Advantages & Disadvantages of a Business Process

According to the Harvard Business School, business processes define how a business functions. A process is a series of related events. For example, to fulfill an order, a phone call is received from the customer, the customer is asked what merchandise he wants, an order is entered into a computer system, and the order is checked against inventory availability. If the item is in inventory, it is shipped, otherwise it is back ordered.

Advantages

A business process and its definition standardize how work is done, according to the Harvard Business School. A documented business process helps assure that everyone part of the process has the same guidelines for how to perform their work. A business process reduces the time required to train new employees. A business process frees up managers to work on exceptions as opposed to dealing with daily operational issues. An operational problem can be more easily identified if a work flow is defined for standard processing. If a business is highly regulated, such as a stock brokerage firm, business processes allow auditors to more quickly review operations to determine if operations are in compliance with regulations. Business processes enhance communications between departments because the responsibility of each is clearly defined. Processes also make it easier to look for cost-saving opportunities. Each process step can be analyzed to determine if the process step is necessary, if it can be done in a more effective way or completely eliminated.

Disadvantages

A disadvantage of a standard business process is that workers who are part of that process might feel that they don't have the flexibility to do the work to accommodate their own style

Business Process Reengineering

In recent years, a method of examining and streamlining business processes has become popular, which is called Business Process Reengineering. One of the original proponents of Business Process Reengineering is Michael Hammer who coauthored the book "Reengineering the Corporation." The book provides case studies of companies that have reengineered their organizations and the experiences of each. With overseas competition increasing from such countries as India and China, improving business process is becoming an imperative. Consider the advantages and disadvantages of business process engineering for your company. If the benefits outweigh the disadvantages, start with a pilot project in a department that has the most to gain from business process improvement.

Warning

Before expanding the use of documented business processes, make sure this effort has the support of business management. Introduce the program to affected workers and explain the benefits to them.