What are Internal Processes? + How to Improve Them

By: Ronan McQuillan

Feb 9, 2023 | 47 minutes read

Internal processes are the basic building blocks of pretty much everything your business does.

Every company has thousands of internal processes, whether they know it or not.

These could be anything from how employees book time off to how your engineering department develops and ships new product features.

No matter what kind of process we’re talking about, however, it pays to get things right.

Ineffective, inconsistent, or undocumented processes are the enemy of efficiency. If you want to run a sleek, profitable, competitive business, your internal processes are the clear place to start.

Today, we’re covering everything you need to know.

Our particular focus is going to be making your colleagues’ daily lives as productive, efficient, and cost-effective as possible.

That’s what internal process improvement is all about.

Along the way, we’ll cover the theory behind effective processes, all the way up to the specific steps you can follow to transform your ops and the tech you can use to implement these ideas in the field.

But first, let’s get the basics down.

What is an internal process?

An internal process is any set of steps that are followed to complete a particular task within your organization. That last part is crucial. We can distinguish an internal process by the fact that it doesn’t involve external stakeholders, like customers, clients, or vendors.

Like any process, we’re also only really concerned with tasks that are carried out regularly - or at least, semi-regularly. So, we wouldn’t really consider the steps behind a task a process if they were only ever followed once.

Rather, we can only call something a process if (more or less) the same steps are carried out to reach (more or less) the same goal every time.

Still - that’s not to say that our employees always know that they’re following a process. This might seem a little counterintuitive but stick with us.

To understand what’s going on, we need to know the difference between formal and informal processes.

Formal processes

A formal internal process is one that’s codified, documented, and/or prescribed from above. Often - though not always - this has been explicitly designed with the intention of being the most efficient way to do the task in question.

There are myriad important reasons to formalize internal processes.

The central benefit is simple. When everyone has a shared understanding of how things are meant to be done, we can reliably scale the relevant process - without compromising accuracy, consistency, or any other important quality metrics.

Informal processes

On the flip side, we have informal processes.

This is any set of steps that your team follows in practice - without it necessarily being the official way of doing things. So, there might not be an official process - or else, there is, but employees prefer their own way of doing things.

Informal processes aren’t necessarily a bad thing. We don’t need an official handbook for every little activity. Some types of tasks suit a more flexible or case-by-case approach - for example, many creative processes.

However, these are more of an exception than a rule. For most tasks, we need standardization to ensure that we can achieve sufficient accuracy, consistency, and quality of outcomes.

6 types of internal processes

So what kinds of tasks are we talking about when we discuss internal processes? As we said a second ago, the possibilities are nearly endless - it ultimately depends on your particular business.

For all we know, your internal processes could concern building satellite defense systems - or you could be thinking about how you approve expense reports.

What we’re getting at is that it’s more useful if we can categorize and characterize the different types of internal processes that we need to know about - rather than trying to list every single task you might deal with internally.

This is harder than you might think.

Remember, we’re talking about any task that doesn’t involve stakeholder or client engagement. We need a highly zoomed-out taxonomy that can be applied to any department or team.

With that in mind, here are the six core groupings we can divide internal processes into.

Operational processes

Operational processes are the kinds of tasks that involve managing resources - whether these are information, raw materials, money, time, or any other resource that’s required to deliver your business’ product or service offering.

So, these are generally at the core of how your business operates - as you may have guessed from the name.

Examples could include anything from product assembly processes to code reviews, logistics, fulfillment, or service delivery - depending on what your business does.

In any case, the key thing is that efficiency, consistency, and reliability within operational processes are critical to your business’ wider profitability - so when we make changes, these are usually the things we’ll prioritize.

Administrative processes

Administrative processes should be pretty self-explanatory - they’re admin tasks. Most of the time, these can be expressed as discrete data management actions.

What do we mean here?

Most admin tasks simply involve applying a defined action to a data object in response to a given event. In other words, there’s a row in a database somewhere that we perform a defined action on when a particular condition is met.

We create a new entry when an order is made. We change its status attribute as it progresses towards completion. Etcetera, etcetera.

Or, in a service business we might require employees to fill out time sheets so we know how much a project is costing us:

Employee timesheet screengrab

These aren’t the core of what your business does. Rather, they’re necessary for facilitating your core operations. You don’t make money from managing database entries - you do it from making sales and delivering for clients.

As such, the important thing is to minimize the time and resources required to complete these kinds of internal processes.

Customer management processes

We said earlier that internal processes are tasks that don’t require external inputs. Still, there are plenty of tasks that fit this description but still concern external stakeholders - even if the people in question don’t know about them.

We can think of these as customer management processes - or vendor/stakeholder/partner/investor management processes, as the case may be.

In terms of the actual actions involved, these can often look a lot like admin processes. For example, if all that needs to be done is for a customer to have their CRM entry updated. The difference, of course, is the goal.

So, whereas admin processes are purely concerned with efficiency and cost-effectiveness, customer-facing processes also concern experiences. For instance, trying to ensure that each interaction with a particular customer flows seamlessly from the next.

Social processes

Social processes are typically a bit trickier to formalize. These are tasks that primarily involve interactions between colleagues - ranging from off-the-cuff conversations to highly choreographed town-hall meetings.

Therefore, formalization wouldn’t necessarily be a good thing.

It would be crazy to think we could predict and pre-plan every conversation that any employee might have.

While we may want to formalize some social processes - like employee onboarding - for the most part, we’re really only trying to facilitate communications.

For example, by providing employees with streamlined communications, collaboration, and information-sharing platforms.

Innovation processes

Similarly, innovation processes might not necessarily benefit from excessive standardization. Indeed, it’s easy to see how this could actually stifle innovation. For instance, if we’re dealing with tasks like research, new product development, or other kinds of innovation.

Instead, we may opt to give colleagues a large amount of autonomy here but still formalize some related workflows - like those concerning how they document and share their learning.

Innovation processes also bring along some unique challenges.

For one thing, it can be hard to establish the value provided by any given task here. For example, not every research spike will pay off - so it’s not as if we can set employees goals around the number of good ideas they come up with in a given period of time.

As such, we’ll need to think hard about the kinds of measures we want to put in place to monitor how effectively our resources are being used with innovation processes.

Regulatory processes

Finally, we have regulatory processes. Again, the name is a dead giveaway here. These are the kind of internal tasks we need to perform in order to comply with various regulatory requirements.

This includes, but is not limited to things like auditing, analyses, contract negotiation, and vetting tasks - along with any actions that need to be taken following on from these.

Here, standardization is paramount. For regulatory processes, we must ensure that no stone is left unturned. On the one hand, we want to know that every aspect of whatever we’re trying to maintain compliance around is accounted for.

On the other, we want to ensure accountability if something does go wrong.

Why do internal processes matter?

Now that we have a firm grasp of what internal processes are and what they look like in practice, it’s worth taking a step back and thinking more deeply about why we should care.

So what can we achieve by actively focusing on our internal processes?

To answer this question, let’s dive into some of the concrete business benefits that come along with more effective internal process management.

Cost-reduction

First of all, there’s the small matter of money. Everything that goes on inside your business has an associated cost. Internal process improvement helps us to rationalize how we use our resources.

This occurs at a couple of distinct levels. First, we can reduce the resources required to go ahead with any given process, through automation, optimization, and reengineering.

Second, internal process improvement helps to develop the monitoring and oversight capabilities we need to ensure that allocated resources are used effectively. We’ll return to this in more concrete terms a little bit later on.

In sum, when our internal processes are working effectively, we are much better positioned to make the most of our resources - both in terms of how we allocate them and whether we actually use them to the best effect.

Internal Process Data

(McKinsey )

Speed

Getting your internal processes right will also minimize lead times, delays, and other time-based inefficiencies. In other words, when your processes are strong, your team gets things done faster.

Again, this can play out in a few different ways in practice.

Simply clarifying expectations around how particular tasks are supposed to be carried out can have a huge impact on how productively your employees work. Just think about all the time they’d otherwise waste asking questions.

Reflecting on our internal processes also gives us the opportunity to assess their constituent steps - with a particular view to determining what’s actually required and what might be redundant.

Or, we might use digital transformation to improve the time-to-completion of internal processes. For instance, eliminating the need for manual admin tasks using automation.

Accuracy, quality, and consistency

Then we have the outcomes that internal processes produce. It doesn’t matter what kind of process you’re dealing with. There’s always some defined outcome that we’re trying to achieve.

The important thing isn’t being able to do this once - it’s consistently doing it to the required standard. This is where things get a bit messier. Simply put, what we’re actually worried about will vary massively from process to process.

In most cases though, we can either think about this as quality or accuracy.

For example, quality could refer to the actual construction of a physical product. Accuracy might be the incidence of errors in a data entry workflow.

Training

Robust internal processes are an effective way to reduce training burdens - for existing colleagues and new hires alike. The principle at work here is fairly intuitive.

When we have a clear set of steps for carrying out any given task, it will obviously be much easier to onboard new team members. Likewise, the less the task at hand deviates from an established pattern - the simpler relevant training will be.

Naturally, this brings along cost reductions of its own.

There’s also a big overlap here with some of the other ideas we looked at a few seconds ago. So, when we have a clearly defined method for carrying out a task, training staff will be much simpler, and we’ll therefore end up with more consistent results.

Employee satisfaction

Finally, the better your internal processes are, the happier your employees will be. This might sound silly, but there are several concrete links between internal process management and staff morale.

Think about how stressful it is when you don’t know how to do something. As we saw a second ago, process management leads to clear, unambiguous expectations around how tasks should be performed.

Besides this, many of the specific improvements we’ll explore in the next section will also have a massive impact on morale. Chief among these is the fact that removing boring, repetitive, or menial tasks from employees frees them up for more satisfying work.

For instance, by automating basic paperwork tasks, our team can spend more time on their more challenging, creative, or cognate responsibilities.

Process improvement strategies

Now we have a clear picture of what internal processes are and the role that they play. It’s time to think about the different levers we can pull to optimize and improve repeated tasks.

As you might have guessed already, this is a pretty big topic.

Except for cases where there’s a single glaringly obvious problem, we can expect to have paths forward.

Let’s take a look at some of the most effective strategies for getting the most out of internal processes.

Formalizing and documenting internal processes

The first thing we should do with any internal task is document how it’s done - even if our intention isn’t to prescribe this as the official way to do it. Knowing how things currently function is the first step toward formalization.

Once we’ve documented the existing method, we might roll it out in its current form - ensuring that colleagues are consistently using it. Alternatively, we may use this as a basis for analysis and improvement - or simply throw it out and start again.

The point is that we won’t know which of these is the right move until we get it down on paper.

We’ll go into more depth about how to do this in practice when we come to creating your own internal process improvement strategy.

Redesigning internal processes

Next, we have changes to the process itself. So, we said earlier that an internal process is a set of steps that our team follows to complete a specific task. Redesigning the process means changing these steps.

Broadly speaking, this could take a few different forms. Obviously, we could add or remove steps entirely. We could also change what’s required within a given step. Or, we might change how they’re structured or who is responsible for different elements of the process.

Generally speaking, these are the kinds of interventions that we want to explore first.

These are the fundamentals of any process. When we get these right, we can often achieve our desired outcomes without needing additional investment or resourcing. If we use other interventions without good fundamentals, we risk just papering over the cracks.

Self-service UIs and internal tools

These are some of the most basic types of digital transformation. The central idea here is that moving to dedicated tools for internal processes instead of generic back-office platforms will greatly improve efficiency, particularly as we scale.

Self-service UIs are tools that allow users to make requests or carry out specific admin actions without the need for going through a centralized point of contact. For instance, if we used a form UI to allow colleagues to submit feedback without contacting HR directly.

Technically speaking, these are typically very simple solutions, but they can have an outsized impact on your internal processes.

In a similar vein, we have what are known as internal tools. As you might have gathered from the name, these are built with the express purpose of handling a particular internal task - like approval requests or event logging.

Often, these replace generic tools like spreadsheets - or even email chains. Check out our in-depth guide on internal tools to learn more.

Automation

Automation has a huge role to play when it comes to improving internal processes, of course. However, like we said a second ago, we can’t jump straight to this. There’s no sense in automating a bad process.

There are also several different kinds of automation that we can turn to.

For most internal processes, relatively simple solutions will go a long way. So, rather than sophisticated machine learning tools, we’ll often rely on business rules engines, platform integration, and basic trigger/action pairs.

We’ll explore this a bit more granularly when we think about the tools we might leverage to improve our internal processes.

Internal processes and automation

(McKinsey )

Roles, responsibilities, and delegation

This is a slightly less exciting type of strategy - altering how responsibilities are divided up amongst our team. You wouldn’t be alone in underestimating the potential impact here - but that doesn’t make it any less of a mistake.

We can think about this at a couple of different levels.

Firstly, there are the relative workloads of different colleagues and teams. So, shifting responsibilities away from overworked employees, towards their colleagues who are under capacity.

Another is the relative costs of different employees’ and teams’ time.

For example, if your developers are burdened with basic data entry tasks that other colleagues could just as easily take care of, it’s pretty obvious how that situation could be improved.

Training, communication, and information-sharing

In some scenarios, our internal process optimization strategy could be based largely around improving training and communications. Say, if you already had robust, effective processes - but your team didn’t understand what they were.

In this case, rolling out better training and information-sharing initiatives would go a long way.

There are actually two things to keep in mind here. The first, and more obvious, is training colleagues on how to carry out the actual process in question.

Less obviously though, we also have the matter of why they need to do it this way. When team members understand the rationale behind our internal processes, they’re more likely to actually adhere to them. We’ll return to this idea a little later.

Resourcing changes

Finally, we might adjust the resources allocated to a particular internal process. This is pretty self-explanatory but it still bears exploration. For one thing, we could easily be talking about several different kinds of resources.

These might be finances, talent, materials, time, or any other kind of resources.

Similarly, we might decide that, in order to improve our internal processes, we need to increase, reduce, or redirect any combination of these.

Remember, the best internal processes are the ones that make the most effective use of the resources allocated to them. Therefore, one of the most important things we can do is take steps to ensure that common tasks are appropriately resourced.

How to improve internal processes in 8 steps

Now we have a better understanding of the kinds of interventions that you might apply to internal processes, we need a working framework to tie it all together. You see, it’s one thing to list off the kinds of things we can do to improve our processes.

It’s quite another to create a plan that puts these into action.

What we need next is a step-by-step approach that we can apply to any internal process - from identifying targets and setting goals to analyzing success, coming up with a plan of action, and eventually implementing and monitoring your success.

Let’s start from the start.

1. Choosing a target process

The first thing we need to do is choose a process to focus on. Sometimes, this could be pretty self-explanatory. For instance, you might have come to this article today because there’s a specific internal task you’re having trouble with.

Alternatively, you might have a more endemic, widespread problem with ineffective, undocumented, or inconsistent processes.

In the latter case, you’ll need to figure out what to prioritize - even if you ultimately want to sort them all out.

You have a couple of different options for how you might go about this. The first is starting small. That is, attacking the smaller but relatively self-contained inefficiencies and gradually freeing up resources to help you deal with the larger more complex problems.

Or, you could do the opposite. That is, we can begin by going after the internal processes that we’ll see the most value in improving.

This might be a particular area of your business with a known problem, or it might simply be one of the most widespread, large-scale tasks your team carries out.

2. Setting high-level goals

With a particular process selected, we’ll next need to decide what it is we actually want to achieve. We’ve touched on this to some extent already when we talked about the reasons why you’d want to pay attention to your internal processes in the first place.

Again, we might have an idea of what our goals will be already. Even so, it’s worthwhile reflecting on what you want to achieve before you go any further.

Cast your mind back to some of the ideas we thought about earlier.

We’ll flesh our goals out into more specific targets a little bit later, but for now, we want to get a picture of what we’re trying to improve - whether this is efficiency, accuracy, consistency, cost-effectiveness, or something else.

Of course, we can reevaluate these as we get new information, but it’s still crucial to have a coherent point of departure.

3. Documentation

Next, we want to descriptively document how our process works in its current form. The analytical work will come later, for now we just want an accurate picture of what actually happens within our internal processes in the real world.

In practical terms, we need to know each constituent action, who carries it out, what’s involved, and when and why it happens. This final part is the most important.

Documenting the constituent steps that make up a process is easy. The thing that is more likely to trip you up is documenting the logic that underpins these.

We can point to a few basic types of logic that can govern the structure of internal processes. Broadly, we’ll be dealing with some combination of the following:

  • Success/failure criteria - Whether or not a step has been completed successfully and the task can progress.
  • Branching logic - If/then rules that determine which step to go to next based on defined criteria.
  • Looping logic - Conditions that govern whether a particular step or action should be repeated.
  • Escalation rules - Situations where issues need to be raised with a higher authority.

We can apply the same ideas to constituent steps within an internal process.

On top of all of this, we need to document the current state of our processes’ roles and responsibilities. Sometimes, this is already well-defined. In other cases, things are quite a bit messier.

So we might know that someone needs to do XYZ, without having a firm stance on who or why. If that’s the case, then that’s what we should document - we’ll worry about how to improve on it a little later.

4. Process analysis and defining specific goals

Once we’ve got our existing process thoroughly documented, we can start to think more analytically. Our next challenge is assessing how effective our present process is, as well as thinking about how it could perform better.

The more detailed the documentation we created in the previous step, the better. We also need to circle back to our overarching goal here. By the end of our analysis, we’ll have fleshed this out into more specific, measurable targets.

Analysis requires us to assess how we’re stacking up against whatever goal we have in mind. So, if we’re trying to reduce what a particular internal task costs us, we’ll need to measure all of the costs associated with each constituent step.

What we’re trying to do is quantify what’s working and what isn’t - with the more specific goal of identifying opportunities to improve.

We’ll deal with deciding on specific interventions in a second. For now, the idea is to decide the extent to which we think we can improve. For instance - by aggregating all of the extraneous costs, time usage, or incidents.

Then we can calculate what proportion of the bigger picture is accounted for by these, and use this as the basis for setting SMART goals for our internal process improvements.

5. Non-technical interventions

Now, we’ve got hard figures for what we want to achieve. It’s time to put a plan together for how we’re going to make it a reality. As we alluded to earlier, it’s vital to get things in the right order here.

Again, we need to start by getting the process itself right - whether this means a wholesale redesign or simple changes, like altering its internal roles and responsibilities.

But how do we decide which non-technical interventions are right for us? Often, the best option is taking an inductive approach. So, we can return to our analysis and start thinking about why particular aspects of our internal processes perform the way they do.

For example, a particular decision point might take an excessive amount of time purely because we ask too many people for their input. An easy process-level change would therefore be reducing this to what’s strictly necessary.

Similarly, if we knew that a particular step cost us an outsize amount, but didn’t really provide any actual value, we might consider eliminating it completely.

Or, we might alter the governing logic so that it only occurs in situations where it will provide value.

By the end of this stage, we should have identified and mapped out any process-level changes that we want to implement. The result will be that we have an improved, more efficient process model, at least in the abstract.

The next step is to think about the technical interventions we can use to make the most of this.

6. Technical interventions

Technical interventions are arguably the more exciting part of internal process improvement, but we should stress again that they must come after the non-technical interventions. We don’t want to throw money at processes with bad fundamentals.

We saw some of the most common kinds of technical strategies we can leverage a little bit earlier, including creating internal tools, self-service UIs, and automated solutions.

However, the question of deciding on the right technical interventions is much more complex than with their non-technical counterparts.

For sure, we have quite a few more concerns to balance anyway.

The most obvious distinction here is that technical interventions are generally going to be more expensive. We don’t necessarily need to pay anyone to redesign an approval workflow, but a new application to automate it would come with either a license or a development cost.

Therefore, we have a far greater impetus to achieve cost-effectiveness. Basically, the stakes are higher - we have a greater risk of wasting our money.

Besides this, we’re also more likely to encounter issues with dependencies, compatibility, extra training needs, scope creep, and project spillover with digital solutions. So, in digitalizing one process, we might find that we need to invest in solutions for other related processes.

And we quickly find ourselves with snowballing costs.

So what do we do here? Obviously, we can’t give a complete account of everything you need to know about IT procurement. But - we can point to some important rules of thumb and best practices to help safeguard your ROI.

Most of all, it’s important to prioritize agility in any process transformation project. It’s normal that new requirements or unforeseen issues will arise as a project progresses - at least to some extent.

So, what’s important is how we manage this. If we indiscriminately actioned every change request, our project scope would quickly get away from us. On the flip side, if we stick religiously to the original spec, we might not deliver a solution that offers any real value.

The key, therefore, is to take a balanced, case-by-case approach, while prioritizing real-world business value for end users.

7. Implementation

Once we know the exact mix of interventions we’re going to leverage in our new internal process strategy, it’s time to put it all into action. This is what’s known as the implementation stage.

Of course, the problem is that this could mean a huge array of different things in practice - any action you might have chosen in the previous step will come along with its own unique implementation hurdles.

But are there any broad lessons we can learn here?

When we really zoom out, we can essentially break implementation into three categories:

  1. Procurement - This is when we need to source a new tool or some other resource in order to bring our changes to life.
  2. Policy - Policy changes are when we alter the process itself, including any rules governing it.
  3. Training - Training simply means making sure that your team has a clear picture of how your internal processes work and why they must follow certain procedures.

Again, there’s huge scope for variation within each of these.

Take procurement. Chances are that if we opt for an off-the-shelf solution, there might be dozens of options, each with its own tradeoffs. We’ll also need to deal with the operational side of dealing with the relevant vendors, including any internal vetting policies.

For policy-level changes to our internal processes, we’ll actually need to account for a broader range of challenges than you might expect. One huge stumbling block is how to measure adherence to our new process - and what to do about it if users aren’t complying.

More on this a little later.

Finally, with training actions, the most important thing is that we adequately adapt our approach to the needs of different colleagues and teams - both in terms of content and delivery.

So, your IT department might have very different training needs compared to your back-office admin team - even if they’re using the same new platform. This could equally relate to their technical skills, their needs from the platform, or simply their learning styles.

(McKinsey )

By the end of this stage, our colleagues will be using our new improved internal process in the real world.

8. Monitoring and continuous improvement

Finally, we must gather and analyze data around what impact our changes have had - if any. Remember earlier when we went to the effort of setting specific, measurable goals for ourselves?

Well, now it’s time to see how we’re progressing toward these.

The first thing we need is easy access to the relevant data. Moreover, we need to give the right people access to this data in a format they can understand and take insights from.

That’s right you guessed it, we need dashboards. These are dedicated interfaces that allow decision-makers to check on key metrics in real-time.

The harder part of the equation is deciding the actions that we’ll take on the basis of these metrics.

In truth, there are no easy answers to this one. Sometimes we might just want to make a couple of tweaks to make marginal gains. Others, we might need to go back to the drawing board entirely.

For our purposes, the important thing isn’t to go in-depth on every possible optimization. Rather, can’t overstate the fact that internal processes require continuous ongoing improvement.

Recognizing that we can always do things better is the first step towards embedding a wider culture of innovation across your organization.

When do we need process improvement?

But if our internal processes can always be improved, how are we supposed to know when some specific task needs to be the focus of our attention?

After all, if we simply think any process can be improved at any time, we’ll get very overwhelmed, very quickly.

So what are the specific situations where we would make a concerted effort towards new internal process management efforts?

Here are some of the most common organizational woes that can indicate that you have an issue that needs to be addressed.

Informal and undocumented processes

First off, we have undocumented processes across your organization. Remember, that’s not to say that every undocumented process is necessarily a problem. It’s perfectly normal for some tasks to employ more informal or flexible processes.

However, this is a problem when informal processes are less of an exception and more the norm. In other words, the more undocumented processes you have, the more likely it is to be a problem.

The real problem here is often that processes are undocumented because internal leaders aren’t strictly aware of them. This can work in two ways. They may be unaware that the task in question is needed.

Or, they might think it follows a different process than the one employees use in real life.

In either case, we end up with what we might call shadow processes. By their nature, these open your business up to huge amounts of risk, as well as potential inefficiencies and other issues.

This is why documentation is the top priority for internal process management.

Known inefficiencies

Next, we have situations where you know your current processes aren’t working properly. That is, they’re costing too much, taking too long, or not delivering the right results. In short, when we want to make our processes more efficient.

The trouble is that inefficiencies can come in so many different shapes and sizes.

So, even if we know that something is inefficient, we could still have a whole bunch of unknowns lurking beneath the surface.

We can apply the same logic at different levels. That is, we could have known inefficiencies with specific, individual processes - or we might know that things are inefficient across the board.

In any case, our first port of call is to figure out why our processes are inefficient and where specifically the inefficiencies occur.

For instance, the issue could be with our process model, or it could be with the tools that employees use to manage it.

This highlights the importance of documentation, information gathering, and analysis in improving our internal processes.

Incidents and errors

Alternatively, maybe things just keep going wrong. High incident or error rates within a process are a dead giveaway that there’s room for improvement. This could range from simple mistakes to serious health and safety breaches.

Obviously, we want to prevent all sorts of incidents, as much as possible. But at what stage do things become so endemic that we need to turn to process improvement?

There are a couple of useful indicators here. Firstly, there’s regularity. That is if you’re constantly dealing with mistakes and issues, there’s almost certainly a deeper issue with the relevant processes.

Secondly, we can follow the money. The thing is, every incident, mistake, or error has a cost associated with it. Therefore, if the sum of these costs starts to eat into our profitability, we know that the internal process in question requires systemic attention.

Again, we’ll need thorough analysis to identify the root cause of the problem before we can identify appropriate strategies to reduce the incidence of things going wrong.

Excessive costs

Other times, the impetus for internal process improvement could simply be that you think certain tasks are costing you too much. Counterintuitively, this can be a more challenging situation than the ones we’ve seen so far.

The reason for this relates to information. So, in the previous scenarios, you don’t need to make much of a leap from the high-level indicator that something is suboptimal to the more specific issue at play.

With cost-related problems, we have a few more gaps to fill in.

Costs can obviously come in a lot of different forms, from a lot of different sources. Let’s think about an example.

Say you had a defined process for managing equipment requests that was costing you 10% more in practice than you thought it would in theory.

The reason for this is unlikely to be immediately apparent. In fact, it’s even unlikely that there’s just one reason for a task going over budget.

So where does this leave us?

We need to break down the different places where we’re incurring costs to figure out where this extra 10% is coming from. This might be one self-contained issue, or it could just as easily be a whole bunch of relatively minor inefficiencies.

This is an extreme example of course. But, the point we’re trying to make is that we need to frame our interventions in terms of the actual costs that are hampering our performance - and to do this, we need a realistic picture of what these are.

Employee feedback

If you’re lucky, your employees will tell you when there’s a problem with your internal processes - although you might not feel lucky in the moment. Nobody understands your internal processes better than the people who undertake them.

However, employees aren’t going to offer off-the-cuff feedback (AKA complaints) unless there’s a pretty severe problem. Besides, on-the-ground staff will inevitably have their own priorities and perspectives surrounding your internal processes.

This is natural, but it could still limit the usefulness of unstructured feedback. For instance, if an employee simply doesn’t like performing a certain task, that doesn’t tell us much about how effective the relevant internal process is.

Therefore, we’re more likely to rely on structured feedback - normally consisting of some kind of survey or focus group. Or, you might provide employees with a specific feedback tool. That way, they can give their thoughts whenever they want, but in a consistent format.

We can also think about employee feedback on internal processes in two interrelated ways.

First, we can take a qualitative approach - assuming that we’re collecting written feedback, of course. For instance, we might assess each individual submission, the points it raises, and the core issues that could underpin these.

Secondly, we could take a quantitative approach. One way to do this would be to ask employees to score different aspects of the internal processes in question. Another would be to code written submissions, to try and measure how widespread the issues raised are.

Feedback Form

Confusion, inaccuracies, and inconsistencies

Sometimes, we know that we need to work on our internal processes purely because our employees clearly don’t know how things are supposed to work - despite our best efforts towards training and information-sharing.

No matter how efficient our processes are in theory, they’re still no use if our team can’t wrap their heads around them.

This fact can create some very difficult situations. For example, sometimes we have complicated internal processes because we’re trying to implement complicated business logic.

Therefore, it will likely be tough to simplify the process itself without undermining its aims.

In this case, we’ll have to approach internal process management from a slightly different angle.

If our processes are too complex for humans to follow accurately, it makes sense to digitalize or automate at least some of the required decision-making.

Alternatively, our processes might not be particularly complex but still suffer from a large degree of inconsistency because of the scale at which they occur. Again, digital transformation would be the key to resolving this issue.

Redundancy

Finally, there’s a strong chance that some elements of your internal processes will be redundant, extraneous, or totally unnecessary.

Most of the time, this has to do with the roles and responsibilities related to a particular process. For example, if more people need to give their approval for a given action than is strictly necessary.

Therefore, we need to try and minimize the number of actors involved in any given decision, without compromising its aims, or the level of accountability and oversight provided.

Alternatively, there might be elements within an internal process that aren’t strictly speaking redundant, but still aren’t the best use of anyone’s time. Most often, these are truly menial, repetitive admin tasks.

Say, manually moving data from one spreadsheet to another, with a little bit of transformation around the edges.

In this case, the action itself might not be unnecessary, but paying a human employee to do it probably is.

Again, automation would likely be our first port of call here. With that in mind, it’s time we started thinking about some of the tools that are going to help us improve our internal process management efforts.

Digitalization, internal tools, and process management software

Nowadays, effective internal processes and digital transformation are basically two sides of the same coin.

That is, most tasks will benefit from some degree of digitization. The question is simply what we can do and which tools we need to achieve this.

With that in mind, let’s take a look at the broad categories of tools that you can use to support your internal process management efforts.

In no particular order, we have…

Internal tools

Internal tools are custom solutions that are built to make a particular task faster, easier, or more convenient. Usually, this is a very simple but relatively business-specific application - hence why it’s custom-built.

This could be just about anything - from simple sign-up forms to more complex tools enforcing conditional logic.

From an IT team’s point of view, the challenge with internal tools isn’t so much building or even maintaining any particular app - it’s keeping up with the sheer demand for solutions across the business.

With most IT departments wildly overstretched already, our options are to prioritize some internal processes over others or to find faster, cheaper ways to build internal tools.

We’ll see how Budibase is changing the game here a little later.

Data management tools

We’ll also often have an outsize impact on a given process by simply giving users an easier way to carry out specific data management tasks.

As we said earlier, most administrative processes can effectively be expressed as a series of data management actions.

So, when we want to improve these kinds of processes, a good place to start is with the tools that empower users to create, read, update, and delete relevant data entities.

The faster and more accurately employees can do this, the more effective the process in question will be.

For instance, a basic GUI can save untold labor costs if the relevant task is widespread enough.

Internal processes for managing data

Automation/integration platforms

Of course, we also need to think about slightly more sophisticated solutions. Automation and integration are at the top of the agenda for IT and ops teams alike - and leaders within most other business verticals, if we’re being honest.

Let’s take a step back and think about why.

Today, your average business relies on a greater number of digital tools and platforms than ever for internal processes. This can include solutions from a whole range of vendors as well as custom builds.

Similarly, your wider software ecosystem will often vary wildly in terms of its age, capability, and underlying technology. This can get to be a big problem when you need to draw on multiple platforms within a single process.

Automation and integration tools allow us to do exactly this - by connecting different platforms to one another, expanding each one’s capability.

We’ll see what Budibase brings to the table here a little bit later.

Forms

Forms are a bit less exciting but no less important. Really, these are a subset of data management tools that allow us to create, update, or search for individual entries.

This is unlikely to be a revolutionary way of doing things. However, the benefits become pretty obvious when you think about how effective forms can impact internal processes that occur on a large scale.

Say you had a whole team of users entering data into a single spreadsheet.

This would just be chaos - but for many businesses, it’s also a daily reality. And it leads to a huge array of problems - across validity, accuracy, reliability, and more. In short, there’s an outsize chance that someone will screw something up.

Even if this doesn’t happen, having multiple users collaborating on a single document will slow everybody down

Forms help to prevent both problems by allowing users to carry out the same actions on a single data object, without the need for exposure to other objects and actions.

Office software

We’ve just seen a very clear example of where you wouldn’t want to use a spreadsheet, but we can obviously point to many, many situations where you would. The truth is that everyday office tools are at the heart of internal processes in countless organizations of all sizes.

This includes spreadsheets, word processing, and other related platforms.

The important thing is simply that these are used in appropriate ways and at a viable scale.

For example, spreadsheets are an intuitive, universally understood tool for managing data. And they’re perfectly effective when a handful of colleagues need to collaborate on the same data set.

However, they are simply not fit for situations when dozens or even hundreds of people need to do the same thing.

Internal process stastistics

(McKinsey )

Dashboards & admin panels

Dashboards and admin panels aim to make it easier for users to access key insights related to a particular process. For example, our budget usage, the average time to completion, or some other aspect of our process’ cost-effectiveness.

Or, we might use dashboards and admin panels to help users access data that they need to make decisions within a particular process.

This might be something like a tool for looking up information about a particular client or order.

These tools could visualize relevant data - for instance in a time series - or they might simply give a readout of the present values of different variables.

In any case, dashboards add value by providing streamlined access to the exact data the users need to make decisions. So really, we’re improving efficiency and user experiences at two levels:

  1. Reducing the time required to access a particular data point.
  2. Eliminating ambiguity by cutting users’ exposure to other data that they don’t need.

Self-service UIs

Self-service UIs are the perfect solution for cutting out extraneous administrative workloads. The clue here is in the name - they’re interfaces that allow colleagues to do things for themselves.

This eliminates two potentially expensive scenarios - employing dedicated staff for menial admin tasks or wasting another colleague’s valuable time actioning requests.

Again, self-service UIs are rarely groundbreaking solutions from a technical perspective. Rather, the value here comes from empowering different people to do the same tasks - and thereby rationalizing how these are delegated.

However, it’s worth noting that self-service UIs can only be deployed for certain tasks - obviously. The key thing is that the user must be authorized to carry out whatever action we’re dealing with.

So, for example, we might deploy a self-service tool to allow employees to update their phone numbers or addresses across different internal platforms:

Employee self-service UI

We couldn’t use one for a task that requires someone else to verify or approve the data they provide.

That leads us to…

Approval apps

For more complex self-service tasks, we’ll need to factor in existing business rules to ensure that we’re not undermining accountability, security, or other important factors whole we digitalize our internal processes.

Approval apps are pretty easy to wrap your head around.

In their most basic form, these involve two elements:

  1. Users can make requests for defined resources, actions, or authorizations.
  2. Authorized users or automated decision-making can then approve, decline, or query these requests, based on defined business logic.

Optionally, there might also be some follow on action. Or, the employee might simply be notified of the outcome of the decision.

Let’s think about an example.

One of the most common use cases for approval apps is handling requests for invoice authorizations. Basically, employees use these tools to upload their expenses and claim reimbursement.

Some submissions might get approved automatically - maybe invoices under a certain value or from trusted vendors. The rest need to be manually reviewed by the finance team.

Depending on the outcome of the decision, the employee might be automatically reimbursed or notified of the reason that their claim has been rejected.

Check out our guide to approval apps to learn more.

Low-code platforms

In the world of internal processes, low-code development represents a major sea change. So far, we’ve mainly concerned ourselves with the solutions that end users need to make internal tasks run more smoothly.

But what about the tools that help IT teams to facilitate this?

We’ve already alluded to the key challenge here. That is, there just aren’t enough hours in the day for IT teams to output all of the solutions that they’re tasked with creating.

Low-code actually offers two different routes through this problem - depending on whose hands we place platforms in.

The first option is deploying low-code tools to enable your developers to output solutions faster. Since they won’t need to waste their time hard coding basic applications.

The other option is leveraging low-code platforms to lower the technical barriers to building solutions. That is, we can empower non-developers to solve their own problems, without the need to go through the specialists.

We’ll see how Budibase is leading the pack here toward the end of this guide.

7 internal process improvement tips

One thing that’s worth remembering with any kind of ops or change project is that we simply can’t know or predict every issue that’s going to crop up. That’s just not how things work in the real world.

However, with time and hands-on experience in optimizing internal processes, you start to pick up some important lessons that will inform your future decision-making.

But we don’t all have the luxury of time and experience, do we?

As a bit of a shortcut, here are seven of our favorite tips for building truly effective internal processes.

Involve your team early

There’s simply no way we can get an accurate view of our internal processes without thoroughly engaging with stakeholders - from the colleagues on the ground all the way up to the C-suite.

This achieves two separate but related aims - providing useful perspectives on our processes and helping us to gain buy-in from the people involved.

The earlier in the process you do this, the better - for a couple of reasons.

One is that we can’t preempt how employees are going to feel about different aspects of our internal processes. Therefore, it’s best to have this information sooner rather than later as we may need to alter our approach to reflect it.

Besides this, there’s the fact that employees are going to be more amenable to change the more notice they receive - in no small part because this gives us more chance to alleviate their concerns.

When we engage with stakeholders throughout the entire course of our internal process improvement, we gain valuable insights that will steer us toward better and more productive ways of working.

Keep your eye on the why

It’s very easy for ops or IT teams to lose sight of what they’re trying to achieve. Sometimes, this takes the form of extreme - and therefore obvious - scope creep. Other times, it can play out a little bit more subtly.

The key here is how successfully we’re able to align our technical efforts with our border strategic aims.

The mistake that many organizations make here is getting hung up on delivering a particular kind of solution and allowing this to take precedence over actually making employees’ real-world lives easier.

By retaining focus on the core pain points we’re trying to achieve with our interventions, we’ll greatly improve our chances of achieving strong ROI.

Prioritize personalized training

Another huge error that countless businesses make is failing to account for the fact that different teams and colleagues will inevitably have unique training needs.

In fact, we can actually distinguish across three separate levels here:

  1. Existing skills and knowledge.
  2. Learning styles.
  3. What’s required of different kinds of users within a process.

To deliver truly effective training programs regarding our internal processes, we’ll need to account for each of these - at least to the extent that this is practicable.

While it would be nice to fully personalize the training provided to each individual employee, the relative costs and benefits of this might lead us to decide we’re better off tailoring our approach at the level of teams or departments.

For example, two departments might need to access a new platform, despite having very different existing knowledge and requirements around a given internal process.

Focus on agility & scalability

Agility and scalability both refer to your ability to respond to change. The difference is the timescales involved. Agility is how well you adapt to sudden, unforeseen changes in the short term.

For instance, when a client requests that a functional requirement is added at the 11th hour.

Scalability is more to do with how effectively your internal processes will meet your needs over the longer term - whether this is five or even ten years down the line. This could just as easily be expanding the scope of an existing process or adding more users to a platform.

Naturally, we’ll need to keep abreast of both elements for our processes to remain profitable as time goes on.

We can’t predict every possible new risk, opportunity, or development. What we can do is remain cognizant of the specific aspects of our process where our needs are most likely to change.

For instance, the data objects we draw on, the users involved, the relevant platforms, and the roles and responsibilities that relate to these.

Plan for post-implementation

So far, we’ve been primarily focused on internal processes in the context of how you can plan to improve them. However, once you’ve drawn up and implemented improvements to your processes, this doesn’t mean that your work is done.

Rather, the post-implementation period is every bit as important.

So, we need to plan for this too.

We saw earlier that one element of this is ensuring we have access to the right data to assess our success and come up with improvement opportunities.

Besides this, we also need to plan for what we might call the bedding-in period. Unfortunately, the likelihood is that you’ll encounter some teething problems with your new, improved internal processes.

Obviously, we’ll test everything as far as we can before this point, but when real users come into play, we might begin to encounter new issues that we hadn’t accounted for - like fringe cases within our processes.

So, it’s useful to have periodical reviews in the period immediately after your new processes go live to ensure that everything is running as smoothly as you’d like.

Share your successes

Often, ops and IT teams are so swamped that they can’t pause to reflect on what’s working well - much less share this knowledge with colleagues or other teams. Naturally, this is a big oversight - and an outright mistake.

Just think of all of the new knowledge and best practices that we could be sharing with colleagues.

More specifically, there are two things that we want to share when we successfully improve our internal processes:

  1. What we’ve achieved - the specific business impact we’ve had.
  2. How we’ve achieved it - the lessons we’ve learned that we can carry forward to other projects.

Of course, there are countless different but equally valid strategies for each.

You might provide a dashboard to key decision makers, reporting on relevant information. Or you might occasionally hold informational sessions with other departmental leaders to share insights and solidify organizational learning.

Adopt a continuous improvement mindset

Our final internal process tip is arguably the most important. Businesses that adopt a mindset of continuous improvement, optimization, and innovation within their internal processes stand a much better chance of retaining their competitive edge.

The reality is that your operating environment - like the rest of our world - is in constant flux. Chances are that your present needs will be almost unrecognizable in a couple of years - maybe even a couple of months.

We must contend with evolving threats, changing consumer preferences, new competitors, and ever-more complex regulatory and economic pressures.

The minute you allow your business to begin standing still, you’ll start falling behind.

Therefore, accepting the need for continuous improvement isn’t just some rhetorical device.

It’s a call to action.

Budibase Screenshot

Manage internal processes with Budibase

We’ve already hinted at the fact that Budibase offers busy IT and ops professionals a faster, easier, more cost-effective way to solve problems for their colleagues across the business.

But how?

Or, perhaps a better question is why do tens of thousands of users around the world rely on Budibase to manage internal processes?

To answer this, let’s dive into what makes our platform tick.

Our open-source, low-code platform

Budibase is nothing short of a revolution for busy, overstretch teams. With autogenerated CRUD screens, a built-in database, extensive design tools, optional self-hosting, and more, you can output fully working solutions in as little as a few minutes.

Check out our features overview to learn more.

All your data in one place

Budibase leads the pack for external support. In addition to BudibaseDB, we offer dedicated connectors for SQL, Postgres, Mongo, Couch, S3, REST, Airtable, Google Sheets, Oracle, and much, much more.

No matter what kind of data source you need to leverage, Budibase has you covered.

Automation and integrations

Use our intuitive automation editor to digitalize business logic, with minimal coding skills. Choose from our library of built-in triggers and actions, with full support for looping, nesting, and combining steps.

We also offer a range of third-party integrations, so you can use external events as trigger or automation actions alike.

Intuitive, fast design tools

With Budibase, you can say goodbye to spending thousands of dollars to build professional app designs. We offer autogenerated screens, customizable components, conditional UIs, and a huge array of professional components.

It’s never been easier to build beautiful apps on the fly.

Custom plug-ins

We’ve recently launched custom plug-ins. Build your own data sources or components, and deploy them across all of your Budibase apps using our CLI tools.

Check out our plug-ins documentation to learn more.

Effective RBAC

Implement fully performant role-based access control without writing a single line of code. Assign permissions to different user groups at the level of data sources, queries, screens, or individual components.

Budibase also offers free SSO with OAuth and OpenID.

Self-hosting

With Budibase, you’re in control of how and where you host your tools. We offer self-hosted plans using Kubernetes, Docker, Docker Compose, and Digital Ocean, as well as our own cloud-based hosting.

Check out our pricing page to learn more about both options.

50+ free app templates

We have a lot of confidence in what our platform can do. So do our users. But why should you take our word for it - or anyone else’s for that matter?

We’ve built more than 50 free, customizable, and ready-to-deploy app templates to show off what Budibase is capable of.

To start building custom applications the fast, easy way, sign up to Budibase today for free.