The word business process is used everyday in various business scenarios. Business after all, has such a wide variety of applications. As such, the range of business processes has become vaster and vaster each day.
When you decide to examine your business processes and formulate strategic priorities for business process improvement, you’ll find that even a seemingly simple business implements a lot of processes. Getting them organized so that they’re coherent can be complicated. However, once you categorize them into types of business processes, it’s a lot easier to prioritize the elements of your business improvement strategy.
In this article, we’ll look at the types of business processes, and what they mean to your business. As we’ll see, this theoretical knowledge has important practical implications!
Why Bother About Processes?
The reasons why process thinking benefits your business are easy to grasp. Your business is there to do something for its clients. They don’t see your business as a collection of independent entities that all do different things, and nor should you.
If you organize your business along purely functional lines, isolated “silos” develop. Production doesn’t integrate with sales; accounting doesn’t talk to purchasing, and so on. Everybody performs their function, but the end-to-end process, the real inputs-to-outputs task, is not well-orchestrated
From a customer perspective, dealing with your business becomes cumbersome. From your business’s perspective, you get a situation in which, as the saying goes, “one hand doesn’t know what the other is doing.”
Since different business functions will have roles in processes, and the results of processes are what matters, managing functional departments as if they were individual entities won’t give the best results. The solution is to break away from functional silos and manage processes rather than departments.
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By making ourselves write down our processes and know-how on Tallyfy – we can now ensure that steps are never missed or done out of order. There’s fewer mistakes and a lot of time is saved on training.Len Gilbert / Digital Prism
There are Three Broad Types of Business Processes
Every business is different, and the categories into which business processes fall will depend on what your business does. A specific type of task could be a support process in one business and a core process in another.
We’re breaking away from function-based thinking, so instead of trying to list functions and the processes they might fall into, we’re going to look at outputs. What they do for your business determines the type of business process.
Here are the three types of business processes along with some tips for spotting which processes fall into each category.
1. Core Processes: How You Deliver Value
To identify core processes, ask yourself: “How does my business generate value and make its income?” Core processes are also known as primary processes, so another way of looking at it is to ask: “What does my business primarily do?”
Every task that directly plays a role in producing your business’s outputs to its clients is part of a core process. To get outputs, you need inputs, and you follow a process to move from inputs to outputs. Don’t get confused if you notice that several departments are involved in the end-to-end process. After all, you’re trying to get away from departmentalized thinking.
You will notice that there are several sub-processes within each core process. Some add value, some (for example, storage) don’t, but all of them contribute directly to the products or services that your clients get from you. Because these processes are at the heart of your business’s value, they’re often referred to as the value-chain. They include:
- Developing and creating a product or service
- Marketing the product or service and conveying it to the buyer
- After-sales service and support also add value and are part of core processes
To deliver excellence, all three of these elements need to work together as one. And since core processes are at the very heart of your business, getting them working as efficiently as possible is a strategic priority that has transformed many organizations.
2. Support Processes: Making Value Delivery Possible
On the surface, it may seem that there’s a fine distinction between generating value and enabling value generation, but there’s a world of difference between the two concepts. Core processes directly serve external clients and generate income. Support processes serve internal “clients” and do not generate income in themselves.
That’s not to say that support processes are unnecessary. For example, your HR activities have nothing to do with your customers, and they don’t directly make you money, but without them, your business couldn’t function. Your IT department doesn’t directly make you a cent, but without the systems it oversees, your value-generating functions could grind to a halt.
As soon as we start looking at functions alongside processes, we can see that certain functional departments will be involved in both support and core activities.
Your financial department keeps track of client accounts – an important part of customer service that is directly involved in the value chain. However, it also generates the management accounts you use to determine whether your investment in the business is bearing fruit. That’s a purely internal service with you as the “customer.”
The bottom line? Support processes make it possible to carry out core processes effectively and are also of strategic importance – as long as they’re fulfilling their supportive role.
3. Management Processes
Processes, be they core or support processes, require planning, coordination, monitoring, and control. Management processes also include measuring overall results and dealing with opportunities and threats that could help or harm your business.
It’s also up to management to ensure that regulatory compliance needs are met and that financial targets and budgets are met.
Although management processes don’t directly generate income, they optimize income generation and ensure the continued survival of the business as a whole.
Why Understanding the Different Types of Business Processes Helps You
All activities in which your business engages should be aimed at optimizing the core processes. Support and management contribute to this, but redundancies can creep into any of the three types of business processes.
In a business with a diverse product and service offering, it’s possible that extras that don’t really fall within your core business are draining resources without adding value to your clients.
In older businesses, support tasks that made sense at the time may have lost their relevance. For example, you may have added a reporting duty to gather data a few years ago. You used the data, don’t really need it anymore, but your staff is still faithfully generating the reports. If any task isn’t adding value to or enabling core processes, you should consider pruning it away.
That’s one of the reasons why mapping your core business processes is so important. If you find yourself asking: “Why do we even do this or that task?” it’s probably time to streamline your business processes.
Understanding the types of business processes can also help you to make outsourcing decisions. Although it certainly is possible to outsource parts of your core processes, it can be risky.
However, support processes can more easily be, and often are, outsourced. Even large businesses are outsourcing support to firms whose core business is the provision of support functions. Many of them are finding opportunities for cost-savings in this way.
Finally, if you’re moving to process-oriented management to improve efficiency, you need a starting point. The best place to begin examining your business process architecture is with the core functions. After all, they are the functions on which everything else in the business should focus.
Track and Map Your Business Processes Using a BPMS
Mapping business processes and tracking them can become very hard as your business starts to scale. At some point you find yourself going through piles of papers and countless folders to find the right implementation design for a certain process. That’s when you realise your processes are scaling faster than your business.
In order to avoid facing such problems, businesses have started adopting business process management software to simplify anythign that has to do with business processes tracking, improving, analyzing, automating, and so on. This is essentially ready-made software that can help you keep track of all your processes from a single screen. You won’t have to go through piles of documents again. Instead, you’ll simply receive an email whenever something is done.
And if you want to map out your existing processes which are not documented, you can do that with a few simple clicks.
The issue with using BPMS before was that they were only adopted by entrerprises due to their high costs. Nowadays however, with the rise of SaaS businesses, that is not the case. There are many BPM tools that are cloud-based web applications. They scale alongside your business and are perfect for any size company. Including startups.
One of the best BPM tools available in the market at the moment is Tallyfy. It was crafted by BPM experts and has been improving businesses all over the world in improving their business processes for the past 4 years.
You saw a screenshot above representing Tallyfy’s website. That is just a tiny peak into what Tallyfy really is. In order for you to get the real experience, you should give it a try. Just like you’d take a car for a ride before purchasing it. Tallyfy provides you with a free trial, allowing you to experience the full potential of this business process management software.
With Tallyfy, you can create re-usable blueprints (templates) so that creating a new business process can be done in a few minutes. How cool is that?
Getting Started with Mapping Business Processes
Now that you know where to get started, it’s time to start mapping your business processes so that you can analyze them and look for areas you can improve. Traditionally, people used flow-charts or business process notation for this. But these methods are cumbersome and have their limitations.
Business process management software can help you to overcome these, but Tallyfy goes beyond that. Task allocation, monitoring, and analytics that show problem areas are all included or integrated nicely.
Tweaking and touching up processes becomes the work of a few minutes. Did you find redundant tasks? Simply remove them from the process flow. Are there areas where work piles up and processes become delayed? Spot them at a glance, investigate the root cause, and make the necessary adjustments.
The road towards greater customer satisfaction and improved efficiency is open to you and understanding the different types of business processes is one of the first steps on the journey.