each of your employees will come up with their own approach to tackling their tasks. This creates inconsistency. Your team is outputting inconsistent work across inconsistent timelines.
An example of process standardization is setting standard operating procedures for filing documents in a company. Employees need to follow a standard template for filling in documents for the company. This way all the details are available in a standard format, making it easy to understand for all employees.What are the four process of standardization? ›
The processes of language standardization are: selection, codification, elaboration of function, and acceptance.What is the most important benefit of standardization? ›
Complying with relevant standards is a way to increase focus and cost-efficiency in activities like R&D and manufacturing. Offering standardized products significantly increases your market potential, since most countries show an interest in the benefits of standardisation.
What is a standardized good example? ›
Examples of standardized products include agricultural products (such as grain and milk), most mined minerals, and fish.What are the different types of standardization process? ›
There are at least four levels of standardization: compatibility, interchangeability, commonality and reference. These standardization processes create compatibility, similarity, measurement, and symbol standards.What is the objective of standardization? ›
Objectives of standardization: To reduce a given line of product to fixed type, size and characteristics. To allow interchangeability of manufactured parts and output among different departments and branches. To maintain quality standards.What are the five principles of the process of standardization? ›
- Due process. Decisions are made with equity and fairness among participants. ...
- Broad consensus. Processes allow for all views to be considered and addressed, such that agreement can be found across a range of interests.
- Transparency. ...
- Balance. ...
- Define standardization goals. ...
- Map activities. ...
- Involve others in this definition phase. ...
- Design new processes. ...
- Incorporate business rules into processes. ...
- Train employees on the new working model. ...
- Review documentation regularly.
Rationalize different varieties of products. Decrease the volume of products in the store and also the manufacturer cost. Improve the management and design. Speed up the management of orders.What are the principles of standardization? ›
Transparency, openness, impartiality, consensus, efficiency, relevance and consistency are key elements for the development of standards, no matter if on a national or international level.What is the importance of process standardization? ›
Standardizing processes tells your staff what needs to be done to produce the right results with minimal resources and in less time. This helps reduce errors and oversights and boosts overall work efficiency.What is the objective of process standardization? ›
The aim of business process standardization is to reduce trial and error and the waste associated with solving problems from scratch. With a singular solution model, it's easy to scale results with certainty and get more done with less resources.What are the three stages of standardization? ›
The formal standardization process has three stages: specification, identification of choices, and acceptance. The specification stage consists of developing a nomenclature and identifying the problems to be addressed.
What are the benefits of system standardization? ›
Standardized technology reduces complexity and offers benefits such as cost savings through economies of scale, ease of integration, improved efficiency, and better IT support. It also simplifies your management of IT.Why standardization and standard work is important? ›
Standardized work creates stability, cuts down on waste, increases uptime and efficiency and can result in more job satisfaction among workers and supervisors. This methodology seeks to define standards for any given type of work or procedure for that type of work.What is the significance of standardizing business processes within an organization? ›
It allows for any process to be performed the same way every time. Business process standardization ensures that processes for things like accounting or regulatory compliance are completed the same way each time and in the most efficient way possible.What strategy is standardization? ›
Standardization refers to a standardized marketing strategy that can be used internationally in different markets. This strategy focuses on high-quality content and brand consistency in every single market. A localization strategy centers on approaching each market at an individual level.