Operational processes are key activities that must be performed to ensure that your company stays competitive.
Every business has (or should have) operational processes, whether they know it or not. These might be small processes, like opening and closing bank accounts, or large processes, like process manufacturing.
You want to carefully map out operational processes to keep them efficient and effective. And that's not just lip service: an efficient operational process will save a company time and money.
To help you better understand operational processes, we’ve put together a comprehensive guide covering everything from what they are and why they’re important to how you can create and implement them in your business.
What are operational processes?
A company's operational processes are the activities that generate revenue and income directly. These activities link the company with its target customers so they can provide the best products and services.
In other words, operational processes are the backbone of a company and play a vital role in ensuring things run smoothly. When these processes are well designed and executed, they can help businesses save time and money, as well as improve quality and customer satisfaction.
An example of what operational processes for a manufacturing company might look like:
- Sourcing materials for what they sell.
- Receiving customer orders.
- Storing products.
- Picking and packing orders.
- Shipping products to customers.
- Receiving and processing payments from customers.
An organization's operational processes are crucial for staying competitive.
The difference between operational processes & business processes
Operational processes are a subset of business processes. Business processes cover all the activities that must be performed in order to run a successful business, from marketing and sales to accounting and HR.
Operational processes, on the other hand, are the types of business processes that directly add value to business outputs. These are the key activities that you need to perform in order to produce a product or service.
📌 Related resource: Operations Teams: How to Assemble and Lead a High-Performing Team
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Why are operational processes important?
Operational processes are important because they are directly linked to a company's bottom line. They have a direct impact on revenues, costs, and profits.
In order to be competitive, businesses need to ensure that their operational processes are efficient and effective. This can be a challenge, as operational processes can often be complex and can involve many different departments and employees.
When business operations are inefficient or ineffective, they can lead to problems such as wasted time and resources, poor quality products or services, and unhappy customers.
However, with proper planning and execution, businesses can overcome these challenges and reap the benefits of well-designed operational processes.
Organizations should strive for operational excellence as their main goal.
Benefits of operational excellence
There are many benefits to achieving operational excellence, such as
- Improved efficiency: When operational processes are well designed and executed, they can help businesses save time and money.
- Improved quality: With proper planning and execution, businesses can produce high-quality products and services, which will boost other areas of the business as well.
- Improved customer satisfaction: Effective operational processes such as fast order fulfillment and timely delivery of products and services can lead to happier customers.
- Reduced costs: Cutting out unneeded steps and improving efficiency can help businesses save money on labor, materials, and other resources.
- Improved competitiveness: When businesses can produce products or services faster and cheaper than their rivals, they gain a competitive advantage.
In addition, operational processes can help businesses reduce waste and improve communication between departments.
To achieve all of these, organizations must first identify their core operational processes and then implement best practices that will help them improve these processes. By doing so, they will be able to improve their overall performance and stay competitive.
How to identify your operational processes?
There are many different ways to identify the operational processes of a business.
Let's go through some of the best ways:
1. Evaluate inputs & outputs
One of the first steps in identifying your operational processes is to evaluate the inputs and outputs of each process.
This will help you understand what each process is supposed to achieve and identify any areas where the process is not meeting its goals.
What are the raw materials or inputs that are required in order to produce our product or service? And what are the finished products or services that we deliver to our customers?
2. Ask for feedback
Another way to identify your operational processes is to ask for feedback from your employees.
Your employees are the ones who are directly involved in carrying out these internal processes on a day-to-day basis, so they will be able to provide you with valuable insights into which ones are working well and which ones could be improved.
Customer feedback is something you should think about as well, with 85 percent of small and medium-sized enterprises reporting positive results from online customer feedback. They will be able to tell you which parts of your product or service they are happy with and which ones they are not.
3. Make a process analysis
Proper process analysis will help you understand how these digital processes work and identify any areas where they can be improved.
There are many different tools and techniques that you can use for process analysis, such as:
These tools will help you visualize your processes and identify any inefficiencies.
4. Use data & analytics
Once you have identified your core operational processes, it is important to analyze the results in order to determine which ones are working well and which ones need to be improved.
This is where data and analytics come in. By tracking the performance of your operational processes, you can identify any bottlenecks that your process has.
On top of that, you can also use data and analytics to benchmark your performance against other businesses in your industry.
📌 Related resource: The Operations Manager Decoded: Role, Skills & New Insights
How to build your own processes?
Creating operational processes can seem like a daunting task, but it doesn’t have to be. Whether you’re starting from scratch, or looking to improve or automate existing processes, there are a few simple steps that you can follow to build your own best practices:
1. Identify the problem that needs a new process
In order to build your own process, you will first need to identify the problem that it will address. This could be anything from a lack of clarity around customer expectations to inefficiencies in the way work is currently being carried out.
It's important to fully understand the problem in order to build a solution and manage process adherence, as this will ensure that your solution is fit for purpose.
2. Define your goals
Once you have defined the process, you need to define your goals. What are you trying to achieve with this process? What are your targets?
Your goals should be specific, measurable, achievable, relevant, and time-bound (SMART). Having clear goals will help you to track and measure the success of your process, and make necessary adjustments along the way.
3. Create a process map or step-by-step guide
A process map is a visual representation of the steps involved in the process. It is a helpful tool to have when you are trying to streamline the process and identify areas of improvement.
Create a step-by-step guide either manually or by automating it with Scribe. Scribe uses AI to document your processes for you — turning any digital workflow into a written guide, with text, links and annotated screenshots.
Use Scribe to outline the steps you need to take to set up a new business workflow and distribute or store it.
💡 Learn more: How Operations Teams Use Scribe
4. Implement best practices
After mapping out processes, you want to capture and implement best practices for process transformation.
Document your business process best practices in a clear and concise way, using tools like Scribe and Scribe Pages to build guides and longer documentation, that you can easily share and store in-platform.
Just discovered @ScribeHow and it's been game-changing. Saved so much time in building the knowledge base for @ShyftedApp. Will see how our clients @cuenorthbuilds like it for their process docs.
— Lorraine (@elorrainewong) May 5, 2022
Some best practices to consider are:
- Ways to streamline processes.
- Process automation.
- Quality control measures.
Remove any unnecessary steps, and make sure that everyone involved in the process understands their role and responsibilities. This will not only improve efficiency but also reduce workplace stress.
5. Monitor & optimize
The final step is to monitor the process and make sure that it is running smoothly. If you find any problems, be sure to optimize the process so that it runs more efficiently. With tools like Scribe, you can take advantage of the universal updating and feedback features to keep each guide up-to-date.
Processes are never-ending and are always subject to change, so it’s important to be proactive in making sure that they are running as smoothly as possible.
6. Document & repeat
Last but not least, don’t forget to document the process standardization. If you have to replicate the same process in the future, or if the process needs to be changed, this will be useful.
Business process documents help employees easily adapt to each process and software. Tools like Scribe make it easier by allowing you to capture a whole process in a step-by-step guide — in seconds. Here's a Scribe in action.
Easily edit, share, export or embed a Scribe. Or, combine it with images, video and more with Scribe Pages.
Now that you know what operational processes are, put them into practice!
