What are operational business processes? (Plus tips)

By Indeed Editorial Team

Published 7 November 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Companies develop operational business processes to support their overall goals and keep them running. Businesses typically aim to achieve these goals by providing customers with products and services in a timely and cost-effective manner. Learning about operational business processes and how to improve them can help you add more value to your employer. In this article, we answer 'What are operational business processes?', explain how they work and look at some tips for improving them.

What are operational business processes?

To answer 'What are operational business processes?', they're the day-to-day tasks that a company performs to keep its business running. They're often repetitive and frequently automated to save time and money. For example, an e-commerce business's operational processes might include receiving customer orders via web form and processing those orders by selecting products from its inventory and sending them off to customers.

Usually, there are two types of operational processes, which are internal and external. Internal processes are those that happen within an organisation. In contrast, external processes are the ones that occur between an organisation and entities outside of it, like vendors.

Read more: What are the key components of an operational business?

How do operational business processes work?

Below, you can find out how operational business processes work:

Define the process

To maximise efficiency, it's beneficial to define the processes used within a business. Not only can this help a business to identify areas for improvement, but it can also help them streamline their business operations. When a business defines a process, they're explicitly outlining the steps involved in completing a task or achieving a goal. This way, everyone involved in the process knows what to do and how to do it. Businesses can also use this definition to assess whether their processes are efficient. If a step seems unnecessary or redundant, they can then consider removing it.

Related: How to define purpose in business: a step-by-step guide

Identify the process's goal

It's also beneficial to identify the process's goal as this helps you to determine what you're trying to achieve by performing that process. Moreover, it helps you to determine if the process is effective.

For example, a manager within a restaurant may set a goal of trying to ensure that every customer gets their food within 20 minutes of ordering. They may do this to ensure that there's a high turnover rate. This is an easy goal to measure as the manager can time how long it takes for customers to receive their food and identify any areas that may be increasing this wait time, like slow food preparation.

Related: What are business goals and how to create them (with steps)

Determine how to measure the process's success

Additionally, it's beneficial to determine how you're going to measure the process's success. If a business avoids this step, it may not realise what requires improvement. These measurements can include anything from the number of customers who enjoy using the business's products or services to the amount of time it takes to complete a task or the total number of errors made during a process. Looking at this information can be beneficial, as an employee can examine the process as a whole and pick out any areas slowing it down and develop a plan for making improvements.

Related: How to measure project success (with steps and tips)

Create a flowchart that outlines the process's steps

When you're working on operational business processes, it's useful to create a flowchart that outlines the process's steps. A flowchart is a visual representation of how one thing leads to another in a process. It's a useful tool that can help you to understand how a business works while also identifying any areas where things are either redundant or inefficient. A flowchart tends to include the name of the organisation and the names of the people involved in the process. It also includes a description of what each participant does during their interaction with customers, employees and vendors.

Read more: What is a process flowchart? (When to use it, plus examples)

Ensure the completion of each step

Ensuring the completion of each step in an operational business process, without waiting on another person or department, is rather crucial because it reduces the risk of errors. It also helps ensure the timely completion of tasks. For example, if hiring a new employee requires the HR manager to approve it, who then sends off forms to another department for processing, such as payroll, this requires the involvement of two departments when onboarding new staff. This increases the likelihood of errors when passing documents between departments.

Related: What is an operational researcher? (With job description)

Identify any bottlenecks

Bottlenecks are a common problem in business processes. They can be especially problematic when at the process's beginning. A bottleneck is a part of the process that isn't working well enough to move through the process smoothly. Instead, they cause the whole process to slow down. It's beneficial to identify bottlenecks because they waste resources, increase costs and cause customer dissatisfaction. To identify bottlenecks during operational business processes, look for places where there are long waiting or slow processing times. Then, figure out why those particular points are causing delays and launch a plan to mitigate the effects of this.

Determine if there are any steps to automate or outsource

There are many reasons for determining if there are any steps in an operational business process to automate or outsource. First, automating or outsourcing a task can save a company time and money. For example, if you have a process that requires manually entering data into a spreadsheet, but you discover that it might be faster and more cost-effective to purchase software that can do this automatically, it's worth automating this step in the process. Second, automating or outsourcing a step in a business process can also free up both employees and resources for other tasks.

Read more: What is outsourcing and how does it work? (Plus advantages)

Try different scenarios to see how long it takes to complete each step

Seeing how long it takes to complete each step in the process can help you to make the overall process more efficient. After looking at this data, consider trying different approaches and then compare the time taken to complete each step. With this information, you can then determine the best way of improving the process.

Tips for improving operational business processes

Below are some tips for improving operational business processes:

Understand the processes

Understanding a business's processes is beneficial because it allows you to identify where inefficiencies are and how to eliminate them. Business processes are one of the most crucial parts of a company, so it's critical to ensure that they're operating as effectively as possible. The first step in improving operational business processes is to identify them. This includes understanding what the process is, who performs it, what tools the process requires and the process's purpose. Once there's a clear understanding of each process, you can then begin to analyse them and determine how you can improve them.

Use data to make decisions

Using data to influence decisions that impact operational business processes is crucial as it helps to ensure that you're improving the right things. This can ensure that you're not implementing a pointless measure that can lead to a reduction in productivity. When deciding if a new process is worth implementing, it's advantageous to look at what the data says about how it can impact a business. This includes things like how much time it's going to take, how much money it's going to save and whether this new process can help to attract more customers.

Read more: What is data analytics? (A guide to types and skills)

Create a plan for implementation and testing

Creating a plan for implementation and testing when improving operational business processes helps you to keep track of what's going on, while also making sure that you're not missing anything. It also helps you to ensure that you're making the right decisions about how to implement the process change by providing a guideline for what to complete and by when. When creating this plan, make sure you include the project's scope, who's going to carry it out, what their roles and responsibilities are and how long it's going to take.

Get feedback from others

It's also useful to get feedback from others when improving operational business processes because it helps you to identify the problems and solutions in your process. It also helps you to understand how other people see your process. When seeking feedback, it's usually advisable to get it from the individuals who use the process.

For example, if a customer is unhappy with their experience at a shop, their experience can help you to identify what went wrong in the process that led to their dissatisfaction. This can then lead to the creation of a plan to prevent this from occurring again.

Explore more articles