Transcript 1) Understanding Process Management

Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management:
An Internationally Recognized
Strategy for Achieving
Organizational Excellence
© 2006 OLC
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The Evolution of Process Management
Maturity
Reactive
Proactive
Predictive
Guaranteed
Process
Management
SelfAssessment
ISO
9000
Total
Quality
Continuous
improvement
Time
“How to embrace process management,” part of the series Business Process Management by EFQM, 1999.
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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Importance of management paradigm
The Ten Eras of Management
1950
Rise of the marketeers
(focus on the
customer)
Process management
Distributed strategies
Commitment to quality
Mgmt. by objectives (MBO)
Teambuilding
Functional disciplines
Continuous improvement
Agility
Specialized skills
1960
1970
FOCUS ON MANAGEMENT
TEAMWORK
1980
1990
2000
FOCUS ON ORGANIZATIONAL
TEAMWORK
“Developing Agile Organizations: Skills for Managers and Team Leaders” by Mike Woodcock and
Dave Francis, Gower Training Centre, www.gowertraining.co.uk.
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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What is a Process?

A system of operations in producing something…a series of
actions, changes, or functions that achieve an end result.
Webster’s Dictionary
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A sequence of steps performed for a given purpose.
IEEE-STD-610

OLC’s definition of a business process is:
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“A set of activities that people undertake to transform the
inputs they receive into the outputs they desire.”
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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What is a Business Process?

A business process is a series of tasks that transforms inputs
into outputs.
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Some business processes result in delivering a product or
service to an external customer.
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Some business processes receive inputs from an external
supplier and provide products or services to an internal
customer.

Some business processes are internal to the organization internal suppliers and customers.

Organizational performance depends on the efficiency and
effectiveness of these business processes.
Supplier
Inputs
Business Process
Outputs
Customer
Transformation Process
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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Business Processes
Usually Cross-Functional Boundaries
Direction of Control
CEO
Functional
Dept. 1
Dept. 2
Hierarchy
Dept. 3
Dept. 4
Dept. 5
Direction of Process Flow
What are the implications of the conflict in the
direction of control and the direction of process flow?
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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What is Business Process Management (BPM)?

BPM is the management of the processes an organization uses to
conceive, develop, produce and deliver its products and services.
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Traditional management functions include:
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© 2006 OLC
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Planning: deciding in advance what to do, how to do it, when to do
it and who is to do it.

Organizing: establishing an intentional structure and definition of
the roles people play in performing work.

Staffing: ensuring that knowledgeable and capable people are
available to fill the roles in the organization.

Leading: motivating people to work towards the achievement of a
common purpose.

Controlling: measuring progress towards achieving organizational
goals and facilitating changes needed to achieve them.
BPM can then be viewed as planning, organizing, staffing, leading
and controlling the processes used to get work done.
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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What is Business Process Management (BPM)?
(Continued)

BPM is a structured approach to analyse and continually improve
fundamental activities (process areas) such as planning, design,
manufacturing, marketing, communications and other major
elements of a company’s operation. 1
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Having a process view of the organization means understanding the
elements that drive and direct the business. 2

Management by process focuses on a holistic view of the complete
set of processes for the organization. It means managing and
reviewing the business as a system of inter-related processes to
improve business and process performance. 2
1. Zairi, Mohamed (1997), “Business process management: a boundaryless approach to
modern competitiveness,” Business Process Management Journal, Vol. 3 No. 1, pp. 64-80.
2. “How to embrace process management,” part of the series Business Process Management
by The European Foundation for Quality Management (EFQM), 1999.
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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Business Process Management and
Functional Management
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Strength in managing functional skills is important to the
success of process management. A business process is the
framework within which the organization’s functional
knowledge and skills are applied.
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Organizations whose current management style emphasizes
success in functional performance need to gain knowledge and
experience in business process management to understand its
value. Gaining this understand enables the organization to
better use its functional skills.

Business process management is a strategy for managing daily
work that is aligned with a majority of strategies proposed for
achieving excellent performance in the 21st century.
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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Business Process Management Works

What do IBM, Texas Instruments, Owens Corning and Duke
Power have in common? They are all redesigning their
organizations around their core processes - and reaping
enormous benefits as a result.

Business process management is not merely a way to address
specific problems - poor quality, or high costs. It is a platform
for capitalizing on new opportunities.

A process enterprise is the organizational form for the world in
constant change.
Reference: “How Process Enterprises Really Work” by Michael Hammer and
Steven Stanton, Harvard Business Review, November-December
1999.
© 2006 OLC
Process Management: The Foundation for Achieving Organizational Excellence
Understanding Process Management
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