Types of Business Processes and Why Understanding Them Is Important

What is a business process?

A business process is a set of activities (often undertaken by numerous employees across departments) that need to be completed to achieve an organizational goal.

Business processes can be simple or complex – simple processes often require fewer steps to execute whereas more complex processes not only involve more steps but are more likely to need to be governed by business rules. 

To ensure processes are executed correctly and deliver value for the organization and its customers it’s key to have process documentation detailing who is responsible for each step and what exactly is required of them.


What are the three types of business processes?


A business’ core processes are those cross-functional processes that form the value chain and directly add value for customers. Their purpose is to serve the needs of external customers and generate income for the business. Take the procurement process at a vehicle manufacturer for example, which is responsible for sourcing the raw materials needed by the factory floor to produce the end vehicle. 


These are the processes that enable core processes to be carried out. Despite not generating any income for the business, they assist internal customers and ensure that things get done. Looking at the vehicle manufacturer again, the HR department doesn’t have any direct involvement in the production of the vehicles but is responsible for helping to hire people with the skills needed to operate the machinery that builds them enabling the business to deliver its end product. 


These processes involve planning, measuring, monitoring, and controlling the core and support processes. Their purpose is to make sure the business is running efficiently. They are responsible for ensuring compliance with regulations, addressing any opportunities or threats and ensuring the continued overall success of the business. An example of a management process at the vehicle manufacturer would be sales forecasting, as this helps to project future revenue to enable the business to run smoothly. 


Why is it important to understand business processes? 

Understanding how each business process in the organization operates from end-to-end allows you to:

Increase process efficiency: Identifying each of the activities that make up a business process allows you to locate bottlenecks and inefficiencies and make changes to eliminate them. 

Lower operating costs: By determining which activities are not delivering value and removing them from the process you increase productivity and reduce costs.

Reduce errors: Clearly defined repeatable activities make executing a process simpler and reduces the risk of mistakes.

Increase agility: Understanding points in a process where changes need to be made allows you to respond to changes in the market and make it possible to do so more quickly. 

Monitor compliance: Understanding who is responsible for each step within a process increases accountability and makes it easier to measure whether compliance procedures and regulations are adhered to.

Measure process performance: Knowing how your business processes are supposed to work enables you to measure whether they are running at optimum efficiency. 

Promote collaboration: Clarifying who does what within a process reduces duplication and makes it easier for employees to collaborate on tasks. 

Identify automation opportunities: Clearly understanding the tasks within a process allows you to identify which of them would benefit from automation.

Standardization: Standardizing a process improves clarity and ensures that it is executed correctly and consistently every time.


How to better understand business processes

A common practice used to understand the people, inputs, rules, and outputs required to carry out business processes is business process mapping. Business process mapping is used to determine the who, what, where, when, how, and why for each activity within a process. 

Bizagi’s free, intuitive and collaborative process mapping software, Bizagi Modeler enables you to create process maps that document each activity within your business processes and identify opportunities for improvement.