The Basic Business Processes and Business Process Management

By Eric Dickmann

April 23, 2019

Business Process, Business Process Management, Management Process, Operation Process, Primary Process, Process, Secondary Process, Support Process

Imagine a business without processes. You can't because they don't exist. Processes exist in all organizations. Sometimes they are formal but many times they are informal, developed over time as a business evolved.

So, what is a business process? How can we make them more efficient? Business processes are steps performed by a group to achieve a specific goal. Particularly, each step in a business process denotes a task assigned to a participant. We all desire for a business that is more efficient and processes that drive down costs and an efficient and effective business process is the lifeline of any business. It helps streamline individual activities and maximize resources.

There are three categories of business processes: primary, secondary, and management.

  • A primary process involves operations like production, marketing, and sales. These processes give direct value to the client through the delivery of products and services.
  • The secondary process does not give direct value to the customer. It is vital because it supports the primary process. It facilitates a smooth workflow in the business. Accounting, human resources, and technical support are some examples of a secondary process.
  • Lastly, a management process monitors and controls the activities of the business. Examples of these processes are internal communication, budgeting, and infrastructure.

Business Process Management

Business Processes are continuous and repeating. Once you get to the end, you go back to the beginning and start it all over again. The more efficiently you can operate, the more potential growth there is for your organization.

Through the use of BPM or Business Process Management, companies document processes which help ensure adoption and consistency. According to Ben Mulholland of Process.st, around 46% of companies primarily reduce cost through streamlining business processes. Documenting, tracking, and managing your processes lets you:

  • Limit or entirely eliminate human error
  • Ensure that no shortcuts are taken
  • Have everyone performing their tasks correctly and reliably
  • Reduce the friction of tasks by ensuring everyone always knows what to do and how to do it
  • Reduce costs by improving on outdated or downright bad processes
  • Easily track the performance of your employees across their various tasks
  • Increase the accountability of your employees (both to motivate them and to see who is responsible for what)
  • Show managers, stakeholders, potential investors, or just your employees as a whole how your business is run, what goes into completing every task, and the due care taken to achieve the results you do.

Ben writes "The only time that it’s not worth it to document workflows and processes is when you are performing a task that will literally never be carried out again. Even then, it’s often worth noting down at least a rough structure to know how exactly you’re going to tackle the task."

"It’s not a question of whether or not you should be documenting and managing your processes – you absolutely should in order to avoid catastrophic human error and inconsistencies. You also need to make sure that everyone in your business is sold on your processes and understands their importance in order to make sure that they’re actually followed."


How to Implement Business Process Improvement

As expectations change, demands to improve your business start to increase. New technologies offer opportunities for increased efficiencies and the need to counter competitive forces grows. Continual improvement within your organization therefore becomes important. One way to make sure your business stays competitive is to conduct regular business process improvements (BPI).

Business processes take many forms including: technology, product development, employee training, customer service, etc. They can be formal or informal and touch many company functions. Regardless of the process you are trying to improve, the procedure to improve business processes follows similar steps.

Business Process Improvement Cycle

Business Process Improvement Cycle

Map and Identify the Need for Change

The first is to identify the need for change. Conducting a process audit is one useful way to discover improvement opportunities. The audit will identify current issues or potential risks for your business. This audit report gives you an outline of areas to prioritize for business improvement. It's also important to review how each process affects your organization, resources, and key stakeholders (employees, customers, suppliers, partners, vendors, etc.).

Analyze Current Business Processes

To start, you need to analyze current processes and procedures. This way you can fully understand your processes from start to finish and create realistic improvement objectives. There are many tools to help in this process but regardless of the tool you choose for process mapping, operational surveys, cause/effect analysis, etc., you should consider the following questions:

  • What processes are broken?
  • What steps in the process are creating problems?
  • What steps require the most time to complete?
  • What steps cause the most delays?
  • Do specific steps utilize the most resource or result in the highest cost?
  • Do specific steps result in quality issues?
Redesign, Create a Plan, and Obtain Buy-in

As you move forward, it's important to secure senior management commitment. This is possibly the single-most important factor in successfully implementing business process improvement. To gain acceptance, you need to clearly articulate the need for change and how it impacts the business. It's crucial that senior management understands the necessity for change to ensure they will support implementation of the recommendations. Business process improvement is time and resource intensive and to be successful, getting senior management support is a requirement.

Finally, once your analysis is done and you have the buy-in of senior management, you need to develop your implementation plan. The plan should include what steps in the process are broken, why, and how they should be improved. It should also include any financial and resource implications. Answering how the process can be improved is a launching point to creating your improvement objectives.

Measure, Monitor and Optimize 

It's also important to measure and monitor the changes you implement. Make sure to set realistic and measurable objectives that align with your overall strategic goals. Take the time to tweak and optimize your processes as you start seeing data. You don't always get it right on the first pass so make sure you build in flexibility to incorporate feedback once you start getting real-world results.

Conclusion

A regular review and analysis of business processes is an important factor in making sure your organization is running efficiently and effectively. In business, things rarely stay static so it's important that processes are regularly reviewed and improved. When done correctly, the increases in efficiency and productivity can have a direct result on your bottom line.

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About the author

Eric Dickmann is the founder of The Five Echelon Group, host of the weekly podcast - The Virtual CMO, and a CMO On Demand for a variety of small and midsize companies. An executive leader with over 30 years of experience in marketing, product development, and digital transformation, he has worked with large, global companies and small startups to develop and execute marketing strategies and bring innovative products to the market.

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