Business Process

February 1, 2012

Business Process

Not a very exciting title, so in an effort to tear this open, look and learn, let’s evaluate the purpose of this blog posting. In our Business Process Modeling class, we want to explore terminology and basics before moving into the good stuff. One definition of Business Process is a collection of related, structured activities or tasks that produce a specific service or product for a particular customer or customers. The three types of business processes are Management Processes which dictate strategy, Operational Processes constituting the core of functionality, and Supporting Processes allowing the core business processes to function for the primary role of doing business (Wikipedia). It appears to be common sense and basic, but a very broad definition opening the door for so much more. Business processes determine the way business is done and ultimately how a company will generate revenue-the measure and life blood of business. Throw the generation of money and evaluation of those numbers, and it becomes not so simple stuff. The subject warrants a great deal of evaluation. Keep in mind, each business is different and so business processes will (should) morph to fulfill the desired outcomes. Identifying which processes are appropriate to your set of circumstances may help determine chances for business success-how ever one may define success.

If you have been involved in a start-up company and have not had the benefit of education on this subject, you may very well understand the value of adequately planning processes to run your business. The learn-as-you-go method works for some things, but when money and time are involved, it is better to get it right out of the gate. So, ask yourself: what is the goal of this venture? Specifically, what is the goal and what are you (and your group of partners/employees) going to do to get there. According to one source (Anderson), these are the five basic business processes for small businesses:

1. Sales & Marketing

2. Accounting & Technology

3. Quality & Product/Service Delivery

4. Management, HR & Finance

5. Product Development

The line between small business and big business may not be clear, but growth exceeding fundamental processes should be given great consideration before the inflection point. Here are “Ten Core Business Processes”:

1. Customer Strategy & Relationships (Marketing)

2. Employee Development & Satisfaction

3. Quality, Process Improvement & Change Management

4. Financial Analysis, Reporting, & Capital Management

5. Customer Acquisition (Sales)

6. Management Responsibility

7. Product Development

8. Product/Service Delivery

9. Accounting Management

10. Technology Management

One distinctly notable difference between the two lists is a dedicated breakout of accounting from technology. In Reengineering the Corporation, a bold link is drawn between innovation and technology. More specifically, the authors suggest inductive reasoning to develop a technological solution, then applying that solution to a set of current or future challenges within the business. This contrasts the traditional deductive solution thinking to promote problem-solving for existing problems. It seems we are not typically trained to think in this manner-why? This presents a good time to discuss change and business processes. We live in a dynamic business world and therefore must become increasingly dynamic-even evolutionary in thinking. Companies are born and die-what determines their lifespan and series of accomplishments? In the “now” technological environment, many companies may find their business processes outdated and inefficient. One must admit there is a problem prior to acquiring a solution. How many of us are involved in this type of scenario? Does anyone else what to suggest business process remodeling to your senior management? As I write this, I keep asking, “How can I mold my thinking & behaviors to become more efficient and less ‘traditional’ in actions and thought?” I am not surprised I have run upon another subject for which I am scratching the surface and have so much to learn about.

Does “process” have a rigid connotation? Can business process be view as art rather than a sequential or parallel series of protocols? A set of authors address this in an article found in the Harvard Business Review: “When Should a Process Be Art, Not Science?” The authors take a few moments to highlight the production of pianos for a particular market. Pianos are constructed of many separate pieces and parts. Some of the crucial elements are wood which may be unique in each piano, creating a slightly different sound (Hall). How can rigid manufacturing processes produce like-sounding, quality pianos fit for sale? Bring in the art side of things. Of course, not all components of a piano are uniquely sourced and custom produced. For a process to lean more artistic, one must evaluate if the inputs to the process are variable and if the customers value the variation of the output (Hall). The article continues to expound upon some key features-human intervention in craftsmanship and decision making and empowering individuals within the process. In a blog review of this article, Boris Gloger suggests three (or four) steps to identify and run the

proper process in a company:

1. Identify what should and shouldn’t be art

2. Develop an infrastructure to support art

3. Creating appropriate metrics: Feedback

4. Periodically reevaluate the division between art and science

It appears that Gloger is suggesting that in every situation, one must determine a balance for a set of circumstances. Can both Hall and Gloger be correct? Is human decision making art when it is statistically relevant (due to a high correlation of successes)? What do we call it when those hunches are judged wrong on a continuing basis? I will suggest those are not termed “art”. This is where I imagine an exchange of opinions from my class group. While the subject of business process appears a bit dull and uninteresting, take a thousand mile view of the company you work for and try to see the processes objectively. Now, could you do that with Your business venture?

In conclusion, the subject of Business Process is another fundamental aspect of any business. Exploring, evaluating and modifying those processes on a continuum may be the only way to get ahead and stay ahead in the decades to come. I look forward to discussing and learning more. Please share your thoughts on the subject.

Lance LeBrun

Works Cited:

Anderson, Chris (2009, July), What are the Ten Core Business Processes? http://www.bizmanualz.com/blog/strategy/what-are-the-ten-core-business-processes.html/

Gloger, Boris (2009, May), When Should a Process Be Art, Not Science-Review http://borisgloger.com/2009/05/11/when-should-a-process-be-art-not-science-review/

Hall, J.M. and Johnson, M.E. (2009, March), “When Should Process Be Art, Not Science“, Harvard Business Review, 58 – 65

Michael Hammer and James Champy (1993). Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business

Wikipedia. “Web Service”. http://en.wikipedia.org/wiki/Business_process

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2 Responses to “Business Process”

  1. Bob Woolverton said

    Some gems of wisdom from your post that I will remember:
    “business processes will (should) morph to fulfill the desired outcomes.” change is constant and should be embraced. have you hugged your change today?

    “One must admit there is a problem prior to acquiring a solution.” yet we learn still from those brought low by addiction. Is complacency habit forming?

    “Bring in the art side of things” this applies most acutely in technology. Try as we may to make a commodity out of technology, the products of high tech reside in a community made up of both machines and works of art. A well constructed process looks like art and drives a mean profit.

  2. Robert Hanson said

    Thanks, Lance. This is very informative and detailed.–it is a fundamental aspect of any business. It always concerns me when a business doesn’t have a clear direction and defined goals

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