What is business process optimisation?

Business process optimization (BPO) is the ongoing process of examining and improving a company's workflows to make them more efficient and effective. It involves identifying bottlenecks, eliminating redundancies, and streamlining tasks to achieve better results with fewer resources.

What is a CFO's role in business process optimization?

CFOs are central to business process optimization (BPO) due to its financial impact. They pinpoint areas for improvement in workflows that can save costs or boost revenue, build the financial case for BPO initiatives, allocate resources to these projects, and track the financial results to ensure they deliver the expected benefits.

Business process optimization: 5 inefficiencies to eliminate

As the financial lead of a company, CFOs are all about reducing costs and making sure things are done efficiently.

Business process optimization helps to achieve this by:

🔎 Analyzing how things are done across different departments.

🎯 Streamlining operations and removing unnecessary steps and/or redundancies.

💰 Optimizing processes to save money, reduce waste, and get more done in less time.

By optimizing business processes, you can help the company react better to fluctuating markets (and other ups and downs) by creating more flexible and adaptable processes.

If you want to prioritize business process optimization as a finance leader, there are a few key areas to look at.

Some of the lowest-hanging fruit will be things like high-volume, repetitive tasks that bog down your team, or areas prone to errors that could lead to costly mistakes.

To help you get started, we’ve listed 5 process inefficiencies you should try to eliminate. By streamlining these areas, you can create a ripple effect of efficiency gains across the entire company.

So, let’s get into it.👇🏼

Business process optimization vs. BPM vs. BPR: What’s the difference?

Before you dive into eliminating inefficiencies, it helps to clarify three foundational concepts: Business process optimization (BPO), business process management (BPM), and business process re-engineering (BPR).

Each plays a distinct role in how organizations improve their workflows, but they differ in scope, approach, and when you’d use them.

Business process optimization is all about making existing processes work better. Think incremental improvements to boost efficiency, cut costs, and reduce errors.

It’s practical, ongoing, and often focused on streamlining what’s already there.

BPM, on the other hand, is a broader discipline. It’s the structured approach to designing, modeling, executing, monitoring, and optimizing all of an organization’s processes, often using specialized tools or software.

BPM is about governance and continuous improvement across the board, not just one process at a time.

BPR is the boldest of the three, as it involves fundamentally rethinking and radically redesigning core business processes.

You’d turn to BPR when incremental tweaks aren’t enough and a process needs to be rebuilt from the ground up, often to achieve dramatic improvements in performance or adapt to major shifts in strategy.

Here’s a quick comparison for easy reference:

Approach	Scope	Typical use cases	Outcome
BPO	Targeted process	Ongoing efficiency gains	Incremental improvement
BPM	Organization-wide	Continuous process management	Sustained optimization
BPR	Core/critical process	Major transformation needed	Radical change

In short: Business process optimization focuses on fine-tuning, BPM manages the whole lifecycle, and BPR is for transformative overhauls.

Understanding these distinctions helps you choose the right tool for your unique business challenge.

The business process lifecycle: From design to optimization

Every optimized process starts with a journey, and understanding that journey is key for operations and project managers.

The business process lifecycle is a continuous loop that keeps your organization agile and efficient. Here’s how it unfolds:

Design: This is where you map out what the process should achieve and sketch the high-level steps. You’re defining objectives, roles, and the ideal flow.
Modeling: Next, you build a detailed representation, such as diagrams, flowcharts, or digital models. This stage lets you test scenarios and spot potential bottlenecks before anything goes live.
Execution: Now, you put the process into action. Whether manual or automated, this is where real work happens and data starts flowing.
Monitoring: You track performance in real time, collecting data on speed, accuracy, and outcomes. This stage is crucial for catching issues early and benchmarking success.
Optimization: Here’s where the magic happens. You analyze the data, identify inefficiencies, and make targeted improvements. Then the cycle starts again.

“Klarity automates business understanding for process life cycle management... making it easier for organizations to identify efficiency opportunities and areas suitable for automation.” – Nick Tiscornia, Chief Business Officer at Klarity

Remember, optimization isn’t a finish line, it’s an ongoing commitment. Each stage feeds the next, and the best organizations revisit this cycle regularly to stay ahead of change.

1. Manual data entry and outdated paper-based processes

Believe it or not, there are still finance teams that manually enter most of their data, making this one of the first business processes you should try to eliminate (or at least, partially eliminate).

Ditching those stacks of paper and automating data entry will help your team:

Stop wasting time: Manual data entry is slow and tedious. Automating it will free up your team for more strategic tasks.

Fewer errors = better decisions: Despite our best efforts, when we enter data manually, it's more likely to include mistakes. By automating it, you’ll have more accurate and reliable data to work with.

See things clearly so they can act faster: Outdated paper trails make tracking things down unnecessarily difficult, whereas you’ll gain real-time visibility if you go digital.

Something to think about: Consider partnering with business optimization experts to identify the most impactful areas for automation and digitization within your finance function. Their experience can help you streamline processes quickly and ensure a smooth transition for your team.

How to map and analyze your processes for optimization

If you want to spot inefficiencies and unlock real improvements, process mapping is your best friend.

Here’s a step-by-step guide for business analysts and small business owners looking to get started:

Identify the process you want to optimize. Be specific, choose a workflow that’s high-impact or frequently causes headaches.
Gather input from everyone involved. Don’t just rely on documentation, talk to the people who actually do the work. Their insights are gold.
Create a detailed process map. Use flowcharts or swimlane diagrams to capture every step, decision point, and handoff. The more detail, the better. According to Nick Tiscornia: “Level five is just, like, deep detailed documentation, step by step process documentation, whether that's in a process flow diagram or or a narrative format.”
Analyze the map. Look for bottlenecks, redundancies, and manual steps. Ask: Where do delays happen? Where are errors most common? Which steps could be automated?
Prioritize opportunities. Not every inefficiency is worth fixing right away. Focus on changes that will deliver the biggest impact with the least disruption.
Document your findings and recommendations. This blueprint becomes your roadmap for future improvements.

Nick also notes: “This gives you a super clear blueprint of that workflow, and is really the foundation for how you're gonna make decisions on that process in the future.”

By following these steps, you’ll have a clear, actionable view of your process, and a practical starting point for optimization.

2. Lack of integrated systems leading to data silos

If you have a bunch of disconnected systems and data silos, some might say that you’re just leaving money on the table. And, if you think about it, you are.

Lacking integrated systems means data gets trapped in different places. Information isn't flowing seamlessly across departments, leading to possible issues with reporting and analysis.

The solution is technology optimization. Specifically, implementing tools or software that'll connect all your disparate data sources into one unified system.

With an integrated system, you’ll have an easier time eliminating redundancies, automating data flows, and establishing a single source of truth (for metrics).

Map out your core financial processes like accounting, reporting, and forecasting. Look at how data moves between these systems. Any manual re-entry points? Places where disconnects happen? Those are areas ripe for integrating tools that will sync up data automatically.

3. Poor communication and collaboration across teams

A lack of communication and collaboration can be a major headache, especially for CFOs who want to focus on business process optimization.

One of the main reasons to build good communication across teams is that when departments don’t share insights, it leads to missed opportunities.

For example, if the finance team adds late fees to customer bills without letting the sales team or customer service know about it, it can be a disaster.

The sales reps will be unprepared to explain the new charges and customer service won’t have the information to address frustrated calls.

This breakdown and lack of communication could end up damaging customer trust and waste valuable time resolving the issue.

Some ways to help improve communication and collaboration across teams include organizing cross-departmental meetings regularly.

This will provide teams with the chance to talk to each other, share important information, and work together to optimize business processes that impact multiple departments.

You could also look into investing in collaboration tools to share documents, real-time updates, and team discussions. This keeps everyone on the same page and makes accessing the information you need a lot easier (and less time-consuming).

4. Inefficient budgeting, forecasting, and reporting processes

Budgeting, forecasting, and reporting are all core financial processes. But if they're inefficient, it can be a serious drain on productivity and insights.

As a CFO, you need to find ways to effectively streamline these areas to ensure financial data accuracy and enable smarter decision-making across the business.

Here are some quick-fire tips to help you improve the efficiency of your company’s budgeting, forecasting, and reporting processes:

Budgeting

Leverage past trends to set realistic budget baselines.
Assign budget responsibility to specific departments for accountability.
Update your budget regularly to reflect changing market conditions.
Save time by creating pre-formatted budget templates for future use.

Forecasting

Model different outcomes to prepare for various market possibilities.
Get input from sales (including insights from sales process optimization efforts), operations, and marketing for more accurate forecasts.
Focus on key metrics that predict future performance, not just past results.
Use software to automate repetitive calculations and reduce errors.

Reporting

Ensure consistency across departments for easier consolidation.
Leverage charts, graphs, and dashboards for clear and concise presentations.
Free yourself from manual report creation with scheduling tools.
Highlight key insights and trends in your reports, not just raw data.

5. Slow financial close and reconciliation processes

If your company has slow financial close and reconciliation cycles, you may struggle with a few things.

One concern is that the data won’t always be up-to-date. This means that the outdated financial data you're basing critical choices on could include inaccurate information, leading to poor resource allocation and missed opportunities.

Slow closes can also make it tricky to see your current cash position, which makes it difficult to manage expenses, negotiate with vendors, or plan for future investments.

Not to mention that the longer it takes to close the books, the higher the chance of errors creeping in.

A key part of your business process optimization strategy for this one is to establish a dedicated close calendar with strict but achievable deadlines.

After each close, perform a “postmortem” to continually identify shortcomings and any areas that could do with better optimization in the next cycle.

Applying lean and Six Sigma to service-based processes

Lean and Six Sigma aren’t just for manufacturing, they’re powerful tools for service-based organizations, too.

The core idea is to eliminate waste, reduce variation, and deliver consistent, high-quality outcomes for your clients and stakeholders.

But applying these principles in a service context (like finance or healthcare) comes with its own set of challenges and adaptations.

Start with lean: Map out your service process from end to end. Identify steps that don’t add value, like redundant approvals, unnecessary handoffs, or waiting times.

Then, work with your team to streamline or automate those steps. In finance, for example, automating expense approvals or digitizing invoice workflows can free up hours each week.

Next, bring in Six Sigma: Collect data on your process performance. Where are errors or delays most common? Use tools like root cause analysis or control charts to pinpoint the sources of variation. Then, implement targeted improvements and measure the impact.

Successful application in services means engaging stakeholders early, making data visible, and celebrating quick wins. It’s about progress.

FAQs: Business process optimization

What is optimal business process?

An optimal business process is one that is streamlined, efficient, and adds maximum value while minimizing waste, delays, and costs.

What are the fundamentals of business process optimization?

The fundamentals of business process optimization include mapping processes, identifying inefficiencies, leveraging automation, standardizing tasks, and continuously measuring and improving.Of course, these might differ across different industries but most will generally include these core fundamentals.

What is an example of optimization in business?

An example of business optimization is automating data entry and validation through system integrations to reduce manual effort and errors.

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