Whether you’re a line manager or individual contributor, you’ve undoubtedly heard the term business process thrown around in meetings and emails. Chances are you have a pretty good idea of what the term refers to, but this guide will ensure you have a definitive, clear understanding of its meaning.
We’ll go beyond simply defining what a business process is (and is not) to explore related terms and give examples of how each concept plays out in real life.
You’ll also hear from two business leaders, Aaron Alpeter and Stephen Roethe, on how they regularly create, refine, and implement processes at their companies to keep work on track, employees on task, and customers happy. Alpeter is the founder of izba, a supply-chain consulting, outsourcing, and technology firm. Roe is the founder and head of digital strategy at Grow Atom, an SEO agency for e-commerce stores.
Here’s an in-depth look at five key business-process terms and how to apply business-process concepts to your organization.
1. Business process
A business process is a set of connected tasks that an organization performs to achieve a specific goal, such as manufacturing a product or delivering a service.
“Business processes require you to create workflows and systemic methods to handle recurring tasks that give you a desired result,” says Roe. Consider what it takes to write an article or deliver an invoice to a customer. To produce those results, you have to take certain steps.
“When creating or refining a process, I recommend working backward,” says Roe. “Define the end result you want and walk through what it takes to get there.”
A process may be formal or informal. Organizations often record formal processes and perform them in the same manner every time. Informal processes are rarely codified, and their exact steps tend to vary depending on who’s performing them.
“Many people don’t realize that the work they do, even if it’s not formalized, is part of a process,” says Alpeter. “If there’s a defined outcome the person is trying to achieve, how they achieve that outcome is the process, regardless of whether it’s written down or performed differently by a coworker.”
Sometimes, informal processes may become formalized after a manager, external consultant, or other authority reviews them. For example, let’s say two employees, Janet and David, both have the same job and create the same work outputs every day. However, Janet routinely completes her work more quickly than David, making her more productive.
Their manager takes note of this discrepancy and calls for a review of how both employees complete their work. The review reveals that the set of steps Janet takes — her informal process — is more efficient than David’s.
Subsequently, the manager asks Janet to record her process and walk through it with David and the rest of the team. Janet’s informal process then becomes the team’s formal business process.
Types of business processes
The term business process is broad and encompasses many kinds of outcomes, so it can be helpful to categorize processes into these three types.
1. Core
This type of process is tied directly to how you generate value for customers (and income for your company). Consider the products and services your customers purchase. How you create and deliver these items and experiences are your core processes.
For example, Alpeter’s company provides consulting expertise on matters related to supply chains. Clients pay for this expertise in the form of consultations, negotiations, strategic planning, forecasting, and other services. The activities that go into developing and delivering these services to clients are core processes.
“Clients buy our experience and problem-solving capabilities — our ability to resolve their issues and educate them on the why and how to avoid the same types of pitfalls as they scale,” Alpeter explains. “Each process that results in generating value for our clients is core to our business.”
Consider another example. Let’s say your company produces a software as a service (SaaS) product. After customers make a purchase, you need to onboard them so they know how to use the product effectively — which ensures they’ll maintain their subscription. “This is a core process because it’s generating value for customers and aiding in continued revenue generation,” Alpeter explains.
You can also find core processes in fast-casual restaurants, like those offering burritos or sandwiches. There’s a clear production line — a process — for making these food items that you can watch take place. “The steps for making the burrito or sandwich are a clear-cut core process, as customers will purchase the food item immediately after it’s created,” says Alpeter.
2. Support
Unlike core processes, support processes do not generate income or direct value for customers — though that’s not to say they don’t have value. Most support processes are internal and tied to areas that are cost centers, such as HR and IT. The activities of these departments may not make money, but they’re important for supporting the company’s ability to do so — that is, they support core processes.
For example, talent management is an important aspect of any successful organization, and HR typically leads these efforts. They have to find the right people to fill the roles you’ve identified as necessary for sales, operations, and other key functional areas.
They accomplish this by posting job openings, asking current employees to refer friends and professional connections, reviewing applicants, and eventually hiring and training approved candidates. All these actions are considered support processes.
Similarly, IT provides technical leadership and support to all areas of the organization. They help implement and maintain software that employees use in their work, fix these tools when they break, and troubleshoot when employees have technical difficulties. Again, the internal nature of these actions means they don’t directly generate client value or revenue — hence, they’re support processes.
3. Management
Like support processes, management processes don’t generate revenue for the company or direct value for customers, but they’re necessary. These processes are high-level activities that set the direction of the company and focus on planning, monitoring, and controlling core and support processes.
For example, company executives regularly perform strategic planning and goal-setting, which helps guide the organization down the desired path. They also keep track of company results and report to a board or shareholders. These activities are management processes.
Consider also how an organization improves processes over time. There’s typically a process in place for identifying and addressing activities that aren’t generating revenue, result in poor customer perception, lead to errors, or negatively affect employees performance. This type of process controls core and support activities, which makes it a management process.
2. Business process management
Business process management (BPM) is the practice of reviewing, analyzing, measuring, and identifying opportunities to automate and optimize business processes. You can think of it as the discipline behind management-type processes.
“With BPM, you’re taking a high-level view of processes, considering how they work both independently and together,” Roe explains. Instead of allowing employees to haphazardly accomplish tasks in whatever way they deem fit, practicing this management discipline ensures your organization is creating and maintaining processes that consistently deliver desired outcomes.
Alpeter recommends a few ways to ensure effective BPM:
- Define clear success criteria for each business process.
- Ensure core and support processes tie together well.
- Formalize processes whenever possible by creating templates and standard operating procedures (SOPs).
Roe notes that many small business owners forgo practicing BPM, mostly because it takes time away from other priorities. But he says it’s important for any organization, regardless of size, to ensure its processes are in order. For busy owners, his recommendation is to loop in other employees and assign them process areas to manage.
“Too many business owners abdicate when they need to delegate,” Roe explains. “Someone needs to be accountable for keeping processes in line and up to date. But you don’t have to do it all yourself. Lean on your workforce to lighten the load and ensure your company’s processes are working as intended.”
How often to review business processes
While organizations should certainly review their business processes regularly, the exact time frame will vary based on several factors: the importance and complexity of the process, available time and resources, and so on.
“For example, we review some of our core processes — such as writing articles — every week to ensure our customers are receiving the value we promise,” says Roe. “However, nonessential processes like vacation requests don’t get nearly the same level of attention.”
Clearly, Roe takes BPM seriously. In fact, he blocks out time every business day to review one or more processes, depending on the priority level he’s assigned to them and what his schedule will allow.
“I keep a tight schedule,” he says, “so I like to batch tasks to limit mental fatigue from switching back and forth between dissimilar to-do items. So I do all my process reviews at once.”
Revising a process
Keep an eye out for indications that your business may need to review and revise a process. For example, a particular process might be prone to human error. A review may find that a step of the process is ambiguous and leads to different interpretations, depending on the person using the process.
“If a problem happens once, it’s most likely a people issue,” says Roe. “However, if a problem rears its head consistently, chances are it’s a process issue that needs to be addressed. Even a few occurrences of a problem may indicate the process should be thoroughly reviewed.”
3. Business process modeling
Business process modeling is a structured approach to recording a set of expected activities, including who is responsible for performing them. It’s a map of what’s happening in a company — a set of living documents that define how work gets done.
Modeling is essentially how you create or develop your processes from beginning to end. “It helps you see the big picture,” says Roe.
“In business process modeling, you’re figuring out and recording interdependencies — the inputs and outputs needed to move from step to step,” Alpeter explains. “It’s a value stream map that shows how something is created. For example, you could produce a product flow that illustrates how a product goes from the factory to the warehouse to the customer.”
There are a number of techniques you can use for business process modeling. Roe likes to use kanban boards because they allow him and his team to quickly grasp the order of steps from a visual representation of tasks.
“The boards tie nicely to our writing phases,” he says, “and we can easily add columns and cards to represent new phases in the process. For example, we recently reviewed our process and determined that having the writer review their article a second time helped improve output quality. So we added an extra column to the board to capture the new step.”
Returning to the burrito-making example, Alpeter notes how fast-casual restaurants have created processes that reflect the need for efficiency. After all, speed is important in these businesses.
“For example,” he says, “you often see that employees will start with a tortilla, move to proteins, then vegetables, and pass off the finished product to the cashier. There’s obviously solid reasoning for this specific set of steps because many burrito places model their building process in the same order.”
4. Business process improvement
Business process improvement is the practice of using different methods to analyze, redesign, and optimize existing processes to reduce task completion time, improve quality, reduce friction, or some combination of these.
“It’s about determining how you can complete a process faster, cheaper, and better,” says Roe. “Just keep in mind you need someone leading the improvement effort, or it won’t get done.”
Process improvement falls under the umbrella of business process management, with the focus on optimization being the key differentiator. BPM says which processes need review and optimization. Business process improvement says how to optimize them.
“What you optimize for depends on what’s important to your company,” says Alpeter. “We try to optimize for client value because that’s one of our primary focuses. We want to ensure we’re doing something better — not just different — than competitors.”
By comparison, Alpeter notes that other consulting companies may optimize processes for profit, which may result in companies billing as much as possible without delivering as much value in their work. “Clients may still achieve their goals,” he says, “but with some drawbacks. The work may take longer, they may not be as informed, the experience may be less than ideal, and so on.”
He cites another example: “Everyone knows Chick-fil-A and Popeyes — they both sell chicken, but the customer experience is different. Chick-fil-A regularly has long lines, but customers happily wait because the restaurant has clearly reviewed its processes and determined that ‘improvement’ for them means optimizing around the customer experience. In contrast, Popeyes tends to be quicker, but the experience can be less than ideal because they’re optimizing for something else.”
5. Business process automation
Business process automation is the practice of using technology to automate repeatable tasks to save time and effort, increase scalability, minimize human error, and reduce costs.
While many have lauded automation in recent years as a beneficial practice, especially for larger organizations where scale is important, Alpeter cautions against automating every part of a business process just because you can.
“Too many business leaders get caught up in automation because of the promised benefits — which are often very real — but neglect to first identify whether automation is even necessary,” Alpeter explains. “You may find there are parts of your process that need to be changed or eliminated altogether, rendering automation an unnecessary task.”
Alpeter provides three examples where business process automation often occurs.
- Meeting scheduling
Everyone knows the headache of trying to wrangle schedules to see what time works for a meeting. SaaS products such as Calendly, ScheduleOnce, and Jotform provide the tools to automate how organizations schedule meetings.
“Instead of emailing back and forth, you can just provide a link for someone to find a time that works for them,” Alpeter explains. “These solutions automatically sync with your calendar to ensure that invitees can only choose times when you’re available.”
- Email drip campaigns
Automation also comes in handy in the marketing realm, where marketers value the ability to connect with a large number of customers automatically. Take email drip campaigns — software solutions can automatically send emails to customers based on certain events. “For example, you may want to send customers a thank-you email immediately after they make a purchase or an exclusive offer X days later,” says Alpeter.
- Ridesharing
The rideshare space has been transformed by automation. Previously, the manual process of calling a taxi led to long wait times and ambiguous fares. Popular apps like Uber and Lyft brought automation into the picture, remedying these inconvenient aspects of the rideshare experience.
“Now you can simply request a ride on your smartphone and be notified when it arrives,” Alpeter explains. “Plus, fares are presented up front so you have a clear estimate of how much you’ll pay.”
Organizational success depends heavily on your business processes. Refining those processes requires taking a multifaceted, thoughtful approach. For best results, your organization should evaluate its processes on an ongoing basis to truly reap the benefits.
Photo by cottonbro studio
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