Business process analysis focuses on the business processes.
Business processes are all sequential and repetitive activities that occur in organizations on a continuous basis – day after day business processes create and deliver value for the organization and its customers in an effective and efficient manner.
Example of business process include production process, product and service delivery process, customer service process, sales and marketing processes, quality management processes… – every activity performed in a specific way on a continuous basis is considered a business process.
Understanding Business Process Analysis
For the sake of analyzing business processes the following three steps give a general outline of the business process analysis approach:
Overall organizational goals and objectives
Strategic goals set by executives and senior management gives strategic direction to business organizations. The major overall strategic issues, problems, opportunities, targets and deadlines will drive every activity and business processes in the organizations.
Understanding the high level goals or the big picture is crucial for business analysis. Business analysts must understand the overall strategy.
Functional goals and objectives
The overall goals and targets will be achieved by coordinating all business functions and processes. In most cases business analysts work with more than one business function such as sales, marketing, production, customer service, quality control, HR, purchasing… because the real business processes delivering competitive advantage and creating high value are cross functional. Business analysts must think in a cross functional way and work with every business function and department.
Every business function has its own metrics, measures, KPIs and targets.
Analyzing Current Business Processes
Defining Business Processes
The real competitive advantage for organizations is created through business processes or the way they create and deliver value. In order to analyze processes and improve them which is the overall goal of business process analysis you have to understand and define the current processes.
During this stage business analysts must understand the current information systems, policies, procedures and organizational structure. Once the current state of business systems and processes is defined the next step is defining the required processes which are based on the business requirements.
The traditional gap analysis between the current and desired processes reveals the required direction and potential actions for business improvement based on improving the business processes.
When it comes to business process improvement there are two general views which are:
- Continuous improvement which is traditional step by step improvement of business performances
- One-time events that create revolutionary changes and design business processes that are drastically improved and deliver exceptional value for organizations.
During business analysis which is sometimes challenging and long process, the collection of data and information is critical. Business managers and analysts need to gather and collect data from many different sources in different ways in order to understand the current reality.
Without proper understanding of the current processes the business process analysis will be based on many good and poor guesses and assumptions which won’t deliver the required improvements down the road.
It is very important to include different stakeholders during the analysis process such as customers and gather data based on their input. Some of the data required will be available while some data must be collected in creative ways and requires data gathering and collection strategy and plan in place.
Company information systems, managers, operational employees, customer surveys, meetings and organizational policies are all sources for important data for business analysis. For large organizations and complex business processes documenting business activities is a must. Business capabilities are driven by the business processes.
For example the six sigma methodology is based on defining and understanding business processes. Sales growth is based on the sales development process which is a set of approaches and activities used by the sales force.
The same is true for each and every business function.