Organization in business or elsewise, entails distinguishing and grouping of work, delegation of authority and responsibilities, and also carrying out tasks delegated. Hence, the main purpose of the formation of any organization is to achieve set goal by means of proper planning and structure. Division of labor and specialization are features of organizations, especially business organizations that are of great importance. This is because, all profit-oriented businesses, and even non-profit businesses, have set goals which in order to achieve, requires use of set skills, which in most cases cannot be found in a single individual.
One major concept in business that corroborates division of labor and specialization is Business process.
WHAT IS A BUSINESS PROCESS?
A business process is a string of finite number of steps performed by members of a team of an organization to achieve set goals. In these steps, material resources as wells as human resources are inputted, in order to get an output, which are the set goals. Business process is put in place in order for resources of the organization to be properly managed, and for tasks to be carried out properly and promptly. It is so important because it sees to the completion of simple to complex tasks in an organization and on the long run, achievement of set business goals. It also improves the efficiency of stakeholders of an organization as well as ensuring their accountability.
In a business process, tasks are defined, mapped out, assigned to team members, tested, implemented and monitored. A typical example is the process involved in the production of products by a manufacturing business enterprise, say business X, aiming at producing a world-class standard food product. In order to actualize this set goal, business X would require the input of her stakeholders across various units and departments. The stakeholders would work towards the actualization of a product that would reflect the aims of the organization and at such the following business process may be adopted:
- Sampling and modeling of products that would reflect the businesses’ goal.
- Choosing the best from modeled products.
- Developing process techniques through which the selected product would be made
- Testing the process and product for standardization
- Production in large scale
- Monitoring of cleanliness
- Sales and marketing
- Repeating the process
All of these processes require inputs from stakeholders from different units of the organization to bring out the right outputs. That is what a business process is about.
MANAGING A BUSINESS PROCESS
There is a need to manage business processes as it might be a cumbersome process, especially core processes that cut across the functional line of the business. The process that make up the core of any organization should be created, edited and analyzed, if not inefficiencies may arise. Business Process Management is the management practice through with this is achieved. In various functionalities of a business, incorporating business management system is of great importance as it helps makes the work easier. Here are some ways through which business process management can help the functional line of a business if implemented:
- In the Human resource department, business process management can help improve processes by cutting down on cost, time, paper forms and stress involved in hiring new employees.
- In sales department, business process management helps reduce manual errors that can ruin sales accounts. It can also help speed up the work of recording sales.
- In finance department, it helps lessen the burden of the finance personnel and makes their works less cumbersome by managing their day-to-day activities.
In every other department too, managing business processes goes a long way in helping the business one way or the other.
CLASSIFICATION OF BUSINESS PROCESS
Business processes are broadly classified into three types, which are:
- Operational Processes: this is the core of the business that creates the value stream of the business e.g. manufacturing of products, packaging of products, order and supply etc.
- Management processes: this is the part of the business that oversees other processes. The managers are the people spearheading these processes. They ensure effectiveness and efficiency.
- Supporting Processes: This process supports the operational processes. These include; marketing, accounts, IT, training etc.
All of these processes work hand in hand and in most cases are interdependent. For example, there is a strong interaction between the operational function and supporting processes like, research and development, sales and marketing, procurement, information management, human resource and so on. The operational processes may not proceed if some of these supporting processes are not in place. For instance, if the research and development unit is not functional there may be no means of manufacturing new product, as there may be no new products and products may lack innovative ideas. In another instance, there would be no need of carrying out the operational process of production if the procurement unit is not functional. This is because, for production or operation to take place, the necessary ‘raw material’ must be sought out for and obtained by the procurement unit. The management processes similarly is very important to the whole process as it is the only means through which the effectiveness and efficiency of other processes is guaranteed and by extension, profit made.
CHARACTERISTICS OF A BUSINESS PROCESS
Business process is not the same as business strategy or a business plan. For a process to qualify as a business process it must have the following characteristics:
- It must be definable: one must be able to tell what the business process is about.
- It must be orderly: the aim of setting up a business process is to make things go orderly; therefore the business process itself must be orderly.
- There must be a ‘customer’ receiving the output of the process.
- It must add value: a business process must add value, especially to the customer.
- It must be embedded in an organizational structure and it must cut across several functions.
HOW A BUSINESS PROCESS CUT ACROSS A FUNCTIONAL LINE IN AN ORGANIZATION; with example.
Every organization is grouped into hierarchy and units in order to function properly. Another key element of an organization is the purpose for which it is formed and the effort through which that purpose is achieved. This is the functioning line of the business and a business process is used to achieve this. For instance, in the business process example above, in order for business X to function properly or particularly succeed in the production of their new food product, a business process which would cut across the functioning lines of the business needs to be created. A summary of the interaction of the business plan of Business X and its functioning line would be:
- Modeling and sampling of products to reflect the businesses’ goal: To model different products that would reflect the businesses’ goal there would be a need for the research and development department of the business to carry out research aimed at searching for products that would reflect the business’ goals. In some instances, the Information technology department too can help in acquiring information regarding products to be modeled.
- Choosing the best from modeled products: this process step would be carried out by the research and development department of Business X. In this step, they would inspect the modeled products and check out for the best suited product. Also in this step, the finance department would come to plays as they profitability of the product would also be considered.
- Developing process techniques through which the process would be made: In developing process techniques, the research and development department, will work hand in hand with production department. Also, the input of the Information Technology and Engineering Department may be required as automation of the processes may be preferred.
- Testing the process and product for standardization: the quality control department as well as the laboratory science department may be involved.
- Production in large scale: large scale production would be handled by the production department, the engineering and maintenance department, the accounts and finance department. While the production department produces the product, the engineering and maintenance department takes care of the repair and maintenance of the machinery used for production, while the accounts and finance department handles cash and profit control.
- Monitoring of cleanliness: while the cleaning would be done by the cleaning staffs, it is to be ensured by the management.
- Sales and marketing: Price fixation and regulation is the responsibility of the accounts & finance department and the management, while sales and marketing is the sole duty of the marketing department.
- Repeating the process: Once the process is accepted it becomes the standard “business process” of business X. it is therefore adopted and repeated unless there is need for change to cater for new innovations.
This is to show that organizational functions operate side by sides in carrying out the business process. In fact, if they do not operate side by side it is considered a bad situation.
In summary, a business process naturally cuts across several functional areas of an organization and for a business to function properly, a business process needs to be set up and the targeted use of this business process is to achieve the objective of the business, but in order for this to be done, it is necessary for all functional lines to carry out their own task.