What Is Business Process Standardization?

Business process standardization definition

Business process standardization (or process standardization) refers to the creation of processes that are executed the same way each time. Process standardization ensures that processes and workflows deliver consistent results and user experiences.

How business process standardization works

Process standardization works by defining each element or activity of a process. These activities are then placed into a defined sequence. The standardized process is then documented.

For example, the process of issuing customer quotes for auto insurance involves collecting different data and completing several steps. Business process standardization defines how that process will be performed so it’s done the same way, in the same order, each time a customer asks for a quote.

Business process standardization and integration: What’s the difference?

Business process standardization creates order and uniformity within a business process. This provides full accountability for who did what and how, and uncovers any issues that may arise.

Business process integration connects systems, like processes, applications, and software with a business process management platform in order to streamline business operations. 

Together, the two practices connect and consolidate important information within a single place and create a uniform and consistent way of executing process workflows — making for better business process management.

The importance of business process standardization

Process standardization is one of the first steps towards automating processes with approaches like business process automation (BPA) or business process management (BPM). The BPM market is projected to expand to $16 billion by 2026, illustrating how important automating standardized processes is to organizations.

Automating standardized processes is critical for transparency and traceability. It’s also necessary to explain the outcomes of those processes — like why an insurance company may have a certain ruling on a customer’s adjudication. Not surprisingly, the compound annual growth rate for automating standardized processes with BPM is growing at a rate of 10.5% between 2020 and 2025.

Business process standardization is also necessary to keep employees accountable for their actions by giving them set procedures for fulfilling certain tasks in workflows. Without standardization, employees could complete tasks however they want to, which introduces risk and potentially compromises the accuracy of the information in workflows.

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Benefits of business process standardization

There are several benefits of standardization that increase its value for companies looking to unify how they perform individual processes. Some of the more enticing benefits include:

Overall efficiencyUsers can complete processes with as few resources as possible while optimizing the value they get from them. This leads to overall cost reduction, which is the natural output of increased efficiency. Relying on process standardization to support hyperautomation will lead to a 30% reduction in operational costs by 2023.
Higher productivityWhen organizations optimize business processes using best practices, they can substantially increase their productivity. As one of the initial steps in implementing Intelligent Process Automation (IPA), business process standardization is instrumental in the 50-60% reduction in straight-through process time IPA facilitates.
Greater customer satisfactionAnother benefit of process standardization is increased customer satisfaction and better customer service. The increased productivity and efficiency of standardizing processes reduces the valuable time for customers waiting to be seen by doctors, for example. As one of the requisites for using Robotic Process Automation (RPA), process standardization was influential in the RPA market’s projected expansion to over $7 billion by 2025.
Regulatory complianceBusinesses in highly regulated areas like finance or healthcare have numerous regulations with which they must comply. Being out of compliance could potentially result in penalties of hundreds of thousands, if not millions of dollars, for violating regulations like GDPR, which is enforceable for as much as 4% of annual revenues. Standardizing processes ensures employees are following the right steps to remain compliant so companies don’t get hit with these steep penalties.
AuditabilityOrganizations no longer have to waste time trying to figure out how they arrived at a decision or how someone’s data was lost. The transparency of standardized processes is perfect for auditing these issues to illustrate exactly what happened for a specific business function.

Build a business process standardization framework in 3 steps

You can begin business process standardization and integration of relevant data sources by following three key steps. These ensure processes are not only uniform but also as efficient and beneficial as possible. The three steps include: 

1. Analyzing processes

This is the starting point in which organizations explore the different ways they can do processes and decide which delivers the most value while reducing the time and resources required to achieve goals. For example, if your goal is to reimburse expenses, it’s first necessary to seek out the different variations for meeting this objective.

Implementing this step requires listing all the relevant data sources, what forms and fields they’re needed for, and what downstream sources and people are involved for approval and issuing reimbursement.

It’s important to consider any duplicate procedures to select the best one. This step is beneficial because it’s exhaustive, takes into account all possibilities, and provides the best of each of them to maximize productivity

2. Creating and implementing standards

The second step for process standardization is to uniformly repeat the process every time it’s required. It’s not enough to simply create standard procedures for certain jobs like recruiting employees; you also must ensure they’re carried out. The best way to complete this step is by putting the individual procedures in this process into a workflow.

This might involve creating an advertisement for open positions, placing it on widely used platforms like Indeed, vetting responses with some sort of automated resume reader, ensuring the proper people review qualified candidates, and extending invitations for them to fill out employment assessments or engage in interviews. The benefit of this step is that the automation capabilities of competitive workflow solutions streamline and expedite these processes, so organizations can optimize their overall usefulness. 

3. Continuously improving processes

The final step is to evaluate processes for points of change, improvement, and additions. There is workflow analytics to reveal how long each step in a process takes, revealing insights about how to make it better. By continuously analyzing processes organizations ensure they remain viable and as helpful as possible. For instance, it’s a good idea to see where to use aspects of machine learning and artificial intelligence to make customer onboarding a quicker process so you can deliver insurance policies faster than your competitors can.

Standardize business practices with Pipefy

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With Pipefy, you can grow your catalog of business processes to meet new complexity, safely involving vendors and partners through customizable workflows.

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