Definition of Business Process
A business process is a sequence of interconnected activities that are systematically organized to achieve a specific goal, resulting in an output (product, or service).
- Every process has an output, it is a product (product or service)
- Processes consist of individual steps and activities
- Each process requires resources—such as financial assets, information, people, materials, technologies, and purchased services—to create its intended output.
A process is what transforms input into output
Business processes create value for the customer
- service or any other intangible output
- products, goods or any other tangible output
Business processes need sources, inputs (FILMA) to create the output
- Finance resources - every process consumes financial resources, either directly or indirectly through other sources
- Information, data and knowledge
- Labor - most processes cannot be done without labor
- Material resources are consumed by business processes - many processes consume material as an input
- Assets and infrastructure that business processes need to use
Business Process Workflow
- each step of the process is performed by someone (a specific person, team, or department/division)
- every person in the company is part of at least one process
- you can describe an employee's job duties using a process or activities
How to categorize business processes?
According to the company value stream business processes are recognized as
- core business processes whose output is products or services for company customers
- supporting processes which enable the production and ensure the smooth running of the company
Organizations and companies operate based on processes
- Organizations and companies are basically just organized collections of various processes, activities and tasks
- These processes encompass various activities and tasks, which are carried out by specific individuals, departments, and organizational units.
- It is crucial for every employee to understand their role within these processes.
- Processes serve as bridges, connecting different parts of the company, often spanning across departments.
- The comprehensive overview of all processes within an organization is known as the business process map.
- Companies document individual processes through job duties, policies and work procedures
- Having well-defined processes is essential for the effective functioning of any company.
From chaos to controlled, managed and improved processes
Business processes vary in their variety and also in how they are managed. From your own experience, you certainly know many companies where the processes are completely chaotic and uncontrolled, because the system and the management allows it. The process management level is well described by the so-called maturity model (CMMI) as follows:
- The process does not exist
- The process is completely chaotic and random, everyone does what they want
- The process is governed by custom and managers, but is not described
- The process is defined and described, typically in company policies and work procedures
- The process is controlled and measured through some indicator (KPI) and its performance is evaluated
- The process is continuously, regularly and systematically optimized and improved
Why do we need to have business processes described?
Business processes and their description and knowledge is the basis of the running of every company and organization. Their analysis and description are created by companies for a number of reasons:
- Business processes description is an essence of work procedures. People must know what to do.
- To automate processes, the process workflow must be described
- Business processes, along with activities are core for an employee job description
- The description enables processes to be optimized and improved
- The processes are an essential part of policies and procedures
- Processes are sources of risks