What is Process Management?

process management

How your organization is linked together

Process management. In the business world, it’s not the sexiest or most exciting term, but it’s an important concept.

Process management is a discipline that uses various tools and methods to define, analyze, optimize, monitor, and control business processes. It’s also called business process management, or BPM. Process management involves defining a process, establishing responsibilities, evaluating its performance, and targeting opportunities for improvement.

In less stuffy terms, business process management is a blanket term for how all the processes in your organization link together to form one big system. Through efficient process management, your system will run effectively. If you don’t understand individual processes, or they don’t join up together well, your business might suffer.

Understand your goals

When you implement business process management, it’s important to know why you’re using it. What are your goals? Do you want a better leadership structure? Do you want people to take more responsibility for their roles in certain processes? Do you want to figure out which processes take up the most resources so you can better allocate them?

Process management will help you figure out all that stuff. However, to achieve your goals, you’ll need to define and clarify them first. That’ll make it easier for your employees to take specific actions that work towards those goals.

Map out your processes

Throw out the term “process” in a room full of employees and see how they define it. Have them list some common processes found at your organization. Who is actually responsible for those processes? We bet many people will think of a process that’s limited to one department or a certain group of people at your company.

But that’s a misconception! Processes are not limited to certain areas within a company. More often than not, processes wind their way through various departments, as well as up and down different levels of management. Consider an entire process from beginning to end. Where does it go?

“End-to-end” is a common term in the world of business process management, used to describe a process that takes a service or method completely from start to finish, usually without needing any support from a third party. End-to-end also describes a strategy that embraces and upholds efficiency: eliminating as many third parties and unnecessary steps as possible.

So let’s think of a common end-to-end process you might find in an organization. Procurement is a great example. Imagine you’re the head of a startup company that designs, prints, and sells shirts to consumers. One of your employees is in charge of procurement. Their main job is to find and order materials to make your products.

You might think this person just talks to third-party vendors in order to do their job, but think again. Someone in procurement might start their day meeting with the design team about a new product idea. Design and marketing want to try creating a new shirt in a looser, softer cut. They’ll need to know if the budget and timeline will allow for different fabric blends.

How different will the cost be? Will the printing process change a lot, or not much at all? Is it faster or easier to have shirts printed overseas or locally? Can you get samples of preliminary fabric, a sample of the new cut, and then a sample of the actual shirt before printing begins?

One department in an organization usually doesn’t work alone in a vacuum. This person in procurement works with a design team to figure out what’s needed. They work with marketing to provide information they’ll need to sell and advertise the new item. Procurement will work with the shipping and logistics department to make sure the shirts arrive safe and sound. And if anything goes wrong with the printing process, they may even work with a team like customer support to figure out solutions.

With process management, you’ll map out every process like this end-to-end. Analyze how much impact a process has on a department or your company as a whole. Does it directly impact your company’s goals or revenue?

Designate process owners

After you’ve mapped out your organization’s processes, what’s next? We’ve talked about how processes usually weave throughout several departments and up and down the hierarchy. So, who’s in charge of each process when you have many different players involved?

That’s where assigning process owners comes in. Making someone responsible for a particular process is key to running it effectively and efficiently. When a process requires many people from various departments, having a process owner in charge ensures that everyone knows who to go to with questions, who will be tracking progress, and who’s responsible for making the process run the best it can.

Even if you’ve laid out your company goals in order to guide everyone’s actions and ideas, it’s easy for people to get confused or be conflicted. What is the utmost goal for a particular process? What should everyone be focused on? The process owner can clarify direction when necessary.

Track your performance and results

Now that your processes are mapped out and your process owners are leading the charge, you’re in the right place to monitor and optimize your processes. To begin tracking your performance and results, you’ll need to establish key performance indicators, or KPIs.

There are many different ways to measure performance. Here are just a few examples of KPIs you might use to measure finances, efficiency, capacity, productivity, profitability, and so on.

  • Customer satisfaction ratings
  • Customer loyalty
  • Brand reach, or number of new customers
  • Monthly sales
  • Net income
  • Cash flow
  • Number of orders
  • Inventory
  • Employee turnover
  • Employee satisfaction
  • Projects completed
  • Return on investment (ROI)

Of course, the KPIs you choose for your processes depend on what kind of process it is and what makes the most sense for your company. You probably wouldn’t use a marketing KPI like social media engagement rate to measure a completely different process in sales, like number of new customer sales per month.

Build process management into your culture

If your organization is very compartmentalized, your workforce may not be aware of how processes touch many different hands in various departments. Some of your employees may be used to “staying in their lane” and only being responsible for tasks that they view as their own.

If that’s the case, you may need to work on a culture change. And that’s where process management can help. By clarifying your organization’s goals, mapping out processes, defining process leaders, and tracking performance, everyone will understand their roles and contributions to the company overall a bit better.