What is a business process? A plain guide for SMEs

Key takeaways

What is a business process? It is a repeatable sequence of steps with a trigger, an owner and an output, that turns an input into something a customer or the business needs. Paying suppliers, onboarding a new client and closing the month are processes. Knowing your processes is the starting point for improving, automating or outsourcing any of them.

• Every process has five parts: trigger, inputs, steps, output and owner.
• A process contains tasks; a procedure describes how to do them.
• Most SMEs run 25 to 40 recurring processes.
• Name each process by its trigger and output.

What are the parts of a business process?

Every business process has five parts. If you cannot name all five, the process is not yet clear enough to improve or hand over.

• Trigger: the event that starts it, such as an invoice arriving.
• Inputs: the information or materials it needs.
• Steps: the work done, in order, including checks.
• Output: the result, such as a supplier paid on time.
• Owner: the person accountable for the output.

• Which business processes should you outsource?
• The process owner: who keeps an outsourced process healthy

How is a process different from a task or a procedure?

A task is one step inside a process, such as approving an invoice. A procedure, or standard operating procedure, is the written description of how to do the steps. A process is the whole sequence from trigger to output. The distinction matters because you outsource tasks with instructions but a process with an outcome you can measure.

• Outsource a whole process or just the tasks in it?
• Work instructions vs SOPs: which one does your team need?

What are examples of business processes in a small firm?

Examples include quote to order, order to cash, purchase to pay, hire to first day, enquiry to booking, complaint to resolution and month-end close. Each crosses more than one person or system and runs on a predictable trigger. A small firm of 15 people typically runs all of these, often without having written any of them down.

• A list of business processes most small firms run
• Order-to-cash process: shorten the road from sale to cash
• Purchase-to-pay process: faster, cleaner supplier payments

Why does an undefined process cost money?

Undefined processes depend on whoever happens to know them, so they slow down when that person is busy and stop when they leave. They also hide rework, because nobody can see where errors start. Defining a process does not need software: a one-page note of trigger, steps, output and owner is enough to begin.

• The cost of undocumented processes
• Key person dependency: when one person holds it all

What does this look like in practice?

A pattern we see: when a team names its processes for the first time, two people often describe the same process with different start and end points. Agreeing the trigger and the output is usually the most useful ten minutes of the exercise.

• See client work
• BPO Solutions for UK businesses

Define a process in six steps

Use these steps for each process you want to understand.

• Name it by trigger and output.
• List the inputs it needs.
• Write the steps in order, including checks.
• Name one owner.
• Record how often it runs and how long it takes.
• Note where it hands off to other processes.

• A business process register: map every process once
• Document your processes before you outsource

Next step

Pick the process that takes most of your team's time and define it with the six steps above. Send it to us and we will tell you whether it is a candidate to outsource, split or keep.