Defining a Business Process
A business process, also referred to as a business method, can be understood as a grouping together of related, structured actions or tasks resulting in a specific service or product (serving a particular purpose) for a particular customer or customers, either internal or external. By using a flowchart, a process can be visualized as a sequence of activities with interleaving decision points. By using a process matrix, it can be viewed as a sequence of activities with relevant rules based on data in the process.
There are three types of business processes:
- Management processes are the processes that govern the operation of a system. Typical management processes include "corporate governance" and "strategic management".
- Operational processes are processes that constitute the core business and create the primary value stream. Typical operational processes are purchasing, manufacturing, advertising and marketing, and sales.
- Supporting processes are those which support the core processes. Examples include accounting, recruitment, call center, technical support.
A business process begins with a target and ends, ideally, with the achievement of the business objective. Organizations which are process-oriented seek to remove the barriers of rigid structural departments and attempt to avoid functional silos.
A business process can be further broken down into several sub-processes, each of which has its own attributes, but also contribute to achieving the overall goal. The analysis of business processes typically includes the mapping of processes and sub-processes down to the activity level.
Business processes are designed to add value for the customer and should not include unnecessary activities. The outcome of a well designed business process is increased effectiveness (value for the customer) and increased efficiency (less costs for the company).
Business processes can be modeled through a large number of methods and techniques. For instance, the Business Process Modeling Notation is a Business Process Modeling technique that can be used for drawing business processes in a workflow.
The Process Chain
Business processes contain a set of sequential sub-processes or tasks, each with alternative paths depending on certain conditions, performed to achieve a given objective or produce a given output. Each process requires one or more forms of input. The input and output may be received from, or sent to other business processes, other organizational units, or internal or external stakeholders.
Business processes are designed to be operated by one or more business functional units, and emphasize the importance of the “process chain” rather than the individual units.
In general, the various tasks of a business process can be performed in one of the two ways:
- Electronically; by means of business data processing systems.
Typically, some process tasks will be done by hand, while some will be computer-based, and these tasks may be sequenced in many ways. In other words, the data and information that are being handled through the process may pass through manual or computer tasks in any given order.