Why Business Processes are Critical for any Organization? Effective deployment of well-defined business processes offers the following key advantages:
a.a set of activities
b.that are integrated in a thoughtful sequence
c.with the purpose of achieving specified business outcome(s).
In addition, the description of a business process may also include the following elements:
a.declaration of roles that will perform the various activities of the process
b.the pre-requisites to start the process (inputs and entry criteria)
c.the pre-requisites to end the process (outputs and exit criteria)
d.scope of the business process in terms of the major activities included as part of the process description and also the conditions under which the business process will be used
e.the interfacing or supporting processes, procedures, guidelines, formats, tools and templates that will be used for performing the business process
Defining or establishing business process is an important aspect of Business Process Management (BPM).
The term “Quality Process” is in use in many organizations to mean the processes that are defined as part of implementing quality management and process improvement program. This term “Quality Process” is a misnomer and dilutes the criticality and effectiveness of the effort spent by an organization on defining business process. Every process used by a business organization should be treated as a “Business Process”. Even the so-called “Quality Process” is nothing but a “Business Process”. In fact all the functional processes for example, HR Process, Admin Process should also be regarded as business process.
Why Every Process in an Organization is a Business Process? The argument for calling all processed deployed and employed by business organizations as “Business Process” is based on the following factors:
An organization should not spend effort on defining any process that doesn’t have a business value – Direct, Indirect or Remote. All processes must have a clearly identified supplier and customer – internal or external as the case may be All processes must have a traceable link to earning of revenue or incurrence of expenses.
How to Categorize Business Processes? All processes must be categorized as one of the three types:
Direct Business Value
Those that require incurrence of expenses but are linked to the earning of revenue in a direct manner. These are the core processes that relate to make and sell activities.
For example, in a car manufacturing company, the process for technical activities related to car body design, engine assembly, etc. needs expenses to be incurred with the expectation of earning direct revenue when a customer purchases a car.
Indirect Business Value
Those that require incurrence of expenses but are linked to earning of revenue only in an indirect manner.
For example, in a car manufacturing company, process improvement activities performed by an organization (such as Defect Prevention Program, Adoption of any Business Excellence Models, etc.) needs expenses to be incurred but lead to better quality products and services and higher efficiencies in business operations which translates into more market wins and lesser costs on internal non-conformances.
Remote Business Value
Those that require incurrence of expenses but are linked to earning of revenue only in a remote manner.
For Example – the “Performance Appraisal Process” is “incurrence of expenses only” process. It is however quite critical to attract, develop and retain talent in the organization.
- Repeatability of business outcomes achieved through use of a proven method or approach to handle common business activities.
- Higher synergy amongst the various business activities through alignment and tight integration of the business processes.
- Consistency in operations through reduced dependency of business activities on people and more dependency on standard processes and procedures.
a.a set of activities
b.that are integrated in a thoughtful sequence
c.with the purpose of achieving specified business outcome(s).
In addition, the description of a business process may also include the following elements:
a.declaration of roles that will perform the various activities of the process
b.the pre-requisites to start the process (inputs and entry criteria)
c.the pre-requisites to end the process (outputs and exit criteria)
d.scope of the business process in terms of the major activities included as part of the process description and also the conditions under which the business process will be used
e.the interfacing or supporting processes, procedures, guidelines, formats, tools and templates that will be used for performing the business process
Defining or establishing business process is an important aspect of Business Process Management (BPM).
The term “Quality Process” is in use in many organizations to mean the processes that are defined as part of implementing quality management and process improvement program. This term “Quality Process” is a misnomer and dilutes the criticality and effectiveness of the effort spent by an organization on defining business process. Every process used by a business organization should be treated as a “Business Process”. Even the so-called “Quality Process” is nothing but a “Business Process”. In fact all the functional processes for example, HR Process, Admin Process should also be regarded as business process.
Why Every Process in an Organization is a Business Process? The argument for calling all processed deployed and employed by business organizations as “Business Process” is based on the following factors:
An organization should not spend effort on defining any process that doesn’t have a business value – Direct, Indirect or Remote. All processes must have a clearly identified supplier and customer – internal or external as the case may be All processes must have a traceable link to earning of revenue or incurrence of expenses.
How to Categorize Business Processes? All processes must be categorized as one of the three types:
Direct Business Value
Those that require incurrence of expenses but are linked to the earning of revenue in a direct manner. These are the core processes that relate to make and sell activities.
For example, in a car manufacturing company, the process for technical activities related to car body design, engine assembly, etc. needs expenses to be incurred with the expectation of earning direct revenue when a customer purchases a car.
Indirect Business Value
Those that require incurrence of expenses but are linked to earning of revenue only in an indirect manner.
For example, in a car manufacturing company, process improvement activities performed by an organization (such as Defect Prevention Program, Adoption of any Business Excellence Models, etc.) needs expenses to be incurred but lead to better quality products and services and higher efficiencies in business operations which translates into more market wins and lesser costs on internal non-conformances.
Remote Business Value
Those that require incurrence of expenses but are linked to earning of revenue only in a remote manner.
For Example – the “Performance Appraisal Process” is “incurrence of expenses only” process. It is however quite critical to attract, develop and retain talent in the organization.
No comments:
Post a Comment