Business Processes – Understanding your Business

I. Why are Business Processes established

In order for a business to improve its performance it must understand how it does business. It must convert the “how” into defined processes, which must be able to have their performance measured, and the results used to make subsequent improvements. They do not usually enable a person unfamiliar with a job to do that job, but they will help an employee, supervisor or manager understand and do their job better.

II. What are business processes?

A business process is a group of activities, which together achieve a specific goal by transforming inputs into outputs. e.g. Sales Order processing. It is often drawn, depicting tasks, roles, resources and activities to be undertaken. A business process consists of sub-processes, decisions and activities. A sub-process is a part of a higher level process which has its own goal, owner, inputs and outputs. An activity is part of the process which does not include any decision making, such as “Answer the phone”, or Produce an invoice”.


III. How are Business Processes used?

They can be thought of as a collection of recipes in a cookbook for running a business, and reaching the objectives defined in the Strategic Business Plan. There are three types of business processes:
a. Management processes – these run the business and comply with legal requirements e.g. Corporate governance
b. Operational processes – these deliver the customer value, they are part of the core business e.g. Deliver goods
c. Supporting processes – these support the core processes e.g. accounting, or induction

IV. How is a Business Process established

It is established by “mapping” what actually happens in transforming inputs into outputs, and writing it down in a form which can be used for reference, training or instruction. The international Quality standard ISO 9001 requires a company to follow a process approach when managing its business, and to this end creating process maps will assist.

V. Process Maps

These are the visual representation of a process. They are diagrams which show each step, and they represent the logic necessary to achieve the desired output. By mapping we can:
a. Understand what happens and who is responsible
b. Simplify the process as required
c. Implement or eliminate activities
d. Redesign and improve what happens

VI Business Process Management

This refers to activities performed by businesses to optimize and adapt their processes. The objective is to make the information required for measuring the performance of the business, (its Key Performance Indicators), as easy as possible to collect. The activities are grouped into 3 categories – design, execution and monitoring. Each of the activities is carried out, practically, by the use of suitable computer software, by manual collection means, or by a combination of both. The most cost efficient way will be adopted to suit the size of each business.