The SWOT Analysis Helps Improve a Business Process
Good business processes are essential to be competitive. The current digital economy requires us to re-design and to improve our processes with agility and focus on how our organization can reach strategic objectives. Indeed, success in improving a process is to ensure that any invested money will produce an advantage and help achieve corporate Key Business Objectives.
Originated by Albert S. Humphrey in the 1960s, the technique of SWOT (an acronym for Strengths, Weaknesses, Opportunities and Threats) is usually used as part of a strategic planning process in business context. The aim of this article is to provide a method to design a one page report to analyze a business process using the SWOT analysis. My contribution is to apply it as a good approach to analyze a business process as we can study the “AS-IS” (the current state) and the “TO-BE” (the future state) process in order to decide the priorities to improve it. This analysis has to be implemented with the current performance of the business process, the clear strategic corporate objectives and the feedback of the stakeholders and customers.
How it works
The methodology consists of identifying the relevant strengths and the weaknesses related to the “AS-IS” process, and the opportunities and the threats related to the “TO-BE” process. The result will be a one page SWOT analysis of the business process, where you will find all the details to facilitate key decision making. You should have modeled the business process using BPMN (Business Process Model & Notation) and you need to have current relevant data about the process (KPIs – Key Performance Indicators). The four quadrants of the SWOT matrix examine the following:
1. About the “AS-IS” business process model:
Strengths:
What are the best current outputs of the business process as aligned to strategic objectives, and what are the benefits of the process? The usual KPIs are based on the following four fundamental metrics:
- Time: which measures the duration of a process
- Cost: which measures the economic value associated with a process, in terms of the resource cost required to complete the process, and the opportunity cost, which is the value that is lost if a resultant output is not obtained
- Capacity: the viable volume that a process can produce
- Quality: satisfaction, variation and the error or defect rate
Weaknesses:
What are the current disadvantages of the business process in terms of faults, inefficiencies, problems…? Apply methods for continuous process improvement like the Theory of Constraints (to detect restrictions or bottlenecks). Six Sigma and Lean also eliminate everything that does not contribute value to the productive process.
2. About the “TO-BE” business process model:
Opportunities:
How to improve the business process? Get feedback and suggestions from stakeholders and customers. Study the weaknesses to evaluate what corrective actions to apply. Analyze what automation could be done. (e.g. RPA – Robotic Process Automation, to automate repetitive and routine tasks that can be solved without a human). You can also examine what disruptive technologies could be applied (e.g. Machine Learning).
Threats:
What uncertainty and obstacles do I have to control? What events could trouble the business process? Risk Management requires you to control the uncertainty of a business process. You need to study the current patterns, trends, and dependencies. Then you can evaluate how these will impact your business and how to be proactive and not reactive.
Once you have completed the four quadrants in your One Page SWOT Analysis, use the technique of Process Simulation. This enables you to detect the possible behavior of the process if you apply the opportunities to improve it. Therefore, you can decide what business process improvements to implement. How and when, according to your priorities, criteria, strategic objectives and budget. Improve processes when you need to solve problems that can damage the success of your strategic business objectives.