Answering the question, “What is a business process?” is pivotal to create processes that work effectively within any organisation. There are various types of business processes, any of which can greatly impact your bottom line. Here, we will touch on all you need to know about the definition of a business process, the importance of a business process, and the benefits of software.
Definition: What Is A Business Process?
A process can be defined as a set of tasks that are completed in a specific order with the purpose of accomplishing a goal. When it comes to a business process, the same is held true, but it is done to achieve a business/organisational goal.
Since businesses are made up of several different people performing roles and the respective technology needed to do so, a business process outlines who and what must be done at each step to be started and completed successfully. Finance automation tools have become an integral piece of the business process for organisations as they maximise efficiency, decrease costs, and help to streamline workflows.
The Importance Of Well-Defined Business Processes
A business process is made up of the necessary inputs (all factors that contribute to the added value) of the output (service or product). Given the sheer amount of processes that occur on a daily basis, it makes sense to clearly define how operations should function to achieve business goals.
Without clearly defined processes, your organisation will likely suffer from:
Poor time management
Low employee motivation and satisfaction
Wasted resources (time and money)
With proper process management (and the aid of finance automation software), your organisation will experience:
An adaptive organisation that is proactive to meet and resolve challenges
7 Steps of the Business Process Lifecycle
To implement a business process lifecycle that is sustainable and manageable, there are seven key steps to follow. These steps are easy to follow, but they require that you will monitor and adjust as needed, rather than set up a process and walk away. It’s helpful to implement the proper automation tools to assist in both process automation, as well as measuring results.
Here’s a look at the steps:
Define Goals: The only reason to create a workflow in the first place is to achieve a goal. Be as specific as possible and clearly define how you will measure the process’ success. If this is unclear, then take the time to further narrow the goal.
Plan and Map Process: What will you need to accomplish this goal? Plan out the required resources and strategies as a broad roadmap for the process.
Assign Stakeholders: Create the actual tasks and assign those responsible along the way to execute the plan. This is where an automation solution can really shine as you can map the process in the software, assign tasks and share the process so it’s standardised across the board (and removes all key person dependencies should it be carried out automatically).
Test Process: Before rolling out the process across the organisation, test it to see how it performs and acknowledge/resolve any gaps or inefficiencies.
Implement Process: Once the process has passed its test, you can roll it out in a live environment. Everyone on your team should be aligned and on board to execute the process as planned so that results will be met.
Monitor Results: Keep track of how the process is going by reviewing metrics and analysing patterns. Again, an automation solution can easily provide you with real-time data and metrics to keep an eye on a process and easily address issues should they arise.
Repeat: If all is running smoothly and the process is achieving the outlined goals (refer back to step 1), then you can continue to run as is. Should there be any problems, you’ll want to readdress the design and alter the approach.
Business Processes Categories
Business processes exist across organisations and in different departments to achieve their respective goals. A simple way to better understand processes is to categorise them into three main types of business processes, as follows:
Operational processes: Operational processes (primary processes) refer to those that are essential to deliver business goals by creating value for the customer in the form of a product or service. These could include the process of taking orders from customers, fulfilling orders and managing bank accounts.
Supporting processes: Supporting processes (secondary processes) are the functions that make operational processes possible. They are the behind-the-scenes actions that don’t directly provide value to the customer, but without them, the business couldn’t function. Examples may include HR management and finance functions.
Management processes: Like supporting processes, management processes don’t directly add value for the customer, but they oversee that activities are running as they should be. These include things like internal communication, strategic planning and budgeting.
Types And Examples of Business Processes
With the types of business processes clearly defined, let’s take a look at two examples in action that most organisations will have to manage.
Accounting management: Finance teams are in charge of a wide array of responsibilities. From handling back-office tasks and the upkeep of documentation to providing stakeholders with insights gleaned from data for decision-making, there’s a lot to keep track of. This department has a lot on the line in terms of decreasing errors and performing tasks in a timely manner due to regulations.
As such, the process of accounts receivable must be clearly defined and easily repeatable. It’s in every organisation’s best interest to be paid on time, so you can leverage a finance automation tool to manage the process for you. From onboarding vendors to approving their creditworthiness, you’ll then move into invoice generation, tracking and recording sales on credit of services or goods.
Process improvement: To create, analyse and improve a process is a process in itself. Having a clearly defined method for process improvement will help you remain agile in changing business environments (whether it be changing customer needs or regulations, for example). This falls under the category of management and exists within the broader category of business process management.
Process improvement follows steps like: identifying a process that may need updates, assessing how it’s performing and then adjusting the process and rolling it out once modifications have been approved. Many organisations leverage automation tools to assess a current process and analyse its “to be” potential.
What Are The Attributes Of A Business Process?
Ideally, any business process should consist of the following attributes:
Finite: To be well-defined, the process should have a clear starting and ending point. It also has a quantifiable, and therefore, finite number of steps.
Valuable: Every step within the process should be connected to the value it creates. Put simply, no step should exist without purpose. Often, it’s possible to pinpoint unnecessary steps during the process improvement practice.
Flexible: Since needs change, a process should be malleable and able to adjust in a timely manner.
Repeatable: The best types of business processes can be run indefinitely and as needed without causing any errors or harm to the organisation.
Key Terms And Concepts Related To Business Process
To accomplish business processes in the most efficient manner, business automation software has become a critical component. Whether the process is simple or complex, the software helps to reduce errors, assign responsibility, and help the organisation be adaptive. To better get a sense of the way software and humans work together, here are some key terms worth knowing:
BPM: Business process management (BPM) is a systematic approach that aims to make an organisation’s processes as efficient as possible. It’s an ongoing methodology that leverages the use of cloud technology and on-premise solutions to carry out.
Business process modelling: To visually represent a business process, there are business process modelling tools that can document any business process. These flowcharts are a key aspect of being able to highlight where process improvement can be of use.
Business process reengineering: Through deep analysis, business process reengineering is the enactment of broad scale change and process redesigns to make a large impact on the organisation. It involves identifying the root of inefficiency, removing unnecessary processes or tasks, and ushering in transformation within the business’ operations.
Business process monitoring: For the purpose of providing management with activity status, business process monitoring provides insight into how processes are functioning. It can help management teams ensure that everything is operating and aligned to achieve business goals.
Business process improvement: Business process improvement adjusts processes to improve efficiency. It involves incremental changes and the buy-in of employees and the application of technology to work.
Business process automation: Business process automation (BPA) is the application of technology to carry out repeatable tasks. It decreases the time it takes to complete a process and decreases the possibility of human error as the system carries out tasks based on user-defined rules and actions.
Benefits of Using Business Process Software
Business process software helps to boost efficiency, reduce errors and decrease costs within organisations. By implementing software, your organisation can reap the benefits of:
Decreasing risk: By reducing the likelihood of bottlenecks and thereby completing integral processes by regulated deadlines, your organisation can mitigate risks.
Minimising costs: With more transparency into how processes are functioning, it’s easier to eliminate waste. As such, costs can be cut.
Boosting collaboration: BPM software helps to bridge the gap between internal teams and external stakeholders. Processes are clearly outlined and anyone with access controls has the means to see the status to remove bottlenecks and meet timelines.
Increasing agility: With cost savings and a way to monitor results, organisations are able to make decisions in a timely manner and respond or proactively prepare for changes in the business environment.
Enhancing productivity: Automation software routes tasks as they move through their steps and can even be completed with little to no human intervention. Therefore, productivity is boosted and humans can spend their time on high-value work.
Managing compliance: The software is equipped to provide reports and audit trails to adhere to industry standards and regulations.
Within every organisation, business processes are what transform inputs to outputs that provide value to customers. To do this is the most cost-effective and productive manner, organisations leverage automation tools to assist with their daily duties. This grants organisations with the ability to reduce human error, easily manage and improve processes, and manage operations without hassle.