In this month’s article, I thought that I would demystify some of the confusing terminology and address the question ‘What are business systems and processes?’
Anyone who knows me will know that I love effective business systems and processes, but I have found that sometimes business owners may not have all the skills needed for business management and may be baffled by the terminology for business systems and processes.
And that is only to be expected.
After all, most business owners didn’t start their business to be tied to a desk implementing systems in their business, did they?
In this blog, I am going to explain the main terms used for business systems and processes and what the differences are.
It is worth remembering that they all have one thing in common - they have been designed to help you run your business and improve efficiency!
So, what are business systems and processes?
As you may have realised by now, I am not normally one for jargon!
However, in explaining the different terms used for business systems and processes, I have to use the terms you may have heard or seen.
I have defined them below, plus a few examples of how they work.
Process
A business process consists of a series or sequence of individual interconnected actions or tasks which, when followed, will achieve an organisational goal or planned outcome.
Business processes are normally quite broad and will consist of a number of procedures and workflows – I will explain these terms later.
Business process examples:
- Order fulfilment
- Customer service
- Processing invoices
Using order fulfilment as an example, this one process may require many procedures:
- The processing of orders received
- The management of inventory to fulfil orders
- Identifying when more stock is required
- Order picking
- Packing of orders
- Despatch
- Invoicing
Workflow
A workflow is a sequence of actions or tasks that should be undertaken in a particular order, to complete a business process.
A workflow, therefore, defines the flow of work from the start to the end of the process and includes:
- The department or job title of the person responsible for individual actions or tasks
- Actions that are dependent upon others
- Specific conditions relating to individual actions or tasks
Workflow examples:
- Getting an important document signed by all members of the management team
- Invoice processing
Workflow management is about the automating of any, or all, of these consecutive sequences of actions to improve quality, productivity and/or efficiency.
Procedure
Procedures consists of step-by-step instructions that should be followed to complete a single action or task within a business process.
Procedures explain in detail the specific actions required to complete a certain task.
Often, they can be documented in the form of a Standard Operating Procedure (SOP), in order to maintain a high standard and consistency, no matter who is performing the task.
For example, a customer service procedure should specify the steps required for handling customer enquiries:
- How to greet customers (introduction and sign-off)
- How to identify their requirements/problems
- Details of how to escalate their query, if necessary
- The time frame for addressing customer queries
- Steps to handle the issue for a satisfactory outcome
Standard Operating Procedure (SOP)
I have already mentioned SOPs in the preceding paragraph defining procedures.
Normally set out as formal corporate documents, SOPs provide written explanations for anyone needing to know a specific procedure to carry out tasks or activities required by a business process.
Therefore, SOPs guarantee consistency through standardising each task, thus maintaining quality, consistency and compliance with best practice or industry regulations.
Once documented, SOPs can be incorporated into an Operations Manual.
This form of written procedure has been traditionally used in manufacturing industries or where there are strict compliance regulations, such as healthcare or the food service industry.
However, more and more industries are now implementing SOPs.
An example where an SOP may be used in the health industry is inventory management, where there will be clear instructions regarding:
- Receiving incoming goods and equipment
- Updating of inventory records (inventory management)
- How to check stock levels
- Set out time frames for physical stock checks (as opposed to using computer records)
Decision Tree
You may also have heard of a decision tree, although this is less common.
A decision tree is a mathematical model to help managers calculate the likely outcome of their decisions.
It contains probabilities and estimates for following certain actions and the likely outcomes.
It can, therefore, help managers to weigh up whether taking certain routes will be profitable, or not.
Business systems and processes – in summary
Hopefully, my definitions have demonstrated the similarities and differences between processes, workflows, and procedures.
All the terms are interrelated:
- Processes provide the framework of how work is actioned
- Workflows outline the sequence of tasks within a process
- Procedures, SOPs, or a combination of the two (depending on the industry), provide detailed instructions for completing specific tasks or actions
- SOPs for processes can be brought together into an operations manual
Business systems
Incorporating the above into business systems can effectively streamline operations, improving efficiency, ensuring compliance, maintaining consistency, and high quality standards and enhancing service.
An effective business system works by:
Integrating processes, procedures and workflows to better manage business operations.
Automating repetitive tasks within workflows to improve consistency and efficiency and reduce the ‘human error’ factor.
Documenting procedures and integrating them into the business system so they become accessible to everyone, providing written guidance on how tasks should be performed.
Implementing key performance indicators (KPIs) within processes, workflows, and procedures so that areas for improvement, optimisation, and modernisation can be identified.
As your business grows, so does everything else:
- Administration
- People management
- Production management
- Financial management etc., etc.
The longer the list, the more daunting it feels to implement systems and processes to make sure your business is optimised and efficient.
It is no wonder that many business owners find it overwhelming!
At Spero Solutions, we provide online business managers who are experts in automating and streamlining processes and procedures into efficient business systems to give business owners back the gift of time.
If the pressure or overwhelm is affecting your life, why not let an online business manager take over the day-to-day running of your business for you?
They will establish systems for all the different processes required in your business, bringing calm and efficiency to daily business operations.
If you are tired of being a slave to your business and just can’t get to grips with systems and processes, the good news is that you don’t have to!
An online business manager from Spero Solutions provides answers to the question, ‘What are systems and processes?’ by implementing the most effective ones for your business. If you would like to know more, talk to Elaine at Spero Solutions about your business and find out how an online business manager can help you to achieve efficiency!