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Most companies today are organized by function within
line of business and geography, with either formal or informal functional
ties across units and geography. Improving & innovating processes
requires structuring the organization by processes, a risky proposition
for many organizations. It involves dissolving not only functional
& geographical boundaries, but also treating resources from
various functions & geographies as one. Imagine the sales function.
The 'sales team' has interactions with marketing, IT, accounts &
operations on a regular basis apart from other departments such
as HR. Defining and understanding these cross-functional workflows
constitute the 'sales process'. Organizations may go to the extreme
of co-locating workers involved in the same process to remove all
traces of functional boundaries. Taking it to the extreme may however
create a situation where the bigger picture is lost & the process
becomes an end in itself, an old roadblock that created the functional
or geographical boundaries in the first place. Important processes
need to be identified according to their contribution towards achieving
the strategic objectives of the organization (key processes). These
processes have to be assigned a process owner who has an outsider's
view of the process.
Business Process Representation
Putting down a business process on paper/software, brings out a
clear view of the matrix of interactions involved in the process,
its inputs & outputs. Flowcharting is a very simple way of representing
a business process. Business analysts have been using flowcharts
for a long time. A need for standardization of notations was felt
over time. With the advent of IT, the representations of business
processes were made using various softwares & even XML.
BPMI.org (the Business Process Management Initiative), is a California
based non-profit corporation whose mission is to promote and develop
the use of BPM through the establishment of standards for process
design, deployment, execution, maintenance, and optimization. Business
Process Modeling Language (BPML), an XML schema developed by BPMI
aims to provide a standard way to represent end-to-end business
processes, allowing direct deployment, management and transformation
of these processes. Specifications developed within BPMI.org are
free for any organization to implement, extend, or modify. The discussion
cycle sub process represented below is a view that talks the language
of both business analysts & software programmers, the reason
for the increasing popularity of BPML.
Source:BPMI.org (the Business Process Management
Initiative)
Process Based Standards
The emphasis on processes is not new. Right from TQM to BPR &
ERP, the focus has been on processes. There have been incremental
developments to total rehauls. The need to look at organizations
from the process point of view is a recent concept though. Quality
standards like ISO 9001:2000, ISO 14000 & MBA have started attaching
more importance to processes.
The revised ISO 9001 standard was developed on a simple process-based
structure as opposed to the element structure used in the 1994 revision
of ISO 9001. The new process-based structure is more generic than
the element-based approach and adopts the process-management approach
widely used in business today.
The ISO 9000: 2000 Family defines a process as:
"Set of interacting activities, which transforms inputs into
output"
Organizations that apply for the Malcolm Baldrige Award and are
judged to be outstanding in seven areas: leadership, strategic planning,
customer and market focus, information and analysis, human resource
focus, process management, and business results. The stress is again
on process management & improvement through benchmarking best
practices, which together account for more than 50% of the points
awarded for the award.
Benchmarking
Benchmarking is an essential step for improving processes in an
organization. Benchmarking should not be limited to competitors
or the industry you are in. Organizations worldwide perform more
or less similar business processes.
It is important to understand the processes that help companies
achieve the benchmark. For example, an organization may find out
that a company has the best known order processing time (A 'core
process' for the organization). The organization should then:
1)Assure everybody involved that they are not comparing apples to
oranges
2)The processes that make it possible for the short order processing
time
3)Assigning a 'process owner' if not already existing
4)Step by step implementation of the processes
5)Adapting those practices to suit the culture of your organization
6)Continuous incremental improvement/ innovation to increase the
value added by the process
There has always been a feeling of uneasiness when benchmarking
a company from another industry. The benchmark seems unrealistic.
The Process Classification Framework developed by American Productivity
& Quality Center (APQC) is a high-level, generic enterprise
model that aims at encouraging businesses and other organizations
to see their activities from a cross-industry process viewpoint
instead of a narrow functional viewpoint.
Source: APQC's International Benchmarking Clearinghouse
According to The Benchmark Exchange, the top-10 benchmarked business
processes are:
1.Information systems technology
2.Employee development training
3.Document control records management
4.Customer service satisfaction
5.Human resources
6.Benchmarking
7.Call centers help desks
8.Accounting
9.Employee benefits compensation incentive programs
10.Performance measurement improvement
Source: The Benchmarking Exchange
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