Business Processes and Systems Thinking

Business Processes and Systems Thinking

To understand how information systems work in organisations, we must first understand the concept of a business process — and adopt a systems thinking approach to how organisations function. Without this foundation, technology implementations are likely to fail because they address symptoms rather than underlying structural realities.

What is a Business Process?

A business process is a collection of related, structured tasks or activities that, taken together, produce a service or product for a client (internal or external). Key characteristics include:

• Processes have clear inputs (information, materials, requests) and outputs (products, services, decisions)
• Processes involve multiple steps that are linked and sequenced
• Processes cross organisational boundaries — they often involve multiple departments, teams, or even organisations
• Processes are repeatable — the same process runs many times for different instances (e.g. every customer order goes through the same order-to-cash process)

Types of Business Processes

Business processes can be classified by their scope and the organisational boundaries they cross:

• Business Unit Specific (Operational) Processes — confined within a single department or business unit (e.g. payroll processing within HR). Risk: creating islands of automation — isolated systems that do not connect or share data with other parts of the organisation
• Cross-Functional (Strategic) Processes — span multiple departments within the same organisation (e.g. order management involving sales, warehouse, logistics, and accounts). These are critical for organisational integration
• Inter-Organisational Processes — cross the boundaries between separate organisations, typically involving supply chains, partner networks, or customer interactions (e.g. electronic procurement with suppliers)

Organisational Levels and Information Systems

Organisations operate across multiple levels, each with different information needs:

• Operational level — day-to-day transaction processing; workers processing orders, recording sales, managing inventory; requires fast, accurate, high-volume transaction systems
• Management level — monitoring and controlling operational activities; middle managers tracking performance against targets; requires reporting, dashboards, and exception alerts
• Strategic level — long-term planning and direction-setting; senior executives setting 5-year strategies; requires trend analysis, forecasting, and scenario planning tools

Systems Thinking

Systems thinking is an approach to analysis that treats a subject as a system — a set of interrelated parts that function together as a whole. Applied to organisations, it means understanding the organisation as a set of interconnected processes, people, data flows, and technologies rather than as isolated functions. The key steps in systems thinking are:

1. Define the boundary — what is inside and outside the system we are analysing?
2. Identify the parts — what are the components (processes, people, data, technology)?
3. Show how parts are related — what are the inputs, outputs, and dependencies between parts?
4. Understand the whole — how do the parts combine to produce the system's overall behaviour and purpose?

Systems thinking is valuable because it reveals bottlenecks, redundancies, and inefficiencies that cannot be seen when looking at individual departments or functions in isolation.

Business Process Management (BPM)

Business Process Management (BPM) is a discipline that combines methods, practices, and tools for designing, modelling, executing, monitoring, and optimising business processes. In the digital age, BPM has become more important — not less — because:

• Digital information flows through and across processes at speed; understanding process structure is essential for managing this flow
• BPM reveals information bottlenecks and redundancies that represent direct efficiency opportunities
• Process improvement is the foundation for successful technology implementation — automating a broken process produces a broken automated process
• Process thinking helps organisations understand themselves in terms of flows of information rather than static hierarchies

Business Process Model and Notation (BPMN)

BPMN is the international standard notation for modelling and communicating business processes visually. It provides a common language for business analysts, IT professionals, and managers. Key BPMN elements include:

• Events — circles representing starts, intermediate events, and ends of processes (e.g. a customer order received, a payment completed)
• Tasks/Activities — rectangles representing work being performed (e.g. process order, generate invoice)
• Gateways — diamond shapes representing decision points or branching logic (e.g. is the order approved? Yes/No)
• Sequence flows — arrows showing the order and direction of activities
• Swim lanes — horizontal or vertical divisions showing which role or department is responsible for each task
• Data objects and stores — symbols representing data inputs, outputs, and storage used within the process

BPMN diagrams make it possible to communicate complex processes precisely and unambiguously, enabling collaboration between technical and non-technical stakeholders in process design and improvement projects.