Enterprise Design Process: Business Processes Johan Strümpfer

Enterprise Design Tool 1/ View 1

ENTERPRISE PARTS INTERACTING AROUND AN OVERARCHING BUSINESS PURPOSE NOT A CONGLOMERATE NOT NECESSARILY A GROUP WITH PARTS MORE OR LESS IN THE SAME BUSINESS NOT A FINANCIAL HOLDING A SYSTEM

ENTERPRISE DESIGN THE DELIBERATE ARRANGEMENT OF FACTORS INTO A SYSTEM THE INTEGRATION OF INTERACTIONS INTO A REGULATED WHOLE

SYSTEM A regulated set of relationships Interacting and interrelated parts Parts organised for a purpose a Whole with novel features

SYSTEM FACETS FUNCTION STRUCTURE PROCESS REGULATION

DEFINITION OF STRUCTURE Relationships that remain unchanged Duration of interest Stability and relative change

Process View

Process view: PURPOSE ä INTRODUCES CONCEPT OF ENTERPRISE AS SYSTEM AS LINKED PROCESSES ä BROADENS SCOPE OF POSSIBLE INTERVENTIONS ä STAGE 1 OF ENTERPRISE DESIGN

DEFINITION OF PROCESS ä Altering or changing of relationships ä Time frame of interest ä Flows and transformations of Matter, Energy & Information (MEI) ä Internal to systems boundary, Input & Output ä Structure: static; Process: Dynamic

PROCESS VIEW OF SYSTEM ä INPUT ä TRANSFORMATION ä OUTPUT I T O SYSTEM

CLASSIC ORGANISATIONAL STRUCTURE Lines of authority, responsibility, accountability

PROCESS ORGANISATIONAL VIEW “Manage the white spaces”

BASES OF DIFFERENTIATION AND INTEGRATION ä Classical ä Functional division ä The whole is integrated at the top ä Optimisation of the parts yields optimisation of the whole ä Process ä Process division ä The whole is integrated at the bottom ä Optimisation of the whole is different from optimisation of the parts

ä Systemic ä Differentiation & Specialisation ä Integration & Synthesis ä System development ä Integrate AND Differentiate ä All bases of division BASES OF DIFFERENTIATION AND INTEGRATION-2 and or

PROCESS REDESIGN ä Develop Process Objectives ä Identify Processes to be Redesigned ä Understand and Measure Existing Processes ä Identify IT levers ä Design and Build Prototype Process ä Davenport & Short (1990)

PROCESSES ä Logically related tasks to achieved defined business outcome ä Have customers, i.e. defined business outcomes ä Cross organisational [functional] boundaries ä Davenport & Short (1990)

RE-ENGINEERING ä Organise around outcomes, not tasks ä Let output consumers produce output ä Integrate information processing with real work producing the information ä Place decision making where work is performed and build control into process ä Treat geographically dispersed resources as centralised ä Link parallel activities instead of integrating results ä Capture information once and at source ä M Hammer, HBR,1990

CHARACTERISTICS OF BUSINESS RE-ENGINEERING ä Re-work the transformation, not the output. ä Singular (insular) view (process) of the organisational structure ä Substitution of one basis for organisation for another ä Heavy dependence on IT perspective ä Patchwork of (some good) concepts; lacks rigour ä Design orientation ä Transcends current boundaries ä Promotes questioning --- What framework? ä Stretches value chain thinking

DISCUSSION ä Relate your own experiences and understanding of business re- engineering

ä Biomatrix ä Teleon ä Doublet ä Telentropy ä Sub-teleon ä Sub-doublet ä Endo, Exo, Centro-teleon ä..... ä Gyuri Jaros & Anakrion Cloete...OF BIRDS AND BEES...

Woven mat of processes: ä Sets of connected activities aimed at purpose ä Interlinked and intersecting processes ä Production processes ä Support processes

PROCESS CHARACTERISTICS ä INPUT, TRANSFORMATION, OUTPUT ä HAS PURPOSE AND GOALS ä STRUCTURE ä REGULATED ACTIVITIES ä MEASURES OF PERFORMANCE ä TELENTROPY ä RIGIDITY, FLEXIBILITY & REDUNDANCY

TELENTROPY ä INVERSE OF LIKELIHOOD OF ACHIEVING ITS GOAL ä Low telentropy = good chance of achieving goal ä High telentropy = low chance of achieving goal ä TELENTROPY “=“ STRESS ä TELENTROPY TRANSFERABLE

EXERCISE ä List 2-3 major processes in your personal life ä List 3-5 major processes in your organisation ä USE PROCESS CHARACTERISTICS CHECKLIST TO DEFINE PROCESSES

PURPOSE OF DESIGN PROCESS ä DESIGN A DESIGN: Model of what ought to be ä CRITICAL REFLECTION: Template for questioning design and reality ä ALIGNMENT: Building up SHARED model of how business works ä PARTICIPATION: Framework for participative design

PROCESS VIEW DESIGN PRINCIPLES ä Outward - Inwards design, not reactive: Holistic ä Actively searches out multiple viewpoints ä Structures and supports a group learning process: Participative ä Uses a formal systems model as design template ä Uses a systems approach to structure design process ä Integrated with overall enterprise design process

DESIGN PROCESS ¶ STAKEHOLDER VIEW · OUTPUTS REQUIRED ¸ PROCESS DEFINITION ¹ PROCESS MODELLING º COMPARISON » ORDERING ACTIVITIES

PROCESS DESIGN PROCESS STAKEHOLDERS? EXPECTATIONS? OUTPUTS? PROCESS ID & DEFINITION TRANSFORMATION ACTIVITIES? MONITORING & CONTROL ? IT ROLE? COMPARISON CATEGORISE

SOURCES ä ACKOFF: Redesigning the Future & Creating the Corporate Future ä Gharajedaghi: Towards a Systems Theory of Organization & Unpublished material ä Mason & Mitroff: Various on Stakeholders ä Churchman: Design of Inquiring Systems, Systems Approach and Its Enemies ä Checkland et al: Soft Systems Methodology

STAKEHOLDER * ä Stakeholder’s view of the enterprise ä Stakeholder’s logic, rationale and value systems ä Stakeholder’s choice to be stakeholder

STAKEHOLDERS ä Who should be served? ä Who should (are) the stakeholders? ä Who should (are) the clients/beneficiaries?

EXPECTATIONS ä What should the purpose be, from the client’s (beneficiary’s) perspective? ä What should (are) the client’s measures of performance? ä What are the underlying worldview assumptions that makes this meaningful to the client?

WHAT ARE THE OUTPUT GOALS? ä What should be produced to satisfy the expectations of the particular client/stakeholder? ä What are the tangible and intangible deliverables? ä What are time related requirements to satisfy the expectations?

PROCESS DEFINITION Checklist ä What is the input, output and transformation? ä Who is the client/customer? ä Who are the actors in the transformation? ä Who are the owners of the transformation? ä Who are the decision makers of the process? ä Why is this transformation assumed to be meaningful? ä What is the purpose of this transformation? ä What are its measures of performance? ä What environmental factors impact directly on this transformation?

PROCESS ACTIVITY MODEL ä One process definition and model per output ä Set of logically linked activities required to perform the transformation ä Elements of model are verb phrases: Activities ä ONLY activities that can be related to definition may be included ä 5-12 activities per model

MONITORING AND CONTROL ACTIVITIES ä Expand model to include monitoring and control of process within process ä Efficacy, efficiency and effectiveness: ä Efficacy: Does the process achieve its goals (output, time)? Telentropy: Likelihood of achieving goals ä Efficiency: Resources used per production unit. ä Effectiveness: Do the goals satisfy the (longer term) purpose and expectations? ä What should be measured for efficacy monitoring? ä What should be measured for efficiency monitoring? ä What should be monitored for effectiveness? ä Required reporting (including telentropy) and control activities?

ROLE OF INFORMATION TECHNOLOGY AND SYSTEMS? ä What should be done differently because of enabling technologies? ä How should activities be done making use of IT/IS? ä Specialist input required ä Refer guidelines

IT/IS GUIDELINES FOR “INFORMATIONALISING”: ä Mass customisation ä Rapid, real time response ä Manufacture at point of delivery ä Shrinking Overhead, Inventory, Working Capital ä Direct customer access & service levels ä Interlinking organisations ä Logistics and globalisation ä Stan Davis & Bill Davidson: Vision 2020, Future Perfect

COMPARISON ä Activity models reflects designed ideal ä Reflect on requirements for rigidity vs. redundancy and flexibility ä Use models as basis for critical reflection on what is and should be implemented ä Cultural issues, value changes ä Human dimension (training, competencies) ä Political feasibility ä Impact dynamics ä Group debate and design of implementation: Interaction

ORDERING OF ACTIVITIES ACROSS ALL PROCESSES ä CATEGORIES OF ACTIVITIES: ä Monitoring and Auditing ä Co-ordinating activities ä Control activities ä Primary production activities. ä Support process activities ä Common, shared activities