Editing Business process (section)

==History==
=== Adam Smith ===<!-- This section is linked from [[Division of labour]] -->
An important early (1776) description of processes was that of economist [[Adam Smith]] in his famous example of a [[pin (device)|pin]] factory. Inspired by an article in [[Diderot|Diderot's]] [[Encyclopédie]], Smith described the production of a pin in the following way:<ref name="SmithAnInquiry27">{{cite book |chapter-url=https://books.google.com/books?id=rpMuAAAAYAAJ&pg=PA3 |chapter=Book I. Of the Causes of Improvement in the Productive Powers of Labour, and of the Order According to Which Its Produce Is Naturally Distributed among the Different Ranks of the People |title=An Inquiry into the Nature and Causes of the Wealth of Nations |author=Smith, A. |publisher=University Press; Thomas Nelson and Peter Brown |year=1827}}</ref>
<blockquote>
One man draws out the wire; another straights it; a third cuts it; a fourth points it; a fifth grinds it at the top for receiving the head; to make the head requires two or three distinct operations; to put it on is a peculiar business; to whiten the pins is another ... and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which, in some manufactories, are all performed by distinct hands, though in others the same man will sometimes perform two or three of them.
</blockquote>
Smith also first recognized how output could be increased through the use of [[Division of labor|labor division]]. Previously, in a society where production was dominated by [[artisan|handcrafted goods]], one man would perform all the activities required during the production process, while Smith described how the work was divided into a set of simple tasks which would be performed by specialized workers.<ref name="vonScheelPhase114" /> The result of labor division in Smith's example resulted in productivity increasing by 24,000 percent (sic), i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division.<ref name="SmithAnInquiry27" />

Smith did not advocate labor division at any price or ''[[wikt:per se|per se]]''. The appropriate level of task division was defined through experimental design of the production process. In contrast to Smith's view which was limited to the same functional domain and comprised activities that are in direct sequence in the manufacturing process,<ref name="SmithAnInquiry27" /> today's process concept includes cross-functionality as an important characteristic. Following his ideas, the division of labor was adopted widely, while the integration of tasks into a functional, or cross-functional, process was not considered as an alternative option until much later.<ref name="GiaglisItsTime12">{{cite book |chapter-url=https://books.google.com/books?id=P2DmCAAAQBAJ&pg=PA315 |chapter=It's Time to Engineer Re-engineering: Investigating the Potential of Simulation Modelling for Business Process Redesign |title=Business Process Modelling |author1=Giaglis, G.M. |author2=Paul, R.J.  |editor1=Scholz-Reiter, B. |editor2=Stickel, E.  |publisher=Springer Science & Business Media |year=2012 |pages=313–329 |isbn=9783642803178}}</ref>

=== Frederick Winslow Taylor ===
American engineer [[Frederick Winslow Taylor]] greatly influenced and improved the quality of [[industrial processes]] in the early twentieth century. His [[Principles of Scientific Management]] focused on standardization of processes, systematic training and clearly defining the roles of management and employees.<ref name="vonScheelPhase114" /> His methods were widely adopted in the [[United States]], Russia and parts of Europe and led to further developments such as "time and motion study" and visual task optimization techniques, such as [[Gantt charts]].

=== Peter Drucker ===
In the latter part of the twentieth century, management guru [[Peter Drucker]] focused much of his work on the simplification and decentralization of processes, which led to the concept of [[outsourcing]]. He also coined the concept of the "[[knowledge worker]]," as differentiated from manual workers – and how knowledge management would become part of an entity's processes.<ref name="DruckerTheAge17">{{cite book |url=https://books.google.com/books?id=Bx0uDwAAQBAJ |title=The Age of Discontinuity: Guidelines for Our Changing Society |author=Drucker, P.F. |publisher=Routledge |year=2017 |pages=420 |isbn=9781560006183}}</ref><ref name="DruckerManagement07">{{cite book |url=https://books.google.com/books?id=1YN3kc31nqAC |title=Management Challenges for the 21st Century |author=Drucker, P.F. |publisher=Routledge |year=2007 |pages=208 |isbn=9781136386312}}</ref>

=== Other definitions ===
Davenport (1993)<ref>Thomas Davenport (1993). ''[https://books.google.com/books?id=kLlIOMGaKnsC Process Innovation: Reengineering work through information technology]''. Harvard Business School Press, Boston</ref> defines a (business) process as:
<blockquote>
a structured, measured set of activities designed to produce a specific output for a particular customer or market. It implies a strong emphasis on how work is done within an organization, in contrast to a product focus's emphasis on what. A process is thus a specific ordering of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs: a structure for action. ... Taking a process approach implies adopting the customer's point of view. Processes are the structure by which an organization does what is necessary to produce value for its customers.
</blockquote>
This definition contains certain characteristics that a process must possess. These characteristics are achieved by focusing on the business logic of the process (how work is done) instead of taking a product perspective (what is done). Following Davenport's definition of a process, we can conclude that a process must have clearly defined boundaries, input and output, consist of smaller parts and activities which are ordered in time and space, that there must be a receiver of the process outcome—a customer – and that the transformation taking place within the process must add customer value.

Hammer & Champy's (1993)<ref>Michael Hammer and James Champy (1993). ''Reengineering the Corporation: A Manifesto for Business Revolution'', Harper Business</ref> definition can be considered as a subset of Davenport's. They define a process as:
<blockquote>
a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer.
</blockquote>
As we can note, Hammer & Champy have a more transformation-oriented perception and put less emphasis on the structural component – process boundaries and the order of activities in time and space.

Rummler & Brache (1995)<ref>Rummler & Brache (1995). ''Improving Performance: How to manage the white space on the organizational chart''. Jossey-Bass, San Francisco</ref> use a definition that clearly encompasses a focus on the organization's external customers, when stating that
<blockquote>
a business process is a series of steps designed to produce a product or service. Most processes (...) are cross-functional, spanning the 'white space' between the boxes on the organization chart. Some processes result in a product or service that is received by an organization's external customer. We call these primary processes. Other processes produce products that are invisible to the external customer but essential to the effective management of the business. We call these support processes.
</blockquote>

The above definition distinguishes two types of processes, primary and support processes, depending on whether a process is directly involved in the creation of customer value or concerned with the organization's internal activities. In this sense, Rummler and Brache's definition follows Porter's [[value chain]] model, which also builds on a division of primary and secondary activities. According to Rummler and Brache, a typical characteristic of a successful process-based organization is the absence of secondary activities in the primary value flow that is created in the customer oriented primary processes. The characteristic of processes as spanning the white space on the organization chart indicates that processes are embedded in some form of organizational structure. Also, a process can be cross-functional, i.e. it ranges over several business functions.

Johansson et al. (1993).<ref>Henry J. Johansson et al. (1993). ''Business Process Reengineering: BreakPoint Strategies for Market Dominance''. John Wiley & Sons</ref> define a process as:
<blockquote>
a set of linked activities that take an input and transform it to create an output. Ideally, the transformation that occurs in the process should add value to the input and create an output that is more useful and effective to the recipient either upstream or downstream.
</blockquote>
This definition also emphasizes the constitution of links between activities and the transformation that takes place within the process. Johansson et al. also include the upstream part of the value chain as a possible recipient of the process output. Summarizing the four definitions above, we can compile the following list of characteristics for a business process:

# ''Definability'': It must have clearly defined boundaries, input and output.
# ''Order'': It must consist of activities that are ordered according to their position in time and space (a sequence).
# ''Customer'': There must be a recipient of the process' outcome, a customer.
# ''Value-adding'':  The transformation taking place within the process must add value to the recipient, either upstream or downstream.
# ''Embeddedness'': A process cannot exist in itself, it must be embedded in an organizational structure.
# ''Cross-functionality'': A process regularly can, but not necessarily must, span several functions.

Frequently, identifying a [[process owner]] (i.e., the person responsible for the continuous improvement of the process) is considered as a prerequisite.  Sometimes the process owner is the same person who is performing the process.