There’s no doubt that processes are the building blocks of all business operations. However, not all processes follow standard operating procedures (SoPs). Let’s consider an example to understand this better. Claims processing is a high-frequency process in an insurance company. When you shadow or interview a claims representative, you might find that the rep receives the first report and records the details of the accident. Then, for validating the claim request, the rep could further ask for accident-related photos and police reports.
When you dig deeper, you might understand how the claims rep organizes data and meets compliance and controls. The rep might even take you through the process of how potential fraudulent cases are dealt with. Now that you have a comprehensive understanding of how claims are processed, you might conclude that all reps follow the same steps.
However, when you interview a more experienced claims rep, you might discover that though they follow similar steps, they use their tacit knowledge to better identify potential frauds or they might even walk you through the undocumented checklist they follow before involving the fraud investigation unit.
Now, because you interviewed another claims rep, you’ve uncovered a new way of executing the same process. And this is called a process variant. A new process variant is created every time there is a deviation from the set process, or a new activity is introduced to increase process efficiency.
How do process variants arise?
Four main reasons give rise to process variations and deviations:
- Varying business conditions: Global enterprises work from multiple locations; as a result, processes are spread across people and technology. As such, there are different rules and regulations to be followed to meet compliance requirements. Also, when exceptions arise, they are tackled differently based on region or business function. As a result, there are process variants.
- A lack of training: Without adequate training, there is a higher chance of employees deviating from the SoPs. By human nature, employees tend to take a new path to complete a task, which could be different for every employee.
- Implicit knowledge: With experience, employees gain tacit knowledge that helps them solve a problem more quickly and efficiently. For instance, let’s say approval is needed to process a large sum of claims, but the authorized person is unavailable to approve the request. A tenured employee would know a roundabout to escalate the request or break the sum to allowed limits in the delegation matrix to approvals.
- Change in tech stack: There are several reasons why adapt or retire the tools they use. Whether business mergers or tech innovation, new tools are introduced or removed, directly impacting process execution. There could be new steps added that are executed on the new tools, and since humans detest change or there is a considerable learning curve with the new execution steps, variants creep in.
How to deal with process variants?
Not all process variants are bad. Instead, they reflect the real state execution of processes, uncovering inefficiencies, automation failures, and broken internal controls. A process discovery tool like SurfaceAI will help enterprises easily identify variants and perform root cause analysis to improve an organization’s internal control.
Get a free custom demo to learn how your organization can benefit from our product.