Business Process Documentation

Introduction

You've probably heard phrases like "business is a system" or "business is processes."

Both terms can be characterized as establishing a company state that ensures predictable results and a high level of organizational interchangeability, achieved through the application of a process-oriented approach, a suitable management structure, and necessary automation systems.

My name is Yaroslav Chernykh. I'm a professional Business Architect and Business Process Consultant with practical experience in the industrial sector since 2016.

In this article, I'll share a sequence of steps on how to properly build and systematize a company's business processes, avoiding common mistakes along the way.

You can find more useful materials on business systematization in my themed channel.

Business Process Systematization: Where to Start

So, let's break down the basic methodology of what needs to be done to gradually start describing and building the process structure within a company.

Before beginning, it's important to define the goals and formalize the planned outcomes – what we aim to achieve:

• Increase process transparency and traceability.

• Optimize processes and reduce operational costs.

• Prepare for automation.

This will set the right direction for the work and help the working group focus on specific aspects.

Step 1: Identify Areas of Activity

The first step is to identify the areas of activity – what the company specializes in, what products or services it produces.

For clarity, it's best to visualize this using a specialized diagram based on ArchiMate notation, or in a simplified format using Excel and SmartArt – the tool isn't critical.

Step 2: Define Core Business Processes

Based on the data obtained, business processes that ensure operations and are part of the identified area are distinguished.

To do this, it's sufficient to start with the inputs and outputs of the process, and the necessary resources that implement a specific area of activity. This representation can be done using IDEF0 or ArchiMate notation, or by using any convenient diagramming tool – MS Visio, Draw.io.

For convenience, the resulting processes are divided into 3 groups:

• Core processes

• Supporting processes

• Management processes

Step 3: Decompose Core Processes

The next action is to decompose (break down) each process into its components. The number of decomposition iterations depends on the stated project goals:

• For delimiting employee responsibilities and functions, a 2nd or 3rd level is suitable.

• For automation purposes, a higher degree of detail will be required, typically a 4th-5th level.

This is a complex stage, especially if no work in this area has been done before. I'd like to note that you shouldn't start from the functions of specific departments, so as not to get a distorted process architecture.

The outcome should be a hierarchical structure of business processes, classified by priority.

Step 4: Prioritize Business Processes

As a result of the previous stage, a list-register of processes was created. Now it's important to determine what is critical for the business and what is secondary.

It's crucial to expertly define a metric or a set of indicators that will be used to prioritize business process documentation.

Such indicators can include:

• Average number of business process instances initiated.

• The criticality of operations to core activities.

• Number of non-conformities or remarks on work results.

• Cost of the process.

This will allow for an organized progression through the approved list and rational use of resources (internal or external specialists) for subsequent phases.

Step 5: Document Business Processes

Next, the current business processes need to be described graphically or textually. This step is the most labor-intensive and takes 1 to 3 months, as it requires a detailed examination of each process.

BPMN modeling notation is the most convenient and understandable for participants; it's suitable for future automation purposes and, in my observations, is regularly used. It's important to note that for this phase, it's desirable to develop a "Modeling Agreement" document, which will help ensure uniform documentation results.

Developing "as-is" process models and process maps is the starting point for optimization, although according to surveys, 54% of business analysts skip this stage and move directly to the next, without the ability to evaluate before-and-after states.

Step 6: Optimize Business Processes

In this phase, the described processes are reviewed, and reengineering is carried out – a complete revision of the structure and sequence of operations.

Basic methods of optimization can be used, such as:

• Parallel execution of operations.

• Reducing process inputs and outputs.

• Improving information collection and transfer forms.

• Eliminating time gaps.

If these approaches are insufficient, complex methods can be applied:

• Functional-Cost Analysis (FCA).

• Activity-Based Costing (ABC).

Step 7: Develop Process Regulations

At this step, process regulations are developed; the creation of functional regulations can be postponed until the need for them becomes clear.

An internal standard for developing regulations is created, which outlines the main requirements for the formalization and management of internal normative documents.

The working group participants, together with representatives from functional departments, conduct sequential development of internal normative documents, followed by their approval and endorsement.

Regulations and normative documents are created by people for people, so they should be written in simple and understandable language, without compromising their intended purpose.

Step 8: Implement and Test Updated Business Processes

The final stage, which determines the return on previous efforts, is the implementation of modified processes.

For this stage to proceed smoothly and quickly, it's essential to involve employees starting from point 5. Otherwise, resistance to changes in established processes will arise, and the procedure can be significantly delayed, potentially turning into sabotage of the innovations.

Applying a Win-Win approach allows participants to benefit from the activities. The company's management and the project leader must convey the value of the modified processes, train and advise key participants, promptly respond to employee questions, and, if necessary, adjust the regulations.

The concluding step of business process systematization is automation. There could have been a Step 9 dedicated to transferring processes to IT systems, but that's a topic for a separate publication.

Conclusion

Performing this set of actions leads to positive changes in a company's operational work. This is the foundation upon which further organizational development and business automation are based.

Investing resources in business process structuring yields a stable and controllable business system that:

• Makes staff work transparent and clear.

• Relieves managers from operational tasks.

• Increases company value for owners.

• Ensures the company's long-term development and scalability.