What is a Business Process?
A business process refers to a specific set of activities or tasks that are performed in a structured manner to achieve a specific outcome or goal.
While certain business processes are mandatory and executed by the book, other processes are carried out with greater flexibility on a priority basis to achieve business outcomes.
A business process that manages business rules is essential for the smooth functioning and fulfilment of organizational goals. A business process may be simple or complex depending on the number of steps required to achieve the expected outcome.
A business process can be different from other activities in the following ways:
- It consists of sequential steps that need to be followed for its completion.
- It is repetitive as the same set of steps need to be followed to execute the process again.
- It can be measured in terms of inputs, resources, the time required, cost, and productivity.
Table of Contents
- What is a Business Process
- Examples of Business Processes
- Why Are Business Processes Important
- Various Steps of a Business Process
- Benefits of Using a Business Process
- Terms Related to Business Processes
A business process can be clearly understood through certain examples.
Examples of Business Processes
Typically, any set of activities with a determined start and endpoint can be deemed as a structured business process. Common applications of business processes can be found in various departments such as HR, purchase, sales, and more. Here are a few examples:
The hiring process followed by the human resources (HR) department in an organization might involve a series of tasks to get a suitable employee in the end. They might involve:
- Posting the job vacancy
- Screening the received applications/ profiles for suitable candidates
- Communicating interview appointments
- Conducting multiple rounds of interview
- Selecting the ideal candidate
- Negotiating terms and salary
- Sending the offer letter for acceptance
Once this process is complete and the candidate is hired, it is then followed by a more elaborate business process - onboarding. Once again a business process comes into play when a candidate resigns from the organization.
Sales or Purchase Process
Both sales and purchase departments have a similar but complex set of tasks that are followed every time to achieve sales targets or purchase the right goods or services. These steps are:
- Sending the sales proposal / issuing request for proposal (RFP)
- Sharing quotes / analyzing bids and selecting or managing vendors
- Receiving / placing orders for product/service
- Updating records of sales / purchase
- Delivery of products / confirmation through receipt of goods
- Billing / receiving invoice
- Payment received / made
Here are few more examples of popular business processes:
- Answering and resolving complaints in customer service
- Collecting, sorting, checking, and recording accounting transactions
- Customer onboarding in banks
- Conducting market research
- Generating ideas, building, testing in the product development process
Why Are Business Processes Important
A business process is vital for businesses to streamline activities and ensure organizational goals are met on time. Business processes:
- Provide clarity on tasks to be focused on to increase business value
- Increase efficiency in carrying out tasks to achieve end goals
- Result in effective communication between departments to make the business process successful
- Ensure better accountability and optimized use of resources
- Provide well-defined strategies that can be documented for repetitive use
- Ensure completion of tasks on time to ensure favorable results
Various Steps of a Business Process
A business process broadly consists of the following steps:
1. Determine the goals
Decide the end goal to be achieved through the means of a business process. The purpose of a business process, the participants, the start, and the end in the process should all be laid out in this stage
2. Chalk out plans and metrics
Decisions on the roadmap for a process include data requirements, identifying methods, tools, the time required, costs, and more that will be decided to make the business process a success.
Organizations can execute a business process in real-time to see how effective it is to bring about desired results. Communication between stakeholders and/ or other departments involved is vital for the business process to be implemented correctly.
4. Track and monitor
Tracking the progress, documenting the business process, noting inefficiencies, and making adjustments are carried out at this step.
5. Repeat the process
Once the process is established and delivers the desired result, the process can be iterated.
Benefits of Using a Business Process
Using a business process, especially an automated business process, has several benefits:
1. Efficiency - Important processes can be streamlined, performance can be monitored, and the time taken to complete tasks is optimized, resulting in increased efficiency.
2. Easy monitoring - Well-defined business processes follow a set pattern that can be easily monitored for progress or redundancies. Changes to processes can be made to suit business needs quickly and effectively. Deploying a business process management software can also help remove duplicate tasking with less dependency on human resources.
3. Lower risk - Established processes are successful and are less prone to huge risks that can impact performance. BPM solutions can track, identify, and resolve bottlenecks to avoid escalation and keep processes going.
4. Cost savings - Clear-cut processes help avert unnecessary expenses and delays. Making improvements in ongoing processes also reduces overheads and cuts down on costs.
6. Improves business relationships - When everyone clearly understands their role in a business process, it leads to less chaotic situations and better communication. The result is stronger internal relationships and improved stakeholder relationships.
7. Ensures smoother audits and rules compliance - Documented business processes follow standard rules and regulations. They are also easy to track and make company audits a lot easier.
8. Enhanced productivity - Companies that invest time and effort in their business processes are rewarded with improved productivity. When processes are well-defined, it speeds up the routing of tasks and with faster accuracy. Using BPM solutions makes processes error-free which also helps employees to concentrate on other tasks improving overall productivity.
Terms Related to Business Processes
There are many terms that one can come across while discussing business process solutions. Here is a list of the most popular terms:
- Business process management (BPM) is a disciplined approach used by organizations to improve business processes. It involves applying several methods to model, analyze, execute, improve, optimize, and automate a business process to make it more efficient. BPM is a continual approach undertaken to make business processes more suitable to changing business requirements.
- Business process improvement is a planning strategy to remodel existing business processes. Stakeholders can use various methodologies to identify, analyze, redesign, effect changes, and refine where required to make processes more efficient and accurate.
- Business process mapping uses a workflow diagram to visually portray the steps of a business process. Process mapping software can guide users to logically map processes, identify overlaps, and more, through an interactive visual interface.
- Business process modeling is a graphical representation that aims to detail the function or workflow of a business process. Its main purpose is to document the flow of activities and make required adjustments for effective execution. A standard called Business Process Modeling Notation (BPMN) is normally used to make the process clear for all stakeholders and users involved.
- Business process documentation involves providing an elaborate and logical description of a business process. It can use graphical, diagrammatical, and written forms to indicate how a process should work in a business environment.
- Business process reengineering is a term used to indicate the rework of core business processes. It involves identifying inefficiencies, removing redundant tasks to transform the business process into a more effective one.
- Business process integration is a practice that enables businesses to integrate multiple processes across many verticals inside the organization. This facilitates sequential communication across systems to reach end goals efficiently.
- Business process analysis refers to the method of assessing business requirements, evaluating current business processes, and incorporating changes to processes or policies to get the desired results.
- Business process optimization is essentially using analytics and other tools to identify inefficiencies in an existing process and correcting them for overall benefit.
- Business process transformation takes place when significant changes to a business process are made to ensure it meets a specific or new business goal. This kind of transformation can take place at the root level, strategic level, or operational level to ensure utmost efficiency.
- Business process monitoring usually happens at the management level. Specific software can be used to monitor business transactions, detect problematic issues, and resolve them quickly to maintain effective outcomes and fulfillment of business goals.
Well-defined business processes can individually contribute to the increased success of meeting the end goals of an organization. BPM software works to remove inefficiencies, allocate activities in time, and incorporate seamless functioning of processes to improve business efficiency. Identifying the right business process processes can make all the difference to help organizations improve workflows for effective functioning and overall productivity.