ERP/U1 Topic 2 Classification of Business Process
A business process or business method is a collection of related, structured activities or tasks by people or equipment which in a specific sequence produce a service or product (serves a particular business goal) for a particular customer or customers. Business processes occur at all organizational levels and may or may not be visible to the customers. A business process may often be visualized (modeled) as a flowchart of a sequence of activities with interleaving decision points or as a process matrix of a sequence of activities with relevance rules based on data in the process. The benefits of using business processes include improved customer satisfaction and improved agility for reacting to rapid market change. Process-oriented organizations break down the barriers of structural departments and try to avoid functional silos.
Broadly speaking, business processes can be organized into three types, according to von Rosing et al.:
Operational processes which constitute the core business and create the primary value stream, e.g., taking orders from customers, opening an account, and manufacturing a component
Management processes the processes that oversee operational processes, including corporate governance, budgetary oversight, and employee oversight
Supporting processes which support the core operational processes, e.g., accounting, recruitment, call center, technical support, and safety training
A slightly different approach to these three types is offered by Kirchmer:
Operational processes, which focus on properly executing the operational tasks of an entity; this is where personnel “get the things done”
Management processes, which ensure that the operational processes are conducted appropriately; this is where managers “ensure efficient and effective work processes”
Governance processes, which ensure the entity is operating in full compliance with necessary legal regulations, guidelines, and shareholder expectations; this is where executives ensure the “rules and guidelines for business success” are followed
A complex business process may be decomposed into several sub processes, which have their own attributes but also contribute to achieving the overall goal of the business. The analysis of business processes typically includes the mapping or modeling of processes and sub-processes down to activity/task level. Processes can be modeled through a large number of methods and techniques.
For instance, the Business Process Modeling Notation is a business process modeling technique that can be used for drawing business processes in a visualized workflow. While decomposing processes into process types and categories can be useful, care must be taken in doing so as there may be crossover. In the end, all processes are part of a largely unified outcome, one of “customer value creation.” This goal is expedited with business process management, which aims to analyze, improve, and enact business processes.