Nigeria: Business Process Solution: Catalyst For Growing A Successful Fintech/SMEs In Nigeria

Innovation, technology, and the continuous need for customers to access convenient products and services have led to the evolution of the Financial Technology (Fintech) industry. However, as the industry continues to boom, the lack of clear, standardized business processes, among several factors, have led to the failure of most startups to meet their corporate objectives. Therefore, the implementation of efficient Business Process Solutions is paramount to countering such failures.

Business Process Solutions (BPS) involve the setup of strategies that aid in operational planning, effectiveness, and efficiency. They are strategies that help to improve operational performance, as well as strategic planning. As business process cuts across every strategic business division of an organization ranging from; Information Technology (IT), Accounting/Finance Operations, Regulatory/ Compliance, Risk Management, Internal Control, to Human Resources, an inadequate business process around core operations such as payments of vendors and suppliers, internal control, and timely delivery of customers' order can lead to considerable losses in revenue and increase business costs.

In addition, investors are demanding that business plans detail business process solutions and strategies, and this contributes to their qualifying and determining of the viability of businesses. Therefore, it is beneficial for startups to adopt and implement a business process solution that best suits its line of operation. Most times, startup founders focus primarily on product and market development but fail to understand the underlying importance of a successful day-to-day business operation that determines the organization's ability to achieve its overall objective. Founders need to see BPS as tools that will assist in generating accurate financial information and detect losses from operations such as poor customer service, employee turnover rate, and account payable inefficiencies.

In this article, we discuss the impacts of effective business processes to startups in Nigeria and selection of suitable business process solution.

Components of Business Processes

The concept of BPS is to drive performance through careful analysis of current business practices. In determining the best cause of action to select, there is a need to collect all relevant data and identification of metrics critical for the attainment of both short, mid and long terms goals.

This realization has resulted in the breakdown of the BPS components into:

• the inputs; which are generated from one or more business units
• the process; which involves a combination of variables and inputs to get desirable outputs
• the outputs; which is the result of the process.

Understanding these components will help startups develop sustainable Business Process Solutions that will meet the demands of their day-to-day operations. With a well-documented and flexible Business Process Solution, excessive waiting time, input error-correcting, incomplete and recreating lost data, processing errors, and duplications will be eliminated.

Why BPS?

BPS is a relatively recent practice in the Nigerian business environment. The management of companies through the business processes has proven to work in terms of optimizing the capacity of companies in facing the challenges of modern business environments.

Startup businesses in Nigeria rely heavily on investors, whether Angel investors or Venture Capitalist (VC), to raise funds to develop their products and services, grow their business, and limit their investment risk in series of investment rounds. Investors continue to invest in these startups due to their innovation, revenue potential, and prominent market in Nigeria. However, some startups have failed to reach their potential by incurring extra costs or facing a significant decline in revenue due to poor services.

The underlying cause of these problems can be linked to poor business process management. Since companies' cultures vary, not all business planning processes are adequate. Therefore, companies must ensure that they get customized, tailored business process solutions aligned to their requirements and organizational goals.

Impact of BPS on Fintech and SMEs

As a Fintech startup, having understood the nature and type of business, the structure, goals, and objectives of the firm, processes and systems have to be implemented to ensure the firm effectively achieves set goals and minimizes risks and failures. With the expectations of businesses to perform process analysis, i.e., analyze each critical business process and identify areas that need change or improvement, the implementation of an adequate business process solution can easily highlight gaps in the process analysis; simplifying the improvement process.

Business process solutions also give your startup control over the timing of processes. It provides visibility into the status of any process created in the system; a competitive advantage that allows you to build and sustain profitability while growing revenue and building barriers to entry. An organization that is well structured and leverages appropriate and unique business process solutions to carry out its duties and responsibilities can efficiently create and sustain a globally competitive advantage.

Every day, technology disruptions are occurring, and businesses likewise need to adapt to these changes. Adopting suitable technology to aid business processes is an enabler of digital transformation, which delivers exceptional customer and business value. Embracing digital transformation is to embrace agility, equipping the business with the ability to rapidly identify and respond to changes in customer needs, requirements and expectations related to products, services, and other customer's engagement processes.

Automation also saves time and creates a price advantage. The use of business process solutions such as re-engineering concepts that identify sub-par activities and eliminate non-value-added work activities aids digital transformation. These solutions can also be applied to employees and other stakeholders of a company to boost performance and employee morale, increasing the organization's productivity.

The lack of these processes and structures has led many startups incurring more costs than budgeted. For instance, employees' lack of adequate training on designated duties can lead to financial loss incurring errors. In a similar vein, when a customer's value addition process flow is not adequately automated, the customer's dissatisfaction from the low quality value-addition process can lead to bad publicity, and dent company's image.

Since the best way to increase profit is to reduce cost, and the most optimal way for cost reduction is automation, automating processes is therefore a winning strategy.

How to Develop Business Process Solutions for SMEs and Fintech/ Life Cycle

To develop a suitable Business Process Solution, startups need to define their goals. What is the purpose of this business process, and why was it created? An effective business process is built on well-defined and clearly stated objectives. After defining the goals, the company is required to plan and map out its processes, then determine the strategies needed to achieve the goal. Afterwards, the organization would set actions and identify the individuals that would be assigned and held responsible for executing the process plan.

The first phase in the development of a Business Process Solution is a process design. This phase involves developing a new process or reviewing the existing business process. The company needs to know what is working and what is not. A startup that does not have a current business process needs to review "to-be" processes that will be key to its operations. The focal point of this phase includes process flow illustration, considering factors such as notifications and escalations system, standard process and procedures manual, service level agreements, and task hand-over tools.

The second phase is the modeling phase. This phase test runs the process based on different variables that may influence the business, whether internally or externally. As soon as the process is established, it should be tested for suitability and effectiveness. A pre-implementation plan would be used to test the viability and usefulness of the business model and structure. Then there would be checks for gaps and error, and the company would terminate or adjust accordingly to allow for effective implementation.

The final phase is the implementation and monitoring phase. After successful testing, the business process can be implemented and reviewed periodically to assess if it still fits the set goals. The implementation process also requires that the process is communicated to the right people and at the appropriate time.

Firms should look for opportunities to automate or outsource in all of these steps, whichever deems fit. Also, business process solutions have to be customized and tailored solutions in tune with the firm's requirements and organizational goals.

Conclusion

Startups and Fintech are disrupting various industries in Nigeria and are beginning to impact the Nigerian economy from job creations to revenue generation. However, several factors, such as the nonexistence of suitable BPS amongst others, will continue to threaten the existence of these businesses.

Therefore, startups are advised to maintain healthy and dynamic business models in this ever-changing economy and develop a world-class Business Process Solution for their operational functions. Outsourcing Business Process Solutions to professionals is usually more cost-effective and provides the founders ample time to focus on key strategic activities of the business.

It is also imperative to employ professionals with adequate knowledge and skill in sensitive areas to recommend bespoke strategic structures in line with best practices. Andersen in Nigeria is a global firm with a wealth of knowledge in various areas.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.