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There are three types of business processes: #Management processes - the processes that govern the operation of a system. Typical management processes include " Corporate Governance " and " Strategic Management ". #Operational processes - these processes create the primary value stream, they are part of the Core Business . Typical operational processes are Purchasing , Manufacturing , Marketing , and Sales . #Supporting processes - these support the core processes. Examples include Accounting , Recruitment , IT-support. A business process can be decomposed into several sub-processes, which have their own attributes, but also contribute to achieving the goal of the super-process. The analysis of business processes typically includes the mapping of processes and sub-processes down to activity level. Activities are parts of the business process that do not include any Decision Making and thus are not worth decomposing (although decomposition would be possible), such as "Answer the phone", "produce an invoice". Business Process Modeling Notation can be used for drawing business processes in a Workflow . HISTORY Adam Smith One of the first people to describe processes was Adam Smith in his famous (1776) example of an English Pin factory. He described the production of a pin in the following way:
Smith also first recognized how the output could be increased through the use of Labor Division . Previously, in a society where production was dominated by Handcrafted Goods , one man would perform all the activities required during the production process, while Smith described how the work was divided into a set of simple tasks, which would be performed by specialized workers. The result of labor division in Smith’s example resulted in productivity increasing by 24,000 percent (sic!), i.e. that the same number of workers made 240 times as many pins as they had been producing before the introduction of labor division. It is worth noting that Smith did not advocate labor division at any price and Per Se . The appropriate level of task division was defined through experimental design of the production process. In contrast to Smith's view which was limited to the same functional domain and comprised activities that are in direct sequence in the manufacturing process, today's process concept includes cross-functionality as an important characteristic. Following his ideas the division of labor was adopted widely, while the integration of tasks into functional, or cross-functional, processes was not considered as an alternative option until much later. Further supporting theories and concepts Frederick W. Taylor Frederick Winslow Taylor developed the concept of Scientific Management . The concept contains aspects on the division of labour being relevant to the theory and practice around business processes. The business process related aspects of Taylor's scientific management concept are discussed in the article on Business Process Reengineering . The span of control The Span Of Control is the number of sub-ordinates a supervisor manages within a structural Organization . Introducing a business process concept has a considerable impact on the structural elements of the organization and thus also on the span of control. Departmentalization by process and purpose Large organizations that are not organized as markets need to be organized in smaller units - Departments - which can be defined according to different principles. Information management concepts Information Management and the organization design strategies being related to it, are a theoretical cornerstone of the business process concept. DEFINITION In the early 1990s, US corporations, and subsequently companies all over the world, started to adopt the concept of Reengineering in an attempt to re-achieve the competitiveness that they had lost during the previous decade. A key characteristic of Business Process Reengineering (BPR) is the focus on business processes. Davenport (1993) defines a (business) process as
This definition contains certain characteristics a process must possess. These characteristics are achieved by a focus on the business logic of the process (how work is done), instead of taking a product perspective (what is done). Following Davenports definition of a process we can conclude that a process must have clearly defined boundaries, input and output, that it consists of smaller parts, activities, which are ordered in time and space, that there must be a receiver of the process outcome- a customer - and that the transformation taking place within the process must add customer value. Hammer & Champy’s (1993) definition can be considered as a subset of Davenport’s. They define a process as
As we can note, Hammer & Champy have a more transformation oriented perception, and put less emphasis on the structural component–process boundaries and the order of activities in time and space. Rummler & Brache (1995) use a definition that clearly encompasses a focus on the organization’s external customers, when stating that
The above definition distinguishes two types of processes, primary and support processes, depending on whether a process is directly involved in the creation of customer value, or concerned with the organization’s internal activities. In this sense, Rummler and Brache's definition follows Porter's value chain model, which also builds on a division of primary and secondary activities. According to Rummler and Brache, a typical characteristic of a successful process-based organization is the absence of secondary activities in the primary value flow that is created in the customer oriented primary processes. The characteristic of processes as spanning the white space on the organization chart indicates that processes are embedded in some form of organizational structure. Also, a process can be cross-functional, i.e. it ranges over several business functions. Finally, let us consider the process definition of Johansson et al. (1993). They define a process as
This definition also emphasizes the constitution of links between activities and the transformation that takes place within the process. Johansson et.al. also include the upstream part of the value chain as a possible recipient of the process output. Summarizing the four definitions above, we can compile the following list of characteristics for a business process. # Definability: It must have clearly defined boundaries, input and output. # Order: It must consist of activities that are ordered according to their position in time and space. # Customer: There must be a recipient of the process' outcome, a customer. # Value-adding: The transformation taking place within the process must add value to the recipient, either upstream or downstream. # Embeddedness: A process can not exist in itself, it must be embedded in an organizational structure. # Cross-functionality: A process regularly can, but not necessarily must, span several functions. Frequently, a process owner, i.e. a person being responsible for the performance and continuous improvement of the process, is also considered as a prerequisite. REFERENCES
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