Many people think that a business is an organization whose purpose is to make money. That’s very true, but it’s also true that a business is a collection of processes. If a business is to make money and grow, then those processes need to be efficient, effective and optimized.
These business processes also need to mesh well together to work in concert. While there are different types of business processes, the importance of a business process in general remains high. Using business process optimization services can help your organization make the most of its true potential.
What Is a Business Process?
What is a business process? The three prominent categories include management processes, supporting processes, and operating processes. Any organization relies on the sum of all its business processes for success. Businesses that constantly study examples of business processes tend to keep up with their industry. Those that don’t suffer decreasing efficiency and needless risks and waste.
Why Are Business Processes Important?
The importance of a business process shouldn’t be understated. Business processes are important because they are vital components of how an organization is structured and functions properly. Deliberately constructed business processes offer many individual benefits. They include lower levels of risk, expenditure, and human error, but they also include a few more benefits you may haven’t thought of.
- Better Efficiency: Enhanced productivity and improved time management mean things happen faster while using fewer resources.
- Adopting New Technology: Business processes are bound to change over time. Technology should be a chance for constant improvement to keep up with the industry.
- Minimizing Communication Gaps: Personnel and teams should have frictionless communication among themselves, but market research and reviews should help understand customers, too.
These benefits only happen if the methods and principles are laid out in advance. Optimizing them for desired results should happen first. When those results are attainable, the processes should be standardized throughout an organization.
Businesses that don’t keep up with improving their business processes face serious risks that can slow down or even derail their business. They might fail to recognize specific problems developing or growing. Employee motivation can lag, efficiency can suffer, and unnecessary risks or even repeated mistakes might happen frequently.
Types of Business Processes
Broadly speaking, different business processes fall into three types of business processes overall:
- Primary: This business process-oriented toward the primary business of an organization. This often involves the fundamental income stream. Specific examples might include sales, marketing, and production.
- Supporting: These are business processes that serve the fundamental business. Specific examples might include technical support, human resources, or accounting.
- Managing: These business processes manage how a system functions. Strategic management and corporate leadership are two possible examples.
If you’re not sure which of your current business processes in which, then you might want to arrange for specialist help in organizing all of this. Consult the professionals at Great Lakes Advisory to get a hand with that.
Primary Business Processes
Primary business processes are perhaps the most crucial ones for any organization. They involve the fundamental values of a business in relation to the organization’s mission and vision. A primary business process is usually a very basic one that makes sure a company can deliver its products or services to customers.
These kinds of processes require very close attention given how integral they are to a company. The end goal of any primary process is optimization for every part of a business so that value is added for clients. Doing this will enhance processes and directly impact business output.
Five specific business processes fall under the umbrella of primary processes:
- Customer Service: Once any sales orders have been generated, there needs to be a team that processes orders so that products and services can be provided to clients. They also help manage situations, where information is required for deliverables or clients, who need technical assistance of any kind. Effective customer service means customer retention and possibly even bringing back clients lost in the past.
- Operations: Operations include supply chain management. Sales professionals might generate orders for products and services, but operations personnel keep up with stock and inventory management to supply the actual deliverables. Warehouse management might apply to certain sectors, but website maintenance can be just as crucial to other companies.
- Finance: Once a company has money flowing through it, someone has to manage the finances. A dedicated department handles both the incoming and outgoing monies. This means paying employees and vendors on time, but it also means keeping expenses underneath revenue so that profits are possible. Finance professionals will look over daily expenses to keep up with recurring and miscellaneous expenses.
- Production: Production processes can be physical manufacturing processes, but they might also be services that are delivered via human professionals or even technology solutions. In any case, any product or service that has been designed, created, and sold to clients needs to be delivered. Tangible products might need packaging and distribution. A ready process is crucial even for intangible deliverables.
- Sales: This one can make or break a business. It’s the ultimate source of revenue generation. Without a sales business process, no company is going to operate much less survive. A robust sales system is crucial to generating the revenue and profit the entire organization relies on. Generating higher profits, gains, and market share helps a company grow. A sales department is often the second most expensive thing in any organization. No sales mean no business.
Each of these primary business processes should be optimized together and individually. Need help doing that? You can use a consultation with business process optimization specialists to do just that.
Support Business Processes
Support business processes are not directly involved in the final delivery of services or products to clients. However, they do support an environment suitable for primary processes to function effectively. They might not generate customer value, but customers wouldn’t get anything without them.
The better supporting business processes work, the better the whole company works. Improving these is always a sound strategy and helps an organization’s fundamentals stay strong. Three of the most prominent examples of support business processes include:
- Accounting: Accounting processes are a necessity for any organization. When these are efficient, then the cash flow is tracked without error and transactions are transparent and authentic. An accounting department reports on profits and losses and counts all liabilities and assets. Specific accounting process functions might include numbers of credit days for clients, collecting payments against sales, accounts payable, and accounts receivable.
- Management: Easy to confuse with the broader management business process category already discussed, the support subcategory of the management process involves middle management rather than the upper echelons. Middle managers work largely on the front lines but report to the senior management. They are responsible for finishing routine work but also implementing target achievements. Big projects get broken down into smaller pieces and delegated in this chain of command.
- Human Resources: This particular support process is something that some companies actually outsource or skip entirely. However, as companies grow and have greater workloads, it’s increasingly crucial to include this. Human resources departments help everyone in an organization work smoothly. They resolve disputes and boost communication between personnel and departments. They should also help career flow and professional growth while encouraging fundamental human values.
Managing Business Processes
Managing business processes have one big similarity to support business processes — they don’t directly add value to end clients or consumers of a business. Management business processes emphasize the orientation, monitoring, and analysis of daily business activities. They’re about growing the business and helping an organization be innovative.
Goal-oriented processes often fall into the category of managing business processes. Tangible objects are defined and then pursued. They might also focus on intangibles, including maintenance of the company brand or standing out in a crowded market by offering consumers better value than anyone else.
Management business processes often include decisions by leaders and executives that happen on the company’s frontlines. Expanding or closing various departments and new product launches are specific examples of managing business processes.
Examples of Business Processes
Reading theories of business processes is crucial to understanding the concept, but only useful if you can make it actionable. Having specific examples of actual business processes helps. Below are two specific real-world applications.
Example #1: Product Development in IT SaaS
Consider the information technology industry, and assume that a business follows the software-as-a-service tool model.
One specific business process would be product development.
The SaaS industry is currently booming. Companies in this industry offer solutions with value and utility. Their development process might follow this list of steps:
- Analyzing market demands and needs;
- Finalizing an online product;
- Doing backend programming;
- Coordination with a program designer;
- Handling the front-end user experience;
- Preparing for onboarding;
- Internal product testing;
- Resolving errors and bugs;
- Beta testing;
- Getting user feedback;
- Ongoing improvements.
Example #2: Ad Creation for a Marketing Ad Agency
This example takes place in the marketing industry with an ad agency responsible for ad creation.
This kind of work involves a certain level of qualitative output, and they might follow these steps in the process of creating an ad:
- Ascertaining the requirements and needs of their client;
- Brainstorming ad ideas;
- Campaign preparation;
- Pitching a specific idea to their client;
- Waiting for client approval;
- Making needed/requested changes;
- Offering the deliverables.
The Time Is Now
If you want to improve your business processes, then the time to begin is right now. While there is a lot you can do to benefit your business on your own, you can make the most of your opportunities by taking advantage of objective specialists from outside your business. Having specialized assistance like Great Lakes Advisory helps you create, comprehend, and then institute business processes that can help your organization on any scale. Contact us today to learn how we can help you!