Business & Information Systems Engineering (2024) AI Processed Human Approved
Building the Processes Behind the Product:How Digital Ventures Create Business Processes That Support Their Growth
This study investigates how digital ventures create and adapt their internal business processes to support rapid firm growth. Utilizing a qualitative multiple case study design across seven digital ventures, the authors analyze process changes in key operational areas such as sales, recruitment, and product management.
Problem
Although business process management literature recognizes that digital technology can facilitate business process changes, the specific technology characteristics that enable these adaptations remain underexplored. Moreover, fast-growing digital ventures face severe operational scaling challenges that require continuous process flexibility and structure.
Outcome
- Identified four distinct patterns of business process change in digital ventures: creating minimum viable processes, creating encapsulated processes, creating centralized control flow integrations, and creating centralized data flow integrations.
- Revealed that digital ventures typically start with flexible, human-orchestrated processes supported by low-specificity tools before migrating to specialized enterprise systems to boost efficiency.
- Showed how proxy communication tools and centralized analytics systems are used to reduce system complexity and eliminate data silos in maturing ventures.
- Revealed that digital ventures typically start with flexible, human-orchestrated processes supported by low-specificity tools before migrating to specialized enterprise systems to boost efficiency.
- Showed how proxy communication tools and centralized analytics systems are used to reduce system complexity and eliminate data silos in maturing ventures.
What it means for you
- CIO / IT Executive: On Monday morning, initiate a review of our current proxy communication tool usage and explore options for centralizing our analytics systems to proactively address potential data silos as we scale.
- IT Manager: On Monday morning, identify one key operational process (e.g., sales lead qualification) that is currently human-orchestrated and explore if a 'minimum viable process' could be documented and supported by a low-specificity tool for immediate iteration.
- Business Strategist: On Monday morning, map out the current flow of data for our top 2 growth-driving products and identify one area where centralized data flow integration could significantly reduce friction and improve speed to market.
- Researcher: On Monday morning, begin compiling a list of digital ventures that have recently experienced rapid growth and categorize their initial process creation patterns based on the four distinct patterns identified in the research (MVP, encapsulated, centralized control, centralized data).
- Policymaker: On Monday morning, task a working group to investigate how current regulatory frameworks might be hindering the adoption of flexible, technology-enabled business processes in rapidly scaling digital ventures.
Transcript
Host: Welcome to A.I.S. Insights — powered by Living Knowledge. I'm Anna Ivy Summers. Today, we are exploring a vital question for every fast-growing business: How do digital startups design and adapt their internal business processes to support rapid growth? We will be discussing a recent study titled "Building the Processes Behind the Product: How Digital Ventures Create Business Processes That Support Their Growth." Joining me to unpack this research is analyst Alex Ian Sutherland. Welcome, Alex!
Expert: Thanks, Anna. It is great to be here.
Host: Alex, startups spend immense time and energy perfecting their customer-facing products, but behind the scenes, operational chaos can catch up with them very quickly as they scale. What specific problem does this study address?
Expert: You hit the nail on the head, Anna. Scaling sales, hiring new team members, and expanding product features create massive operational challenges. While traditional business process management literature understands how established corporations handle process change, we lacked insight into how digital technology enables fast-growing startups to continuously adapt. Startups need extreme flexibility at early stages, but eventually require structure and efficiency to survive growth. The study investigates how specific characteristics of digital tools facilitate these process changes over time.
Host: That makes a lot of sense. How did the researchers go about studying this phenomenon?
Expert: The authors conducted a qualitative multiple case study examining seven digital ventures across sectors like software-as-a-service and e-commerce. They analyzed core business processes across three main areas: lead-to-cash, hire-to-retire, and product management. By interviewing founders and operational leaders over multiple rounds, they tracked how software tools were introduced, modified, and combined as the ventures grew.
Host: What were the key findings from observing these seven digital ventures?
Expert: The study uncovered four distinct patterns of business process change that digital ventures move through as they scale.
Host: Let's walk through those patterns. What is the first pattern?
Expert: The first pattern is creating "Minimum Viable Processes." In early stages, processes are informal and human-orchestrated. To create basic structure without sacrificing agility, startups adopt low-specificity tools like Notion or Slack. This allows them to persist and share process data for the first time while keeping workflows completely flexible. For example, one venture organized their initial recruitment steps using simple Notion templates rather than a rigid HR system.
Host: Simple and adaptable for day one. What happens as the venture expands and simple documents no longer suffice?
Expert: That triggers pattern two: creating "Encapsulated Business Processes." When manual workflows cause bottlenecks or employee burnout, startups migrate those processes to high-specificity enterprise systems like Personio for human resources or HubSpot for sales. These specialized systems enforce standardized reference processes and integrated data models, significantly boosting efficiency and process maturity, though reducing immediate flexibility.
Host: But as a venture adopts specialized software for every department, doesn't their system landscape become fragmented?
Expert: Exactly, and that brings us to patterns three and four, which address that exact friction. Pattern three is creating "Centralized Control Flow Integrations." Startups use flexible communication tools like Slack as a single control layer or proxy. Instead of switching between dozens of apps, employees can approve invoices, request vacation, or trigger sales workflows right within Slack.
Host: That saves a ton of time and context switching. And what about pattern four?
Expert: Pattern four is creating "Centralized Data Flow Integrations." To eliminate data silos created by separate enterprise tools, ventures introduce centralized analytics systems like Metabase or data warehouses. By pulling process data from marketing, sales, and fulfillment into one place, management gains end-to-end visibility to make real-time, data-driven operational decisions.
Host: This sequence—from flexible minimum viable processes to structured enterprise tools, and finally to centralized control and data hubs—provides a clear blueprint. Why do these findings matter so much for business leaders and software vendors?
Expert: For startup founders, it validates that starting with lightweight, flexible tools isn't a mistake—it's a necessary first phase. But as operational pain points emerge, leaders must systematically adopt specialized enterprise systems and connect them using central platforms. For software providers, the study highlights a major market opportunity: building modular, composable enterprise applications that allow growing firms to transition smoothly from lightweight flexibility to structured automation without painful, costly system migrations.
Host: Building the internal processes behind the product is clearly just as critical as building the product itself. Alex, thank you so much for sharing your insights with us today.
Expert: My pleasure, Anna.
Host: And thank you to our listeners for tuning into A.I.S. Insights — powered by Living Knowledge. Be sure to join us next time as we continue to explore the research shaping the future of business and technology.
Expert: Thanks, Anna. It is great to be here.
Host: Alex, startups spend immense time and energy perfecting their customer-facing products, but behind the scenes, operational chaos can catch up with them very quickly as they scale. What specific problem does this study address?
Expert: You hit the nail on the head, Anna. Scaling sales, hiring new team members, and expanding product features create massive operational challenges. While traditional business process management literature understands how established corporations handle process change, we lacked insight into how digital technology enables fast-growing startups to continuously adapt. Startups need extreme flexibility at early stages, but eventually require structure and efficiency to survive growth. The study investigates how specific characteristics of digital tools facilitate these process changes over time.
Host: That makes a lot of sense. How did the researchers go about studying this phenomenon?
Expert: The authors conducted a qualitative multiple case study examining seven digital ventures across sectors like software-as-a-service and e-commerce. They analyzed core business processes across three main areas: lead-to-cash, hire-to-retire, and product management. By interviewing founders and operational leaders over multiple rounds, they tracked how software tools were introduced, modified, and combined as the ventures grew.
Host: What were the key findings from observing these seven digital ventures?
Expert: The study uncovered four distinct patterns of business process change that digital ventures move through as they scale.
Host: Let's walk through those patterns. What is the first pattern?
Expert: The first pattern is creating "Minimum Viable Processes." In early stages, processes are informal and human-orchestrated. To create basic structure without sacrificing agility, startups adopt low-specificity tools like Notion or Slack. This allows them to persist and share process data for the first time while keeping workflows completely flexible. For example, one venture organized their initial recruitment steps using simple Notion templates rather than a rigid HR system.
Host: Simple and adaptable for day one. What happens as the venture expands and simple documents no longer suffice?
Expert: That triggers pattern two: creating "Encapsulated Business Processes." When manual workflows cause bottlenecks or employee burnout, startups migrate those processes to high-specificity enterprise systems like Personio for human resources or HubSpot for sales. These specialized systems enforce standardized reference processes and integrated data models, significantly boosting efficiency and process maturity, though reducing immediate flexibility.
Host: But as a venture adopts specialized software for every department, doesn't their system landscape become fragmented?
Expert: Exactly, and that brings us to patterns three and four, which address that exact friction. Pattern three is creating "Centralized Control Flow Integrations." Startups use flexible communication tools like Slack as a single control layer or proxy. Instead of switching between dozens of apps, employees can approve invoices, request vacation, or trigger sales workflows right within Slack.
Host: That saves a ton of time and context switching. And what about pattern four?
Expert: Pattern four is creating "Centralized Data Flow Integrations." To eliminate data silos created by separate enterprise tools, ventures introduce centralized analytics systems like Metabase or data warehouses. By pulling process data from marketing, sales, and fulfillment into one place, management gains end-to-end visibility to make real-time, data-driven operational decisions.
Host: This sequence—from flexible minimum viable processes to structured enterprise tools, and finally to centralized control and data hubs—provides a clear blueprint. Why do these findings matter so much for business leaders and software vendors?
Expert: For startup founders, it validates that starting with lightweight, flexible tools isn't a mistake—it's a necessary first phase. But as operational pain points emerge, leaders must systematically adopt specialized enterprise systems and connect them using central platforms. For software providers, the study highlights a major market opportunity: building modular, composable enterprise applications that allow growing firms to transition smoothly from lightweight flexibility to structured automation without painful, costly system migrations.
Host: Building the internal processes behind the product is clearly just as critical as building the product itself. Alex, thank you so much for sharing your insights with us today.
Expert: My pleasure, Anna.
Host: And thank you to our listeners for tuning into A.I.S. Insights — powered by Living Knowledge. Be sure to join us next time as we continue to explore the research shaping the future of business and technology.