"If you can't describe what you are doing as a process, you don't know what you're doing." W. Edwards Deming.
In this article, you will find extensive information about business processes, what they are, what are their key attributes, how to recognize them.
You can also find tips to improve your business process by looking at the 7 reasons why business processes decay over time or how to measure their performance.
In summary, the world of business processes is all about balancing compliance, productivity and agility in order to support you and your organization in delivering value to your customers consistently.
TLDR
Business processes are repetitive series of activities (tasks, meetings, approvals, etc.) that together execute business objectives. Business processes are essential and everyone use them whether you are in a small company or a large enterprises, often most are not visible and transparent as their formalization is limited or deprecated.
However, considering today's working environment (remote working, staff turnover, growth, increasing customer’s expectations), mastering essential business processes for your company is essential to deliver consistent outputs productively. Too often, business processes stay unformal, unwritten ("in people's mind") and this poses serious challenges such as relying too much on a few key individuals.
Business processes are particularly challenging not only to define and implement but even more to keep constantly aligned to the latest business needs without becoming too bureaucratic or deprecated.
The best business processes are simple, clear and support individuals and teams in doing what they need to achieve the business objectives without falling into a tick the box exercise.
Table of Contents:
1. What is a Business Process?
2. What are the key attributes of Business Processes?
3. What are the main Business Process categories?
4. How to identify the most important Business Processes?
5. Examples of Management Business Processes
6. The importance of maintaining and improving your Business Processes
7. What are the 7 reasons why Business Processes decay over time?
8. How to get started with your Business Process effort?
9. How to measure Business Process Effectiveness?
What is a Business Process?
Business process definition : Business processes are repetitive series of activities (tasks, meetings, approvals, etc.) that together execute business objectives.
Many work activities can be considered processes, as far as there are a suite of steps.
We call business process the ones that typically share several of the below attributes.
What are the key attributes of Business Processes?
Here are some attributes shared by most business processes:
- Repetitive, either triggered manually for instance processing an invoice or based on a preset frequency such as daily, weekly or monthly
- Clear start and end
- Consistent and controlled inputs and outputs
- Require specific activities to be performed in a specific order
- Engagement of numerous stakeholders each for their role and skill
- Replicated several times within an organization, for instance for each part of the business be it a business unit, a country, customers, teams, factories, etc.
- Measurable!
“A business process is not an instance, a project or a procedure.”
Types of business processes with a monthly frequency, will have one instance per month.
Now, imagine the process of bringing new products to market (often called “new product introduction”). Each new product or group of new products being introduced in the market can be identified as one project which would be just one instance of the “new production introduction” business process.
A procedure, would typically be a prescriptive way to do a part of the process, often referred to as a “step” or a “sub process part”. A business process may contain no procedures or several procedures.
In summary, a business process is the level above: instances; projects and procedures.
It is like a container.
What are the main Business Process categories?
Business processes can usually be categorized into 3 categories according to von Rosing et al.:
Operational processes
These are the core activities that needs doing in a company, this can be producing a blog article like this one or developing a new feature in a software or like many companies actually produce a physical goods or a service to the customers.
Management processes
These are the business processes that oversee operational processes, from planning; budgeting, training, governance and many more.
Supporting processes
Which are the processes that are usually non-core to the good or service delivered. These processes are not directly (though indirectly for sure!) connected to the perceived value of the end product or service delivered.
This can include things like accounting, recruitment, call center and technical support (of course, in a recruitment agency, recruitment would not be seen as supporting by as an operational process).
How to identify the most important Business Processes?
Identifying what are the most important business processes is not easy. The most important business processes will depend on your specific company needs. But one thing that’s for sure is that you will benefit most from getting the right operational business processes (see above) defined and adhered to. This is the best way to ensure efficiency and more importantly the desired consistent output to your customers.
There is another reason why some types of business processes are more important in some organizations than some others: scale.
Some activities need to be done consistently, not only over time but in parallel, in different parts of the organization in a similar fashion (similar is better than identically in many cases!).
Without this structure it can be challenging to scale and grow a business without disappointing your customers.
For example, a business process will be seen as more important in your organization if it needs to happen simultaneously in 10 teams (exactly the same way or with some controlled local variations) while stakeholders, roles and responsibilities, tools, customers and many other variables are different.
Examples of Management Business Processes
Business processes are everywhere, it does not matter in which field or industry you are working, the truth is that where there is something done repeatedly: you have a process. Just making a great coffee or dinner requires a step by step approach that done the wrong way around may lead to the result being not that good.
Some commonly observed repetitive business process examples in management are:
► Supply Chain Planning: Sales and Operations Planning (S&OP ), Integrated Business Planning (IBP), demand planning, project planning, capacity planning, supply planning, etc.
► Product Management: Portfolio management, new product introduction, etc.
► Budgeting & Reporting: Yearly budgeting, financial planning, P&L reporting, etc.
► Strategy deployment & communication: strategic quarterly initiatives; steering committee decision making and communication, company priorities quarterly updates, etc.
► Sales & Marketing: Go to market review, sales promotion, customer collaboration, campaign management, content marketing, etc.
► Corporate & Social Responsibility
► Risk & Quality Management, Business continuity management
The importance of maintaining and improving your Business Processes
Many business professionals, practitioners and consultants focus on the design and the implementation of business processes looking at applying best practices in the context of the organization, its people, its culture and together with the right systems, tools and data. Usually, after a few months piloting the new process flow all extra spot resources to supporting the design and implementation move to other parts of the business.
It is fair to say (and it is great news!) that sustainability is hot these days. But Business Process sustainability is not as sexy. Indeed let's be honest, the biggest business process return on investment (ROI) is related to the initial implementation. Maintaining the status quo is not the most interesting part as it is more difficult to measure ROI.
But it is wrong, here are some reasons why it is important to maintain and improve your business processes for further productivity:
► Get a more enjoyable job
► Be quicker at what you and your team do
► Get a consistent approach & outputs for your customers
► Ensure your have the right people and skills contributing at the right time
► Same is true for the rest of your team
► Be quicker to react!
► Save or at least optimize resources
What are the 7 reasons why Business Processes decay over time?
Assuming your business processes are well designed and already implemented, the challenge are just getting started. Indeed maintaining and improving them over time is not the easiest task!
We have identified 7 key reasons why Business Processes decay over time.
1. Staff turnover
In most companies business process lack clear definition, are undocumented and rely on a few key stakeholders to do their bits. If one leaves, it often creates a gap in the organization that no one is very clear on how to fill. Appointing a colleague to shadow the leaving person is a good step but quite resource hungry and often just a way of pushing back the issue down the road.
2. Decreased employee motivation
Doing the same thing again and again over time can be quite annoying. Even for the ones who enjoy mastering their craft. And over time, when a process or workflow is inefficient with a lot of manual activities and people chasing required, motivation can be short-lived. Business process automation can be a key part in keeping employees motivated.
3. Unsustainable work life balance
Processes are often designed for their output and not always with enough focus on its efficiency. The typical worker who needs to juggle with competing priorities, burning issues and requests will often deprioritize what is very important but not urgent to protect their work life balance.
4. Silo internal mentality
A regular characteristic of business processes is the necessary involvement of multiple stakeholders across multiple functions and teams. Thus, to happen consistently, the process usually needs people with the right influencing and relationship building skills across functions as well as leadership support.
5. New priority within the business
All (or at least most!) organizations need to be good at capital allocation, indeed, there are always some kind of resource limitation typically: money or people. Often a business will push a very important new imperative for the future that may take some eyes off another strategic business process and challenge its sustainability.
6. Lack of agility
To be efficient business processes rely on getting the right people with the right business role to perform tasks in a set order with specific outputs. You have a large risk in trying to be too precise and prescriptive: the process is very quickly becoming outdated. Finding the right balance between prescription and agility can be eased with appropriate design and tools such as intelligent business process management solution.
7. Limited automation and smart tools
The number one challenge is to stick to the agreed ways of working, the process lead often move to a “chase in chief” mode to remind people about their responsibilities and deadlines. Most of this role can be automated quite easily so that low value added activities can virtually disappear. Then become the challenge of having solutions supporting smart processes. Imagine you do some business processes for each and every of your customers or some specific steps of a process for each country or each category of product you are selling. Then, as soon as the organization structure change or the customer base evolve, you end up with a digital solution that cannot cope automatically, either you invest time or money.
How to get started with your Business Process effort?
The following steps can be as relevant if you start from scratch of if you already have a legacy structure that would benefit from some revamping. Getting your business processes right is key and you should not underestimate the benefits from the following (not so easy!) steps:
► Perform an organization wide review of your ways of working to categorize and prioritize your business processes
► Select a cross functional team that will be in charge of designing and documenting (ideally digitally!) your business processes, this should include at least:
1. Process frequency
2. Process input and outputs
3. Process steps and their sequence
4. Steps type (task, meeting), inputs and outputs as relevant
5. Steps content (agenda, activity, medium, tools, etc.)
6. Define roles and responsibilities at process and step level (RACI Matrix)
7. Confirm the level of agility v prescription that is left to the people executing the process
► Pilot your business process
► Implement
►Continuously revisit and improve to make your business process repeatable, sustainable and scalable.
It is fair to say that making all this steps in that order every 6 months would make it another business process in your organization. The business process of your business processes. Let’s stop here…
Checkout our checklist to audit your business processes.
How to measure Business Process Effectiveness?
“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.” H. James Harrington
Measuring business process effectiveness can be a game changer.
In most businesses, the focus is on lagging quantitative indicators and the leadership focuses in particular about the financials (well, if the company does not make money, then it will not stay in business for long, so your business processes won’t matter…)!
In this last section of our article, we would like to share 5 areas to consider when building your business process KPI suite. These areas are aiming at building a leading KPI suite looking at the process rather that the lagging outputs.
Business process Compliance
To measure to what extent the business process and its underlying steps and activities are happening following your standard.
Business process Productivity
To measure the amount of resources used to run a specific business process, this can include the type of resources used, their amount, whether the workload is well averaged over time or has spikes, what are the seniority of the resources involved, what costs or investments related to process automation may be present, etc.
Business process Health
Are the instances of the business processes (e.g. an instance is a specific week in a weekly process) usually performed on time in full? Is it the whole process instance or some identifiable steps within it that are always jeopardizing the health of the process?
Business process Contribution
Are all stakeholders attending and contributing to the process? Or is the process relying on a subset of “do it all” contributors putting at risks the sustainability of the process and its adoption by the organization?
Business process Relevance
Is the process still relevant and up to date aligned to the latest business needs ?
You will need to tailor your KPIs based on your specific needs, company culture and actual people doing and leading the work.
Having a balanced KPI dashboard between leading and lagging indicators will help you manage your organization with more agility and increase your performance.
