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Importance

of
Process Modeling
Business

Business
for Your

In some of our previous article we discussed about what is business


process modeling and business. In this final article of the series well
be talking about the importance of business process modeling.

(1) Align Operations with New Business Strategy


Implementing or modifying a business strategy usually requires
changes to operations and people performing the work. And by nature
people resist change. So the processes, rules and the personal
involved in the old strategy can have an impact on the new strategy.
Business Process Modeling facilitates this by:
By helping managers and executives maintain consistency
across processes while keeping an eye on the overall strategy of
the organization
By ensuring that the operational tasks and activities performed
by the team members actually help the organization implement
its strategy. If the processes and the strategies are not aligned it
usually leads to failure in execution. Because even if the
operational tasks are performed correctly, the overall
organizational goals are not achieved.
Implement Business Process Re-engineering (BPR) by
understanding the existing processes and changing them for
improved performance Business process analysis helps in
identifying bottlenecks and inefficiencies in the processes and
thus improving them.
Enable Process Agility, an ability to change and communicate
processes quickly to take advantage of new business
opportunities or address business challenges.

Business process models help to visualize the processes to make better decision

(2) Improve Process Communication


One area that distinguishes successful businesses and teams is that
they have a very clear idea of what they are supposed to do, how they
are supposed to do it and what is the exact role of every team member.
Clear communication of the operational processes is critical to facilitate
a smooth functioning of a team.
Business Process Modeling enables the documenting
communicating of the organizations business processes:

and

Process modeling offers a common unified language and


methodology for communicating processes and information
about processes and decision rules.
It is ideal for training of new people and rapid knowledge transfer
because with a thoroughly documented process any new team
member can be very quickly trained on what they have to do in
any situation that they may face.

Minimizes potential danger of loss of staff resulting in loss of


business process knowledge.
It helps business managers communicate their ideas quickly and
clearly.
Jump-starts the organizational process documentation initiative.
Turns the teams experience into documented processes.

(3) Increase Control and Consistency


Organizations and companies that succeed are ones that ensure their
business processes and rules are well designed and that they are
consistently applied the same way every single time. This process
control and consistency is key for success in any organization.
Business Process Modeling makes this possible by helping:
Formalize existing processes which may not be well documented
or which have evolved over time into informal knowledge.
Execute process in consistent manner because instead of relying
on people to remember to do the right thing the documented
process can be given to the business users.
Make better decisions because guesswork is eliminated as
business users can have the documented business rules in front
of them.
Handle exceptions faster and in a better way.
Complete regulatory compliance by ensuring that the
documented processes follow the company guidelines and legal
regulations.
Put business people in charge.
Support compliance initiatives such as Six Sigma, ISO 9000

(4) Improve Operational Efficiency


In todays business environment, every business and every
manager wants to ensure that they are achieving the best
possible results with the resources available to them. There is no
room for inefficiencies and wastage.
The Process simulation and analysis steps of Business Process
Modeling are critical tools for managers and analysts to ensure
that their processes are optimized and are running accurately.
Process Simulation allows analysis and understanding of the
process flows and helps managers know if there is room for
further optimization and efficiencies.
It helps spot needed improvements and reduce process cycle
time.
It increases productivity of existing resources and staff and so
allows the team to do more with less.
It facilitates risk free experimentation and encourages exchange
of process improvement ideas.
Process simulation allows modeling of process designs before
actually implementing them thus minimizing disruptions.
It encourages a mind-set of continually optimizing business
critical processes to incrementally improve operational efficiency.
Process analysis enables better resource utilization.

(5) Gain Competitive Advantage


All the benefits mentioned above lead to a significant competitive
advantage for an organization that has invested the time and effort to
document, simulate and improve its business processes.
Studies of many wildly successful companies has often shown that
they succeeded not only because of better ideas or better business
models. But also because they constantly refined and improve their
processes through business process modeling.

A slight improvement in one activity here and another one there leads
to an overall better process. And those little refinements help
organizations run efficiently and give the edge over their competitors.
The above points highlight the importance of business process
modeling to an organization. And this marks the end of the series of
articles we shared on business process modeling.
We sincerely hope that it had helped improving your knowledge on
BPM and that you would put the knowledge gained, in to practice. And
we have professionally designed business for you get started fast as
well.
As always if you have any questions feel free to ask them in the
comments section.

What is a 'Business'
A business is an organization or enterprising entity engaged in commercial,
industrial or professional activities. A company transacts business activities through
the production of a good, offering of a service or retailing of already manufactured
products. A business can be a for-profit entity or a nonprofit organization that
operates to fulfill a charitable mission.

business process

A business process is an activity or set of activities that will accomplish


a specific organizational goal. Business process management (BPM) is
a systematic approach to improving those processes. If an organization
is unable to perform certain business processes internally due to cost
or resources, the company might utilize business process
outsourcing (BPO). Many organizations contract specific business

tasks, such as payroll, human resources (HR) or accounting, to a thirdparty service provider.

Administrative Procedures
Administrative procedures are a set or system of rules that govern the procedures for
managing an organization. These procedures are meant to establish efficiency,
consistency, responsibility, and accountability.

The Importance of Administrative Procedures


Administrative procedures are important because they provide an objective set of rules by
which an organization is governed. They also help establish the legitimacy of management
action by ensuring the application of management rules and decisions is done in an
objective, fair, and consistent manner. Finally, they help ensure that managers are held
accountable for decisions that deviate from the procedures.

Administrative processes substantially contribute to a companys costs.


Obviously, it depends on the company, but estimates commonly attribute 6080% of expenses to administrative processes.
Administrative processes are the office tasks that are required to keep a
company humming along. Administrative processes include human resources,
marketing, and accounting. Basically anything that entails managing the
information that supports a business is an administrative process.
On occasion, the administrative process is actually the service for the customer,
and thus is production work. Processing loan applications or managing rental
properties are examples.
It makes sense, given the high level of costs associated with administrative
processes, that Lean would leap from the shop floor to the officeoften called,
not surprisingly, the Lean office. While this transition has been happening for
some time, it picked up significant steam around the turn of the century.

Processes benefi t a business in several ways:

Processes make a business competitive: Companies


with defi ned processes are better able to evaluate their
strengths and weaknesses and identify opportunities for
improvement. They can improve the quality of their
products and services and deliver more consistently to
their customers, increasing customer satisfaction and
loyalty. They are better able to cope with the unknown
and react swiftly to changes in the competitive
landscape. In short, process companies know when
they are doing things right, and can more quickly
course-correct when they are not.

Processes enable growth: By leveraging defi ned


processes, it becomes easier to deliver new products
and services quickly and effi ciently, without 'reinventing the wheel' every time. Processes provide a
blueprint for new employees, and enable cross-training
to minimize business interruption in cases or illness or
employee turnover. They enable your company to
understand what roles to hire for and identify those skill
gaps that are hindering success. (The importance of
process to growth was discussed in more detail in my
previous post Take Your Business to the Next Level .)
Processes drive profi tability: A company with defi ned
processes can fi nd opportunities to improve effi ciency
without sacrifi cing quality and consistency. They can
identify duplication of eff ort and spot areas that are
being overlooked. They maximize the value of
everything they do by ensuring it can be leveraged
elsewhere, ultimately saving time - and money. (For an
example of how documenting processes can be used to
save time, take a look at Need Another Hour in the
Day?)
Having gained an understanding of the critical importance of
business processes, the next step is to begin documenting

them. In my next post, we'll look at Process Documentation


Basics.

What are the disadvantages of not having business


plan?
First and foremost disadvantage is all the ideas you have will be sitting in your brain itself,
as you have not given clarity to them to flow out and have also not tested are they just your
thoughts or it can be implemented.
You cannot raise funds for your project and take them to next levels, they just remain as
ideas and when one fine day you see the same idea being done by others and tasting
success you feel I should have done that.
You are stuck as you dont have road map that means you dont have clarity to put down
what is that needs to be done first and what next. It clearly shows you are not good at
planning or you are not in a position to document things.
You will not have clarity as to how much funding is needed and how to run the business
what type of business model, what will be revenues from it, you will also have no clarity on
is your idea actionable, implementation and executable
When you talk about your project to other people there reaction will be ok how are you
going to do this for which you will not have answer as you have no clarity on how you want
to take your project to next levels.