What is business process modelling and why is it important?

Also known as business process mapping or analysis, business process modelling is the visual depiction of every aspect of a process, including inputs, outputs, workflows, and various points of decision-making. You can use modelling to promote greater clarity around marketing campaigns, sales funnels, financial processes, recruitment and employee data management, cash flow, and other everyday business functions. Modelling can involve flow charts, diagrams, Gantt charts, blueprints, or similar visual media.

The method a business should choose depends on the process it wants to model and the volume of data associated with it. Many businesses adopt project management tools to assist with modelling and ensure the model is retained long-term.

Process modelling is often used for IT projects. The overall goal is to optimise existing processes and reduce the costs associated with labour hiring, raw materials, and upfront investments. Modelling, therefore, is the first stop on a long road trip—and it shouldn't be confused with business process management.

With so many organisations recognising the benefits of digital transformation, business process modelling has become more relevant and necessary than ever before.

Who is business process modelling for?

Any business with workflows and stakeholders can benefit from process modelling. However, medium and large scale organisations need modelling to run effectively.

Business process modelling serves as a reality check for many organisations. It’s an ideal way to look through existing processes and identify bottlenecks, information gaps, and opportunities for improvement. Depending on the size of the organisation, management might choose to model processes manually or to run data mining algorithms through existing system logs to derive a process.
 
Once the information is available in an accessible format, management can decide which technologies it needs to invest in and determine which departments or processes will benefit most from automation or outsourcing.

In medium and large organisations, in particular, process modelling is an effective way to streamline work and assess the health of the business’ overall operations. Because larger organisations have multiple internal and external stakeholders, every process is usually tied to other related processes. For a small business, processing a maternity break may only involve two people. But in a larger organisation, the same process may trigger a workflow involving various departments, including payroll, HR, and any contractors or casual hires who might temporarily replace a team member. It may also require management to work with an external recruitment agency to vet and recruit potential replacements. 

Benefits of process modelling

Modelling is usually one part of a larger transformation that benefits all stakeholders. As an individual activity, modelling is most useful to smaller departments or teams within an organisation.

Helps optimise existing processes

Consider a reimbursement process. An employee records their expenses and submits them for approval. Ideally, as soon as the employee’s manager approves the expense, the employee is entitled to reimbursement. Now, if this is a corner-side retail store with five staff members, the manager might directly reimburse the employee from their cash flow—depending on the cost, of course. In the case of a bigger organisation, there needs to be a more stringent process, as well as limitations on which expenses will be reimbursed. At Zoho, for example, employees are reimbursed for their home internet expenses. However, there is a limit to how much each employee can claim, and if one person claims more than the limit, the system will flag the anomaly. Mapping or modelling this process helps the payroll team identify where it should implement anomaly detection mechanisms, so it can automate the process and make work easier for everyone.

Encourages teams to maintain accurate documentation

Process modelling is a time-consuming and complicated activity. Because of this, management and related teams should aim to gather extensive information from their models about goings-on across the organisation. This is an excellent opportunity to document organisational processes and policies for future reference. Usually, larger organisations will maintain some form of documentation about their processes. Periodic modelling exercises ensure documentation is constantly verified and updated to remain accurate. 

The modelling process also opens up discussion amongst management and encourages collaboration and feedback. That way, the entire organisation’s operations can keep up with technological advancements, regulation requirements, and workplace conditions.

Most importantly, maintaining accurate and visually-represented process documentation helps organisations comply with industry audits and government data protection requirements.

Practical challenges in process modelling

The biggest roadblock to successfully modelling business processes is a lack of processes. It may sound odd, but a surprising number of organisations, big and small, don't have defined processes for many of their everyday activities. The result? The teams involved simply do what they think is best in a given situation. They often find effective band-aid solutions for their problems without addressing the root causes. This creates a bigger problem: How do you optimise a process that doesn't exist in the first place? In a growing organisation, the lack of defined processes can cause uncertainty, making it hard for employees to create and stick to routines.

The second biggest challenge in modelling is the potential disconnect between the modelling team and the people actively involved in the process. Aside from a communication gap, there may be differences in team culture and rationale, leading to additional friction.

Parting thoughts

Business process modelling is an activity that every business needs to undertake periodically. While modelling is often recognised as one of the many steps involved in a larger business process management endeavour, as an individual activity, modelling is essential for teams to optimise their work and be more productive.