8 reasons why business processes fail

Processes are the lifeblood of business operations, critical to the effective running of all organizations. Given their vital importance, process failures can have damaging ramifications.

“Business process failures are the organizational equivalent of a car’s check engine light,” says Sally Derian, founder of 4D Intel, a consulting firm that bridges the gap between operational excellence and strategic business transitions. “Everyone dreads seeing them, and ignoring them only makes things worse. It’s fascinating because, despite all our advances in management theory and technology, we still see companies stumbling over the same hurdles time and time again.”

There are various reasons why even the most critical processes fail. Business leaders are well-advised to consider them carefully if they wish to preserve the effectiveness and reliability of their processes. Here are eight of the most common culprits to watch out for.

1. Business over-focus

The most common reason a business process fails is because it is too business-focused, JL Heather, managing partner and principle executive coach at Centered.Work, tells PEX Network. “We design processes to solve business problems not realizing that we aren’t just solving a business problem, but we are trying to solve a human problem.” As a result, we lose sight of our culture’s principles and values and forget to include and empower the people the process effects, Heather adds.

“At the end of the day, it quickly becomes an adoption problem where you either let the process die or you take more and more extreme measures to enforce the process. If your business processes are often backed up with an ‘or else’ it’s a sign that you’re falling into this camp.”

2. People mismanagement

For Richard Krumm, VP of assurance, compliance and ethics, enterprise risk and technical accounting at CarSaver, Inc., the leading reason why processes fail is people. “Not people in and of themselves, but rather ineffective management,” he says. This is particularly relevant in relation to new or drastically changed processes, Krumm says.

“No organization can institute successful business processes if its employees do not accept and understand those business processes. This is especially true with significant business process changes where I have seen, more often than not, for-profit public and private companies with disappointed management and frustrated employees.”

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3. Poor communication

Another classic cause of process failure is poor communication, says Derian. “It’s like watching a game of telephone gone wrong. Consider a large financial services firm where the risk management team and the client-facing advisors speak different languages.” The risk team develops complex models to assess investment strategies, but the advisors struggle to translate these insights into terms their clients can understand.

“The result? Misaligned expectations, frustrated clients and missed opportunities for the firm and its customers,” Derian says. “It’s a textbook example of why silos in organizations can be so damaging. Clear communication is key. Break down those silos, get everyone on the same page. I’m talking about regular check-ins and cross-departmental collaborations.”

4. Misalignment between data, technology and objectives

Business process failures often arise from a misalignment between data, technology and strategic objectives, says Ashok Reddy, CEO of KX. “Organizations may face challenges in defining clear goals for new processes or lack the necessary resources and infrastructure, leading to poor adoption and return on investment (ROI).” This issue is particularly pronounced with advanced technologies like generative AI, where unclear objectives and technical barriers can limit their full potential, he adds.

“Additionally, siloed data and the absence of real-time insights often result in reactive decision-making, inefficient resource allocation and missed opportunities for optimization. Success requires addressing both technical and business-level inhibitors before establishing any new core processes.”

“Success requires addressing both technical and business-level inhibitors before establishing any new core processes.” Ashok Reddy, KX

A data-driven approach is essential to overcoming these challenges, and by investing in real-time data infrastructure, breaking down data silos and leveraging AI, organizations can gain actionable insights, streamline workflows and make more informed decisions. “Aligning technology with clear objectives and fostering continuous improvement can unlock the full potential of business processes, driving sustainable growth.”

5. The data divide

The ‘data divide’ is indeed a key issue in relation to business processes, echoes Keith Rigg, SVP of global solutions architects at Jitterbit. This is the inability to effectively integrate distributed technology systems, applications and data, he adds. “Many systems operate in isolation, lacking the ability to communicate with each other. Enterprise-wide integration enables the sharing of crucial data and information across the enterprise, which is essential for unlocking efficiencies in workflows and operations. Integration is a significant hurdle in an organization’s digital transformation journey.” When hundreds, if not thousands, of disparate systems across on-premise, multi-cloud and hybrid environments fail to communicate inefficiencies, errors and delays are inevitable, he says.

“To overcome these challenges, organizations should adopt business automation and orchestration platforms with robust end-to-end process automation capabilities. Leveraging intelligent automation (IA) and AI within these low-code platforms can reduce manual tasks, enhance accuracy and boost productivity.”

6. Insufficient training and inadequate resources

Insufficient training of incoming staff on processes is another common cause of process failures, says Mark Greenhouse, operations and Lean consultant and associate, management division (supply chain and operations management) at Leeds University Business School. “New staff can arrive having used the “same” software, machines etc. or used processes with the same “name” elsewhere. They come with years of experience in your industry, with your competitors. However, your processes will be unique no matter how much standard software or machines you use, and no matter how much experience someone has in your industry.”

“It’s amazing how often companies will green-light a process change without providing the tools to make it happen.” Sally Derian, 4D Intel

Inadequate resources are an issue too, adds Derian. “It’s amazing how often companies will green-light a process change without providing the tools to make it happen. I’ve seen IT overhauls launched with outdated hardware and training programs without trainers or documentation – it’s a recipe for disaster.”

7. Resistance to change and failure to adapt

Then there’s the issues of resistance to change and failure to adapt, Derian says. “Humans are creatures of habit, right? I've seen countless initiatives fall flat because employees were comfortable with the ‘old way’ of doing things.” She recalls a retail chain that tried to implement a new, state-of the-art inventory system, underestimating how attached staff were to the old manual methods. “The new system gathered dust while employees kept their trusty clipboards and pens.”

Business environments change fast, and processes need to keep up, Derian adds. “I worked with a company that stubbornly stuck to its original fulfillment process even as order volumes exploded. They ended up with a backlog that took months to clear, costing them a chunk of their customer base.”

When it comes to change management, businesses need to bring their people along for the ride, she says. “Explain the ‘why’ behind the change, provide comprehensive training and celebrate small wins along the way. At the end of the day, business processes are about people. Engage your team, listen to their feedback, and create a culture that values continuous improvement.”

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8. Lack of shared process agreements

Process can fail if there isn’t an agreed, shared process across people promising to deliver the same outcome as well. “Different people follow different processes to try and achieve the same outcome,” says Greenhouse. “This introduces risk into the process if not every step is followed.” He cites an example he saw working with a firm assembling machinery. “They didn’t have a process for routing wiring inside the control panel. The result was that you could tell which team had built the machine by how the wire was routed. One team did take longer and one team had a routing which looked better. Imagine the issues when the two machines were issued to the same plant, who thought they’d been given two different pieces of equipment.”

When setting objectives, take the SMART approach – specific, measurable, achievable, relevant and time-bound, says Derian. “It keeps everyone focused and accountable. Do your homework too. Map out exactly what you’ll need for a successful implementation, and make sure you've got all the resources in place before you start. Finally, build flexibility into your processes. Regular reviews and a willingness to pivot when necessary, can prevent you from becoming obsolete.”

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