Core Business Processes

This is about core business processes and their functions.

Every organization relies on a series of processes to reach goals.

You’ll learn what core business processes and their functions are, plus
what drives the processes you employ every day.

Let’s get started!

Core Business Processes and Their Functions

Demystified
Have you ever thought about what drives your day-to-day business?

Be honest, who hasn’t received a company-wide memo detailing

changes to a process and wondered why?

Every organization relies on a series of processes to reach goals.

Sometimes they make sense at every level, and other times you may
scratch your head because it seems like a waste of time. 

Successful businesses refine their processes to benefit the company as a

whole. They cut away the waste and streamline each step to maximize
profits and keep the machine of industry running smoothly. 

If you ever wondered what drives the processes you employ every day,
this article might be able to help.

The article got answers about what a core business process is and how
they function in the business world.

What Is a Business Process?

In short, a business process is everything your business or organization
does over the course of a day, week, or month. While the concept sounds
simple enough, it involves an intricate balance of input, output, and
methodology. 

Business processes apply to everything from answering phones to

delivering goods, but not all actions are equally important.

Some processes are core or essential, while others serve supporting

roles. 

Understanding the difference between core processes and supporting

processes is the first step in understanding how businesses work.

Companies and organizations that can separate and refine operational

roles function more efficiently.

The success of a business depends on the efficiency of its core business

processes.

Supporting processes may enhance essential processes, but if they don’t

change, the business doesn’t suffer. This explanation oversimplifies
things, so let’s dig a little deeper.

What Is a Core Business Process?

Core business processes are also known as operational, primary, or
essential processes. These terms all refer to the actions, capabilities, and
activities that a business needs to create and deliver a product or
service. 

Though core business processes do many things for a company, the

primary objective is to deliver value to customers or business partners.

The core processes need to work together to achieve a common goal in

the most efficient way to maximize profits.
It’s necessary to understand that a company’s ability to identify and
manage its core business processes efficiently is critical to success. If
one core process fails, it puts the entire organization at risk. 
Core Business Process vs. Core Business Function

Before we press on, we wanted to point out some key distinctions

between core business processes and core business functions.

While they sound interchangeable, processes and functions are two

different approaches to organization, coordination, optimization, and
planning.

Differentiating between business processes and business functions

across these four domains is helpful because it explains the foundation
of most companies.

After all, how can you identify, refine, or optimize your business if you
don’t know which model to adopt?

Each approach has pros and cons, so determining which model to choose
depends on your company’s goals.

The primary difference between these methods is independence

(function-driven) versus cohesiveness (process-driven), but like most
things in business, it’s not that simple. 
Organizational Differences

Businesses organized by core business functions usually resemble a

hierarchy where each function works independently of the others. This
approach means each level can deliver outstanding results, but their
output may not integrate well.

Conversely, a company organized by core business processes strives to

optimize the organization as a whole. It doesn’t draw lines between
processes, so every department works together for the benefit of the
company. 
Coordination by Function or Process

Function-oriented companies have no direct path for coordinating

between departments. Each one has many activities that they carry out
independently and without overlap.

The department managers coordinate the input and output of individual

departments.

Process-oriented companies thrive on coordination because they

embrace it throughout the company. These firms encourage departments
to interact, cooperate, and create streamlined approaches for the greatest
good. 
Optimizing Function vs. Process

Optimization is possibly the most challenging domain for function-based

companies. If you embrace this approach, your sales team may oversell a
product that your manufacturing team can’t possibly deliver on. The
results can be disastrous in some cases.

Process-driven companies approach optimization as a company to

deliver maximum volume without overtaxing an individual department.

The cooperation prevents a sales department from overselling because

they receive information about the production team’s abilities and
limits. 
Functional Planning vs. Process Planning

Strategic planning is an essential step in building any business.

For function-based organizations, management assigns goals to

individual departments. Each department works toward their goals with
no regard for other functions.
Managers of process-based companies assign goals based on the work to
be done. Planning focuses on the activities within each process, and
teams work together to reach the goals.

As you can see, companies that build foundations on core business

processes tend to be collaborative and cohesive at every level. Their
cooperative approach opens many doors and can achieve higher
production standards, but only if done correctly. 

How to Identify and Organize Core Business Processes

Primary business processes vary because no company or organization is
exactly the same. Some companies consider accounting essential, while
others treat it as a supporting process. 

To achieve success, companies need to develop efficient, cohesive core

business processes.

Shown below are the major operational challenges for organizations in

multiple cloud environments. Around 35 percent of respondents stated
that consistent security is an obstacle in reaching their organizational
goals:

When a business struggles to reach its goals, it’s often related to a fault
in one or more core processes because they are all interconnected. 

You can’t organize your firm or refine your core business processes until
you identify them.

Most companies identify four to eight core processes and arrange the
other secondary or supporting processes around them. 
Core Business Process Examples

Where do you even start with core business processes?

Every company has a unique set of core business processes, but there is
plenty of overlap because most companies rely on the same basic
departments. 

For example, a music label may determine they have five core business
processes.

While each process may have several supporting processes, these are the
five they want to focus on as essential.

 Marketing is how the label communicates with listeners. They

need to find the best outlets to reach their desired audience.
 Sales, one of the most common core business processes, involves
selling the music.
 Manufacturing, in this case, recording music, is essential.
 Technology is increasingly important to a company’s essential
business processes, especially in terms of music. Just look at the
changes in the industry over the past ten years!
 Services, most commonly customer service, is a primary business
process for many companies, including the entertainment industry. 
Identify Your Core Business Processes

Armed with your business model and ideas, let’s dig into your business
processes. We want to identify and separate core processes from
supporting processes. 

It’s time to make a new list or lists if you prefer. Grab those colored
pens or highlighters because we suggest color-coding for this exercise!

 Ask yourself what actions and activities drive your business. 

 Create a list of all departments and roles. Don’t forget to identify
who has input in company decisions at each level.
 Define each process with essential and non-essential activities.
 Detail transitions and places where products or materials transfer
internally and externally. 
Map Your Processes

Compare your business model to your current processes. Use your list of
core business processes then plug them into a cycle from beginning to
end. 

Link suppliers, inputs, processes, outputs, and customers to develop a

map that includes cash flow in both directions. Your finished map
should represent the cash cycle of your business.

You did it! Take a good, hard look at what you wrote because these
pieces represent your company’s money trail, the foundation for your
income and success. What did you discover?  

Redesigning Your Core Business Process

There is a difference between optimizing and redesigning your business
processes. When you undertake a redesign, you commit to a complete
overhaul of your existing processes to make massive changes. 

Business process redesign requires a thorough audit of your existing

business. Once you feel comfortable with the information you have at
your disposal, do one last review to make sure redesign is necessary. If
so, get started!

 Identify and outline clear goals, including desired results.

 Analyze existing core business processes to identify gaps or room
for improvement.
 Create and detail the changes.
 Put the new processes in place and monitor their effectiveness. 

Best Practices for Managing Core Business Processes

Congratulations, you created (or refined) your business model, identified
your core processes, and identified opportunities for change. Maybe you
already pushed some changes into place. If so, kudos to you! 
Establishing business processes is only half of the equation. You need to
manage them and monitor for areas of improvement. Remember, as the
world changes, you may find new resources or encounter obstacles that
require adjustments.  

Common Problems with Core Business Processes and

How to Fix Them
What if you know there’s a problem with your business processes, but
can’t figure out where? It happens. 

Sometimes you can’t step back and see the big picture, but other times
it’s impossible to see what slips between the cracks.

Maybe the process itself is like Alice’s rabbit hole, and you can’t reach
the bottom or crawl out.

Take a breath, grab a notepad, and let’s tackle this together. Note that
you may need to call in reinforcements to answer some questions or take
a little field trip to see something with your two eyes. 

Problem #1 Your Company is Disorganized

Do you run a company where everybody does everything? Probably not.
Even if there is cross-training or overlap between departments, it’s
doubtful that everybody handles everything. 

If your team struggles with boundaries, it can present in different ways.

Maybe two people did the same assignment, and another job went
unfinished.

Perhaps nobody communicated to HR that one team needed a temp for a

day, and they fell behind. 

Organizational issues between departments can wreak havoc on a

company. You need to address it immediately.
Make sure your team, and all of your partners, understand everybody’s
roles within the company. Keep lines of communication open to keep
things moving smoothly.  

Problem #2 You Don’t Leverage Technology Correctly

Who remembers learning the Dewey Decimal System and flipping
through card catalogs at the library to find a book?

While libraries still rely on the Dewey Decimal System, most card
catalogs went the way of the DoDo. 

Integrated communication systems allow library patrons to access

millions of digital titles and request items from different branches or
cities.

The library system still needs librarians, but their world changed
dramatically over the past thirty years.

Would librarians be as successful if every library used a different

organizational system? What if their computers couldn’t communicate
with each other at all, or had to work through a translation program? 

The same is true for businesses relying on software, like CRMs. If you
don’t have a standardized system for tracking your business needs, like
communication and inventory. 

The graph below shows the usage of different automation technologies

in organizations worldwide. Around 36 percent of the respondents stated
that they had been implementing RPA (Robotic Process Automation) in
their organization, with 31 percent using such technology in selected
functions and 5 percent implementing it extensively:

Do a thorough audit of your existing system.

Look for any gaps in communication or information exchanges. Make
sure team members have access to all information they need to work
effectively. 

Problem #3 Your Company Loves the Status Quo

Change is frightening for many people, but as we discussed previously,
it’s necessary for business. Complacency is comfortable and convenient,
like a ratty, old college sweatshirt on laundry day.

Would you wear the ratty old sweatshirt on a date? Probably not, at least
not if you want to make any type of impression on your date. The same
is true about businesses that refuse to upgrade from comfort to
innovation.

There are two typical causes of complacency in the business world – ego
and fear. Let’s start with ego, the manager who refuses to relinquish
control or embrace new ideas.  

Ruling with an Iron Fist

Be honest, look in the mirror, and ask your reflection if you’re the ratty,
old sweater unwilling to admit that there could be a better way. No?
That’s not you? Great, admitting you’re open to change means you can
move on to the other common cause.

On the other hand, if you can honestly admit that you are a barrier to
change, it’s time to rip that sweater off and step out of your comfort
zone. Trust us, it will be okay! 
Don’t Rock the Boat
Take some time to evaluate your work environment. Do team members
feel like they can speak up and make suggestions?
Employees see issues with processes they use every day, but if they
don’t feel it’s safe to speak up, they won’t. It’s a sign of distrust within
your organization.

Don’t worry, all is not lost. It just means you need to take a different
approach and find the source of fear.

Try initiating open-door policies, surveys, and town halls to encourage

your team to share ideas. It may take time to establish trust, but it will
open the door to real progress. 

Problem #4 We Need that in Triplicate

Who remembers the dreaded team projects in grade school that
inevitably resulted in one person doing nothing, one doing the wrong
thing, and two others completing the same thing?

Miscommunication occurs in the business world as much as it did in

Mrs. Johnson’s 4th-grade classroom.

Failed team projects in the business world can mean significant losses. If
you’re lucky, it costs a little time and money, but you could lose
customers if it happens too often, or the mistakes are egregious.

Is this an issue for your company? Roll up your sleeves and get down to
business. Investigate the trend to see where things go awry so you can
fix it.

Cutting out redundant processes will streamline your process and save
you in the long run. 

Problem #5 You Don’t Have Access the Information You

Need
“Tell me about a time you had to make a decision without all of the
facts. How did you handle it? Would you do anything differently?” 
This is an excellent interview question because it can tell you a lot about
a person’s character. However, when it comes to managers making
decisions about business processes, insufficient or inaccurate
information can lead to bad choices.

If you suspect issues with reporting, it needs to be remedied

immediately. Analyze your situation to see where the gaps are and
determine how to fix them. 

 Real-time reporting is beneficial in many situations, but not always

possible.
 Too much information is as detrimental as too little information.
 Are the timelines and goals reasonable for your team?
 Watch out for obstacles or events that temporarily impacted the
numbers but resolved. Don’t make decisions based on those
numbers.
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