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The Boomer Bulletin - 2015
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The Impact of Efficient and Consistent Processes

Posted By Jim Boomer, Tuesday, December 8, 2015

Originally published in The CPA Practice Advisor, August 2015

Every firm wants to be more efficient and consistent in their processes. However, it’s often difficult to step back and dedicate the time and resources to do a true in-depth process analysis. Instead, technology tools are often thrown at the problem, causing dysfunctions in the process to be even more glaring.

A better practice would be to start with process and then identify technology which will accelerate the progress. The expansion of Lean Six Sigma into professional services firms is providing a proven methodology to do just this.

What is Lean Six Sigma?

So what is Lean Six Sigma? It is the combination of two concepts that have made a major impact in manufacturing.  Lean is all about eliminating wasteful activity and becoming more efficient while Six Sigma is focused on improving quality and eliminating variations of the end product.  As I mentioned previously, they are expanding their reach into public accounting and other professions.

What’s Holding Firms Back?

Lean projects have been a tough pill to swallow for many firms primarily because we’ve come to expect the quick fix – the low hanging fruit if you will. Process improvement is not low hanging fruit; it takes a true commitment from top to bottom of the firm.

We also hear firms say clients don’t care about their processes and honestly, they don’t directly care how you produce the deliverable.  But your processes have a huge impact on the quality and timeliness of the work product you hand over so indirectly, clients do care about your processes.

The Steps

A Lean project involves a few simple steps, but that doesn’t mean they are easy. They are time-consuming and resource intensive. In its simplest form, the steps are as follows:

  • Assemble a balanced team from multiple disciplines and levels 
  • Document your existing process
  • Tear apart that process
  • Go back and document the new and improved process based on the Lean Six Sigma principles
  • Communicate, train and rollout the new process

I have simplified the process significantly but that's essentially what it's all about.

The Benefits

A comprehensive process improvement project will drive out redundancies, personal preferences and overall inefficiencies. It will help us with the tunnel vision that develops over years of doing our jobs.  Roles are often “line of sight” and it’s not until we step back and look at the entire process that we start to see dependencies that we've never seen before.

You can also identify wasted time and money. Hidden dollars start to show themselves. Morale and job satisfaction improve because people are more efficient and aren’t wasting time doing meaningless or redundant tasks.  You’ll have more consistent and effective work and can ramp-up new hires. Current employees can more easily shift between roles within your firm because the amount of time that it takes to get them up to speed is reduced significantly.

Real Results

The results vary from firm to firm and process to process. However, here are just a few of the results that have been recognized by other firms.

  • Increased realization percentage (typical projects have gained from 3 to 12 percent increases in year one)
  • Increased capacity – you can do more with the same or fewer resources
  • Decreased write-offs (upward of 50 percent has been achieved)
  • Decreased number of review comments issued
  • Decreased cycle time (work is turned around and back to clients quicker)

Where to Start?

Another important question we hear often from firms is where do we start if we decide we want to do a Lean project? The firms that have seen success have primarily focused on their tax process, audit and client accounting services. My advice to you is to pick one area, focus on success, build some confidence and then you'll be equipped to move on to the other areas of your firm.

Are you ready to start with process?  Contact us to schedule an Introductory Workshop or sign up for our next certification class so that you can lead internal projects or take it to your clients.

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