Business Process Management & IT
From a business perspective,
- A process is a coordinated and standardized flow of activities,
- Performed by people or machines,
- Which can traverse functional boundaries to achieve a business objective and
- Creates value for internal or external customers.
To manage a process-
(i) Define it and map the tasks to the roles involved.
(ii) Performance measures can be established.
(iii) Describe the organizational setup that enables the standardization of the process throughout the organization.
| Functional Organization | Process Organization | |
|
Work Unit |
Department |
Team |
|
Key Figure |
Functional Executive |
Process Owner |
|
Benefits |
(i) Functional excellence. (ii) Easier to implement work balancing. (iii) Clear management direction. |
(i) Responsive to market requirements. (ii) Improved communication and collaboration between different functional tasks. (iii) Performance measurements aligned with process goals. |
|
Weaknesses |
(i) Barrier to communication between different functions. (ii) Poor handover between functions that affects customer service. |
(i) Duplication of functional expertise. (ii) Increased operational complexity. |
Business Process Flow:
(1) Accounting:
(2) Sales: (Order to Cash)
(i) Customer Order (ii) Recording (Checking availability) (iii) Pick release
(iv) Shipping (v) Invoice (vi) Receipt (vii) Reconciliation
(3) Purchase: (Procure to Pay)
(a) Purchase requisition (b) Request for quote (c) Quotation
(d) Purchase order (e) Receipts (f) Payments
(4) Finances:
Classification of Business Processes:
A. Business Strategy: (Highest Level):
Describes long-term concepts to develop a sustainable competitive advantage
B. Goals: (Second Level):
Business strategy is broken down to Operational Goals.
C. Organizational Business Processes:
High-level processes that are specified in textual form by their inputs, outputs, expected results and dependencies on other organizational business processes
D. Operational Business Processes:
The activities and their relationships are specified
E. Implemented Business Processes:
Contain information on the execution of the process activities.
Business Process Management (BPM):
“The achievement of an organization’s objectives through the improvement, management and control of essential business processes”
Business Process Management System (BPMS):
- A generic software system
- that is driven by process representations
- to coordinate the enactment of business processes.
The primary benefits of using technology for BPM are:
(i) Effectiveness gains - Automated coordination of activities;
(ii) Distribution of tasks to process participants;
(iii) Amalgamation of applications;
(iv) Ability to process more with less effort and higher quality.
BPM’s Principles:
1. Processes are assets that create value for customers.
2. Management of processes - Measuring, monitoring, controlling, and analyzing business processes.
3. Continuous improvement of processes.
4. Information technology is an essential enabler for BPM.
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