Business process this, business process that.
The word is thrown all around just about any business environment all the time, but what exactly does it mean?
In this guide, we’re going to cover everything you need to know about business processes and how to get the most out of them, including…
- What EXACTLY is a business process
- What’s the difference between a process, procedure, and workflow
- 4+ real-life business process examples
- BPM, BPI, and all other process management terms you have to know.
So, let’s get started!
What is a Business Process?
A business process is a set of steps performed to complete a specific goal.
For example, if you’re onboarding a new employee, you will have to go through the following steps:
- HR prepares all the paperwork for the new hire.
- The new team lead ensures their integration into the team, socially and work-wise
- IT gives them access to the systems and sets up their workspace (PC, accounts, etc.)
- You give out the first assignments and make sure the new hire understands their role and responsibilities.
…And that’s a very simple example of a process.
Now, a process can be implicit (just something that you do), or structured (you have the process documented and standardized).
See, the process of onboarding an employee is relatively straightforward for small-to-medium sized businesses.
But if you own a large corporation, you end up doing this for dozens, hundreds of people at all times (and that’s where this gets complicated).
That’s when using structured processes come in handy.
Benefits of using structured business processes are:
- Productivity. Business processes eliminate all redundant steps, allowing your employees to focus their attention on the core tasks, do more for less time, and boost efficiency.
- Agility. All businesses operate in a constantly changing world. Having your business processes set up and running will definitely minimize the time and costs of adapting your whole company to the inevitable changes.
- Measurability. The business process steps make all your activities measurable and easy to track in terms of quantity, time, and length of the process. Once you have all this data, it is easier to see where and how you can improve.
- Employee Satisfaction. The outline of all steps makes it easier to leave out all unnecessary bureaucratic formalities which might slow down the work process. This makes your employees’ job more straightforward and simpler which results in increased work satisfaction and productivity.
- Compliance and transparency. When you have all your business processes outlined and organized, it is easier to see if they align with the industry’s rules. This makes it easier for both your company’s staff and regulatory officials.
What are the 3 types of processes?
There are 3 main process types that all business activities can fall into and these are:
They are the processes that make your company money and are fundamental for the delivery of your end product to the customer. Examples of such processes are production, marketing and sales.
Support processes do not provide direct value to the customers but they assist the successful completion of the primary process activities.
For example, having a properly functioning HR department does not affect your clients directly, however, without it you can’t assemble a good team. Lack of a good team means production, marketing and sales will not be done right.
You can also think of support activities as serving the internal customers of the company.
For instance, if the Accounting department is not there to do the payroll, the rest of the employees will not get their paychecks.
Not receiving your paycheck can be very demotivating to do your job well. This, on its own, will lead to a decreasing performance of the company, and negatively affect your primary processes.
Management processes modify, regulate and monitor all other processes. They are also not directly involved in the customer’s value chain but are essential for the healthy functioning of the company.
They coordinate the primary and support processes with each other and increase the company’s money-making capabilities.
Process vs Procedure vs Workflow
This is where it gets a bit confusing, but bear with us.
There are a TON of other buzzwords associated with business processes that make it hard to understand how they work.
Here’s what they are, and what’s the difference.
A procedure is a documented, formalized process.
A “business process” CAN be implicit.
Whereas a “procedure” means that the process follows a strict structure.
A workflow, on the other hand, is pretty much the same thing as a process.
The complicated part, though, is that when people refer to workflows, they usually mean the visual representation of the process, not the process itself. E.g. a workflow diagram…
4+ Business Process Examples
Pretty simple stuff, right?
Now, to make this even clearer, let’s cover some common business process examples.
Employee Onboarding Process
Every company goes through an employee onboarding process. Therefore, having a well-structured process can make the integration of new employees easier and more effective for both the company and the new hire.
Smooth employee onboarding process also results in higher employee retention rates and productivity levels among other benefits.
So, what steps do you need to consider in your onboarding process in order to create a good experience for the company and the new hire?
Before the first workday, you need to make sure that you:
- Prepare and hand out all necessary paperwork.
- Submit paperwork for approval.
- Prepare all training materials, tasks and projects with the new employee’s supervisor.
- Set up the workstation and tools.
- Register them in the system and set up their accounts.
- Give out all required reading materials for the job position.
- Prepare a benefits package.
- Provide a detailed job description document.
On the first workday make sure to:
- Welcome them to the team.
- Show them around.
- Explain job role expectations.
- Give them some background on the company’s culture.
- Introduce them to their mentor.
During the first week you should cover:
- Assign their first project.
- Explain your expectations for their work progress in the first month.
- Schedule a meeting to go over more detailed assignments you have for them.
In the first month, make sure you:
- Schedule regular meetings.
- Explain their role in the long-term goals of the company.
- Make sure they integrate successfully with the team.
- Check with them to see if they are satisfied with the onboarding process so far.
This is when you turn your potential leads into closed sales, so the better this process is the easier you will complete a successful sale.
No matter what business you’re in, the following steps will help you meet your sales end goal:
- Prospecting. This is the stage when you generate leads to potential clients.Tasks from this stage include:
- Collect client referrals.
- Attend networking events.
- Gather leads from your website.
- Search social media for target clients that might be interested.
- Connecting and qualifying. Reach out to potential clients and understand if they are a good match for your product.Tasks from this stage include:
- Assess the client’s pain points.
- Understand who is the decision-maker for purchases.
- Presenting. At this stage, you present your product/service in more detail with the intention to show how it will help your client.Tasks from this stage include:
- Schedule the presentation.
- Research how your product fits in with the client’s needs.
- Develop an appropriate offer that will show your client you have a good solution to their problems.
- Closing. This is when a deal is closed and the sales stage is completed.Tasks from this stage include:
- Finalize the proposal.
- Last negotiations.
- The signing of the contract.
- Follow-up. Here you want to make sure you nurture your clients after the sale is closed. Providing them with post-sales support means that you can receive follow-up sales from them and get your business referred to other potential clients.Tasks from this stage include:
- Contact your client right after the sale is closed.
- Make sure your client gets the newest updates on your products (sign them up for a newsletter).
- Ask them to refer you to other potential clients and give you good reviews.
In order to buy the materials needed for your business you go through the following steps:
- Recognizing the need for a certain product.
- Send a purchase requisition to the purchasing department.
- The purchasing department reviews the Procurement request.
- They send an offer with all financial details to the financial department for budget approval.
- If approved, the purchasing department sends the quotation request and supplier bids are received.
- Then they select the vendor and sign a contract with him.
- After the purchasers receive the goods, they check the delivery quality.
- If the order and invoice slip match, the invoice payment is approved.
- The buyer keeps all orders and approved invoices on record.
Client Onboarding Process
Client onboarding is a very common process that is crucial for your client’s retention rate, no matter what industry you’re in.
After all, it sets the foundations for a long-term relationship with your clients. Recurring clients spend 67% more on average than new ones among other benefits.
If they have a positive experience with their onboarding process they are likely to come back and purchase from you again.
The general steps of this process are:
- Sign the contract. Your leads are not really your official clients until you have agreed on the proposal, signed the contract and processed the payment. So make sure you both agree on all details related to this starting step.
- Prepare a questionnaire. This is a really helpful way to get all the needed information and useful insights from your client. From it, you can understand how you can meet your client’s needs in the best way possible.
- Launch the project. Assign the client to a suitable team and set up the workflow.
- Arrange the initial meeting. Here you introduce your client to their assigned team and set up the expectations and further steps on the project.
- Provide a welcome package with further guidance on the process, homeworks and cheatsheet. Literally, any materials that will ease up and make the client’s journey more pleasant would work.
- Check up with your client to eliminate any mistakes in the early stages.
How to Get the Most out of Your Business Processes with BPM
Having a healthy system of business processes can really change your business for the better.
See, most companies just set up their business processes, and never look back.
For an organization to get the best out of their processes, they need to constantly be monitoring and improving them.
That’s where business process management (BPM) comes in.
BPM is a methodology of constantly monitoring, analyzing, and improving your processes.
Here’s how it’s done:
Mapping is the first step when you model the process with the help of a diagram or Business Process Management Software (BPMS). At this stage, you want to visualize the process at its current state so that you have a top-down understanding of how it works.
Analysis is when you look closely at each step of the process and identify:
- Are any of the steps redundant / can be removed?
- Are any of the steps underperforming?
- Are they taking longer than they should?
- Can any of the steps be automated with software?
Redesigning comes after you identified the things that need to be changed. At this stage, you make all necessary adjustments that will lead to better performance.
Implementation. Here, you put the newly-designed process into action.
Monitoring and Improvement. Once you implement the new process, you might think your job’s done. Well, not exactly. You need to monitor your new process, see if it performs better than the last, and if needed, make further adjustments.
In a lot of cases, you’ll see that any new change comes with its own set of problems.
For example, you can improve the production rate of your manufacturing process by 2%. But then you see that this also increased the defect rate by 2%. This makes the entire change pretty redundant.
…And repeat. BPM is a continuous process. Meaning, you go through the steps we mentioned above on an ongoing basis, improving your business processes whenever possible.
Using Business Process Management Software (BPMS) to Manage Your Processes
If you really want to get the most out of your processes, you should use process management software (BPMS).
BPMS is a type of software that allows you to create digital versions of processes. This is helpful in several ways…
Easier process management – your management team gets a top-down view of all your active processes, as well as notifications if there are any bottlenecks.
Simple task automation – BPMS lets you automate simple tasks. Things like sending an automated email, inputting entries in a database, etc.
Process flow automation – BPMS automates task assignments for employees involved in specific processes. For example, Person A completes a task and hits DONE. Then, Person B automatically gets assigned to a task with a set deadline.
For any business that wants to get the most out of their processes, using BPMS is essential.
More About Business Processes & Related Terms
There are a ton of buzzwords around business processes – BPI, BPM, BPA, and so much more. Here’s what they all mean…
Business Process Improving (BPI) is the act of analyzing and improving your existing business processes.
Business Process Management (BPM) is pretty much the same thing as BPI, but on an ongoing basis. Doing BPM means constantly tracking your processes, and making improvements when needed.
Business process reengineering (BPR) is the act of re-creating your business processes.
While BPI is about improving processes incrementally, BPR is all about completely breaking them down and recreating them from scratch. Usually, this happens with some sort of innovation that lets you complete a given process faster or better.
Finally, business process automation (BPA) is the act of automating a business process. Usually, when someone refers to BPA, they mean one of the following:
- Automating the task flow from employee to employee using BPM software.
- Automating menial tasks using BPM software.
When people refer to BPA software, on the other hand, they basically just mean the same thing as business process management software.
And to wrap it up…
Finally, let’s review everything we’ve learned so far:
- A business process is a set of steps you do to achieve a goal.
- The 5 top benefits of using business processes are productivity, agility, measurability, employee satisfaction, compliance and transparency.
- The most common business processes are employee onboarding, sales, procurement, and client onboarding.
- How to get the most out of BPM through its 5 steps: mapping, analyzing, redesigning, implementation, monitoring and improvement.
- How to make things even easier to manage with BPMS which automates some menial tasks and task assignments among other benefits.
For more industry-leading advice on process management & workflows, make sure to follow our blog!