Earlier, we have defined the business process and talked about its components. Today, I would like to discuss the principles to follow in order to build a functional system. Naturally, there is no universal recipe working for every business as any production process must be adapted to your offer, niche, specification, and managing style. It’s fully individual.
Unfortunately, similar to the majority of cases, we will never find an ideal algorithm, nevertheless, there exist basic principles that will help you create a viable workflow and working cycle for your product.
Why do we need a business process?
The business process exists to regulate the process implementation. When a business process is laid out, it can be improved, and correspondingly, increase the company income and satisfy a client’s needs.
With the help of business processes described and implemented, it becomes possible to solve such problems:
- Conflicts between departments and teams.
- Expenses grow faster than business.
- Problems connected with client service and production: delivery terms collapse, call center employees’ rudeness, good defects.
- Difficulties with the adaptation of new employees.
- Innovation resistance.
One of the serious mistakes a business founder can make is the neglect of a business plan because these are the processes that determine the way a company works: hires employees, resolves clients’ tasks, scales.
How to build a business process?
The first and fundamental step is to outline the goals of your business process.
And here we can highlight two types of goals:
- basic ones, that add value to a client and bring profit to a company («Sales» process);
- support ones, that help with basic process completion («New employee’s investiture» process in terms of a basic business process «Human resource manager»).
As soon as the goals are outlined, we can proceed to the next step, which is a process limits establishment.
Process limits are the initial– and endpoints that establish the framework an operation is conducted within. For instance, in the «Sales» process the start point is a request from the client, whilst the endpoint is the delivery of a finished product.
Nevertheless, the preparatory phase does not stop here.
Now let’s proceed to the basic actions of a business process establishment.
Actions, or stages otherwise, can be formulated and presented as a chart, diagram, or any other way that is suitable for you.
After the basic stages are established, we need to choose people responsible for their completion.
It should be taken into account that in a business process individuals do not matter. Why so? People can come and leave, though it mustn’t influence the process that is to work without interruption. Let’s consider several key roles and jobs:
- Architect. This is a person responsible for quality projecting and process scheme improvement. He is not in charge of the direct process implementation. As a rule, the position of the architect is occupied by the head of the management team (group) who works with a specific business process.
- Manager. Responsible for the correct fulfillment of all stages of the process and the achievement of goals being set. Every unit of the process is subordinate to its manager.
- Management team. The team together with the architect project and improve the business process. It usually consists of department managers and leading specialists.
In order to effectively cope with the stages of a process, we need to have a picture of a desirable result.
Stages may have several results, and each of them needs to be taken into consideration while formulating and describing a business process.
As we cannot exclude the possibility of mistakes as the result of a human error or system failure, it’s important to lay a scenario of an alternative way of business process while planning.
Thus, if in the «Receiving payment from the client» process a client declines the purchase, an alternative way will be «Attracting specialists to work with objections».
An inherent part of any business process optimization is the various instruments we have already described in one of the previous articles of this series.
They also need to be specified and then actively implemented.
How to specify the optimization points of a business process and its integrity?
In order to understand how to optimize the business process and whether it works properly enough, it’s essential to establish and identify KPI (key performance indicator). These indicators differ depending on the specification of the niche, client, and product, and are unique for every case.
As an example, we can take such indicators as terms of performance of the order (in days) or the cost of a client attracted (in dollars).
Every KPI is an indicator, but not every indicator is KPI, as they present key factors that influence the number of goods released, their quality, and other basic parameters of your business, respectively, not all of them are equally significant.
These are the basic points we wanted to light, and now I want to hear your thought. Share your experience with the formation or identification of a business process algorithm!