Business Process Improvement – Estimating the Cost of a Business Process
To measure any accomplishment, you need to know where you started. Whether you want to lose weight or run a marathon, you need to establish a baseline to know how much you have improved. How much do you weigh today, or how quickly do you run a marathon today? In BPI work, to establish an improvement target, you first need to know how long a process takes and what it costs.
After you draw a process map, you understand the activities involved and you can estimate how much time is required to complete each step, known as the process time. You often hear two types of time related to BPI:
- Process time is the time required to complete a single activity.
- Cycle time is the time required to complete an entire process, from its first to its last step. You may also hear this referred to as elapsed time.