The success of a business is closely associated with its processes. Streamlined business processes that run as per a set procedure enable optimal business outcomes.
Wait! Process and procedure are not the same?
Process vs procedure is a comparison worth debating. It is not easy to distinguish a process from a procedure, more so because both these terms have been used interchangeably in business parlance. Read on to understand what processes and procedures are, and processes versus procedures – similarities and differences.
What is a Business Process?
Processes are the building blocks of a business. A business process may be defined as a series of tasks that transform inputs into outputs. A process is made up of a set of tasks, steps, activities, and workflows. These tasks or activities are executed in a sequential manner as per business rules in order to achieve a specific measurable result.
All processes have a starting point and an ending point, and between these two points are a number of steps and tasks. A business process is about what we do. An elaborate definition of a business process may be written as: A collection of business tasks and activities that when performed by people or systems in a structured manner, produce an outcome that contributes towards business goals. The tasks and activities in a business process are repeatable and predictable in nature.
Processes are anywhere in a business, from vendor invoicing to employee onboarding to exit interviews, every business is entwined in its processes. Some business processes are executed strictly according to documented guidelines, while others are executed with a greater degree of flexibility. The way in which processes are executed varies with their priority and the importance of the business outcomes.
The main elements in a business process are:
➤ Tasks/activities – a piece of work that needs to be done for a particular purpose.
➤ System – this is what drives the process
➤ Human resources – these resources are needed to execute the process
➤ Workflow – the process of defining, executing, and automating business process
➤ Data – the information required to run the process and that which defines it.
The main intent of business processes is to contribute to overall organizational goals and objectives. Through each process, the business strives to achieve specific goals. What are the key attributes of a process? The most distinguishing feature of a process is that it is repeatable. A process is made up of repeatable steps that are executed in an orderly manner. A process is flexible and not rigid. A business process is flexible enough to accommodate modifications and additions in the future. A process has specific start and end points. Finally, a process is measurable. The process outcome and performance must be measured to ensure that the outcome of every task is as expected.
Processes form the lifeline of any business and help it streamline individual activities so that resources are optimally utilized. Why do businesses need well-defined business processes?
➤ Improves process efficiency
➤ Identify the tasks that are important to achieve larger business goals
➤ Set approvals to ensure accountability and optimal resource utilization
➤ Bring orderliness into day-to-day operations
➤ Streamline inter-department, inter-team communications
➤ Standardize a set of processes that matter to the business
Types of Business Processes
Depending on the importance and priority of the process, it may be classified into the core process, support process, and management process. Let us look into each type of process.
The most critical functions of a business that adds direct value to the end customer are classified as core processes. Core processes are closely aligned with the fundamental values, objectives, and vision of the business. Continuous monitoring and improvement of these processes is a must as they directly contribute to the growth and revenue flow of the business.
Processes that enable and support the core business processes for smooth execution are called support processes. They do not directly contribute to revenue generation, they assist core processes in creating a collaborative environment where core processes can be aligned to work better. Business processes like HR, Finance management, administration, and operations can be categorized as support processes.
Business processes that are focused on end-to-end planning, monitoring, managing, and controlling of the core processes are categorized as management processes. These processes are goal-oriented and ensure efficient and seamless business operations. Management processes focus on monitoring business functionalities both internally and externally, and on analysis of opportunities and challenges faced by the business.
Business Process Explained with an Example
Business processes vary according to the type, industry, and location of the business. However, there is a common set of business processes that all businesses utilize. Let us understand business processes better with 2 examples. One is the sales process and the other is the hiring process.
Making a sale of the product or service offered by the business is a fundamental process. The approach to the sales process may vary, but the end goal is to ensure successful and consistent sales.
The common tasks in the sales process include:
➤ Sharing the sales proposal
➤ Sending the sales quote
➤ Negotiating the pricing
➤ Receiving orders for product/service
➤ Updating the records of sales
➤ Delivery of product/service
➤ Invoice Billing
These steps are repeated for every sale that the business engages with. The sales workflow and structure of the process depend on the nature of the business. These tasks need to be executed sequentially and some of them depend on the input from the preceding step.
The hiring process of the HR department involves several steps, some of which are tedious and time-consuming. The main steps in the hiring process include:
➤ Updation of the job requirement by the HR executive
➤ Acceptance of job applications from prospects via the job portal
➤ Screening of profiles based on suitability to job description by HR executives
➤ Chosen candidates are called for the next stages of recruitment
➤ The best fit for the role is chosen at the last stage of recruitment, which is usually a personal interview
➤ Negotiations for salary and policy are held with the candidate
➤ Offer letter is sent to the candidate for acceptance
➤ Acceptance of the offer letter initiates the employee onboarding process
Similar to the sales process, all the steps are repeated each time a new job vacancy opens up at the organization. All the steps are executed in a sequential manner with each step having a dependency on the preceding step.
Other examples of business processes are materials procurement, employee onboarding, claims processing, document approvals, CapEx approvals, and customer service.
What is a Procedure?
What is the meaning of procedure?
A procedure is a set of instructions that guide the execution of a specific task or activity. A procedure is usually documented in great detail to ensure that the task is completed consistently and precisely. The instructions listed in a procedure explicitly mention how a task/activity/stage must be completed within a process. When a procedure is followed diligently, they provide employees with the necessary skills and path to perform the task/job with precision. A procedure is about how we carry out an activity.
A procedure is usually in text form. Work instructions or standard operating procedures are other names by which a procedure is known. It details the exact steps that an individual must execute in order to complete an activity detailed in a process. A simple example of a procedure is “The time and attendance spreadsheet can be found in the HR folder of the network drive. You need to populate the number and hours worked in Columns C and D of the spreadsheet”.
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Characteristics of Procedures
Procedures are meant for insiders in the business like employees, managers, directors, and workers. A procedure comprises operational guidelines that reflect the way policies are implemented in a business. The policies and procedures are interconnected to each other and are to be undertaken within a general policy framework. The main characteristics of procedures are listed below:
Acts as an action guide for the team – a procedure instructs the team on how to carry out the task in great detail. In other words, it is a comprehensive action guide for the team.
Aligned to the company’s objectives, resources, and policies – procedures are defined according to the company’s objectives, policies, and resources.
Related to the time sequence of the work to be performed – business procedures are closely related to the time sequence for the work to be performed.
Helps handle repetitive and regular events effectively – procedures outline instructions on how repetitive and regular events should be handled effectively.
Effective in controlling and coordinating process activities – procedures are relevant for controlling and coordinating activities related to the process.
The beginning and end points that are required to be pursued in an exact manner for efficient and satisfactory implementation of the task are clearly defined by a procedure. What is the importance of a procedure in a process? Businesses that are looking for streamlining their business operations must make procedures an integral part of their business strategy.
The importance of procedures in a business is described below:
➤ Defines the manner in which work is to be carried out so that repetitive and irrelevant steps are eliminated.
➤ Brings uniformity into task execution so that every task is consistent with company policies and there is no confusion or chaos in process execution.
➤ Minimises errors in process execution. When a process is executed according to a standard operating procedure, the incidence of errors, inconsistencies, or accidents is minimal.
➤ Suggests ideal ways and methods to undertake any task.
➤ Enables successful completion of the work assigned in a timely manner.
➤ Saves time and money by standardizing task execution.
➤ Specifies the base for evaluating the performance of workers or employees
Types of Procedures
Depending on the purpose, procedures may be classified as compliance procedures, instruction manuals, and policy procedures.
Procedures are required by compliance standards like ISO for Quality, Joint Commission for Healthcare, Sarbanes-Oxley for public accounting, etc. These compliance standards are specific to the domain and geographical location of the business. Compliance procedures are used to train new employees on a process in order to obtain more consistent results. They are also used to document company knowledge to ensure that important information is recorded and retained within the organization. Overtime procedures improve and evolve into company best practices.
Procedures are often associated with company policies. Laying down company policies as clear procedures guides the entire organization through various processes. Some examples of procedure-supporting documents are process maps, business manuals, reports, forms, checklists, Control plans, and quality plans.
An employee manual or a handbook defines policies and procedures that are needed to comply with various laws and regulations, and own company software. Employee manuals include policies and sometimes procedures.
Procedures are helpful for training purposes in the form of SOPs and best practices documents as well. The usefulness of procedures has been well established in the above sections. The only limitation with procedures is that they constrain the scope for innovation or improvement in performing the work.
Example of Procedures
Let us take the example of the procedure around activities like purchasing, issuing raw materials from stores, conducting meetings, handling grievances, etc. All these repetitive activities have a definite procedure to be followed.
Procedure for Recruiting Employees
➤ Inviting applications through advertisements on multiple platforms
➤ Screening of employees through CV
➤ Shortlisting candidates and inviting them for further recruitment steps
➤ Conducting a written test
➤ Conducting interviews for candidates that clear the written tests
➤ Further HR and medical tests for candidates that clear the interviews
➤ Candidates that clear the medical test are sent the joining letter.
The procedure for recruiting new employees has been clearly defined in the above steps. Essentially, a procedure is a well-defined method for completing a task. It comprises a series of steps that need to be undertaken while performing a course of action in a uniform and consistent manner. Procedures can be reviewed and revised based on events or incidents that have occurred in the past.
Process versus Procedure: Differences and Similarities
Procedure versus process – why do we even need to have the debate? Quality and improvement professionals are mainly concerned with the difference between process and procedure. Organizations spend a good deal of time and money on capturing and improving processes in order to support the best practices followed in the company. Process and procedures are important aspects of business operations. The former sets out the “what you do” part, while the latter sets out the “how you do” part. The below table lists the differences and similarities between processes and procedures.
|Definition||A process is a series of tasks or activities that are executed in a structured manner to achieve outcomes that contribute to business goals.||A procedure is a set of instructions that guide in the execution of tasks.|
|Focus||The process focuses on what to do||The procedure focuses on how to do|
|Inputs/Outputs||A process has well-defined inputs and outputs/outcomes||Procedures only list out the steps, there are no inputs or outputs associated with procedures|
|Compliance||A process requires a standard operating procedure (SOP) to make it compliant with organizational policies or laws||Standard operating procedures or work instructions by themselves are quality guides that are compliant with policies and laws|
|Purpose||Processes bring about structure in business operations||Provide a way to communicate and apply consistent standards and practices within the business|
|Components||Events, tasks, decisions, inputs, outputs||The specific set of instructions on how activities or tasks need to be carried out|
|Types||Core, support, and management||Compliance, process manuals, and policy|
|Representation||Visual modeling methods like flow charts, BPMN diagrams, process maps||Text-based work instructions|
|Automation||Repetitive steps in a process can be automated||Work instructions cannot be automated|
|Documentation||A visual or textual documentation is a must for processes||Textual documentation is a must for all procedures|
The procedure vs process debate has been dealt with in the above section. Whether it is a process or procedure, both are extremely important for business operations. A well-laid-out process ensures efficient and smooth transformation of inputs to desired business outcomes. A procedure on the other hand ensures that all the activities in a process are executed as per business standards.
Process and Procedures Explained with an Example
To further understand process vs procedure comparison, let us take the example of a fast food outlet. The typical process at the fast food outlet begins with the placing of the order.
An outline of the process at a fast food outlet is given below:
Placing an order by customer ——>Waiter receiving the order——-> Waiter passing the order to the chef and team——-> Once the order is ready the chef’s team informs the waiter—–> waiter picks the order and delivers it to the customer—–>customer consumes the food—–> if there are no further food orders, the waiter presents the bill to customer—–> customer pays the bill and leaves the restaurant.
The above is the typical process that takes place at the fast food outlet. Each of these steps has a standard operating procedure that must be followed. Also known as work instructions, procedures clearly instruct how each step has to be executed. For example, the second step is the waiter receiving the order. The store owner or the manager provides specific instructions on how the waiter must greet the customer and note down the order. There may even be a script for the way waiters interact with the customer. Such detailed procedures make a huge difference to the success of any business. Similar procedures are scripted for each step of a process, which when followed diligently results in favorable business outcomes.
Proper documentation is essential for processes and procedures. Having clear documentation for a business process captures all the steps so that the staff can understand workflow and refer in the future. Documenting procedures is all the more important because the compliance of a process depends on the SOPs laid down by the business. Processes that operate according to SOPs are audit ready and compliant with organizational standards, policies, and laws. Moreover, documentation allows users to revisit the process and figure out what’s working and what isn’t so that corrective measures can be taken.
Business Process Automation
The most efficient way of building consistent and standardized processes is via workflow automation. Business process automation is a process improvement measure that ensures that processes are performing at optimum levels and that desired outcomes are delivered each time.
What is business process automation?
Business process automation (BPA) is a methodology used to automate business processes to improve efficiency and reduce their complexity, cost, and paperwork. Automating business processes requires a clear mapping of the way processes operate currently. A clear process map helps in understanding the workflow and spotting bottlenecks and inefficiencies. Once a process map is made, it becomes easy to design a new system that addresses all the inefficiencies.
For example, repetitive tasks in a process that do not require human intelligence are prime candidates for automation. Such tasks operate based on standard inputs, which are reviewed and translated to desired outcomes. Business process automation can be effectively done using workflow automation software like Cflow.
A no-code BPM software like Cflow quickly automates core business workflows. When you have Cflow, the workload on the team is greatly reduced. This allows them to focus on more productive work that improves the business’s bottom line. The visual form builder can be used by just anyone to build automated workflows.
Understanding the processes versus procedures differences and similarities helps organizations reach their quality goals. Both processes and procedures are a must for business growth and sustainability. Processes focus on what is to be done, while procedures focus on how it is to be done.
Standardizing business processes enables businesses to reach their compliance goals. Workflow automation is effective in standardizing business processes for operational excellence. Cflow helps you get there. To explore the rich automation features that Cflow provides, sign up for the demo right away.
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