The Ultimate Guide to Business Process Design
If you want to design the best business processes possible, it helps to understand why they exist in the first place.
Business Process Design might not seem like a hot topic when you hear people talk about it, but if you think about it, almost everything in your business happens through a process. You take an order; someone takes it off the shelf, it gets packed, shipped, invoiced, and so on. All of these processes involve some level of design.
It might not seem like a big deal until you realise that if one of those steps in a process doesn’t go well, the whole process can fall apart. And if a process falls apart, it could cost you money, create a frustrating experience for your customers, or even be dangerous. So, as a business owner, it’s essential to know how to design a process from top to bottom.
There are many reasons why organisations need to implement business processes. Let’s explore the main benefits of doing so.
What is a business process?
The term business process describes the series of activities you must carry out to achieve a specific result. In other words, it’s how an organisation runs its business.
Business processes are generally divided into two types, i.e., transactional and operational. The former refers to how business occurs in day-to-day operations, while the latter describes how the organisation is managed.
Transactional processes are the ones that relate directly to transactions. An organisation uses these to meet its customers’ needs. Examples include providing information about services offered and pricing, scheduling appointments, processing credit cards, receiving orders, and collecting payments.
Operational processes relate to managing the organisation, including internal management (e.g., human resources, finance, and operations) and customer relations. They help to achieve organisational goals and objectives, such as developing strategic direction, planning and budgeting, controlling expenses, and improving productivity.
What is a business process map?
A business process map is a diagram that shows how an organisation’s business processes interact with each other. These maps are helpful because they show how the different departments within an organisation communicate and use each other’s services.
There are several different business process maps, and they all serve a different purpose. The most common ones include:
- Process flow diagram. This map represents employees’ various steps to complete a given business process.
- Activity diagram. This is a diagrammatic representation of how a given business process is carried out. For example, an activity diagram can represent the stages of completing a customer order.
- Value chain. This shows how the value produced by a company flows through the supply chain.
What is business process design?
Business process design is designing a system or a set of related systems. The term was coined by the Institute of Electrical and Electronics Engineers (IEEE) and was formally defined in a document published in 1978.
The word “design” is used in designing a process, such as a production line, and designing an object, such as a car.
According to the IEEE, the basic idea behind business process design is to “provide users with an optimal experience using an organisation’s resources.” In other words, process design tries to ensure that the user has the best possible access to those resources, given time and space constraints.
Process design is not the same as “business process management,” commonly used in the software industry. Whereas process management is usually concerned with a single company or business unit, process design addresses the entire organisation or enterprise.
Business process design can be divided into three parts: process analysis, modelling, and implementation. The first part aims to determine the flow of work needed to perform specific organisational activities, such as sales, purchasing, or production. This information is then transformed into a model of the process. The model describes how the different activities in the process are related to one another. The third part of the process design consists of implementing the process model by creating the system.
The IEEE defined two business process modelling types: activity-oriented and event-oriented. Activity-oriented modelling is the traditional process modelling approach based on the concept of a flowchart. Each block represents a task, and the sequence of blocks shows the steps needed to complete the process. Activity-oriented modelling is used for processes with one or more inputs and a single output, and it is typically implemented using flowcharts, block diagrams, or state charts.
On the other hand, event-oriented modelling is more suitable for complex processes with multiple inputs and outputs. Each event in the process triggers the corresponding activity, and the number of events indicates the number of paths through the process.
Event-oriented modelling can be implemented using Petri nets, queuing theory, or agent-based models.
In the 1980s, process analysis became a significant part of process modelling, and several tools were developed to analyse existing processes.
Two of the most common process analysis techniques are job-shop scheduling and flowchart generation. Job-shop scheduling is a technique that schedules jobs to run on a sequential machine. The most popular scheduling algorithm for this purpose is the well-known LK algorithm, developed by Bruce D. Lucas and Takeo Kanade.
Flowchart generation is a technique used to generate flowcharts from a textual representation of a process. Early flowcharting tools were designed for human use and tended to be simple and easy. Today, many commercial and open-source tools generate flowcharts, including ProcessMaker, PlantUML, and Microsoft Visio.
Why Is Business Process Design So Important?
BPD is critical to the successful functioning of organisations and a vital part of any business strategy. It encompasses all the elements required to create, maintain, develop, integrate, support, control, execute and change the organisational processes. The main objective of this process is to ensure the achievement of business goals and objectives.
Here are some reasons why business process design is so important.
- An effective business process defines the processes needed to run the business. An effective BPD enables business functions to be performed efficiently.
- Business processes are the foundation of an organisation. They are the foundation that supports the delivery of products and services and allows the business to perform effectively.
- Processes help to achieve consistency and accountability. Processes allow a business to deliver consistent outputs in a fast-paced business environment.
- BPD supports continuous improvement. BPD gives businesses the ability to respond quickly to changing market conditions. It helps to create the framework for innovation.
- Processes help to define the structure of the organisation. Processes help to define roles, responsibilities and relationships between people. This helps to create the foundation of a structure.
- Effective BPD provides a common language for communication and information exchange. This increases the efficiency of communication and the speed of decision-making.
- Effective BPD is a crucial enabler for organisational effectiveness. It creates a business culture where people follow the processes and procedures. It allows the organisation to work as a team and perform at its best.
Business process design rules to follow
Do not be afraid to innovate. Innovation is one of the critical characteristics of the digital world. Innovation is the result of an iterative process. Start small, test, measure, make corrections, and then repeat. You can begin by experimenting with new marketing ideas and see how well they work.
If the results aren’t good enough, consider whether your product needs to be rethought or if it’s time to stop. You must be prepared to do things differently if they don’t work in business processes. Sometimes, you’ll need to cut costs and simplify the product, but sometimes you’ll need to look at a new approach.
Remember that innovation is a two-way street. Your customers will not be able to understand your product unless they have a clear idea of the problem it solves. Similarly, you will be unable to understand your customers unless you can articulate what you are doing. The key is ensuring that your customers and you understand each other.
Keep an open mind.
Always keep an open mind when encountering something that has never been done before. Remember, the only thing that hasn’t been invented is the unknown. Try to keep an open mind and always ask questions when you can’t find answers on your own. Asking questions of experts in your field is an excellent way of finding answers to questions that have never been answered before.
Use actual data to drive decision-making.
The more information you have, the better you can make decisions. Make sure that your data is accurate and reliable. If you don’t know the answer to a question, research it. Remember, a great deal of data is available free online. If there is a question you cannot answer, write down a tentative plan and keep track of the results.
Don’t get carried away by trends.
If any particular trends are sweeping your industry, keep your eyes open and don’t lose sight of the big picture. If you get carried away by a trend, you may get stuck in a rut and fail to look for other opportunities. If you have a strong vision, your organisation may be more likely to survive in the long run.
Don’t just react to problems; take action to prevent them. For example, you can save money in the long run by planning and setting up systems to ensure that your organisation doesn’t fall apart. It’s important to understand that a mistake can happen anywhere in your business, even while you are asleep. So, make sure that you have a backup plan.
Make sure your technology is secure.
If you have access to confidential information, you should be careful to protect it. Use secure storage, encryption and firewalls to help protect your data.
Be aware of the legalities.
It’s a fact that some of the rules and regulations that apply in the real world of business do not necessarily apply in the virtual world. Make sure that you have all the necessary permissions and that you are compliant with the law.
You may have planned for a particular outcome and found it to be a dead end. If this happens, don’t panic. Instead, try to find a solution, even if it’s different. Flexibility is one of the critical benefits of the digital world. Keep an open mind and be prepared to change your plans if the results don’t turn out as expected.
The Best Way to Design a Business Process
We are asked this question by clients wanting advice on how to make their business process more efficient. They need to streamline processes, reduce costs and increase quality.
The most common response is to do an extensive audit to determine how the business processes are currently run. Next, several changes are made in one big step. For example, they might make the existing workflow more efficient. They might set up a new system and use this. They might try to rationalise the whole process. Then, when they understand the business processes better, they can think of other ways to make the business more efficient and make their lives easier.
There are problems with this approach. It’s like trying to design the best car or the perfect house by starting with a significant overhaul. This leads to frustration, as you won’t have the time to take small steps that will lead to gradual improvements.
Here are three steps to a better solution.
1 – First, understand where your business processes are headed.
This helps you avoid the situation of making drastic changes. Instead, you will be able to make incremental changes. It also helps to have a clear picture of the “what”, the “why”, and the “how” of your business processes. You must clearly understand your organisation’s goals and what you want to achieve.
2 – Second, analyse the current processes.
There are two main stages to this. First, look at the current processes, then review and compare the results with the goals.
Analysing the current processes
To do this, you need to map out the existing processes. Then, it would be best to try to find out what you need to improve. In other words, ask yourself these questions.
- Who needs to perform these actions?
- What do you want them to do?
- What do you want them to produce?
- What does the current process look like?
- Do you have a written process? If so, what are the benefits and drawbacks of having a written process?
- Do you follow a formal process? If so, what are the benefits and drawbacks of doing this?
- How do you record the results?
- What would happen if you didn’t have a record?
- Do you have a system for updating and reviewing the current process?
- What are the benefits and drawbacks of having a system?
- How do you update and review the current process?
- What would happen if you didn’t have a system for updating and reviewing the current process?
When you are finished with this, you should be able to see what the problems are in the current process. What could be improved? Are there other ways of doing the same thing?
Analysing the results
You must look at the current business process design and compare this with the goals. You will be able to see whether the current process is meeting your organisation’s needs. What changes would need to be made to improve the results if it isn’t?
For example, if the current process results in a lot of waste and errors, it might not be as efficient as it could be. The process should be streamlined and improved to ensure the results are promising.
3 – Third, take small steps that will lead to incremental improvement.
Once you have a clear picture of the existing processes, you should have a clearer idea of what you need to do. This means you can take small steps that will lead to incremental improvement. If you do the following, you can avoid the problem of making a significant change that will end up causing more problems than it solves.
First, you can start with one action at a time. This means you can test each small change and then make a decision about whether to keep this change or to revert to the previous state. This will help you avoid falling into the trap of taking one significant change, only to realise it wasn’t working and you had to make further changes.
Next, you should consider each change and how it will help you to achieve the goal that you have set. Is the change helping to achieve your goal? If so, is it worth making the change? If not, is there another way to achieve the same result? These are all questions that you need to ask yourself.
Now, you should make a plan for the future. Think about what you want to do and how you want to do it. Are there any changes that you need to make? Are there any changes you can make now to help you achieve your future goal? Finally, it would help if you were prepared for the worst-case scenario.
Most Important Business Process Design Tools
There are many business process design tools available. The key to success in any business process design program is the ability to choose the most appropriate tool to support the specific project. A business analyst will use the following questions to help make a choice:
- What is the project’s objective?
- How will the process affect the customer’s experience of the product or service?
- What are the risks and rewards of different design options?
- What are the expected benefits?
- What are the constraints on the development team?
- What is the estimated time and cost of the project?
- What are the technical requirements of the environment where you will implement the process?
A majority of organisations use the business process design tools listed below. Many of the tools are designed by the same vendor.
- AIDA – The Activity-Information-Decision-Action model.
- BPMN – Business Process Model and Notation.
- BPEL – Business Process Execution Language.
- CDE – The Customer Decision Entry model.
- DMN – Decision Management Network.
- EMF – Eclipse Modeling Framework.
- GORM – Google ORM.
- IAF – The Information Analysis Framework.
- MARTE – the Model-based Analysis and Reengineering Tool for Enterprise.
- POM – Project Onward Model.
- PRAM – PRoteam of Analysis Model.
- SCA – Software Capability Analysis.
- UML – Unified Modeling Language.
You might also consider using other methods to gain information. For example, some organisations have the following models and techniques to help them gain insight.
- KANO – Knowledge Acquisition Notes.
- KPI – Key Performance Indicators.
- MCA – Management Control Analysis.
- MFA – Marketing Functions Analysis.
- PFE – Product Function Exploration.
- RFQ – Requests for Quotation.
- RFV – Requests for Vendor.
- RFI – Requests for Information.
- ROI – Return on Investment.
- SFA – System Functional Analysis.
- TEM – Temporal Event Model.
- VSM – Value Stream Mapping.
How do you know if you’re heading in the right direction? If your business has a set of core processes you’re following or a set of core processes that you’d like to introduce, you’ve likely got a good grasp on how to get from here to there. But, having a clear picture of the end goal helps you understand what to focus on and how to approach the problem. There are two ways to do this: You can work from the outside in or inside out.
Let’s start with the inside-out approach: By thinking about your current business model, you can figure out where your processes fit into that picture.
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