{"id":3521,"date":"2020-09-29T17:04:05","date_gmt":"2020-09-29T17:04:05","guid":{"rendered":"http:\/\/www.rtgsolutionsgroup.com\/?p=3521"},"modified":"2020-10-09T17:15:36","modified_gmt":"2020-10-09T17:15:36","slug":"3-ways-to-measure-impact-of-process-improvement-efforts","status":"publish","type":"post","link":"https:\/\/www.rtgsolutionsgroup.com\/3-ways-to-measure-impact-of-process-improvement-efforts\/","title":{"rendered":"3 Ways to Measure Impact of Process Improvement Efforts"},"content":{"rendered":"
[vc_row][vc_column width=”3\/4″][vc_single_image image=”3528″ img_size=”1110×500″][vc_column_text]Process improvement: it\u2019s one of the most important investments a business can make. But how do you know if your processes have actually improved? How do you know if they\u2019ve just gotten worse? It\u2019s all in the numbers.<\/span><\/p>\n

In this article, we cover why you need to measure process improvements. Next, we share some expert methods to measure the effectiveness of business process changes.<\/span><\/p>\n

Approach to measure process improvement efforts<\/span><\/p>\n

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  1. \n
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    1. PDCA Cycles<\/span><\/strong><\/li>\n
    2. ROI Models<\/span><\/strong><\/li>\n
    3. Needs assessments<\/span><\/strong><\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

      Why You Need to Measure Process Improvement Results<\/strong><\/h4>\n

      Measurable results are an important \u2013 yet often overlooked \u2013 component of any project. Too often, project managers make the mistake of thinking that performance is self-evident. After all, you can just <\/span>tell <\/span><\/i>if something is working or not, right?\u00a0<\/span><\/p>\n

      Not quite.\u00a0<\/span><\/p>\n

      While <\/span>business process changes<\/span><\/a> can certainly be felt through day-to-day experience, the only way to understand efficacy is to measure it.\u00a0<\/span><\/p>\n

      Employee or customer experience is only <\/span>one <\/span><\/i>measure of process improvement. It doesn\u2019t give you the full picture. Only comprehensive data collection can do that.<\/span><\/p>\n

      Let\u2019s consider an example. Suppose your business i<\/span>mplements a new LMS for employee training<\/span><\/a>. And suppose all of the employees love the new system. From the time you launch it, they have nothing but good things to say about the new <\/span>LMS training program<\/span><\/a>.\u00a0<\/span><\/p>\n

      Because you don\u2019t gather any other post-implementation data, you believe the new process is a success!\u00a0<\/span><\/p>\n

      However, weeks later, your quarterly figures tell another story. Sales are down, customer complaints have gone up, and employee errors are unchanged. What happened? How is this possible with such a well-received system?\u00a0<\/span><\/p>\n

      A number of things might have gone wrong. Maybe the <\/span>remote training<\/span><\/a> is easy, fun, and user-friendly. But the modules don\u2019t have the right information. Or maybe the training <\/span>is <\/span><\/i>effective. It just eats up too much of your employees\u2019 time.\u00a0<\/span><\/p>\n

      If data was tracked from the beginning, you could have caught the problem \u2013 and fixed it \u2013 much sooner. But now, you have a much bigger mess on your hands. You don\u2019t just have to figure out what\u2019s wrong with the training system. You have to overhaul a system that\u2019s now become routine, and you have to compensate for weeks of lost productivity and revenue.<\/span><\/p>\n

      If you\u2019ve ever found yourself in a process-improvement conundrum, you\u2019re not alone. Process improvement is a science, and it\u2019s tough to nail. In fact, we wrote a whole article on the <\/span>top 4 missteps leaders make when improving business processes<\/span><\/a>.\u00a0<\/span><\/p>\n

      At RTG Solutions Group, we want to jump-start you on a path to <\/span>continuous learning<\/span><\/a> and improvement. That\u2019s why we\u2019re highlighting another crucial part of process improvement: measuring the results!<\/span><\/p>\n

      As we saw in the example, it\u2019s not enough to just make a change and hope for the best. You want to be proactive with your data-collection plan.\u00a0<\/span><\/p>\n

      Here are three approaches to measure process improvement. <\/span>[\/vc_column_text][vc_custom_heading text=”1. PDCA Cycles” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_column_text]PDCA stands for \u201cPlan, Do, Check, Act.\u201d It\u2019s a four-step process-improvement and project management model that is grounded in data collection. What sets PDCA apart is that it was inspired by the scientific method. Therefore, it mimics scientific inquiry and produces quality results. \"PDCA<\/span><\/p>\n

      First, you <\/span>PLAN<\/b>. In this phase, you identify the problem you want to solve and its plausible causes. You also collect baseline data to use for comparisons later on. Finally, you hypothesize solutions to the problem.\u00a0<\/span><\/p>\n

      In the <\/span>DO<\/b> phase, you implement a possible solution. You also identify which indicators you\u2019re going to measure once your solution is implemented. Finally, once you roll out your solution, you collect data.\u00a0<\/span><\/p>\n

      Now comes the <\/span>CHECK <\/b>phase. Here, you\u2019re looking to figure out the effectiveness of your intervention. In other words \u2013 you\u2019re trying to figure out if your hypothesis was correct or not. To do this, you compare your before-and-after data.<\/span><\/p>\n

      Finally, in the <\/span>ACT<\/b> phase, you <\/span>document<\/span><\/a> your results. Based on your findings from the Check phase, you decide whether your new process will be permanently implemented. If you found, in the Check phase, that the intervention was not effective, return to the Plan phase and start the cycle again! <\/span>[\/vc_column_text][vc_custom_heading text=”2. ROI Models” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_single_image image=”3568″ img_size=”1110×500″][vc_column_text]ROI stands for <\/span>Return on Investment<\/span><\/a>. ROI is a standard measure of performance that is useful for all organizations. Regardless of the process you want to improve, you can create an ROI model to track its efficacy.\u00a0<\/span><\/p>\n

      ROI measurements are used to justify an intervention based on its financial impact. To calculate ROI in its most basic form, you divide the net return of the improvement by the cost of the improvement. Finally, you multiply by 100 to obtain a percentage.\u00a0<\/span><\/p>\n

      If you calculate a positive number, that means your improvement is yielding returns. In this case, the larger the number, the better. If your ROI is a negative number, then the <\/span>process improvement<\/span><\/a> is creating a loss.\u00a0<\/span><\/p>\n

      To sum it up, ROI measurements can tell you whether or not your process improvement effort is profitable. This is a very useful \u201cbottom line\u201d figure, but it won\u2019t necessarily give you the full picture of an improvement\u2019s impact. For this reason, it\u2019s best to compliment a standard ROI with other data.\u00a0<\/span>[\/vc_column_text][vc_custom_heading text=”3. Needs Assessment” font_container=”tag:h3|text_align:left” use_theme_fonts=”yes”][vc_column_text]Needs assessments<\/span><\/a> are a fantastic starting point for any improvement project. They\u2019re a lot of work, but they produce results. Needs assessments map out where your business is, where you want to be, and how you\u2019re going to get there.\u00a0<\/span><\/p>\n

      For this reason, they are very useful for navigating business process improvements. One of the best features of needs assessments is that they lay out a result-measurement plan at the beginning of a project, rather than at the end.\u00a0<\/span><\/p>\n

      There are several priorities for conducting a needs assessment. You want to identify project outcomes, assess current-state processes, create a scope of work, prioritize workflow, develop a project schedule, and more.\u00a0<\/span><\/p>\n

      Importantly, however, in a needs assessment, you also create two data sets. First, you identify Key Performance Indicators (KPIs). A KPI is any metric you use to measure performance. Some examples of KPIs include:<\/span><\/p>\n