HomeBUSINESSBusiness Processes: Definition, Characteristics, And Examples

Business Processes: Definition, Characteristics, And Examples

What is a business process? For the BWL ‘er, he describes value creation steps to the end product. It serves as the basis for optimization and supplements and generates critical figures. The term often seems like a bohemian village for the customer, and unfortunately, it is often confused with a similar workflow. Here comes clarity in less than five minutes!

A business process arises from a value-adding action. This so-called value-adding activity must consist of at least one input and one output for the customer’s benefit. The business process can be described and viewed by considering the value-added move. It is used for “Business Process Reengineering.” A precise analysis of the overall process or a detailed analysis of sub-processes is carried out here. These analyzes themselves serve as a starting point for optimization processes. The technical term for the sub-processes is aggregation levels. Therefore, a value-added activity can only be considered in one division or one functional area.

Relationship Workflow And Business Process

The expression “business process” describes the business management function. In general, such a process is often run through. Both input and output are clearly defined. On the other hand, the workflow describes how the individual processes build on one another. The previous production of the process always determines the following input for the subsequent process.

Business Processes And Business Levels

Depending on the business field, input and output vary greatly. They all have in common that during the actual (partial) process, one thing is transformed into the other. Put, it transformed into something monetarily usable. In this way, wood can be converted into thermal energy by burning, or information during a consultation can lead to a purchase. The business processes to be dealt with within each company are different depending on the position. A manager is responsible for overseeing, possibly sourcing goods and hiring staff, and responsible for marketing. At the same time, the employee takes care of the core process, namely assembling the materials into a recognizable product. There are also supporting processes. They include distributing advertising, cleaning, and possibly luring them to a booth.

In addition to the processes mentioned, there are also intermediate steps. For example, the management level can be much more ramified; Individual IT departments and salespeople are named representatives. The core process itself usually consists of many sub-processes. Here, it becomes clear how relevant the consideration of input and output is in the course. Errors can be found faster. Reductions and extensions can be defined. Furthermore, the sub-processes can be adapted to a new output target.

What Are The Characteristics Of A Business Process?

A business process always begins with the customer. In most cases, this is due to the existing demand. And this is precisely where the business process ends; the output goes back to the customer. There is someone responsible for both the overall strategy and each sub-process. This person is called the process owner.

In contrast to the workflow, the business process has a defined goal and not just a defined beginning. The required input, i.e., the resources converted by the process to create value, is fixed. The resources also cost money. In some cases, sub-processes are also outsourced and require an external company to start a new business process.

For Better Visualization:

A company pursues an overarching goal. The journey from start to finish is the overall business process. All the steps up to that point can be broken down into logical and self-contained parts—a kind of timeline with consecutive sections. The sections are the time with defined resources and input. After the end of the whole process, the beam starts again.

This is also the case if skilled workers should only ever carry out the same action. For them, the action, i.e., the process, begins anew with each piece of goods.

The entire process is finished when the number of pieces is reached or the working day is spent.

Documentation Of Business Processes

All processes must be fixed in writing. In addition, they are measurable. Which periods are compared and which method is used for the analysis can be freely determined. As mentioned initially, these records form the basis for process optimization.

Example Of A Simple Business Process In A Restaurant

The guest makes a start. It represents demand and thus heralds the core process. The guest is like the input. The waiter who entertains the guest embodies the process. As a result, he can take the order. The second sub-process of the core process comes into play: the order is given literally as input to the cash register, and the chef carries it out. So the cook converts resources and the order into a serveable dish.

Another sub-process follows: the dish is brought to the guest by the waiter who serves it. However, the business process does not end here. Because the answer to order is the bill and not the food. So the next and last sub-process of the core process begins with the guest who wants to pay. The cash register manages the billing process, and the receipt is exchanged for money. Now the core process is complete.

However, for the management, the overall business process is not over yet. Taxes, bookkeeping, employee payment, operating costs, and the like all have to be taken care of. And to be able to serve the next guest. Without providing the resources, this would be impossible.

Example Of A Business Process In The Insurance Industry

A customer wants to take out insurance. This corresponds to the input. The insurance broker advises him. He converts the request into a signature under a contract in the best case with the advice. Or the customer can first have an offer made. This is where other sub-processes come into play. This example clearly shows the workflow. Each step is defined by the previous one. It is best thought of as a test from a magazine, where lines lead to further questions depending on the answer given.

In the beginning, it is already stated that a business process should not be used synonymously with the word workflow. A better synonym is the value creation process. However, the meaning is not identical in itself, but only the intention of the description of the steps. Because a business process is always a process of value creation simultaneously, and that’s precisely how the essential characteristic of a business process can be noticed: It begins and ends with the customer!

Also Read: E-commerce What Is It?

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