Business Process Audit: A Guide to Prepare, Analyze, and Act on Results

• BPM

Do you ever wonder why some basic business processes in your company are never fast and smooth? Particularly the processes that happen frequently like purchase requests, employee onboarding, access requests, etc. There is always a basic level of confusion and mismanagement in these processes. 

One of the most common reasons for inefficient processes is the failure to examine and streamline them. Once the documentation for a process is done, department heads and employees tend to leave the process unattended. Unless there is something seriously wrong with a process, attempts to improve it are never made.

Processes form the core of any business. You always want your core to operate at high efficiency to enable quick processing and make faster leaps towards your goals. To keep your processes at peak efficiency, you have to audit them regularly.

What is a business process audit?

The term ‘audit process’ may sound synonymous to ‘business process audit’, but they are different.

An audit process is a series of steps followed to perform audits on any compliance certifications or SOPs. It can mean any audit like GDPR, SOX, ISO, annual financial audits, etc. Each of them has their own unique series of steps. Specially trained auditors or legal teams are the only people who are capable and authorized to do it.

A business process audit is a series of steps to follow when auditing and analyzing a business process in an organization. Unlike certification standards, most business processes follow a common method of function. Any employee who understands and has access to the entire process can conduct a process audit.

Three steps of a business process audit

Any business process can be audited in three steps.

1. Prepare the data

Choose an appropriate time frame that gives enough sample data. You don’t fix faulty processes by auditing them frequently. You choose the right time frame that gives meaningful data to work with. Only when the sample data tells you something, you can take action. It may be a quarter or a month depending on the number of requests.

Metrics and KPIs to measure

  • Average cycle time
  • Number of errors and reworks
  • List of the most common errors
  • Steps that have the highest processing time
  • Number of in-progress, unattended, and lost requests
  • The ratio of approved to rejected requests 

Apart from the above quantitative data, you can also collect qualitative data by taking feedback from individual stakeholders in the process. The employees working closely with the process hold a lot of information. 

Be sure to have all the above information in place before you jump into the next step. You may need to piece data together to identify areas of improvement.

2. Analyze the process

Average cycle time gives a rough idea of how fast and efficient the process functions. You can get an overall idea of how every step is working together, but not anything actionable. If the cycle time is low, the process is in good health. If it is high, something can be done to bring it down. You need to dig deeper and find out.

Errors are the most important metric of a business process. See where the frequency of errors is high. It may be due to manual entries or wrong interpretations. If it is a system-based error, correct the software tool. If it is a human error, train the employees responsible for that particular task.

All steps should have the lowest processing time possible. Automation using business rules engines helps reduce processing time. Instead of relying on manual decisions, you can automate routing of requests to the right person using rule-based workflows.

At any point in time, lost and unattended requests should ideally be zero. If requests are lost, it is due to poor tracking. Invest in a BPM tool that can handle requests with ease. If requests remain unattended, it is mostly due to delays in decision making that are a result of improper documentation. 

The number of in-progress requests should be a number that all stakeholders can handle easily. If it is too high, you may need extra help or figure out a way to bring down the number of requests. If the approvals are fairly simple with quick decisions, this is not an issue.

If the ratio of approved to rejected requests is too high, it means requests are almost always approved. It is an opportunity to reduce the number of steps/requests by relaxing the conditions of approval. Automate approvals and inform the stakeholders with automated email notifications once a request is fulfilled.

3. Make changes to the process

When you make considerable changes in the process, make sure everyone is informed about what is changing and why. Everyone should know the reasons behind process changes to avoid errors in the future.

Introduce changes in small iterations. Deploy the new process for a short time and see how it performs. Address new challenges if there are any. Once everyone is comfortable and understands the new process, deploy it full time.

Tip: Keep a record of all audits and changes conducted. It can help identify patterns in the process over long periods to make better decisions and plan for the future.

Easier process audits

In some organizations, processes reside in multiple software tools and papers. Most commonly, emails, spreadsheets, and project boards. Gathering data for an audit from different tools is a lot of mind-numbing manual work. It also invites errors and might skew the reports of the audit.

Kissflow Process is a BPM tool that can handle any number of requests with complex approval conditions easily. You can build and automate any approval process on Kissflow with drag-and-drop form builders and logic-based workflow routing. 

Process audits are easier in Kissflow Process with readily available reports that have in-depth details about the process. You can audit all processes in your organization with a tap of a button. Take a free trial and see what you can do with Kissflow Process.