Business Process vs. Business Procedure (+ Examples)

Do You Even ERP

Updated on January 10, 2021

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ARTICLE TABLE OF CONTENTS

This is about business process vs. business procedure.

You’ll learn:

What a business process is
What a business procedure is
The differences between a business process and a business procedure
Lots more

So if you want to understand this essential part of business processes, then this article is for you.

Let’s get started!

What Is the Difference Between a Business Process and a Business Procedure?

A business process covers how you run various parts of your business, while a business procedure shows how you and your team should carry out those parts. It can be hard to differentiate between the two elements.

The most significant difference between a business process and a business procedure is their details.

When creating a business process, you create a plan for producing a product or offering a service.

You may hear the terms business function or method instead of the business process, but they’re the same.

However, they’re different from a business procedure, which is what tells you how to carry out tasks in your business.

Both are essential to any growing business, and anyone in your company should know about both. Then, you can make sure the processes and procedures you implement will make their way through the company.

What Is a Business Process?

It sounds simple, but when it comes to answering the question “what’s a business process,” you have to dive deep.

In fact, a business process is a series of steps, not a single action. The process leads to a specific goal within the business.

So, a business process might involve multiple steps and numerous team members to reach the desired outcome.

Learn exactly what a business process is in this definitive guide to business process.

Elements of a Business Process

A business process includes methods and tasks that you use to alter inputs and form them into outputs.

You find here an in-depth explanation of what a business process is: Why Is Business Process Management Important to Any Business?

Once you have one or more inputs, you will transform them through a series of steps.

The steps you take will depend on your business and what makes the most sense.

A restaurant is probably not going to have the same business process as a hair salon or a computer company.

Still, all businesses need a set of inputs along with desired outputs.

You and your team can use your goals and outputs to decide on the right inputs. Then, you can use the inputs to set up the proper steps to follow.

Setting up a business process is a great way to plan for your business.

If you want to develop a sustainable business process, consider each of the elements in more detail.

Input

In a business scenario, an input refers to resources that you use in your business. Such resources can include:

Raw materials
People
Information
Energy
Finances

Every business will have different resources depending on the team involved and the industry.

But no matter what resources you have, they’re important to consider when devising a business process.

From an accounting standpoint, you need to account for these materials and resources.

You need to pay your employees, and you need to pay suppliers when they provide you with your inventory.

Consider all of those costs when determining the more efficient business process.

If you’re starting a new business, you may need to pay a little less for raw materials or hire fewer people.

But as your business grows, you will be able to afford to put more into your inputs.

Steps

The steps you follow to run your business will depend on the business you have.

Factors that can affect the steps you need to implement can include:

How long you’ve been in business
The industry you’re in
How big your business is
Whether you offer products or services
Where you do business

Your business process needs steps that can transform your inputs into outputs so that you can reach your goals.

Common business goals include increasing your revenue or getting more customers.

Having a set of steps is useful for larger businesses because it keeps everyone on the same page.

You can avoid confusing your customers when all of your locations follow the same process.

If you ever need to make changes, you can send an update to everyone. That way, you can expect all of your employees to perform the same tasks as you want them to.

But when you do make changes, give everyone time to adjust to the new process.

Output

The output portion of a business process includes the goal or outcome of that process.

When your team follows the process as you want them to, they should be able to reach the goal.

An output could be as simple as ringing someone up for some clothes at a retail store. But it could also be as complex as meeting certain sales goals.

The specific outputs you want, depending on your business.

Service Outputs

The biggest type of output for a service business is providing that service.

Perhaps it’s cutting someone’s hair or driving them from one place to another.

The steps you take should consider this output that you want your employees to achieve.

Product Outputs

If you run a product-based business, your outputs might be selling a specific number of units.

Maybe you want to get into a certain retail location, or you want to get more visitors to your website.

Whatever it is, your transformation should work toward that goal.

Elements of a Business Procedure

As a business owner, you probably think more about your business process.

You want your company to grow, so you need to stay on top of everything.

But your managers and low-level employees need a business procedure.

Business procedures tell your employees how they should execute different tasks.

In the case of a restaurant, you should have a procedure that tells servers how to tell the kitchen staff about new orders.

The kitchen staff should then notify a server when an order is ready.

When you implement a new business procedure, you should review it with as many team members as possible.

As you make the switch to a new set of procedures, you can make sure that everyone is on board.

Consider a few essential pieces of any good business procedure before you develop new ones or change your current ones.

Who Participates

Almost everyone will participate in some sort of business procedure.

From the top executive positions to the entry-level workers, your people all need to help.

If one branch or location doesn’t follow the same procedure, you won’t have as much consistency.

Consider a bank and the procedures that the employees need to follow.

When a customer enters the branch, employees should smile and greet the customer. The person who helps should continue to be welcoming.

In this example, everyone in the branch is a participant.

Even though only one person will perform a transaction, the other employees can make the customer feel welcome. And that applies to any in-person business.

If you have a larger business, you may have different procedures for different departments.

A bank branch may have to follow certain procedures for closing, but employees in marketing won’t need to follow those steps.

When Things Happen

If the customer needs to make a deposit or withdrawal, the teller should verify the customer’s information.

They should then count the cash that they will take in or give out. Those steps may not sound like much, but they’re part of a business procedure.

Verifying customer accounts and carefully counting cash can help protect the customer, the teller, and the entire bank.

If a teller haphazardly performs a cash deposit, they may not apply the correct amount to the customer’s balance.

All of these steps should occur when the customer is right there.

Whether you run a bank or another brick and mortar business, you should have a procedure for everything.

You should also list the steps employees should take when opening and closing the location.

Having and following a business procedure in any business will help. It can give current employees guidelines to follow, and it can make it easier to train new hires.

What Each Part Involves

Once you have an overview of the procedures you want for your business, don’t be afraid to go into detail.

You should list out what you want your employees to do to follow the procedure correctly. Consider the bank example:

List out the steps employees should do to prepare for opening the branch.
State how you want tellers to perform transactions and how sales representatives should work with customers.
Include procedures for verifying cash records and other essential banking information.
You should also include steps for how employees should shut down the branch.

Every business procedure you have should include detail.

That way, your employees can follow the procedure without having to ask a ton of questions.

Also, the more detail you include, the easier it will be for everyone to follow the steps in the same way.

Why You Need Both

When comparing a business process vs. business procedure, you may wonder why you need both.

On the surface, both help you meet certain goals and run your business. But the details are where they differ.

Your business process focuses on the bigger picture. It covers how you want to structure your business and the big steps involved.

On the other hand, a business procedure tells you and your employees how to follow those big steps.

Without a business process, you won’t know what procedures to include.

You won’t have a plan for how to grow your company and get more revenue. So it will be hard to train your employees to do their jobs well.

But if you don’t have a business procedure, your employees also won’t be able to do their jobs.

They may understand that you have big goals for the company, but each store may do things differently based on the manager’s experience or assumptions.

Consider how both a business process and a business procedure can benefit you and your team.