Business processes occur at all organizational levels and often are invisible to customers. However, they are critically important for such stakeholders as employees and managers, and can be used to advance the overall organizational performance.
In this article, we’re going to explain the importance of business processes and their benefits to businesses, especially in terms of decision making and goal setting.
What are business processes?
To understand the role business processes play in an organization, you first have to understand what they are. A business process is defined as a wide range of structured, often connected, tasks or activities (such as planning and manufacturing) performed by a group of stakeholders to accomplish a particular goal.
The goal is typically pre-determined; for example, a business could aim to produce a service or a product for a specific target audience, determine marketing, receive orders, and ship products.
There are three types of modern business processes:
- Operational processes: the ones that constitute the core
- Managerial processes: the ones that help to manage activities and operations within a business
- Supporting processes: the ones that provide support to essential organizational activities such as accounting.
The need for these processes in medium and large business is quite obvious. Each of them forms the lifeline for the organization by helping to streamline certain activities (which can be enhanced by workflow software) and ensure that resources are used efficiently and effectively.
Finance management, production, emergency management, banking, compliance with legal requirements, HR, and medical assessments are all examples of the common business processes in large organizations.
Now, let’s consider a simple example of a business process model for a winery.
This model is a part of a business process model and shows a goal (Receiving Payment), activities involved in reaching that final stage (Growing wine grapes, Producing Wine, and Selling wine), Start Event, and End Event.
As you can see, this particular process has the following essential attributes:
- It’s finite. A well-thought-out business process has a start event and an end event, as well as a limited number of activities between them.
- It’s repeatable. An effective business process can be used successfully an indefinite number of times.
- It creates value. An effective business process has a goal of translating value creation into executable activities.
- It’s flexible. A business process should be flexible to allow managers to make changes without significantly affecting the organization and stakeholders.
What is business process management (BPM)?
According to John White, an analyst from Prowritingpartner, BPM is “the discipline of managing business processes to make an organizational workflow more effective, efficient, and more capable of adapting to changing business environment.”In other words, the main goal of BPM is to align business goals and processes and determine the ways in which the processes can be improved.
Also, another significant goal of BPM is to deliver value and quality for customers. In an increasingly competitive business environment, the vast majority of companies are using BPM to not only focus on facilitating collaboration among employees, managers, and customers, but also to ensure that the goals of a target audience are met.
In fact, the size of BPM market worldwide is projected to increase up to $13.52 billion from $6.96 billion in 2016, according to Statista.
A recent Vendor Landscape: BPM Platforms For Digital Automation report states that 64 percent of BPM users are focused on creating value for customers and meeting their needs while only 26 percent were more focused on organizational needs such as cutting costs. Clearly, the businesses employ BPM for many reasons, and one thing is clear: more and more of them will use it in the future.
The benefits of BPM for businesses are numerous. In the next section, we’re going to find out how business processes can be used to improve decision making and goal setting.
How business processes impact decision making and goal setting
Business processes are the core of an organization, so their analysis can yield some useful data and information about improvement. For example, by reviewing the steps involved in a business process, one can come up with questions that improve them.
Below, you’ll find common steps in a business process. These are universal steps that can be applied to all processes, including sales, finance, accounting, audit, and others. They are combined with questions that could be asked to improve decision making.
Step 1: Setting better goals
- What is the main goal of this business process? – the answer defines how this particular process helps the organization to achieve a goal (cutting costs, improving products etc.)
- Why was this process created? – answering this question helps to establish how this process can meet an organizational goal.
- How can one define whether the process is successful? – helps to establish and improve measuring and monitoring activities and goals.
Step 2: Creating goal oriented plans
- What strategies are required to accomplish the goals? – helps to define a roadmap for the process of creating a plan for achieving a certain organizational goal.
Step 3: Determining actions
- What are the tasks needed to be accomplished to deliver the plan? – defines individual tasks for employees and teams of employees that need to be performed in order to execute what was planned.
Step 4: Getting the most out of testing
- How can one run the business process on a small scale and test its performance? – helps to define a way to test a business process and identify gaps.
- How can adjustments be made? – helps to analyze options for improving the process.
Step 5: Communicating results
- How can performance results be communicated to stakeholders? – helps to improve knowledge of the implementation of the business process.
Step 6: Monitoring
- How can one review the process and analyze its performance in an effective and efficient way? – encourages to find more ways to monitor a business process’ performance.
Step 7: Repeating
- How can a completed process be repeated and improved to produce better results? – If the process achieved the set goals, it should be improved and repeated.
Clearly, business processes can be an important source of information for effective goal setting. In fact, goal setting is one of the areas of BPM requiring metrics against which to measure performance. For example, by reviewing and analyzing business processes, one can determine new goals to reach.
Each business process can inform goal setting. For example, use the following tips:
- Given that BPM provides means for tracking organizational resources, you can use the data and information generated by the tracking to address gaps and inefficiencies.
- BPM increases accountability of each employee and manager in an organization. Set the goal to improve accountability gradually, thus minimizing the risk of losses due to human error.
- BPM can improve and increase productivity if appropriate goals are set by the management. Using the information provided by analysis of business processes within an organization, one can determine how productivity can be enhanced and set a reasonable goal.
- The data provided by BPM system can also be used to set a goal regarding compliance with regulations and rules. For example, one can set a goal to keep track of obligations and duties and improve compliance after analysis of business processes.
Why use a BPM software now?
The business landscape has become intensely competitive, so organizations must find ways to stand out really fast. One way is to reap the benefits delivered by effective BPM. By actively monitoring business processes and activities, management can gain an insight into inefficiencies and gaps within a business, eliminate them, and align business processes and goals.
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