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Process Profanity: Why your process is no big deal until you realize how much it actually costs

October 30, 2015

Process Profanity:  I’ve seen it quite a bit in my experience, and more importantly it never ceases to amaze me the costs associated with certain processes.  By definition, a process is a series of steps to start and finish something, usually to get a repeatable and desirable outcome.  You’ve probably heard the mumblings from your team such as “Can you assist?”, or CYA;   “Let me acknowledge obscurity”, known as “LMAO”; or the infamous “Why this function?” also known as “WTF?”

 

Processes are generally well intended when first developed, but there are associated costs that often go overlooked.  Take for example the process of doing something in a spread sheet to get to a summary for a report.  I had the privilege to witness a process that took multiple spreadsheets from multiple people, cut and paste that data into a table in a small database, cut and paste queries to sort and search the data, then spit out a new spreadsheet.  This process took one person approximately 40 hours a month.  Over a year, that comes out to about 480 hours.  Now, you may believe this is an important function assisting an obscure end result (You saw what I just did there?)  It very well may be, but if you apply a cost to that process and then factor in the benefit, you will know what the true value of the process is.  Understanding the true cost of the process gives you the input to make an informed decision if maybe training needs to occur elsewhere to minimize all the different data coming in, the real value of the report generated and options to get the data elsewhere, or simply kill the process entirely.

 

Going back to our example, let’s say the cost for that one person, including burden rate with being an employee is $125 and hour.  This number represents all the costs for that employee.  Multiply the hourly rate times the monthly number of hours, then by 12 months for the year; you get a functional process costing you $60,000.  Now it makes sense why you may ask “Why this function?”, or “WTF?”

 

Just because you do not understand a reason behind a process doesn’t make it valuable or not.  Some processes, such as maintaining brand image, are difficult to calculate the overall value as it is subjective.  Travel back in time with me to the folks at the pyramids.  I would be interested to see what some of the discussion points were around going with the triangular pyramids or 2-story square boxes.  I’d also be willing to bet that someone controlling the budget said “It’s good enough” when asked about the value of going with the boxes over implementing a process to ensure the pyramids were perfectly formed.  That person probably woke up with the beetles the next morning.  Processes that are difficult to put an accurate value on fall into “Let me acknowledge obscurity”, or “LMAO” category.  However, don’t under estimate the power of these types of process.  Would the pyramids still strike awe in people today as they did a few thousand years ago if they were 2 story square boxes?  Maybe not so much.

 

Some processes are designed to assist others.  These types of process pretty much go from one extreme as being extremely valuable and could save lives, such as surgical procedures, to the other extreme of not being missed or even noticed if they were no longer in use.  One of several ways to ensure your process adds value is by determining the cost of the process, or running the process, against the benefits.  Again, some processes have a high value by their inherent design with safety in mind.  It’s the processes that expose a root cause, such as additional training needs, capturing data such as plan estimate hours against actual hours or doing QC checks.  All these processes add value, but the cost vs the benefit needs to be re-examined periodically. 

I was working with a client where several emails were going out based on a template with specific data for each group of recipients.  The entire process would take anywhere between 15-30 minutes to research and craft each message across a couple of dozen recipient groups.  This was done weekly.  So assuming the same burden rate we used previously, $125/hour, we can multiply the effort of the approximate average of 20 minutes against the couple of dozen groups, 24 groups each week for one year.  By this formula, the employee will average 3 groups an hour, and go for 8 hours per week to cover the 24 groups.  The process of assisting others via “Can You Assist”, or “CYA”, costs your company approximately $52,000 annually.

 

You now have enough information to determine the cost of the process to assist someone, and then determine if you want to do a deep dive to identify other options such as training needs, different tools or simply one email telling your group of data submitters to proofread what they are sending you instead of having a process reminding them to do so. 

 

While many processes add value, be aware of the Process Profanity.  Be mindful of the actual value on a process as well as the expected benefit.  When in doubt of what a process is meant to achieve, ask questions.  Most companies like to streamline processes to eliminate confusion, minimize costs and ensure people understand the “Why” behind something.

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