We talk to startups and investors, you get the value.
A startup is a project which is meant to be unique by default. It is a search for a new solution for users problem, creation of an innovative product, which still does not exist on the market. Perhaps, it seems to be a sacrilege to speak like that about planning, setting up rules and regulations and writing manuals along with business processes modelling. Nevertheless, without all the previously mentioned things, and especially the latter one, it will be hard to achieve success for your startup. Sooner or later you will face the fact that you don’t know areas of responsibilities of your team members, because everyone is doing everything a little bit. That will lead to the reduction of effectiveness and other benefits of “the creative process”. In this article, I will tell what business processes are, how to model them and how this will help to make the work of a startup more cooperative and productive.
We talk to startups and investors, you get the value.
Business processes are interconnected events and works, the aim of which is to create a product or a service. All business processes are subdivided into three main types, depending on their purposes:
Managing business processes — it is corporate and strategic management. Such processes move your project ahead, these are searching partners and concluding contracts, sales, entering new markets.
Operational business processes — provision, manufacture, marketing, sales, debt recovery.
Supporting or ministerial processes are those that maintain the service of the main business. These are financial reports, recruitment, technical support.
For example, your startup is a network of fitness centres with consulting nutritionists and a mobile application that allows customers to schedule appointments with specialists, book and pay for classes taking into account the convenient time, direction, and area. In this case, managing processeswill be researching markets of neighbouring cities in order to open new fitness centres, negotiating with local authorities about providing you with an emplacement on favourable terms. Operational processes are about the scheduled work of gyms, organisation of client-nutritionist personal meetings, creating individual dietary regimen and plan of exercises, brand promotion. Supporting processes include the search for nutritionists and fitness trainers in a team, maintaining accounting, maintaining the website and mobile application.
Modelling a business process is like building a view model that reflects the most important features and functions of a sourcing process. In other words, you write a step-by-step list of what and how things have to be done in a perfect case.
To create such a model, you need to define:
by whom and what actions are performed;
what is the order;
what is a paper flow during the process;
a possibility of scaling/development of the process in the future.
In our startup, a business process result of acquiring clients is a client’s appointment to a paid face-to-face meeting with a nutritionist via a mobile app. The actions are done by a client, who installed the app and used it to send the application form, and also, by an administrator, who processes all incoming applications and re-confirms whether the client will come to the meeting in the appointed time.
As considers documentation, in the scale of business processes we understand documentation as any type of information on any kind of storage medium. In our case, this is information on the screens of a mobile application with a presentation of our product, a survey of a client to identify his problems, a calendar and a map with the help of which a client chooses a convenient time for him and a place for consultation/training. Further on, when the application form is received by the administrator, he calls up the client and uses pre-prepared scripts, which are also considered as documents in this case.
The process reliability is guaranteed by an automatized work of the application, and also, the administrator’s work, who tracks all possible incoherences and failures in the software.
Scaling the process in the future we also have foreseen: the mobile app gives clients a possibility, after consulting with a nutritionist, to choose the time and place of classes, book them and pay through the application without contacting the administrator.
Case 1. Perfectly orchestrated business process: Wikipedia
We all know it and regularly use the product of this project — a free encyclopedia. This is the fifth most visited site in the world, which hosts tens of millions of articles in 300 languages, anyone can write articles and edit them, i.e. hypothetically, any resident of the planet who has Internet access can “work” for Wikipedia.
It is surprising but in the Wikimedia fund, that provides technical support and manage Wikipedia, works about 300 people. A giant project is led by a well-tuned business project with a maximum level of automatisation and artificial intelligence usage.
No matter how boring this may seem, however, at the very beginning of the active phase of the startup development, you should devote a few days to describing the processes that take place in your, still very small, enterprise. This may help you to avoid several inconveniences and problems, both in real-time and in the far future, when your project will scale. So, what problems helps to avoid business processes modelling?
Doubts what to do on this or that stage of company development.For example, one of the key employees, that was in the project from the very beginning, quitted the job, and now it is unclear how exactly he was working, as the company saw the results, and they were satisfying. The management didn’t see any necessity to intrude into the person’s work. And as a result, it is hard to describe how the work was done and explain it to the new employee. If all the processes on your project are prescribed, then you will avoid the above-mentioned inconveniences: you will know in advance where and how your product will be delivered and who will control it; You will know how the work of each of your employees is structured, and all their business contacts, communications will be documented.
Sabotage from the employees when a company reaches a new stage and decides to regulate their activities . People will consider that their interests and freedoms are grossly infringed because initially nothing was said about instructions, regulations, descriptions of work processes.
Chaos in a team, for example, when employees have positions but do not have powers, or when few people are working on one process simultaneously, in the end, the work is duplicated while other tasks are not done.
Decrease of efficiency in a startup and its shareholder equity. Business processes modelling allows owners to concentrate on their own profit of the enterprise, to control income and expenses in detail. The company at the expense of borrowed funds (loans, investments, grants) may seem to be lossless for some time, but in fact, its shareholder value, in this case, is not that big.
Client attrition. Well-tuned business processes help the team to work quickly and effectively, and this is an essential factor these days. If to compare the business environment with a food court, then companies with well-tuned business processes are the food places, where clients are served with no delay, they pay for their order and leave satisfied. And those companies, where business companies are not well-tuned, usually lose their clients, as because of the in-company mess, managers cannot pay attention to all of the orders, and many orders bailout..
A number of ill-considered/uncontrolled expenses. Modelling makes transparent the work of each person: it is known how much his salary is, under what conditions he receives bonuses, what the costs of his business trips are, where and at what price stationery is purchased. When all processes are registered, the possibility of any concealment of money, their theft — both small and large, is practically excluded.
Conflicts in the team. Conflicts at work usually occur where the management is not formalized and not regulated. Thanks to the business processes modelling, the duties and powers of each employee are detailed, managers are aware of how all the processes in their responsibility area are structured and able to explain them to subordinates. Each manager knows exactly what each employee should do.
The majority of startup does not outline their business processes. Founders think that a small team doesn’t need it, as it is clear who does what.
Nevertheless, business processes that were primitively formed on the initial stages can significantly improve startup’s work in the future. To do so you have to outline:
project goals for the nearest 3–4 months;
roles of the team members;
interactions with the external environment.
The first point — the project’s goals — it is all clear. To start doing something, we need to know what we want to get and in what period of time.
Further on, we need to distribute roles in the team and divide the responsibility areas according to them. Next, we need to distribute the roles in the team and divide the responsibilities accordingly. In a startup, you don’t have to describe the step-by-step routine work of each of the team members, but it is vital to have a specific area of work assigned to each member. Business analysts advise not to interfere with each other’s work at the very beginning: each team member is responsible and authorized to work only in his own segment. Here is a list of key areas: management, production/development, logistics, security, sales, marketing, standardization, accounting. Divide them among your team members and analyze how the work is going in each direction, and what can be improved to save time and money.
And at last, the most important point — connections with the external environment — it requires in-depth behavioural templates development. You interact with investors, partners, potential clients, test audience, to which you will make the MVP offer of your product, clients, mass media, government… The image and success of your enterprise directly depend on how you will behave.
Outline the key peculiarities of the representatives of each segment of the external environment, note for yourself what you expect from them, how this can be achieved and what they expect from you. Based on the obtained data, create a behaviour model with different contacts — with possible variations depending on the course of negotiations.
During the first iteration, analyze the work within the team and pay attention to the processes that impede the development of the project. Before the next iteration, try to optimize these processes and see how the work will proceed in the future. Each new iteration will lead you to the most efficient business model.
Case 2. McDonald’s
McDonald’s is considered an example of an enterprise with perfectly tuned business processes. Automated cash desks, almost cooked semises, possibilities of self-service make this fast-food restaurant attractive not only for the hamburger and fries lovers but also for the people who value their time, — they know that in this place they wouldn’t wait for their order for long.
At one time, the McDonald’s reduction of customer service time from 15 minutes to 30 seconds was revolutionary for the fast-food industry. The competent implementation of business process models helped to achieve this. When the company decided to change, it made a model of the kitchen on the tennis court: so they could quickly apply and test various ways of arranging kitchen furniture, appliances and employees. As a result, after numerous experiments, the perfect furniture arrangement and the distribution of roles of employees were found.
McDonald’s business processes are not only worked out in terms of customer service. Of great interest is a smoothly running system of personnel training, motivation and promotion on the career ladder — you can build a career even if you occupy the position of a cleaner.
There are distinguished five main stages of modelling each business process.
The first stage — detecting processes and building up a source model “as is”. To upgrade a business process, you need to have a clear vision of how it is working at the moment. In the framework of this stage, we define and detect process boundaries, process key elements, data about the process performance.
The second stage — overview, analysis and elaboration of the model “as it is”. At this stage:
discrepancies are detected and actions are duplicated in the process;
the limits of a business process are defined;
process interconnections are defined;
the necessity of project change is determined.
The third stage — development of “how it should be” model. At this stage we define the desired process outcome: how should the process look like in the future, including all the necessary improvements.
The fourth stage — testing and implementing “how it should be” model. The model is tested and endorsed, and necessary changes are incorporated.
The fifth stage — upgrading “how it should be” model, as the letter is not static, each of the processes is changed and upgraded throughout the working process.
The following special programs will help in supporting and ministerial processes modelling.
A free program for creating priority distribution diagrams. The tool is considered a good option for small companies. The functionality includes model checking, automatic document generation, managing the attributes of model elements, the ability to add your own elements to the model, and unloading the model in graphical form. Software is in Russian and provides the possibility of collective work on models.
Paid software for modelling and describing business processes. All models can be interconnected in a way that it is possible to create the entire model of a business system.
Provided a possibility of checking diagrams, generation of automated attribute description for specific elements, for each element you can assign a behavioural model in the system, outline business rules.
Allows you to track the implementation of business processes in real-time. The functionality of the program includes the ability to assign roles of business processes to employees, work with document management, integration with 1C.
The program is paid.
This software allows you to draw up business plans, monitor the degree of fulfilment and quality of the goals that are set for the team, analyze the effectiveness of tasks, simulate the work process, track work efficiency.
A free program, that allows creating models and process maps. There is available a Smart Design function, which allows to quickly type-in data in a sheet, and after that, a program will automatically create a diagram.
A drawback of this soft is that it is impossible to connect models.
A Russian development that appeared on the market in 2004. There is a function of automatic generation of documents, for instance, job descriptions. It helps to control the execution of processes, integrates with other systems.
Business processes modeling is an action that will help you to save a startup from many troubles — starting from disagreements in the team to a low effectivity of work in the project in general.
To create a model of a business process, it is necessary to determine its result, executor, source documents, process reliability and the possibility of its scaling in the future.
Creation of a business model is a laborious work, which, however, can be of big benefit to a startup. In the model, you outline all processes and their composite operations, that happen in your company, establish connections between employees, who are working in different areas, define desired results and track how they are fulfilled.
Business process modelling has five main stages that follow one after another. Upon reaching the last stage, you are working on how to make the project work even more efficient and optimized with each iteration.
To simplify the work on modelling business processes, several specialized programs have been developed — both paid and free. They will help not only to draw process models that are in your company but also to automatically generate documents, track the progress of operations and processes.