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Business Processes Analysis - Overview

 

A prospective client wanted to look into streamlining and perhaps automating some of his company business processes. He expressed an interest in something that he could do on MS-Access or SQL-Server, both of which he owns but doesn't know much about using. It became apparent during the course of the conversation that it was going to take some study from both of us. The good news is that it's a successful business yet still small enough to move quickly and develop processes that can grow with the company. The client realizes something needs to be done now before it gets out of control. The bad news is that while successful there's not a lot of revenue available to make a significant investment toward streamlining and automation. The bad news isn't so bad because streamlining and optimizing is more an application of common sense than how much money you throw at the problem. We agreed that I would visit his place of business, spend some time observing what he does.

So where to start?  What are business processes?  One definition defines a business process as any function within an organization that enables the organization to successfully deliver its products and services.  A simple analogy would be to look at an organization as a wheel and the individual Business Processes are the spokes to the wheel.  Another way of saying the same thing is that business processes are the spokes that keep the wheel from collapsing on itself.

Business Process Management or BPM as it's affectionately called (don't you love acronyms?) is one of the big buzzwords heard around the business world today.  Consulting companies love it because it's terminology they can mystify to the point they convince you they are the only ones who understand.  That sells their services and while they may not understand your processes to the detail they'd like you to believe.  They do understand their processes and how to bring in the revenue.

To manage your business processes, you must first know what they are.  The study of business processes is called Business Process Analysis (BPA) another acronym.  This involves asking questions.  Who?  What? When? How?  In a one person shop the who is obvious but the process details are still needed to understand what's right and what's wrong.

You can find many books or do a web search and find many discussions on analyzing the business process but a lot of it is just common sense.  You can go Harvard Business School and start talking about defining your paradigm but first check the definition and see what it really means.  Paradigm means model or example.  The definition I like best is; "a general agreement of belief of how the world works; what could be called "common sense''."  So there is our first buzzword for working with business processes.

Start at the beginning where your orders originate and work your way through to how products and services are delivered.  Note each step along the way to your deliverable at a high level creating an outline.  As you visit the different processes in your organization, be sure and make notes on your findings.  The end result will be your "paradigm,"  your model to which you can apply your "common sense."

Once your outline is developed, it's time to begin digging into each process defining the details within the process.  This will identify repetitive processes, the things you do most and most often.  Random processes occur once, occur occasionally or haven't occurred yet so obviously those are dealt with as the arise.

Don't lose site of the forest when your winding your way around all the trees.  Keep referring back to your high level outline and how it all ties together.  You might want to set aside any ideas you have about improving a single area or process until you know how that improvement is going to effect other processes in your business.  It doesn't do well to cut your cost in half in one area if you double the cost in another.  Most importantly while you're drilling down into details, don't forget to keep your business running.

If you don't know a lot about business processes don't feel like the lone stranger.  There are a lot of medium to large companies where management doesn't know the processes it takes to run their business.  Individual managers usually understand their piece of the pie but not all the pieces.  It would be nice if they could understand the company processes at a high level and their own area in great detail but that isn't always the case.  The larger a company gets, the more compartmentalized they become and that's why consulting companies do a booming business.

This discussion isn't just about software.  While software in many cases is the "glue" that holds the organization together, there are still physical processes to consider.  People have to take phone calls, sell, make, deliver and service.  The physical processes that are the spokes in the wheel and software is the hub that holds them together.

About software:  Larger businesses usually have a software package called for Enterprise Requirements Planning ERP.  These are expensive and usually outside the reach of small business owners.  This discussion assumes an integrated ERP system isn't available.  Many of the processes discussed are integrated into ERP.  While having an ERP system is a good thing but just having it shouldn't imply that a company runs efficiently or that employees and management understand how it works.

While small business doesn't have a lot to spend on consultants, it's still important to understand what business processes are.  This series of pages discusses how to do your own business process analysis and start you on your way to successful Business Process Management or as it's affectionately known BPM.  Once you've done your business process analysis, BPM is the art of managing your business to assure the processes you've streamlined and developed keep happening the way you expect them to.  Another way to put it is managing your business.