Business Processes: Concepts, Types, and Examples

A business process is an integral part of any enterprise, regardless of its size or field of activity. It helps improve productivity and the quality of the services provided. Let’s explore what business processes are and what their purpose is. We’ll examine the different types of workflows and analyze some examples. This article will be informative for business owners.

What Is a Business Process?

A business process is a structured set of interrelated actions performed to achieve a specific goal. It is particularly important for entrepreneurs, as it allows them to streamline their work and avoid unnecessary steps and costs.

Understanding the importance of business processes allows you to organize your business systematically, meaning that all actions will follow a specific logic. This will enable the company to produce more output in the same amount of time.

A clearly defined procedure helps improve the quality of services or goods, since all processes are standardized. A business process makes it possible to ensure tasks are performed correctly and to identify problems in a timely manner. It forms the foundation of any company’s operations, from a small startup to a large corporation. Describing, analyzing, and optimizing these processes are essential for the successful operation and growth of your business.

This business process encourages employees to be creative, as it involves brainstorming, reflection, and creative collaboration. This enables the team to find interesting and innovative solutions to achieve their goals.

The absence of business processes causes problems for companies, such as the production of substandard products, which can lead to a loss of reputation and a decline in profits. A poorly designed workflow hinders the ability to attract new customers. Companies that lack effective human resources management mechanisms will be unable to retain qualified and newly hired employees. And companies without financial management systems risk financial losses.

Business processes are characterized by the following features:

• repeated;
• flexible;
• limited.

Teams can use the same pattern multiple times to achieve a similar result. Algorithms are flexible because they allow for changes to be made without affecting operations. However, processes are limited because they have clearly defined starting and ending points with precise steps.

See also: Delegation of Authority: Principles of Effective Leadership

Types of Business Processes

Today, business processes are classified according to their role in value creation as follows:

• auxiliary;
• main;
• management.

Support mechanisms are designed to create the conditions, resources, and environment in which core processes can be carried out efficiently and quickly. Their output is directed toward employees—for example, tracking the company’s performance, sourcing suppliers, and managing the office.

Core business processes are the activities that create value for external customers and form the foundation of a company’s operations. They include manufacturing products, providing services, managing logistics, sales, and procurement, and managing bank accounts. These mechanisms directly influence the quality of goods and customer satisfaction, thereby fostering competitiveness in the market.

For example, in the manufacturing sector, this could include car manufacturing or baking bread, and in the service sector—software development, providing legal advice, or repairing equipment.

Management processes include personnel management. They involve defining the team structure and preparing the budget.

Core, management, and support business processes do not exist in isolation; they are interconnected. For example, if HR specialists are unable to find qualified workers, production—that is, operational processes—will suffer.

See also: Modeling and Optimizing Business Processes at a Company

Based on the level of detail, the following types of processes are distinguished:

• macro — a broad, high-level overview of the main stages of the company’s operations;
• detailed — a thorough description of each step, the people responsible, and the input and output data;
• micro — the smallest, most basic actions within a process.

Based on their scope of application, processes are categorized into sales, production, logistics, marketing, and finance.

Key Attributes of Business Processes

Once you understand what a business process is and what types there are, you need to familiarize yourself with its essential attributes. These are the characteristics or properties that break it down, describe it, and make it understandable. The more detailed these descriptions are, the easier it is to manage operational mechanisms, identify bottlenecks, and implement improvements.

Let’s take a look at the four key attributes of a business process:

• entrance;
• process;
• exit;
• consumer.

Input is anything that helps kickstart a process: resources, information, or a customer order. Without them, the next steps are impossible.

A process is a sequence of actions or operations that transform inputs into outputs. It is a core activity, such as manufacturing a product or providing a service.

An output is the final result or product that has value for an external or internal customer. It is considered proof that the process took place and achieved its goal. A consumer is someone who receives the final result.

Description of Business Processes

A description of a company’s business processes is a powerful tool for increasing efficiency, improving control and quality, and laying the foundation for the company’s sustainable development and growth.

To describe the mechanism of operation, follow these steps:

• identify the process;
• gather information;
• model and visualize the algorithm;
• analyze effectiveness;
• create documentation;
• conduct monitoring.

In the first stage, you need to clearly define the boundaries of the process. For example, the start is “receiving an order from a customer,” and the end is “the product is delivered to the customer.” You also need to select the department that will be responsible for this process. Then, you formulate the goal and value that this workflow is intended to deliver.

The next step is to identify the specialists involved in the process and analyze the documents: reports, templates, instructions, and regulations. In addition, it is necessary to specify the input and output information (the resources required to launch each stage) and describe the final result (service, product, documents).

Next, a notation is chosen for modeling the process. The most popular ones are:

• The BPMN international standard—which uses a wide range of elements to provide a detailed description—is suitable for large-scale projects;
• Flowcharts — the best option for simpler processes, an intuitive way to visualize sequential steps;
• IDEFO diagrams — suitable for modeling functional aspects.

During the analysis, attention is paid to the presence of errors, duplication, and unnecessary steps. The description is then formalized into a document, which may include text, a visual model, a list of participants and their roles, and specifications for inputs and outputs. Monitoring allows you to track the algorithm’s performance metrics and encourage employees to suggest improvements.

A business process diagram is not static; it must be updated in line with changes within the company or in the market. This will ensure that it remains relevant and effective, thereby guaranteeing the company’s competitiveness.

For a company to operate more effectively, it is important not only to describe and refine its operational processes but also to optimize them. To this end, modern technologies—including artificial intelligence—are used. For example, in the customer service industry, chatbots provide round-the-clock support, responding promptly to customer inquiries. And in manufacturing, automated systems ensure quality control and precise, accessible monitoring—tasks that are much more difficult to perform manually.

If you’re a small business owner, start by describing the most critical part of your process—such as sales or delivery. First, enter the information into Google Docs or jot down notes on paper. Then, identify bottlenecks and optimize your process. Gradually automate the process using modern innovations.

eDilo Service It helps executives at companies involved in business process development to control costs and manage finances. To get started, submit a request on our website.

Examples of Business Processes

A company’s business processes make it possible to optimize workflows, avoid common mistakes, and eliminate unnecessary steps that affect the final result. They vary across different industries, as each sector has unique operations, regulatory requirements, and customer expectations. For example, the workflow in a manufacturing company will differ from the processes in a service-oriented sector—such as healthcare. In the latter case, processes are carefully designed to ensure patient safety, compliance with regulatory requirements, and the effective delivery of medical services. Such algorithms cover the entire period from hospitalization to treatment prescription and discharge.

Now that we’ve figured out how to properly document processes, let’s look at some examples from various areas of business.

IT Company Business Process Diagram

Project Title: Development of a New Feature; the owner, for example, is the CTO. The goal of the process is to create and launch a new product that meets customer requirements and business objectives. The deliverable is a developed and active feature.

Business Process Map for the Restaurant Industry

The project owner is the restaurant manager. The goal is to provide high-quality service and meet the guests’ needs. The outcome is a paid bill and a positive review from the guest.

An example of a business process at a furniture manufacturing company

The purpose of the algorithm is to manufacture high-quality furniture in accordance with the customer’s requests. The result is a finished, shipped, and packaged product.

An Example of a Business Process at a Consulting Firm

The head of the consulting department is appointed as the project owner. The goal of the process is to provide the client with an effective financial solution or to ensure its implementation. The outcome is a paid service and a final report.

Conclusion

A business process is a set of interrelated actions that enable the achievement of a specific goal. It is a fundamental tool for any business, regardless of production volume. A clearly defined operational mechanism can positively impact the efficiency of service delivery and goods production.

If your budget doesn’t have enough funds to improve certain business processes, the installment payment service can help eDilo. Thanks to our service, the seller receives the full amount immediately upon completion of the transaction. The buyer, on the other hand, can pay in installments, which helps them better plan their finances and invest more in the company’s growth.

FAQ

Who is the “owner” of a business process, and what is their role?

A business process “owner” is a specific individual or functional unit responsible for the process’s efficiency, results, and improvement. Their role is to develop documentation and manage changes and risks within the process.

What is a bottleneck in a business process, and how can it be identified?

A bottleneck is a stage at which the workflow slows down or resources become insufficient. This leads to overall inefficiency and delays in service delivery or product manufacturing. To identify such a point, you need to create a detailed process diagram, visualize each step, monitor the execution of a request, and use process management software.

Can a business process span multiple departments or even companies? Give an example.

Yes, a business process often spans several departments within a single company. Sometimes it can extend across multiple companies—in which case it is called an interorganizational process. For example, a furniture manufacturer receives an order to produce a sofa from a retail store, which, in turn, received the order from a customer. The store involves the sales, purchasing, and logistics departments, as well as accounting, while the manufacturing side involves the order processing, design, purchasing, production, quality control, and shipping departments.