Business Process vs. SOP (Standard Operating Procedure)

Do You Even ERP

Updated on January 10, 2021

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ARTICLE TABLE OF CONTENTS

This is about business process vs. SOP (Standard Operating Procedure).

You’ll learn:

What a business process is
What an SOP is
The differences between a business process and an SOP
Lots more

So if you want to understand this 101 of business processes, then this article is for you.

Let’s dive right in!

What is the Difference Between a Business Process and SOP (Standard Operating Procedure)?

Getting a handle on the inner workings of a business is hard work, especially when you sprinkle in the seemingly endless array of specialized terms that you’ll need to familiarize yourself with.

From business logic and rules to business processes and procedures, it’s easy to get discouraged.

But, there’s nothing to fear.

Today, we’re going to dig into two of the most often-confused business concepts, business processes, and standard operating procedures.

When you finish, you’ll have an expert understanding of what these two concepts are and their similarities and differences.

What is a Business Process?

A business process refers to the different steps or tasks that you must complete to achieve a stated goal.

As an example, let’s say that you own a pizzeria. Making pizza is one of your business processes, and the steps to complete the process will include making the dough, stretching the pizza, putting sauce onto the dough, adding cheese, and placing the pizza into the oven to cook.

Business processes are fundamental to your company, and they serve as the foundation for other important concepts like automation and process management.

Businesses use these processes to streamline operations by providing your team with the information they need to complete the tasks inherent to your business.

Business processes are critical to every business, as well defined processes can help you save time and money while ensuring that you provide customers with a consistent product.

The Anatomy of a Business Process

To be successful, business processes must contain four different elements.

Defined

Strong business processes have a clear beginning and a definite end, with a set number of steps that you must complete to achieve the process.

Repeatable

For a business process to work, you must be able to achieve the same result repeatedly when you follow the steps of the process.

If there is a margin for error, the process won’t function correctly.

Has value

Every step in a business process needs to deliver value, either to your organization or to your customer.

When creating business processes, you must ask yourself if what you’re doing is necessary and if it adds value to the next step in the process or the end-user.

If a step isn’t adding value, there’s a strong chance you can eliminate it.

Flexible

The only constant thing is change.

So, effective business processes must be malleable enough to change with the needs of your business.

Processes that are too rigid will often fail because they can’t meet your organization’s changing needs.

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

What is an SOP (Standard Operating Procedure)?

Standard operating procedures serve as a road map for a business, providing step-by-step instructions for how routine activities must be handled.

A standard operating procedure ensures that processes are carried out as consistently as possible, regardless of which employee completes it.

SOPs can be implemented across every department, ensuring that work is completed correctly and efficiently. Some of the departments which are governed by SOPs include:

HR
Finance and accounting
Legal
New hire training
Operations
Production
Sales and service

Standard operating procedures should be concise and clear, with nothing left up to interpretation.

Clarity is of paramount importance, since many different employees will be accountable to these procedures, and they’re a practical requirement of consistent service.

SOPs are also the basis for training new hires, and strong SOPs are critical for ensuring that new employees can integrate themselves as members of the team.

These procedures should regularly be updated to reflect the changing needs of your business.

Why Are SOPs Important?

Many business owners figure that since they spent plenty of time training their employees, that there’s no reason to install standard operating procedures.

After all, your employees are well trained, right?

But, here’s the truth:

Even the best employees can fall into bad habits, and those habits can be passed down to new hires who are trained by that employee.

Before you know it, your staff isn’t carrying out business the way you would like them to, requiring you to reinvest time and money in training.

Using a grocery store as an example, let’s say a customer comes in to return an item.

If no standard operating procedures are in place, the return will be governed by what the employee thinks is the best practice.

Perhaps one employee would refuse the return, while other employees would gladly accept it.

In this example, it’s easy to see how the service customers receive could vary between different employees.

If your company had standard operating procedures in place to govern returns, it’s safe to assume that every customer will receive the same service, regardless of the employee who is assisting them.

Still not convinced?

Here are some examples of why standard operating procedures are so important.

SOPs Can Save You Money and Time

If ten different employees handle their duties in ten different ways, it will take longer to accomplish the same processes.

By installing SOPs in your business, every process will be completed in the same way, allowing you to save time and money.

SOPs Make Your Employee’s Lives Easier

As long as you have standard operating procedures in place, your employees won’t have to leave anything to chance or rack their brains, trying to remember information that was taught to them when they were hired.

Instead of wondering if they’re doing the right thing, employees will know they’re doing the right thing because it’s outlined in the SOP handbook.

SOPs Make Training Easier

SOPs are especially important when it comes to training new hires.

These standards ensure that new employees learn how to do their job properly and according to company guidelines.

SOPs also lower the chances that an employee will need retraining since the SOP can remove human error from the training process.

They Provide Consistency

Having a standard operating procedure ensures that regardless of who is working, your staff completes business processes the correct way.

SOPs Improve Accountability

It’s very difficult to evaluate performance when there is no standard to act as a benchmark.

Without SOPs, you lose the ability to quantify the performance of your staff, which means you’ll have a blind spot when it comes to your personnel decisions, such as who to promote, or who is underperforming.

SOPs Improve Workplace Safety

When every employee completes tasks based on their own methods, you lose consistency, but there may be some liability involved.

If an employee takes it upon themselves to work in a manner that’s unsafe or against a policy, you may be at fault if there aren’t well-defined procedures.

With SOPs, each employee knows what they must do, and they are taught to do so in a way that prioritizes workplace safety.

Business Process vs. SOP: Understanding the Differences

When it comes to business process vs. standard operating procedure, the two have a symbiotic relationship.

How these two function together can be summed up in two sentences.

A business process turns an input into an output through a series of steps.
An SOP governs how you must carry out the different steps of a business process.

Since both procedures and process deal with the same business activities, it’s easy to see how it can be confusing for some people to learn the difference.

The thing is, with a process, you’re dealing with the “what,” whereas with a procedure, you’re dealing with the “how.”

A business process breaks into three parts:

The input (either information or materials)
The steps required to turn the input into an output
The output (which provides value to the customer, or to your company)

Meanwhile, operating procedures help to answer all the questions inherent in a business process.

Which department or employee is responsible for which step in the process
When each step in the process must occur
Any specifications that must be made for each step of the process to occur

Business processes are typically documented in workflow diagrams.

In contrast, procedures are outlined in text documents that tell you how exactly to complete each step in the process according to company guidelines.

Business Process vs. Standard Operating Procedure in Practice

Still on the fence? This example should make the difference between business process vs. SOP more clear.

You own a steakhouse, and your business process is simple.

First, the waitstaff takes the order from your customer and delivers it to your kitchen staff.

Next, the kitchen staff begins preparing the order.

Finally, the order is delivered to the customer once it’s complete.

Inside of this business process is where your restaurant’s standard operating procedures lie.

The way the waitstaff greets customers, how they deliver the order to the kitchen, and how the food is delivered to the customer can all be outlined through SOPs.

Without SOPs, it’s easy to see how customers’ experience will change based on who is waiting on their table and who is preparing their food.

But with SOPs in place, you can ensure consistent service for each guest at your restaurant.