Description
Business Processes & their Strategic Implications
Business Processes & their Strategic Implications
Why a course on BPM in 2010?
• Management becoming more and more business process centric.
– Processes as organisational capabilities – Cisco, Texas Instruments, Dell, Amazon.com consider their processes as strategic intellectual assets, and getting them patented
• Most managerial interventions are business processoriented:
– ERP and enterprise systems (SCM, CRM, etc.) implementation – Process automation and integration – Business process outsourcing (BPO) as global capability sourcing
• Business process management, a core competency for managing or influencing any organisational change.
Business Processes & their Strategic Implications
2
How do we make it a participative course?
• Read and comprehend readings. • Attend classes. • Ask questions as well as respond to questions asked. • Analyse cases and participate in role plays. • Compete in project
(remember project weight is same as mid-term exam)
• Do not play role of Kumbhakarna or pose heads down ?
Business Processes & their Strategic Implications 3
Changes in the Business Environment
• Developments in the global economy have changed the traditional balance between customer and supplier. • Due to new Information Technologies and the establishment of reasonably open global trading regimes, (a) customers have more choices; (b) variegated customer needs can find expression; and (c) supply alternatives are more transparent. • Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. • Businesses, therefore, require to re-evaluate the value propositions they present to customers.
Business Processes & their Strategic Implications 4
Challenges in Current Business Environment ?
• Pressure to avoid commoditization and differentiate their services/products from those of the competition. • Pressure to improve performance through better, faster, cheaper operations. • Pressure to make operations more agile still ensuring compliance and reduced operational risk. • All this to do in –
– An evolving, innovating and fast-adapting competitive environment. – A market demanding new forms of compliance, transparency and accountability.
Business Processes & their Strategic Implications 5
Competitive Advantage & Value Propositions
• A company has market leadership if it has consistently better results than its competitors for a reasonably long period of time. This happens when they have gained and sustained a competitive advantage over their competitors. • A company gets a competitive advantage over others in the same industry because it offers something (value proposition) valued by customers that they cannot find in competing products/ services. • Customers can change their minds at any time for a variety of reasons. Therefore to sustain their competitive advantage, leaders must anticipate changes in the market and must be poised to alter their structures and processes to accommodate those changes.
Business Processes & their Strategic Implications 6
Market Leadership & Strategic Focus
• Market leaders apparently do certain right things and do them right, while competitors are less successful in doing so. • Market leaders define, communicate, refine and generally stick to a well-articulated, clear and focused strategy, based on a thorough understanding of target customers’ expectations. • Their value proposition is also based on realistic appraisal of product or service delivery potential.
Business Processes & their Strategic Implications
7
Organisational Capabilities
• A capability refers to the capacity of an organisation to perform a coordinated set of activities, utilising organisational resources, for the purpose of achieving a particular end-result. • Capabilities constitute a collective know-how. Specifically, they determine what the company can potentially do, not what it really does. • Operational capabilities are required to produce products or deliver services and constitute a “must have” set of know-how. • Dynamic capabilities enable an organisation to improve or extend its existing strategy, resource base and processes.
Business Processes & their Strategic Implications 8
What is a business process?
• A process is a collection of inter-related work activities, initiated in response to an event that achieves a specific result for the customer of the process.
Product or Service Executed by one or more actors Request for producing process result
Business Processes & their Strategic Implications
Internal or External
9
Strategic Potential of a Business Process
• If a set of processes provides a unique capability to an organisation, the organisation is differentiated from its competitors in terms of that capability. • This differentiation can be exploited strategically by the organisation to gain competitive advantage. [e.g.
1-800-FLOWERS.com]
• On the contrary, if an organisation’s processes provides the same capability as the processes of other organisations, the process is like a commodity, and may not provide any competitive advantage to that organisation!
Business Processes & their Strategic Implications 10
Linking Business Strategy to Business Processes
Business Strategy Formulation
Required Organizational Capabilities
Required Organizational Functionalities
Functionality Delivery through Processes
Business Processes & their Strategic Implications
11
Business Processes & Strategy Development
Business Situation
Constrains/ motivates
Business Purpose Business Strategy Development
supports fulfills
Business Commitment
governs
Business Outcome
produces
Business Capability
enacts
Business Process
12
Business Processes & their Strategic Implications
Process-Based View of an Organization
Capabilities Business Process Information Flows Activity Activity Flow of Consumable Resources Business Reputation
Activity
Business Reputation
Resident Resources
Business Processes & their Strategic Implications
13
Business Trends Over Time
Topic Competition 1970
Local/regional Smaller competitors
Take whatever is delivered, Limited choices of products/services Functional (departmental) focus Heavily manual Mainframe-based Focus on computing power Stable, long-term employment Experts on narrow range of tasks
1985
National, Becoming global
Increasing standards, Demand higher quality products/services Need for integrated automation, TQM brings process improvement Desktop-based Focus on speed
2005
Global Larger competitors
Very demanding Loyal to whoever is currently the best Processes seen as capabilities, Crossfunctional focus Technology-driven Mobility Focus on access
Impact on Processes
Must have processes matching worldclass companies Processes must deliver excellent quality to meet customer needs Companies recognise the need to be processcentric An enabler only if processes are flowing smoothly to begin with Processes documented to capture employee knowledge 14
Customers
Processes
Technology
Workforce
Dynamic, Increasing diversity, Increasing need of breadth of knowledge
Mobile & diverse Premium on thinking vs simply doing, Telecommuting
Business Processes & their Strategic Implications
Four Waves of Business Process Management
ProcessBased Competition Six Sigma Business Process Management (BPM)
(BPMS, SOA)
Total Quality Management (TQM) 1970-80s
Business Process Reengineering (BPR)
1990s
2000-2005
Beyond 2005
Business Processes & their Strategic Implications
15
Multiple Perspectives of Business Processes
Business Process Operational Perspective Strategic Perspective
Customer Perspective
Process as Workflow
Process as Capability
Process as Service
16
Business Processes & their Strategic Implications
Business Processes as Organisational Capabilities
• A capability refers to the capacity of an organisation to perform a coordinated set of activities, utilising organisational resources, for the purpose of achieving a particular end-result. • Since a process results in a product or service (an endresult), it may be considered as an embodiment of the organisation’s capabilities. Example: Distribution process Capability to distribute organisation’s products or services.
Business Processes & their Strategic Implications 17
Competing on Capabilities
Competitive Strategy
Strategy of an organisation is defined by its customers and the products/ services it offers.
Capabilities are the use and deployment of competencies to accomplish organisational goals.
Business model Business strategy
Capabilities
Organisational Capabilities
Business processes Organisational Infrastructure IT Infrastructure
Organisational Competencies
Competencies are a firm’s capacity to deploy resources using processes to effect a desired end.
Organisational Processes
Business Processes & their Strategic Implications
Organisational Resources
18
Capability Functionality Links
Capabilities C1 C2 C3
Functionalities (F1, F3) (F2, F3, F4) (F5)
(Process-driven) P1 P2 P3
Business Processes & their Strategic Implications
19
Business Processes as Services
• From a customer-perspective, delivery of a process outputs through its various transactions can be considered as service. • Componentising business processes into services can lead to more granular control and management of business processes of an organisation.
Business Processes & their Strategic Implications
20
Service Blueprinting
• Developing a new service based on the subjective ideas contained in the service concept can lead to costly trial-anderror efforts to translate the concept to reality. • Service blueprinting is the process of capturing a service delivery system into a visual diagram, which shows what the service will look like and all the specifications needed for delivering it.
Business Processes & their Strategic Implications
21
Service Blueprint Structure
Physical Evidence Customer-initiated steps Contact-employee actions
Line of Visibility
Line of Interaction
Backstage Contactemployee actions Support Processes
Business Processes & their Strategic Implications
Line of Internal Interaction
22
Process-centric Organisations
• Process-centric organisations ensure that their major business processes run efficiently and deliver value to customers; they be aligned to the organisation’s business strategy, and linkages between process performance and corporate objectives are established. • Many of the best companies like Cisco, Texas Instruments, and Dell, have embraced this new approach to business. They treat their business processes as strategic intellectual assets. • Amazon.com is protecting their processes through patents. Dell has over 40 process patents.
Business Processes & their Strategic Implications
23
Characteristics of a Process-centric Organization
• Business processes are aligned to business strategies. • Process architecture is made explicit. • Performance measures are created to allow managers to define exactly how specific processes contribute to corporate objectives. • IT systems and human resources are organized according to the processes they support. • Quality management tools are used to improve processes. • Process automation is used to make processes more efficient and to enable managers to monitor them.
Business Processes & their Strategic Implications 24
Multiple Perspectives of Business Processes
Stakeholders of a Business Process
• Process sponsor or champion who sponsors resources (financial, human, material, equipment, etc.) for process operations, and is accountable for realisation of process goal or purpose (end-result). • Process owner who has the pivotal role of maintaining oversight of the process across the enterprise, and is accountable for its performance. • Process actors who are from functional areas and business units that actually perform process operations.
Business Processes & their Strategic Implications
26
Defining Business Processes: Different Views
• A process can be conceptualised in a number of ways:
– The process sponsor’s view: process as outcome – The process owner’s view: process as transformation – The process actor’s view: process as activity flow (i.e. workflow)
Business Processes & their Strategic Implications
27
Business Processes as Activity Flows
• A business process is a set of inter-dependent work activities, characterised by specific inputs (provided by Suppliers), that may cut across functional boundaries in order to achieve some pre-specified types of outcomes (goals) by transforming, transferring or merely monitoring the inputs. • A set of processes describes the way a business carries out its work of producing a set of outputs for its Customers. Activities
Inputs Suppliers
Outputs Customers
Outcome
Business Processes & their Strategic Implications
28
Activity Inter-dependencies
• Flow or producer/consumer dependencies: when
one activity creates a resource that is used by another activity. This dependency constrains the order of the activities (precedence dependency), and may also require additional activities to manage the transfer of the resource between them, or to ensure the usability of the resource.
• Shared resource dependencies: when two or more
activities require the same resource.
Business Processes & their Strategic Implications
29
Business Process Elements
Process
4Ps of a Business Process
Procedure Purpose
Business Processes & their Strategic Implications
Performance
30
Business Process Types
• Mega business trends • Legal requirements • Technology developments • Shareholder expectations
Business environment
...
Governance processes
Rules and guidelines for business success
• Business strategy and policies
Executives
Management processes
Ensure efficient and effective operation processes
• Service level agreements (SLAs)
Managers
Operational processes
• Business level agreements (BLAs)
Get the operations performed
• Key performance indicators
Operation staff
Business Processes & their Strategic Implications 31
Stakeholders of a Business Process
Process Sponsor
Process Purpose Process Resources
Governance process
Management process Process Owner
Process Performance Change Management
Process Procedure Process Productivity
Process operation
32
Process Actors
Business Processes & their Strategic Implications
Stocks & Flows in a Business Process
Stocks Material Flows Material Flow Analogy with Flows in Human Body Digestive system
(e.g. raw material stock)
---
(e.g. paper flow)
Work Flow
(food flow)
Circulatory system (blood flow)
Information
(e.g. a data base) Knowledge
Information Flow
(e.g. e-mail message) Knowledge Flow
Respiratory system
(air flow) Nervous system
(e.g. a knowledge base)
(e.g. help messages)
( reflexes)
Stocks without or inefficient flows are pathological symptoms of the business process system.
Business Processes & their Strategic Implications 33
Process in BPR, ERP, and BPO
BPR Find ? Analyse ? Design ? Change Process
ERP
Find ? Analyse ? Select
? Change Process
BPO
Find ? Analyse ? Migrate ? Change Process
Map Process
Measure Process
Improve Process
Implement Process
34
Business Processes & their Strategic Implications
Business Process Completeness
• A true business process comprises all the activities we do to provide some one who cares with what they expect to receive (output). • It also contains all the actions we take when we fail to meet those expectations. • A final test of a process’s completeness is whether the process delivers a clear product or service to an external stakeholder or another internal process.
Business Processes & their Strategic Implications 35
Case-study: MCD e-counter issues fake birth certificate
NEW DELHI: The newly-opened e-governance counter in the Civil Lines zone recently issued a birth certificate to a child who was not even born in the city. This case was noticed a day after the Municipal Corporation of Delhi (MCD) drew flak from chief secretary Shailja Chandra for rampant corruption in the organisation. The fake certificate episode shows that corrupt MCD officials have found ways to use even information technology for generating slush money.
-Times News Network, May 8, 2003
Business Processes & their Strategic Implications 36
Birth registration and certification
Birth Birth registration
Birth recording
Birth certification
Hospital
Business Processes & their Strategic Implications
MCD
37
Case: Passport Application Processing
Application Passport
a
e
b
Verification
c
d Web site
Police Department (Home Min)
Business Processes & their Strategic Implications
Passport Office (Min EA)
38
Passport Application Processing
Activities:
a. b. c. d. e. Application scrutiny and data entry Police verification of application facts Granting issue of passport Preparation of passport Passport dispatch
Application status and messages for applicants
Business Processes & their Strategic Implications 39
Website:
Issues in Passport Application Processing
• Lack of process ownership and accountability • Activity ownership - departmental focus • Activity interfacing - automated versus manual systems • Lack of integration between application processing system and web-based information system
Business Processes & their Strategic Implications
40
Business Process Types
Management Processes
Customer Request Customer Satisfaction
Core Processes
Support Processes
Business Processes & their Strategic Implications 41
Process Types
• Core processes concentrate on satisfying external customers. They directly add value in a way perceived by the customer of the business. They respond to a customer request and generate customer satisfaction. • Support processes concentrate on satisfying internal customers. They might add value to the customer indirectly by supporting a core business process, or they might add value to the business directly by providing a suitable working environment. • Management processes concern themselves with managing the core processes or the support processes, or they concern themselves with planning at the business level.
Business Processes & their Strategic Implications 42
APQC Framework for Core (Operating) Processes
1. 2. 3. 4. 5. Understanding markets and customers Developing a vision and a strategy Designing products and services Marketing and selling the products/services Producing and delivering the product in the context of a manufacturing organisation 6. Producing and delivering a service in the context of a service organisation 7. Invoicing and servicing the customers
Business Processes & their Strategic Implications 43
ONGC’s Business Processes
Management Process Exploration Production Core processes
Fin. Hum. Mat. Drilling Civil Logging etc. Mgt. Res. Mgt. Mgt. Support processes
Business Processes & their Strategic Implications 44
PGC’s Business Processes
Management Processes
Contracts Management
Grid Operation & Maintenance Projects Management
Core Processes
Financ. HRM Mat Asset Tech Dev Know Mgt Mgt. Mgt Mgt & Abs
Support Processes
Business Processes & their Strategic Implications 45
doc_631166290.pptx
Business Processes & their Strategic Implications
Business Processes & their Strategic Implications
Why a course on BPM in 2010?
• Management becoming more and more business process centric.
– Processes as organisational capabilities – Cisco, Texas Instruments, Dell, Amazon.com consider their processes as strategic intellectual assets, and getting them patented
• Most managerial interventions are business processoriented:
– ERP and enterprise systems (SCM, CRM, etc.) implementation – Process automation and integration – Business process outsourcing (BPO) as global capability sourcing
• Business process management, a core competency for managing or influencing any organisational change.
Business Processes & their Strategic Implications
2
How do we make it a participative course?
• Read and comprehend readings. • Attend classes. • Ask questions as well as respond to questions asked. • Analyse cases and participate in role plays. • Compete in project
(remember project weight is same as mid-term exam)
• Do not play role of Kumbhakarna or pose heads down ?
Business Processes & their Strategic Implications 3
Changes in the Business Environment
• Developments in the global economy have changed the traditional balance between customer and supplier. • Due to new Information Technologies and the establishment of reasonably open global trading regimes, (a) customers have more choices; (b) variegated customer needs can find expression; and (c) supply alternatives are more transparent. • Businesses therefore need to be more customer-centric, especially since technology has evolved to allow the lower cost provision of information and customer solutions. • Businesses, therefore, require to re-evaluate the value propositions they present to customers.
Business Processes & their Strategic Implications 4
Challenges in Current Business Environment ?
• Pressure to avoid commoditization and differentiate their services/products from those of the competition. • Pressure to improve performance through better, faster, cheaper operations. • Pressure to make operations more agile still ensuring compliance and reduced operational risk. • All this to do in –
– An evolving, innovating and fast-adapting competitive environment. – A market demanding new forms of compliance, transparency and accountability.
Business Processes & their Strategic Implications 5
Competitive Advantage & Value Propositions
• A company has market leadership if it has consistently better results than its competitors for a reasonably long period of time. This happens when they have gained and sustained a competitive advantage over their competitors. • A company gets a competitive advantage over others in the same industry because it offers something (value proposition) valued by customers that they cannot find in competing products/ services. • Customers can change their minds at any time for a variety of reasons. Therefore to sustain their competitive advantage, leaders must anticipate changes in the market and must be poised to alter their structures and processes to accommodate those changes.
Business Processes & their Strategic Implications 6
Market Leadership & Strategic Focus
• Market leaders apparently do certain right things and do them right, while competitors are less successful in doing so. • Market leaders define, communicate, refine and generally stick to a well-articulated, clear and focused strategy, based on a thorough understanding of target customers’ expectations. • Their value proposition is also based on realistic appraisal of product or service delivery potential.
Business Processes & their Strategic Implications
7
Organisational Capabilities
• A capability refers to the capacity of an organisation to perform a coordinated set of activities, utilising organisational resources, for the purpose of achieving a particular end-result. • Capabilities constitute a collective know-how. Specifically, they determine what the company can potentially do, not what it really does. • Operational capabilities are required to produce products or deliver services and constitute a “must have” set of know-how. • Dynamic capabilities enable an organisation to improve or extend its existing strategy, resource base and processes.
Business Processes & their Strategic Implications 8
What is a business process?
• A process is a collection of inter-related work activities, initiated in response to an event that achieves a specific result for the customer of the process.
Product or Service Executed by one or more actors Request for producing process result
Business Processes & their Strategic Implications
Internal or External
9
Strategic Potential of a Business Process
• If a set of processes provides a unique capability to an organisation, the organisation is differentiated from its competitors in terms of that capability. • This differentiation can be exploited strategically by the organisation to gain competitive advantage. [e.g.
1-800-FLOWERS.com]
• On the contrary, if an organisation’s processes provides the same capability as the processes of other organisations, the process is like a commodity, and may not provide any competitive advantage to that organisation!
Business Processes & their Strategic Implications 10
Linking Business Strategy to Business Processes
Business Strategy Formulation
Required Organizational Capabilities
Required Organizational Functionalities
Functionality Delivery through Processes
Business Processes & their Strategic Implications
11
Business Processes & Strategy Development
Business Situation
Constrains/ motivates
Business Purpose Business Strategy Development
supports fulfills
Business Commitment
governs
Business Outcome
produces
Business Capability
enacts
Business Process
12
Business Processes & their Strategic Implications
Process-Based View of an Organization
Capabilities Business Process Information Flows Activity Activity Flow of Consumable Resources Business Reputation
Activity
Business Reputation
Resident Resources
Business Processes & their Strategic Implications
13
Business Trends Over Time
Topic Competition 1970
Local/regional Smaller competitors
Take whatever is delivered, Limited choices of products/services Functional (departmental) focus Heavily manual Mainframe-based Focus on computing power Stable, long-term employment Experts on narrow range of tasks
1985
National, Becoming global
Increasing standards, Demand higher quality products/services Need for integrated automation, TQM brings process improvement Desktop-based Focus on speed
2005
Global Larger competitors
Very demanding Loyal to whoever is currently the best Processes seen as capabilities, Crossfunctional focus Technology-driven Mobility Focus on access
Impact on Processes
Must have processes matching worldclass companies Processes must deliver excellent quality to meet customer needs Companies recognise the need to be processcentric An enabler only if processes are flowing smoothly to begin with Processes documented to capture employee knowledge 14
Customers
Processes
Technology
Workforce
Dynamic, Increasing diversity, Increasing need of breadth of knowledge
Mobile & diverse Premium on thinking vs simply doing, Telecommuting
Business Processes & their Strategic Implications
Four Waves of Business Process Management
ProcessBased Competition Six Sigma Business Process Management (BPM)
(BPMS, SOA)
Total Quality Management (TQM) 1970-80s
Business Process Reengineering (BPR)
1990s
2000-2005
Beyond 2005
Business Processes & their Strategic Implications
15
Multiple Perspectives of Business Processes
Business Process Operational Perspective Strategic Perspective
Customer Perspective
Process as Workflow
Process as Capability
Process as Service
16
Business Processes & their Strategic Implications
Business Processes as Organisational Capabilities
• A capability refers to the capacity of an organisation to perform a coordinated set of activities, utilising organisational resources, for the purpose of achieving a particular end-result. • Since a process results in a product or service (an endresult), it may be considered as an embodiment of the organisation’s capabilities. Example: Distribution process Capability to distribute organisation’s products or services.
Business Processes & their Strategic Implications 17
Competing on Capabilities
Competitive Strategy
Strategy of an organisation is defined by its customers and the products/ services it offers.
Capabilities are the use and deployment of competencies to accomplish organisational goals.
Business model Business strategy
Capabilities
Organisational Capabilities
Business processes Organisational Infrastructure IT Infrastructure
Organisational Competencies
Competencies are a firm’s capacity to deploy resources using processes to effect a desired end.
Organisational Processes
Business Processes & their Strategic Implications
Organisational Resources
18
Capability Functionality Links
Capabilities C1 C2 C3
Functionalities (F1, F3) (F2, F3, F4) (F5)
(Process-driven) P1 P2 P3
Business Processes & their Strategic Implications
19
Business Processes as Services
• From a customer-perspective, delivery of a process outputs through its various transactions can be considered as service. • Componentising business processes into services can lead to more granular control and management of business processes of an organisation.
Business Processes & their Strategic Implications
20
Service Blueprinting
• Developing a new service based on the subjective ideas contained in the service concept can lead to costly trial-anderror efforts to translate the concept to reality. • Service blueprinting is the process of capturing a service delivery system into a visual diagram, which shows what the service will look like and all the specifications needed for delivering it.
Business Processes & their Strategic Implications
21
Service Blueprint Structure
Physical Evidence Customer-initiated steps Contact-employee actions
Line of Visibility
Line of Interaction
Backstage Contactemployee actions Support Processes
Business Processes & their Strategic Implications
Line of Internal Interaction
22
Process-centric Organisations
• Process-centric organisations ensure that their major business processes run efficiently and deliver value to customers; they be aligned to the organisation’s business strategy, and linkages between process performance and corporate objectives are established. • Many of the best companies like Cisco, Texas Instruments, and Dell, have embraced this new approach to business. They treat their business processes as strategic intellectual assets. • Amazon.com is protecting their processes through patents. Dell has over 40 process patents.
Business Processes & their Strategic Implications
23
Characteristics of a Process-centric Organization
• Business processes are aligned to business strategies. • Process architecture is made explicit. • Performance measures are created to allow managers to define exactly how specific processes contribute to corporate objectives. • IT systems and human resources are organized according to the processes they support. • Quality management tools are used to improve processes. • Process automation is used to make processes more efficient and to enable managers to monitor them.
Business Processes & their Strategic Implications 24
Multiple Perspectives of Business Processes
Stakeholders of a Business Process
• Process sponsor or champion who sponsors resources (financial, human, material, equipment, etc.) for process operations, and is accountable for realisation of process goal or purpose (end-result). • Process owner who has the pivotal role of maintaining oversight of the process across the enterprise, and is accountable for its performance. • Process actors who are from functional areas and business units that actually perform process operations.
Business Processes & their Strategic Implications
26
Defining Business Processes: Different Views
• A process can be conceptualised in a number of ways:
– The process sponsor’s view: process as outcome – The process owner’s view: process as transformation – The process actor’s view: process as activity flow (i.e. workflow)
Business Processes & their Strategic Implications
27
Business Processes as Activity Flows
• A business process is a set of inter-dependent work activities, characterised by specific inputs (provided by Suppliers), that may cut across functional boundaries in order to achieve some pre-specified types of outcomes (goals) by transforming, transferring or merely monitoring the inputs. • A set of processes describes the way a business carries out its work of producing a set of outputs for its Customers. Activities
Inputs Suppliers
Outputs Customers
Outcome
Business Processes & their Strategic Implications
28
Activity Inter-dependencies
• Flow or producer/consumer dependencies: when
one activity creates a resource that is used by another activity. This dependency constrains the order of the activities (precedence dependency), and may also require additional activities to manage the transfer of the resource between them, or to ensure the usability of the resource.
• Shared resource dependencies: when two or more
activities require the same resource.
Business Processes & their Strategic Implications
29
Business Process Elements
Process
4Ps of a Business Process
Procedure Purpose
Business Processes & their Strategic Implications
Performance
30
Business Process Types
• Mega business trends • Legal requirements • Technology developments • Shareholder expectations
Business environment
...
Governance processes
Rules and guidelines for business success
• Business strategy and policies
Executives
Management processes
Ensure efficient and effective operation processes
• Service level agreements (SLAs)
Managers
Operational processes
• Business level agreements (BLAs)
Get the operations performed
• Key performance indicators
Operation staff
Business Processes & their Strategic Implications 31
Stakeholders of a Business Process
Process Sponsor
Process Purpose Process Resources
Governance process
Management process Process Owner
Process Performance Change Management
Process Procedure Process Productivity
Process operation
32
Process Actors
Business Processes & their Strategic Implications
Stocks & Flows in a Business Process
Stocks Material Flows Material Flow Analogy with Flows in Human Body Digestive system
(e.g. raw material stock)
---
(e.g. paper flow)
Work Flow
(food flow)
Circulatory system (blood flow)
Information
(e.g. a data base) Knowledge
Information Flow
(e.g. e-mail message) Knowledge Flow
Respiratory system
(air flow) Nervous system
(e.g. a knowledge base)
(e.g. help messages)
( reflexes)
Stocks without or inefficient flows are pathological symptoms of the business process system.
Business Processes & their Strategic Implications 33
Process in BPR, ERP, and BPO
BPR Find ? Analyse ? Design ? Change Process
ERP
Find ? Analyse ? Select
? Change Process
BPO
Find ? Analyse ? Migrate ? Change Process
Map Process
Measure Process
Improve Process
Implement Process
34
Business Processes & their Strategic Implications
Business Process Completeness
• A true business process comprises all the activities we do to provide some one who cares with what they expect to receive (output). • It also contains all the actions we take when we fail to meet those expectations. • A final test of a process’s completeness is whether the process delivers a clear product or service to an external stakeholder or another internal process.
Business Processes & their Strategic Implications 35
Case-study: MCD e-counter issues fake birth certificate
NEW DELHI: The newly-opened e-governance counter in the Civil Lines zone recently issued a birth certificate to a child who was not even born in the city. This case was noticed a day after the Municipal Corporation of Delhi (MCD) drew flak from chief secretary Shailja Chandra for rampant corruption in the organisation. The fake certificate episode shows that corrupt MCD officials have found ways to use even information technology for generating slush money.
-Times News Network, May 8, 2003
Business Processes & their Strategic Implications 36
Birth registration and certification
Birth Birth registration
Birth recording
Birth certification
Hospital
Business Processes & their Strategic Implications
MCD
37
Case: Passport Application Processing
Application Passport
a
e
b
Verification
c
d Web site
Police Department (Home Min)
Business Processes & their Strategic Implications
Passport Office (Min EA)
38
Passport Application Processing
Activities:
a. b. c. d. e. Application scrutiny and data entry Police verification of application facts Granting issue of passport Preparation of passport Passport dispatch
Application status and messages for applicants
Business Processes & their Strategic Implications 39
Website:
Issues in Passport Application Processing
• Lack of process ownership and accountability • Activity ownership - departmental focus • Activity interfacing - automated versus manual systems • Lack of integration between application processing system and web-based information system
Business Processes & their Strategic Implications
40
Business Process Types
Management Processes
Customer Request Customer Satisfaction
Core Processes
Support Processes
Business Processes & their Strategic Implications 41
Process Types
• Core processes concentrate on satisfying external customers. They directly add value in a way perceived by the customer of the business. They respond to a customer request and generate customer satisfaction. • Support processes concentrate on satisfying internal customers. They might add value to the customer indirectly by supporting a core business process, or they might add value to the business directly by providing a suitable working environment. • Management processes concern themselves with managing the core processes or the support processes, or they concern themselves with planning at the business level.
Business Processes & their Strategic Implications 42
APQC Framework for Core (Operating) Processes
1. 2. 3. 4. 5. Understanding markets and customers Developing a vision and a strategy Designing products and services Marketing and selling the products/services Producing and delivering the product in the context of a manufacturing organisation 6. Producing and delivering a service in the context of a service organisation 7. Invoicing and servicing the customers
Business Processes & their Strategic Implications 43
ONGC’s Business Processes
Management Process Exploration Production Core processes
Fin. Hum. Mat. Drilling Civil Logging etc. Mgt. Res. Mgt. Mgt. Support processes
Business Processes & their Strategic Implications 44
PGC’s Business Processes
Management Processes
Contracts Management
Grid Operation & Maintenance Projects Management
Core Processes
Financ. HRM Mat Asset Tech Dev Know Mgt Mgt. Mgt Mgt & Abs
Support Processes
Business Processes & their Strategic Implications 45
doc_631166290.pptx