What is a Business Process? Definition, Types, and Key Benefits

Business processes are the backbone of every successful organization. From startups to global enterprises, these structured workflows determine how efficiently a company operates, serves its customers, and achieves its goals. With business process automation and management tools transforming how organizations operate, understanding how to optimize these processes has never been more crucial.

In this guide, we'll explore what business processes are, why they matter, and how to optimize them through effective management and automation. Whether you're looking to streamline operations or scale your business, understanding business processes is your first step toward operational excellence.

Coming Up

1. What is a Business Process: Understanding Its Definition

2. What are the Types of Business Process?

3. Why are Business Processes Important?

4. Benefits of Business Processes

5. What are the Steps in the Business Process Lifecycle?

6. Examples of Business Processes

7. Business Process Management (BPM) and Automation

8. Business Process Improvement

9. Measuring the Success of a Business Process

10. What are the Essential Attributes of a Business Process?

11. What are Terms Related to a Business Process?

12. What are the Benefits of Business Process Software?

13. Wrap Up

What is a Business Process: Understanding Its Definition

In the most simplest of terms, a business process is a set of steps taken to achieve an outcome. The outcome could be to deliver a product, assemble a product, bring on new employees, pay invoices, or anything else of this sort.

For a business process to be completed, it’s common for many people to be involved. The process can be broken down into each task, and each task is generally assigned to its respective stakeholder. Each step or resource needed for completion is considered an input. The end result is the output.

The concept of a business process can be dated back to Adam Smith, in the same year that America signed the Declaration of Independence (1776). Since then, this concept has evolved to be the focus of many who study operations, management, and business.

Business process mapping and business process modeling are now essential practices in this field. Business process mapping involves documenting and visualizing business processes through methods like flow charts, enabling organizations to enhance operational efficiency and gain better visibility into their workflows. Business process modeling provides a diagrammatic representation of the flow of business activities, often using standards like Business Process Modeling Notation (BPMN) to document current processes and identify opportunities for improvement.

With the aid of technological solutions like automation, business processes no longer have to be performed manually. Automation has allowed for a reduction in errors, an increase in speed, and an easier way to manage and measure business processes.

What are the Types of Business Process?

Business processes come in different shapes and sizes, depending on their intended purposes. When approaching, designing, and optimizing processes, it can be of use to approach them within their categories.

Operational Processes

Operational processes (core business processes) are those that bring direct value to customers and the company itself. They are the processes that directly create revenue. Examples include: product manufacturing, order to cash process, and delivering products to customers.

Supporting Processes

Core business processes are rarely completed in isolation. Supporting processes help to ensure that operational processes are carried out as planned. These types of processes are those that take place in departments like: accounting, call centers, sales, human resources, marketing, and technical support.

Management Processes

Amongst the layers of supporting and operational processes, management processes exist to make sure that rules and procedures are being upheld. These processes monitor, measure, and report. They include things like: budgeting and governance.‍

Why are Business Processes Important?

Although it may at first seem cumbersome to delineate and organize business processes, it ends up being in the best interest of everyone involved (from business owners to customers and those in between).

Business processes help to ensure that resources are being allocated as efficiently as possible. Business processes also streamline activities.

Business processes are essential for maximizing productivity, ensuring consistency, and driving efficiency in any organization. Efficient processes help eliminate waste, improve consistency, and facilitate growth, ultimately leading to higher customer satisfaction and a competitive edge in the market. When properly implemented, they form the foundation for sustainable business success and growth.

Here’s why implementing proper business processes is crucial:

1. Increased Efficiency and Productivity

• Reduces time wasted on repetitive tasks
• Eliminates bottlenecks that slow down operations
• Allows employees to focus on high-value work instead of routine tasks

2. Guaranteed Consistency

• Ensures every task is performed the same way, every time
• Maintains quality standards across all operations
• Delivers reliable customer experiences regardless of which employee is involved

3. Measurable Performance Improvements

• Provides clear metrics to track progress
• Identifies areas for optimization
• Enables data-driven decision making
• Monitors and analyzes process performance to improve organizational efficiency

4. Cost Reduction

• Minimizes resource waste through standardization
• Lowers training costs with documented procedures
• Reduces errors that lead to expensive corrections

Without established business processes, organizations often face:

• Inconsistent output quality
• Repeated mistakes
• Higher operational costs
• Employee confusion and frustration
• Difficulty scaling operations

Benefits of Business Processes

Any activity that requires inputs in sequential steps to obtain an output is a process. Life is filled with processes, but within business, measurement and management of such activities will certainly impact the bottom line. 

Beyond the bottom line, both customer and employee satisfaction are affected by business processes and how they are carried out. 

Benefits of business processes are wide-ranging and include:

• Resource management: Time and resources are allocated according to needs and goals, thereby minimizing waste 

• Optimized performance: Employees are assigned to tasks based on their maximum value, helping them to achieve their full potential and utmost level of satisfaction  

• Reduced risk: Through business process automation, many operational risks are avoided and/or reduced 

• ‍Accountability: Everyone is aware of their responsibilities and inputs/outputs are measurable

Business process automation can further enhance these benefits by enabling seamless execution, reducing manual effort, and providing real-time visibility into process performance.

What are the Steps in the Business Process Lifecycle?

No matter where you stand in your business’ lifecycle, you can implement the following steps to create a No matter where you stand in your business’ lifecycle, you can implement the following steps to create a business process. By doing so, you’ll be empowering your team with a roadmap, your managers with oversight, and your customers with a clear understanding of what they can expect from your business.

Here are the 7 steps to follow:

1. Goal-setting: Define and outline the process’ purpose. Answer questions like: How can I measure success? Why does this process matter for our overall business goals?

2. Process mapping: Map out the process. You can do so by hand or using software to develop a flowchart. This is like a blueprint that details each task along the way. Business process mapping helps in documenting and visualizing each step, enhancing operational efficiency and visibility.

3. Assignment: Who is involved? Allocate your team members according to their abilities and/or design the system in an automation solution if you can minimize manual effort.

4. Testing: Before rolling out the process department-wide or across the organization, test it out on a small scale to ensure you achieve your desired results.

5. Implementing: Once you’ve made sure the process is designed successfully, then you can implement the process in its live environment. Be sure that everyone involved has what they need to complete their steps. If you’ve chosen an automation solution to run the process, you’ll have to provide user access to those who may have to provide approvals for the process to reach completion.

6. Reviewing: Monitor the results of the process to ensure that it’s optimized. It’s also a good idea to store process history should you need it for reference. With an automation software, this is already part of the solution because the process is defined and stored in the system. All process run history is immutable.

7. Repeating: Given that the process delivers the intended results, you can repeat the process ad infinitum. Automation solutions can carry out processes without the need for human intervention, thanks to robotic process automation and artificial intelligence.

Examples of Business Processes

Let's explore three common business processes with their detailed workflows to better understand how they operate in real business environments:

1. Invoice Processing

A fundamental financial process that ensures timely vendor payments and accurate record-keeping:

Step-by-Step Workflow:

• Receive invoice from vendor
• Extract key information (amount, due date, vendor details)
• Match invoice with purchase order
• Verify invoice accuracy
• Code into accounting system
• Route for manager approval
• Process payment
• Archive for record-keeping

2. Sales Process

A revenue-generating process that converts leads into customers:

Step-by-Step Workflow:

• Identify potential customer
• Make initial contact
• Qualify the lead
• Present product/service
• Handle objections
• Submit proposal
• Negotiate terms
• Close the sale
• Process order
• Follow up

3. Customer Support Process

A service process that resolves customer issues and maintains satisfaction:

Step-by-Step Workflow:

• Receive customer inquiry
• Log issue in support system
• Categorize priority level
• Assign to appropriate team member
• Investigate the problem
• Communicate solution to customer
• Confirm resolution
• Document solution for future reference

Each of these processes demonstrates how organizations break down complex activities into manageable, repeatable steps. When properly documented and followed, they ensure consistency, efficiency, and quality in business operations.

Business Process Management (BPM) and Automation‍

Business Process Management transforms how organizations operate by systematically improving and automating their processes. Modern BPM combines traditional management principles with cutting-edge technology to optimize operations.

Key BPM Tools and Strategies

Essential tools and approaches for effective process management:

1. Process Mapping Software

• Facilitates business process modeling by creating visual workflows
• Documents process steps
• Identifies bottlenecks
• Enables team collaboration

2. Performance Analytics Tools

• Tracks key metrics
• Measures process efficiency
• Generates real-time reports
• Identifies improvement opportunities

3. Workflow Management Systems

• Coordinates team activities
• Manages task assignments
• Monitors progress
• Ensures deadline compliance

The Role of Automation in Process Optimization

Automation transforms traditional processes into efficient, error-free operations:

1. Core Benefits
   • Reduces manual work
   • Minimizes human error
   • Increases processing speed
   • Ensures 24/7 operation
   • Maintains consistent quality
2. Key Implementation Areas
   • Document processing
   • Data entry and validation
   • Approval workflows
   • Customer communication
   • Report generation
3. Impact on Business Operations
   • Lower operational costs
   • Improved accuracy
   • Faster processing times
   • Better compliance
   • Enhanced scalability

Modern automation tools can transform complex, manual processes into streamlined, automated workflows that save time, reduce errors, and improve overall business performance.

Business Process Improvement

Business process improvement is a strategic planning initiative that aims at reshaping business processes based on operations, complexity levels, employee skills, and other factors. It involves identifying areas for improvement, analyzing data, and implementing changes to create better processes.

By focusing on process improvement, organizations can streamline their operations, reduce inefficiencies, and enhance overall performance. Technologies such as Robotic Process Automation (RPA), Artificial Intelligence (AI), and digital process automation play a crucial role in automating tasks and processes, making them more efficient and less prone to errors.

Business process improvement helps organizations stay competitive and adapt to changing market demands by continuously refining and optimizing their processes.

Measuring the Success of a Business Process

Measuring the success of a business process is crucial to identify areas for improvement and optimize processes. Here are the steps to measure the success of a business process:

Identify Key Performance Indicators (KPIs)

Identifying KPIs is the first step in measuring the success of a business process. KPIs are metrics that measure the performance of a process. They can be time-based, financial, quality-based, or productivity-based. Examples of KPIs include cycle time, throughput, and defect rate. By setting clear KPIs, organizations can track the effectiveness of their processes and make data-driven decisions to enhance performance.

Collect Data and Analyze Results

Collecting data and analyzing results is the next step in measuring the success of a business process. Data can be collected using tools and software that gather information related to KPIs. Analyzing this data helps identify areas for improvement and optimize processes. It also helps pinpoint bottlenecks and inefficiencies that may be hindering performance. By continuously monitoring and analyzing process data, organizations can make informed decisions to improve their business processes and achieve their goals.

Business process improvement is an ongoing process that requires continuous monitoring and analysis. By identifying KPIs, collecting data, and analyzing results, organizations can optimize their business processes and achieve their goals. This proactive approach ensures that processes remain efficient, effective, and aligned with organizational objectives.

What are the Essential Attributes of a Business Process?

For a business process to be designed ideally, there are four essential components. These are:

1. Repeatable: The process can be carried out as many times as desired without having to change inputs or outputs. 

2. Finite: There are a clear number of steps, with a defined beginning and end to the process. 

3. Flexible: The certainty in business is that things are uncertain and change is constant. As such, business processes should be adaptable and malleable to be adjusted and improved on an as needed basis. 

4. Value-driven: Each step of the process is included with intention. If there’s a step with no value-add, then it shouldn’t exist as part of the process. 

What are Terms Related to a Business Process?

Automation solutions and automation software help to streamline and optimize business processes. In this endeavor, there will be other related key terms worth noting and addressing. Let’s take a quick look:

• Business process management: Business process management refers to the ongoing and systematic approach to constantly improve business processes. It is performed with the utilization of software solutions, both on-premise and in the cloud. 

• Business process improvement: Business process improvement aims to develop more efficient business processes through dramatic measures as opposed to incremental, small steps. It involves process mapping and the use of IT expertise (or automation solutions) that are aligned with business goals to carry out. 

• Business process reengineering: After conducting analysis on current business processes, business process reengineering may be initiated to completely rehaul processes. It’s a top-down approach for organization-wide change aimed at optimization. 

• Business process analysis: Business process analysis identifies solutions to solve business problems. It involves policy development, organizational change, process improvement, and strategic planning. 

• Business process flow: Business process flow is a visual representation of a business process. It tends to be drawn as a flowchart or form in which each stage outlines necessary steps. 

• Business process monitoring: To gain oversight and better control of a process’ activity, business process monitoring is the active tracking of a process.

Benefits of Using Business Process Software?

Business process software and process automation tools are purposefully designed to be goal-oriented and data-driven solutions. There are an array of benefits that business process software delivers to an organization of any size. 

Consider these stand-out upsides of implementing business process automation: 

• Streamlining: Automation solutions reduce redundancies, eliminate bottlenecks, and remove key person dependencies so that processes can flow smoothly and in a timely manner to deliver results. 

• Decreased costs: With transparency and oversight of processes, wasted resources (money, time, energy, etc.) can be accurately allocated. This helps businesses cut unnecessary costs and save more. 

• Increased collaboration: With software, processes are clearly drawn out and accessible to those involved. This allows for both internal and external stakeholders to retain visibility into the current status of a process and take action if necessary. 

• Enhanced agility: With automation, a process can not only be actively monitored, but it can also be adjusted in real-time if the situation calls for it. This type of agility allows for organization to continue to deliver to its customers without having to slow down or shut down to make adjustments to a process. 

• Maximized efficiency: Dashboards and real-time analytics provide the insight your team needs to know if processes are running as best as they can. 

• ‍Improved compliance: Automation solutions document every action they take, making it easy to pull audit reports and adhere to regulations.

Wrap Up

Understanding and optimizing business processes is crucial for any organization's success. Through proper process management and automation, companies can increase efficiency, reduce costs, and deliver better customer experiences.

Start by evaluating your current processes, identifying improvement opportunities, and implementing changes systematically. Remember: well-designed business processes aren't just about efficiency—they're about building a foundation for sustainable growth and competitive advantage.