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|Management of a business|
A business process, business method or business function is a collection of related, structured activities or tasks by people or equipment in which a specific sequence produces a service or product (serves a particular business goal) for a particular customer or customers. Business processes occur at all organizational levels and may or may not be visible to the customers. A business process may often be visualized (modeled) as a flowchart of a sequence of activities with interleaving decision points or as a process matrix of a sequence of activities with relevance rules based on data in the process. The benefits of using business processes include improved customer satisfaction and improved agility for reacting to rapid market change. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.
List of common business processes
- Sales and marketing
- Inventory management
- Manufacturing management
- Material requirements planning (MRP)
- Manufacturing resource planning (MRP II)
- Master production schedule (MPS)
- Service management
- Human resource management
- Professional services
- Civil engineering
- Supply chain management
- Warehouse management
- Transport management
- Fleet management
- Resource management
A business process begins with a mission objective (an external event) and ends with achievement of the business objective of providing a result that provides customer value. Additionally, a process may be divided into subprocesses (process decomposition), the particular inner functions of the process. Business processes may also have a process owner, a responsible party for ensuring the process runs smoothly from start to finish.
Broadly speaking, business processes can be organized into three types, according to von Rosing et al.:
- Operational processes, which constitute the core business and create the primary value stream, e.g., taking orders from customers, opening an account, and manufacturing a component
- Management processes, the processes that oversee operational processes, including corporate governance, budgetary oversight, and employee oversight
- Supporting processes, which support the core operational processes, e.g., accounting, recruitment, call center, technical support, and safety training
A slightly different approach to these three types is offered by Kirchmer:
- Operational processes, which focus on properly executing the operational tasks of an entity; this is where personnel "get the things done"
- Management processes, which ensure that the operational processes are conducted appropriately; this is where managers "ensure efficient and effective work processes"
- Governance processes, which ensure the entity is operating in full compliance with necessary legal regulations, guidelines, and shareholder expectations; this is where executives ensure the "rules and guidelines for business success" are followed
A complex business process may be decomposed into several subprocesses, which have their own attributes but also contribute to achieving the overall goal of the business. The analysis of business processes typically includes the mapping or modeling of processes and sub-processes down to activity/task level. 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 visualized workflow. While decomposing processes into process types and categories can be useful, care must be taken in doing so as there may be crossover. In the end, all processes are part of a largely unified outcome, one of "customer value creation." This goal is expedited with business process management, which aims to analyze, improve, and enact business processes.
Importance of the process chain
Business processes comprise a set of sequential sub-processes or tasks with alternative paths, depending on certain conditions as applicable, performed to achieve a given objective or produce given outputs. Each process has one or more needed inputs. The inputs and outputs 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 two ways:
Typically, some process tasks will be manual, 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.
- Weske, M. (2012). "Chapter 1: Introduction". Business Process Management: Concepts, Languages, Architectures. Springer Science & Business Media. pp. 1–24. ISBN 9783642286162.
- Kirchmer, M. (2017). "Chapter 1: Business Process Management: What Is It and Why Do You Need It?". High Performance Through Business Process Management: Strategy Execution in a Digital World. Springer. pp. 1–28. ISBN 9783319512594.
- von Scheel, H.; von Rosing, M.; Fonseca, M.; et al. (2014). "Phase 1: Process Concept Evolution". In von Rosing, M.; Scheer, A.-W.; von Scheel, H. (eds.). The Complete Business Process Handbook: Body of Knowledge from Process Modeling to BPM. 1. Morgan Kaufmann. pp. 1–10. ISBN 9780128004722.
- Chen, M. (2012). "Chapter 8: BPR Methodologies: Methods and Tools". In Elzinga, D.J.; Gulledge, T.R.; Lee, C.-Y. (eds.). Business Process Engineering: Advancing the State of the Art. Springer Science & Business Media. pp. 187–212. ISBN 9781461550914.
- Chand, D.R.; Chircu, A.M. (2012). "Chapter 3: Business Process Modeling". In Elzinga, D.J.; Gulledge, T.R.; Lee, C.-Y. (eds.). Business Enterprise, Process, and Technology Management: Models and Applications. Springer Science & Business Media. pp. 187–212. ISBN 9781466602502.
- von Rosing, M.; Kemp, N.; Hove, M.; Ross, J.W. (2014). "Process Tagging - A Process Classification and Categorization Concept". In von Rosing, M.; Scheer, A.-W.; von Scheel, H. (eds.). The Complete Business Process Handbook: Body of Knowledge from Process Modeling to BPM. 1. Morgan Kaufmann. pp. 123–172. ISBN 9780128004722.