Most successful companies utilize business processes as a way to keep their operations and objectives in order. This helps make important business activities and tasks consistent, and it allows for much easier refining and updating.
So, how can your business benefit from using business processes? Knowing where and how to start can help you tremendously. Keep on reading to find out more about business processes, their types, and why your company should start implementing them as soon as possible.
A Business Process Definition
When it comes to the business process definition, the simplest one is that it’s one activity (or several consecutive activities) required to reach a certain business objective.
It is important for each activity to be specific and consistent so that organizational goals can be easily achieved.
A business process is conducted by a specific group of people or systems. These processes are structured in a way that allows the business to achieve a pre-defined goal.
Each business process is divided into steps. Each step contains a task that is assigned to a person. This process can help create process automations and BPMs (Business process management).
The difference between business processes and other processes is that business processes are repeatable, flexible, and measurable. A business process can also be distinguished as having a set beginning and end goal.
You can consider the following as a business process definition example:
- Prepare and print out paperwork
- Submit the paperwork to team members
- Make a list of possible training tactics for new employees
- Prepare materials and tools that will be needed
- Set up the materials and tools
- Prepare a document detailing the entire job description
- Welcome the new employees
- Introduce them to the team
- Describe the work environment
- Show what you expect from them
This business process outlines a hiring and onboarding process. This is a great way to integrate new employees smoothly into the company and the team. This leads to a more productive team, which ultimately benefits the company.
Lastly, integrating business processes into your company will drastically affect it. According to a recent study, businesses have noted a higher project success rate after utilizing business processes. That’s why many businesses are spending their time and money to establish proper business processes.
Types of Business Processes
When talking about the definition of business processes, we have to mention that they can be divided into three main categories:
The first type of business processing is management.
This type deals with the following aspects of a business process:
These attributes help make the entire process run smoothly, which then contributes to a more efficient business. They make sure that every step and activity stays on track and that every task follows regulations. This then helps to finish a project successfully without errors.
An example of a management process is developing an app.
The company has to make a list of the following management process steps:
- Coming up with an app idea
- Deciding on an app design
- Deciding on the color schemes
- Projecting sales
- Determining estimated downloads
- Assessing the number of tools and people needed to finish the task
The operational (or core) process is the business process that creates a value chain. They are cross-functional and can benefit customers as well. This type of process is used to meet the needs of external clients while still generating profit for the company.
Operational processes generate direct income and revenue for the business.
These processes can be:
- Manufacturing a certain service or product
- Turning every order into income
- Shipping products to the clients
As these types of processes are referred to as primary and essential business processes, it’s important to utilize them for your company’s benefit. Operational processes deal with the actions that need to be taken in order to deliver a product to a customer.
Supporting processes help operational processes be carried out properly from the starting point to the finishing point. Although businesses cannot gain any additional profit from these types of processes, they are still an essential part of every successful establishment.
These supporting processes are important as they make sure that every client’s needs are met. This helps to keep track of everything and allows every task to be finished efficiently.
To use the same app development project as an example, a supporting process would outline the approach to hiring app developers.
Business Process Characteristics
A business process can be differentiated from other processes as it has certain characteristics that can benefit a company in the long run.
Every business process should have some or all of the following characteristics:
- It should be flexible. A good business process allows you to make changes to it without the need for operations to interfere.
- It should have certain limits and parameters (a beginning and an end). This is also referred to as the scope of the business process. Each process needs to establish a starting and finishing point to be efficient.
- It should be repeatable. Also known as the sequence of business processing. This means that every business process needs to have a set sequence in which every action needs to be taken. This order can then be replicated.
- It should create value. Every business process needs to show why a task or activity needs to be performed. This gives the process value and a purpose.
Business Process vs. Business Procedure
The main difference between a business process and a business procedure is that a process refers to a sequence of activities that can help a team reach a goal. On the other hand, a business procedure refers to instructions that can help you finish a task.
Differentiating between the two can be quite challenging. However, the main distinction is that a process answers the “what” question, whereas a procedure answers the “how.”
Additionally, a process contains an input, a main process portion, and, lastly, the output. These elements define the entire process. In contrast, a procedure only describes the features of an activity. This includes defining which person is required to finish what task.
Another difference is that a business process can be visualized with a flowchart diagram. In contrast, a procedure can be visualized as a checklist (or document) and serves as a guide on how to finish each task.
Business Process vs. Business Function
The key difference between a business process and a business function is that the process showcases the steps that are needed to reach a specific goal. A business function refers to the collection of activities used to accomplish a general goal.
One thing to consider is that every step, task, and activity needs to be connected with one another in a business process. This is not the case with business functions. A business function can be diverse and include many spectrums and details of an entire project.
Business functions are essentially what make your business function. They focus on the structure of the entire process instead of sequences, orders, and steps.
The Importance of Business Processes
Business processes can help your business prosper by offering the following benefits:
#1. Work is Organized
A business process breaks down each step of a goal. It explains what activity is needed to finish a task and what task needs to be finished to reach a specific goal. To achieve this, every step is divided into what needs to be done and which person needs to do it.
This division helps keep the work more organized as it allows each person to focus on their own task. This makes the entire process more efficient as well.
#2. Opportunity to Automate
Since business processes follow a repetitive pattern and a specific sequence of steps, the entire project, or at least parts of it, can be automated. Once each task and activity is set and every person is assigned a step in the process, the business process can be subject to automation.
This is a great way to avoid manual errors, and it’s a much more efficient option in the long run.
#3. Reduces Errors
Without using business processes, task assignments would go as follows:
- Choose an employee who has knowledge of the topic
- Assign them tasks if they are available
This type of task assignment is prone to errors, as the person conducting the activity may not be the best fit for it. Business processes can help choose the right person for every activity and task.
Since each step of the process is visualized, every employee can check what the requirements of each task are and whether they’d be capable of finishing said task. Choosing the right person for the activity reduces human errors drastically.
#4. Time Management
Since business processes use strategic task division and flowcharts, it ultimately reduces the time needed to finish activities on a project. These strategies and flowcharts help finish activities more efficiently and in a timely manner.
Since the diagrams visualize the entire process, employees and stakeholders will understand the project more easily. This ensures no time is wasted explaining the project in more detail.
#5. Utilizes New Technology
Improving your business processes will inevitably improve your business, and staying on track with new tech-related trends will help optimize and improve business processes. This allows them to become more efficient in the long run. Adapting to these trends is a requirement for any and every business.
Examples of Business Management Processes
Depending on the activity, here’s what business management process examples can look like:
#1. Onboarding Employees
The main priority when it comes to onboarding new employees is to show professionalism and start the process with a solid first impression. To avoid having to think of things on the spot, a business process is required.
Developing a business process for onboarding new employees can help maintain a good image of the company as an employer. It keeps the work consistent and allows new employees to integrate into the company more easily.
An example of an onboarding business process is:
- Decide on a meeting date with the new employees
- Describe the goals and missions of the company
- Explain the tasks that the employee will be assigned to
- Show the employees around the company
- Ask your current employees to introduce themselves
The finance department of an organization can greatly benefit from using business processes. That is because the finance department also deals with repetitive projects. It’s necessary that these projects be accurate, and for that to happen, mistakes need to be avoided.
That’s where business processes come into play. A business process can help automate the entire repetitive process without any man-made errors.
A financial business process can be:
- Sending invoices
- Automating payroll
- Staff expenses
- Office expenses
- Budget control
- Processing taxes
A management business process relates to the entire company and its functions. These types of business processes help maintain the core business and support all processes within an organization.
Although they don’t necessarily deal with the creation of the company, these business processes keep the company on the right track.
Examples of management business processes include:
- Redefining a company’s mission
- Strategizing for the company’s benefit
- Deciding on goals
The company can greatly benefit from management business processes as they help keep the company together while handling the necessary “behind the scenes” work.
Examples of Business Operational Processes
As mentioned above, operational processes are the core processes that keep the company moving.
The main divisions of business operational processes include:
Manufacturing (or production) operational processes tackle changes to the input and focus on transforming these inputs into final products that can be sent out to customers.
It also includes activities such as:
- Maintaining an office
- Maintaining good co-worker relationships
- Tracking whether each employer is doing their assigned tasks
All of these attributes help to maintain a positive outcome at every step of the manufacturing process.
In an establishment that deals with sales and provides services to clients, business processes can be quite helpful in managing each step of the process, starting from the creation of the product and ending with shipping it out to customers.
A sales operation’s business process can include the following:
- Identifying new product ideas
- Identifying sales opportunities
- Looking into potential customers
- Researching market trends
- Proposing a new service or product
- Approaching a customer
- Giving a sales pitch
A sales business process can also refer to the required steps that a company needs to take to turn a potential customer into a buyer.
Good marketing can make or break your organization. That is because marketing helps customers relate to your products or services more, which results in better sales for your business.
The right marketing tactic can also help customers make the final decision on whether they want to purchase your product or not. Additionally, utilizing a marketing business process can ensure a good reputation while keeping track of the customers’ demands.
A marketing business process can include:
- Identify market trends
- Identify the customer’s needs
- Set the right sales goals
- Choose a marketing platform
- Create products based on clients’ needs
- Keep track of any market changes
Examples of Business Supporting Processes
Let’s go over some of the most common supporting processes in a business.
The accounting process is also referred to as an accounting cycle. That is because it involves a set number of steps that are repeated over a specific period set by the company. These processes handle financial statements for an establishment.
An example of an accounting business supporting process is:
- Keeping track of incoming and outgoing transactions
- Documenting each transaction
- Creating worksheets
- Conducting financial statements
Maintenance refers to the monitoring of a product’s quality. This means that maintenance deals with the entire process, from getting the final product to shipping it to a customer.
That’s why a maintenance business process includes:
- Delivering goods to customers
- Packaging orders
- Keeping track of delivery efficiency
- Tracking delivery tools
- Maintain a running order
- Identifying order and product issues
HR processes are usually made up of multiple core processes that need to be linked together to make sense. These types of processes are fundamental, as they help new employees integrate into the company with a positive outlook and a good first impression.
Every HR business process follows a workflow in which each step is defined in detail.
This can include the following:
- Recruiting new employers
- Training new employers
- Onboarding new employers
- Scheduling meetings
- Sending out payrolls
Terms Related to Business Processes
The main terms that can be related to business processes are:
Business Process Management
BPM (or business process management) is an approach used to make business processes more efficient for an organization. This approach is considered systematic and more impactful as it deals with end goals.
This can include:
- Focusing on productivity
- Reducing the time needed to finish tasks
- Reducing costs
- Checking for duplications and errors
Business Process Improvement
Business process improvement refers to a project that can help an organization improve its ongoing processes. The main goals of this process are to make the team more productive and to increase efficiency levels.
Business process improvement can also help reduce the costs of an ongoing process.
Business Process Mapping
Business process mapping refers to the visual aspect of the process. This includes the entire mapping process, from beginning to end. It highlights each step and denotes which person is responsible for what tasks.
A business process map can either be made by hand on a whiteboard or you can use process mapping software available online.
Business Process Documentation
Business process documentation deals with outlining all the steps that can help create a process document. This process documentation provides instructions on how to do each step of a specific process from start to finish.
Process documentation is important as it clearly highlights and instructs each person on what their tasks are. This allows the process to become easier and be finished in a timely manner.
Business Process Development
Business process development goes hand in hand with business process management and can, therefore, be referred to as BPDM (business process development and management). This process deals with designing, developing, and creating business processes.
BPDM can also improve and modify ongoing business processes. This process allows organizations to improve their performance, which will help them in the long run.
- Outlining steps and activities required to reach a goal
- Designing the entire process
- Maintain the organization’s mission and values
Additionally, BPDM can help create metrics such as risk management, transform the business, and align business and IT processes.
Business Process Automation
Business process automation utilizes technology in order to automate all manual processes. This helps with avoiding any future man-made mistakes as it automates each frequent and recurring task.
Examples of business process automation include:
- Managing HR
- Follow-up automation
- Maintaining client relationships
- Onboarding new employees
Business Process Diagram
A business process diagram shows the steps of a process from the beginning to the end. It uses flowchart symbols to showcase how the tasks can be completed.
Business process diagrams can benefit your organization as they give you a look at how an entire process works. This can be crucial to identifying inefficient tasks or errors.
Business Process Design
Business process design refers to the creation of a new process. This means that a business process design deals with developing the process from the initial stage. This is essential in order to foster growth for a company.
Designing new business processes can be beneficial for organizations as they make every process more structured and allow the development of repeatable processes that will consistently result in successful outcomes.
Any type of organization can benefit from a business process. It’s a way of visualizing the steps and activities that need to be taken in order to reach a goal. Companies can greatly benefit from business processes as they help with time management and are fairly cost-efficient.
Additionally, business processes help keep work organized and automate each step, so there are few to no errors. That’s why it’s never too late to start using business processes to spruce up your company.