What Actually is a Business Process?
February 21st, 2018 • BPM
A business process is a series of steps performed by a group of stakeholders to achieve a concrete goal. It is the fundamental building block for several related ideas such as Business Process Management, Process Automation, etc.
While there’s a deluge of things written and said about business process management, it’s hard to find a clear answer to the question, “What exactly is a business process?”
Let’s break this down further.
The Importance of Business Processes
The need and the advantages of a business process are quite apparent in large organizations. A process forms the lifeline for any business and helps it streamline individual activities and make sure that resources are put to their optimum use.
Some of the key reasons to have well-defined business processes in place are:
- Identify what tasks are important to your larger business goals
- Streamline them to improve efficiency
- Streamline communication between people/functions/departments to accomplish specific tasks
- Set a hierarchy of approvals wherever relevant in order to ensure accountability and an optimum use of resources
- Keep chaos from creeping into your day-to-day operations
- Standardize a set of procedures to complete tasks that really matter to your business
Steps in a Business Process
A business process flows in a linear sequence. It needs direction and a fixed route in order to arrive at a specified destination.
A sales process might seem to be very different from a finance process, but there are certain steps that are universally common to all business processes.
- Goals – What is the purpose of the process? Why was it created? How will you know if it is successful?
- Plan – What are the strategies needed to achieve the goals? This is the broad roadmap for the process.
- Set Actions – Identify the individual tasks your teams and machines need to do in order to execute the plan.
- Test – Run the process on a small scale to see how it performs. Notice any gaps and make adjustments.
- Implement – Start running the process in a live environment. Properly communicate and train all stakeholders.
- Monitor – Review the process and analyze its patterns. Document the process history.
- Repeat – If the process is able to achieve the goals set for it, replicate it for the future processes.
- Finite – A good business process has a well-defined starting point and ending point. It also has a finite number of steps.
- Repeatable – A good business process can be run an indefinite number of times.
- Creates value – It ultimately aims at translating creation of value into executable tasks and does not have any step in the process just for the sake of it. In other words, if any step in the process isn’t adding value, it should not exist.
- Flexibility – It has an in-built nature to be flexible to change and is not rigid. When there is any scope for improvement that is identified, the process allows that change to be absorbed within itself without operationally affecting its stakeholders as much.
- Achieving greater efficiency
- Reducing human error
- Adapting to changing business needs
- Clarifying job roles and responsibilities
Business Process Examples
Let’s take a simple business process like creating a video ad campaign.
It might start with the Account Manager who drafts a brief based on the meeting with the client.
Then, the Creative Director might assign the work to a video producer. The work is completed and approved by the Creative Director, Account Manager and client.
Aside from the media, other business processes are interwoven such as purchase orders and staffing hires.
What are some essential attributes of an ideal business process?
There are 4 essential attributes that constitute an ideal business process:
Business Process and BPM
If processes are wheels of a business, business process management (BPM) is the property maintenance and support to keep the wheels running and in good shape.
As a business process takes on more workload, it tends to wobble and perform badly. A BPM initiative can establish a robust framework to minimize complexities and create a solid foundation for the process to withstand challenges.
Business process management is a process improvement paradigm for businesses to cut cost, time, and resources. Business process management helps you remove redundancies and improve efficiencies.
What are some of the terms related to business process?
Business Process Automation – This is a technology-driven strategy to automate a business process in order to accomplish it with minimum cost and in a shorter time. It is extremely useful for both simple & complex business processes. Some areas where business process automation is greatly helpful are:
BPM – This is a systematic approach to make an organization’s processes more efficient and dynamic in order to meet the changing needs of business. Continuous improvement is one of the core underlying philosophies of BPM and it aims to put it at the centre of all BPM initiatives. BPM is an ongoing approach to continuously make execution of business processes better. Several cloud and on-premise software solutions are available to implement BPM.
Business Process Modeling – This is a diagrammatic/structural representation of flow of business activities in an organization or function within an organization. Its primary use is to document and baseline the current flow of activities in order to identify improvements and enhancements for speedy accomplishment of tasks. Usually, they follow a standard such as Business Process Modeling Notation (BPMN) which is a globally accepted standard which most process professionals easily identify with.
Business Process Improvement – This is a strategic planning initiative that aims at reshaping business processes based on operations, complexity levels, employee skills etc. in order to make the entire process more meaningful, efficient and contribute to overall business growth. It is a rather drastic way to rediscover more efficient ways to run a business process rather than taking small incremental steps. It usually starts with process mapping and its core aim is to align IT resources with organizational business goals.
Business Process Reengineering – This is a complete redesign of business processes after thorough analysis in order to bring drastic impact. It involves identifying the core of inefficiency, culling out tasks that don’t add any value and even implementing a top-to-bottom change in the way a process is designed in order to bring about an overall transformation.
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Business process optimization takes an existing process and uses analytics and business process mining tools to weed out bottlenecks and other significant inefficiencies in a process.
Business process mapping is a procedure to document, clarify, and break down process sequences into logical steps. The mapping is either done in written format or visualized using flow charts.
Business process analysis is the process of identifying business requirements and deciding on solutions that best solve business problems. This can consist of process improvement, policy development, organizational change, or strategic planning.
Business process integration is the ability to define a process model that defines the sequence, hierarchy, events, and execution logic and movement of information between systems residing in the same enterprise.
Business process Simulation is a tool for the analysis of business processes to measure performance, test process design, identify bottlenecks, test changes, and find how a process operates in different environmental conditions with different datasets.
Business process transformation is a term that means radically changing a series of actions needed to meet a specific business goal. This is aimed at ensuring that a company’s employees, goals, processes, and technologies are all in line with each other.
Business process Monitoring is the active monitoring of business processes and activity to help management gain insight into important transactions and processes within an enterprise. This helps management gain visibility on how their processes are functioning, and if they’re aligned with the company’s business goals.