Types of Business Processes - Classifications

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Business Process Modeling and Simulation > Best Practices > Types of Business Processes - Classifications

Types of Business Processes - Classifications
Marten van der Zee, Student (University), Netherlands, Premium Member
Henk Kleijn and Fred Rorink in their book 'Change Management' distinguish between 5 different kinds of business processes in any company (organization):
1. Primary processes: these are the main processes in a business, typically being Porterís inbound logistics, operations (incl. production), outbound logistics, marketing and sales, services. According to some also R&D and purchasing could be viewed as primary activities / processes.
2. Secondary or supporting processes: these processes support the work of the primary processes. Examples: financial management & control, HR, administration and facility management.
3. Systems, or steering systems: these are the processes which help the primary processes (typical on a corporate level). Examples: planning & control, logistics.
4. Decision processes: these processes interact with and guide the primary processes.
5. Communication and information processes: these are also integrated in the other processes. The accuracy of the choices and decisions made by managers is strongly dependent on the maturity of these communication and information processes.
 

 
5 Kinds of Biz Processes
Jim Burke, Manager, United States, Member
Would be interesting to see these laid out as a systems map, with leverage points identified, for particular companies, since each is a bit unique.
Thanks for sharing this.
 

 
5 Categories of Business Processes
K.V.MOHANAN, Turnaround Manager, India, Member
Thanks for this enlightenment; though I'm interacting with each of these processes everyday, I never noticed the difference and interdependence.
 

 
Innovation and Logistic Processes
Doug Gilbert, Professor, United States, Member
I believe that Dr. Scheer at one time used a classification of only two types:
- Innovation processes, and
- Logistic processes.
Under each there were several sub types.
 

 
The Anatomy and Physics of Processes
Michael Wood, Business Consultant, United States, Member
Interesting. However, I find that it is the anatomy & physics of a process that eludes most.
Understanding object transformations, stimulus triggers, etc. are hardly ever discussed; well except in my books :) - the Helix Factor series.
 

 
Most Critical Business Processes
Leodegardo M. Pruna, Professor, Philippines, Member
Note that the last two (4. decision and 5. communication processes) are the most critical, because their failure to function and work well would cause all the other processes to work in an erratic and confused way.
 

 
Understanding Business Processes Well
Marco Coronado, Manager, Mexico, Member
I think this types of classification is important and helpful to understand some specific characteristics of each process.
But is very important never forget the main components of each process as SIPOCo.
And its relationship versus the 7M.
If we understand these elements very well we will be ables to define and improve any type of process.
Best regards.
 

 
Communication Processes are Key
Fernando Valdez, Consultant, Panama, Member
@Leodegardo M. Pruna : 100% agree with you. The communication processes are key for all others, specially in large organizations with vast amounts of human resources and physical dispersion.
Even if all of the other processes are in an "optimum shape", lack of or weakness in communications process (this includes feedback mechanisms) could bring down the overall performance considerably.
 

 
Value Stream Business Processes
Ben Schlussel, Career Consultant, United States, Member
Also when you are considering the specific business' value stream, there are those processes that move the product or service from the suppliers through the business to the customer (primary), and there are those processes that support these activities (secondary).
 

 
Business Process Types like Wooden Barrels
Claudio Priolo, Director, United States, Member
The 5 types of business processes... a wooden barrel with 5 staves...Great comments on business processes! It is very important to acknowledge the value and key part that each play in the success of the organization.
I would suggest that we evaluate these processes using the analogy of staves of a wooden barrel: this barrel would have 5 staves, one for each process.
So we need to set up an internal evaluation system for these processes to uncover the weak stave. That's where the leak is caused in the barrel, or in actuality it is where the weak point is in the organization.
 

 
There is Complex Interaction Between the 5 Types
nan zeng
The efforts in corporate process categorization are appreciated. However, the processes, systems and mechanisms in any corporates are complex and somehow 3 or even 4 dimensions may interact with one another in various ways.
We have to view processes, systems and their interactions in a systematic way (System Dynamics).
In many cases, a symptom may implicitly represent a problem far away from the process which explicitly is revealing the trouble.
 

 
Organisational Framework is Important for Communication Processes!
Mansingh Jaswal, Director, India, Member
@Fernando Valdez : (On the other hand) the communication processes are based on the framework set by the primary, secondary, system & decision processes based on organisation structure.
If the framework is right, the communication processes would act in a mature manner, but if the basic framework set out is faulty, the communication processes will not give the desired results.
 

 
Understanding Different Kinds of Business Processes
Abdullahi Mohammad Hari, HR Consultant, Nigeria, Member
I am impressed with this discussion because it helps me a lot to understand which kind of business processses exist, as well as the system structure of an organisation.
 

 
Strategy Process is Missing...
eugenio bastianon, Professor, Italy, Member
I find that is the strategic management that lacks most.
 

 
The Link between Business Processes and Management Functions
Lawrence Chinkhunda, Student (MBA), Malawi, Member
The 5 processes are quite alright. Managers should however bear in mind that these processes are interdependent and their classification and categorization is merely for the sake of ensuring that attainment of the entity's specific business strategic mission which can be linked to the first process.
It is at this critical point that the management functions are required to be seen to be effective so that coordination, control, planning, budgeting, monitoring, communication and all that form the integral tools in unison to achieve the primary mission.
When there is no effective integration between processes and functions, a proper value chain cannot be achieved.
 

 
Isn't the Decision Process Most Important?
Miguel Sacramento, Business Consultant, Brazil, Member
@Leodegardo M. Pruna: in order to keep a company alive in a constantly mutant environment as the current one, the necessity of quick and efficient responses to changes on the environment has become most important.
I therefore believe an efficient decision-making system is now the key factor to most companies, closely followed by communication.
 

 
All Business Processes are Important!
Dayson Castilhos, Consultant, Brazil, Member
Interesting discussion; we see that every comment enlightens the subject: Coronado and the SIPOC; Priolo and the weak points; Nan Zeng and the system dynamics; interactions, interdependency and so on...
I believe that each "case" is unique and even a little process that does not affect the final product quality must be optimized. The processes in a production system act like an orchestra, "all instruments are important, from triangle to piano".
 

 
3 + 4 + 5 = Management Processes
Jackeline Molina, Consultant, Dominican Republic, Member
@Lawrence Chinkhunda:
I haven't read the book, but to classify communications, taking decisions and steering systems as processes is probably in order to reinforce how important they are for the organization success.
However, in my opinion, this could make the modeling process a little bit complex. If we consider the modeling process, one of the most important intentions is to define inputs and outputs from primary and secondary processes with defined characteristics which are critical to reach strategic goals.
So I would considerate items 3, 4 and 5 as management processes or functions that must be integrated in the whole system by the managers or organizational capabilities.
There are always a lot of things to learn...
 

 
Creating Process Interactions
ashraf serry, Financial Consultant, Egypt, Member
Should we want to consider the levels of process in a business environment, then we have to track the "interactions" between the said levels.
Typically, no single level is processed alone and it is a real challenge for organizations to succeed in developing the core business and creating harmonized and integrated process relationships.
 

 
An Alternative Category Scheme
Jerry Talley, Business Consultant, United States, Member
I'd suggest a different schema; I distinguish processes that..
1. Operate on things (make, ship, etc.)
2. Operate on information (combine, analyze, interpret)
3. Involve an unavoidable judgment (expertise, strategy, innovation)
4. Manage a dilemma (conflicting but essential goals)
5. Involve politics (unconstrainable executives, personal agendas, implicit alliances)
6. Result in changed relationships or feelings (teaching, consultative selling, team building)
Each type would have a different design or improvement strategy. The purpose of process characterization would also vary across the types. Only the first 2 or 3 are amenable to classic pi techniques; not acknowledging the other types only makes our field seem irrelevant to the people who live in those types of processes.
 

 
6th Business Process Type
Miguel Sacramento, Business Consultant, Brazil, Member
I would suggest an additional category of business Processes:
6. Monitoring the environment. This has become so important that it must be implemented, exercised and constantly improved at any organization with long term purposes, whatever long term means to them.
 

 
Communication and Decision-making
Leodegardo M. Pruna, Professor, Philippines, Member
@Miguel Sacramento: I believe that a decision maker would best be in the position to decide when the parameters communicated to him are well described and explained. Decision making is a choice and once facts/figures necessary to make one are not properly communicated, then decision making would suffer. I believe that the two (decision making and communication) should go hand-in-hand or be complementary if business processes are to run smoothly.
 

 
Does This Categorisation Work for All Organisations?
Andy Lake, Management Consultant, United Kingdom, Member
Interesting. But I wonder if it works for all organisations?
Say you are a public sector organisation delivering social work outcomes, the service you deliver may really be 99% around communication and decision-making. These are the primary processes that deliver the value.
HR, IT, facilities, procurement are all very much secondary activities.
Or say you are in an information-based company where you make money from people buying into an online service, then information is right up there in the primary processes: the information process is the product. Or there's a need to distinguish between primary and supporting processes for information, perhaps.
 

 
New Classification of Business Processes is Very Interesting
Alice Quevedo O., Consultant, Mexico, Member
Thanks Marten for sharing this new classification.
In my personal opinion, the implementation of this classification depends of the kind of organization and its needs. For example, a communication organization differs from a security organization. They have different needs and different responsibilities towards their customers, employees and suppliers.
 

 
Are the Classifications Mutually Exclusive?
Suman Rao, Turnaround Manager, India, Member
Hello Marten - thanks for bringing this to our attention.
However I think one of the fundamental requirements for any classification/taxonomy is that it is mutually exclusive. In this case I find that they intersect with each other. For example all decision boxes in primary processes will be part of one or more decision processes. No primary process is complete without including the corresponding process communication... And so on...
 

 
Is R&D a Primary or Secondary Process?
Sohail Ejaz, Consultant, Pakistan, Member
I have one question, R&D is listed as a primary process. Why it is not under category 2 as R&D is generally done as support to any decision making.
Similarly we can have a process in which certain decisions are made which can come under any category but why they are categorized under 4 only.
 

 
Add 6. Environment Monitoring Including Competitive Intelligence
LESAFFRE Serge, Consultant, France, Member
@Miguel Sacramento : I agree to add environmental monitoring process which includes the competitive intelligence process as an important section.
 

 
Process Integration
Akin Akinreti, Management Consultant, Canada, Member
@Jackeline Molina and @Lawrence Chinkhunda intelligent contributions: the business process model of items 1 to 5 may be helpful for certain needs and adaptability but not necessarily a silver bullet (one solution that fits all).
Item 4. Decision process is a question of integration (vertical or across the board) wherein hierarchy, role and authority are vital elements.
Item 5. Communication and information may not be thought of as processes but as a relational integration that exist at every level.
A business process should connect systems function, applications and people to specific objectives. Where this is lacking, there is a gap in the process and a process re-engineering is required to put things right.
Processes are business specific; while a primary process design may be typical for particular business types, the secondary and supporting processes will be diverse to business case, for example interfaces between internal systems and external systems, environment monitoring etc.
 

 
Internal and External Business Process Types
Le My, Student (University), Viet Nam, Member
Business processes can also be divided in 2 types: internal and external:
- External processes include the "primary processes", related to customers or outside market.
- Internal processes are the other processes, more integrated in sections of an organization.
 

 
Type versus Location of Processes
Jerry Talley, Business Consultant, United States, Member
I urge a distinction between where a process occurs and the essential nature of a process. To call a process primary just tells me where it sits in the organization. But I would still find processes of widely varying types within that spot. I proposed a different category scheme (above) because we need to start working with the essential nature of a process, regardless of where it falls within (or without) of the organization. We should have different protocols and strategies for different types of processes, not for different locations.
 

 
Process Classification Framework (PCF)
shahmohammadi, Business Consultant, Iran, Member
I think the PCF (Process Classification Framework) is a more comprehensive and better classification. It also features processes for industry-specific versions.
 

 
Business Process Relevance Depends per Organization
Mick Breare, Business Consultant, United Kingdom, Member
Very interesting but in my experience, things do not generally work like that in reality. What might form key processes (you call them primary) in one organisation may not be as important in others.
For example, financial processes are key for my organisation although not, it would seem in your description.
Likewise a well mapped process may well encompass many of the activities you list according to its nature. Mick.
 

 
Alternative Business Processes Classification
Alex, Accountant, China, Member
We can also classify business processes by their role and duties:
1. Operation process
2. Analytical process
3. Decision process.
 

 
Agree on PCF
Suman Rao, Turnaround Manager, India, Member
@Shahmohammadi:
Yes indeed agree that PCF (the important one I am atleast aware of is APQC's PCF) is comprehensive-even though inevitably there are process overlaps... Do you or anybody on this forum have experience with APQC or such PCFs?
 

 
3 Categories of Business Processes
Fernando Valdez, Consultant, Panama, Member
I tend to disagree with large lists of categories. I only see primary processes (in the value chain) and support processes which focus on the delivery of internal services and the administration of resources (including the quality of deliverables and the quality of processes).
Every process deals with decisions points, policies & standards compliance points, information registration and generation points, etc etc.
Every process must be published, monitored, audited, measured and improved. Some process depend in some resources more than others, but that is not a categorization that deals with the nature of the process; deals with the nature of the inputs and the output and/or the resources used by the process.
Beside the 1. primary and support classification I only see 2 other classifications of processes:
2. In-house or out-source
3. Deterministic or non-deterministic
Sure we can think many other classifications based on many aspects but, that its a matter of perspective and specific situations.
 

 
Position of Financial Processes
Osman Abdel-Rahman, CEO, Ghana, Member
@Mick Breare : I very much like the 5 business process types, and I think it will work for most organisations. If the organisation's core business is financial management for instance, this will be the primary process. There will still be the secondary financial processes that the organisation uses internally to support the primary process.
 

 
Internal and Expernal Business Processes
Ajanaku Adewunmi, Consultant, Nigeria, Member
@Le My : The internal business processes could encompass: decision processes, systems or steering systems and the supporting processes. While external business processes could consist of the primary processes.
Communication and and information processes could either be external (customer service and offering of support) or internal (internal memos, corporate emails among staff, meetings etc).
 

 
eTOM
Alba Lucia Duque Salazar, Project Manager, Colombia, Member
What about eTOM (enhanced Telecom Operations Map)?
This framework has been developed for telcos industries and it has been implemented for some financial enterprises as well.
eTOM defines 3 groups:
1. Strategic, Infrastructure and Product processes
2. Operations processes
3. Enterprise Management processes
The purpose of the eTOM is to set a vision for the industry to compete successfully through the implementation of business process driven approaches to managing the enterprise. This includes ensuring integration among all vital enterprise support systems concerned with service delivery and support.
The focus of the eTOM is on the business processes used by service providers, the linkages between these processes, the identification of interfaces, and the use of customer, service, resource, supplier/partner and other information by multiple processes. Exploitation of information from every corner of the business will be essential to success in the future.
 

 
Business Processes Differ per Industry
Leodegardo M. Pruna, Professor, Philippines, Member
@Alba Lucia Duque Aalazar: every industry has its own business processes to follow. Besides, sequential processes are usually lumped together and considered as one. In this manner we could observe that depending on the type of industry we are in, the processes differ. Generally, the processes in any industry are tied up to the stages of development - start-up phase, operation phase, and, management and development phase.
 

 
Summary
Kurt Ludikovsky, Consultant, Austria, Member
This is somewhat an interesting thread, and the comments are valuable. Nevertheless is seems to me a little like "losing the sight of the forest for the trees". So stepping back a little:
1) A business is a business if it creates added value, therefore
2) According to Peter Drucker a business has 2 main functions: innovation and marketing (best example: red bull)
3) We can break them down further into some more processes, like R&D, sales, SCM, etc.
4) But operating in a work-sharing environment, some of these functions might be located somewhere else (headquarter versus production facility), might have more or less importance or complexity.
So any activities which are repeatedly executed and are creating business value (business processes) need to be carefully identified and designed in the respective context.
 

 
Business Process Classification
venkataramanan, Professor, India, Member
I agree with the first classification.
1) primary processes and 2) secondary processes.
All others can also be grouped under these two categories. The sub-processes may be integrated with POSDCORB.
 

 
Keep Business Process Categorization Simple
Tin Win, Member
Making a categorization simple is better than making complicated ones.
The first two is more prevailing, and the others are better taken consideration in the first two.
 

 
Think End-to-end And..
Matthias Bittrich, Business Consultant, Germany, Member
Think end-to-end: what about redundant processes? If your goods or services are perfect, for example Six Sigma level, why would you need an expensive, huge customer or complaints service? Most of your hot lines or similar processes - would be simply redundant!
 

 
... But also Left and Right
Kurt Ludikovsky, Consultant, Austria, Member
@Matthias Bittrich: _disagreement! Think at Nokia: they had excellent products, now they lack customers and are in a crisis. They simply did not listen to their customers.
CRM is essential to have your ear at your customer. But it's still a secondary process.
 

 
Voice of Customer is Fundamental
Matthias Bittrich, Business Consultant, Germany, Member
@Kurt Ludikovsky: Very true. Same as Microsoft, or is anyone here who likes the new menu structure of MS Office or can at least handle it?
Complete failure and massive market losses to Apple and Linux. Many voices of customer are critical to business - but neglected. The bill follows.
 

 
Processes are Essential, But Uniformity is a Risk
Kurt Ludikovsky, Consultant, Austria, Member
@Matthias Bittrich: fully agreed. So for me the point is: each organisation is different. And this is good so, because how else could one company differentiate itself from another...
And the processes are influenced by so many factors. One of the most important is the skill level of the labour workforce. There are tremendous differences in various countries. And also the values and believes of the company owners/leaders. Many companies rose with the entrepreneur, with just a few rules, and died after transition to a corporation when some guys tried to make everything uniform. Examples: DEC, Compaq, EDS,
So processes need to be adapted to the company needs. The only ones who believes one approach can do everything is SAP.
 

     
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