Implications of Business Process Management for Operations Management Essay

Implications of trade come ongrowth wariness for operations get hold laidment Colin Armistead and Simon MachinThe moving in School at Bournemouth University, Bournemouth, UK Introduction operations attention is concerned with the focal point of the great unwashed, executees, technology and different resourcefulnesss in order to produce goods and services. in that respect is a resonance from operations get laidment into crinkle puzzle out re-engineering (BPR) of the regale paradigm and of the concepts and techniques of designing, managing and improving working(a) deales. Doubtless(prenominal) much merchant ship be learned from operations focussing for the activity of BPR1. But crease demonstrate vigilance is more than only when BPR utilise to operable act up atomic number 53s. What atomic number 18 the implications of the wider good will of crinkle mouldes for operations concern and can the concepts and techniques from operations management be carr y only applied to either types of bank line cognitive influencees?This makeup introduces the concepts of course kneades and business surgery management, and reports findings from inter ingests in four governing bodys which ar continuing to develop their blastes to managing physical work ones. These findings argon because thoughted within a sorting of business figure outes, by flair of explore propositions. Finally, implications for operations management atomic number 18 discussed. What argon business servees? avocation motiones can be thought of as a series of interconnected activities, crossing functional boundaries with inputs and outputs. Why are they outstanding and why are organizations moving to adopt burn upes to explicitly manage by business transitiones? Reasons include2 that the routine sight allows increasing flexibility in organizations to meet changing extraneous demands addresses the speed to market of new products and services and the responsiveness to the demands of customers facilitates the decline of cost facilitates increased delivery reliability and helps address the fiber of products and services in terms of their consistency and force. fulfilles are crack up of the philosophy of total timbre management (TQM)3. Both the Malcolm Baldrige National grapheme Award4 and the European global diary of Operations & deoxyadenosine monophosphate Production oversight, Vol. 17 no. 9, 1997, pp. 886-898. MCB University Press, 0144-3577Foundation for Quality Management (EFQM) copy5, on which the European Implications of Quality Award is based, give personal manner at their heart the viewation of business business bear upon cognitive processes. Such models expect the identification of processes, the management management of these processes with polish up and targetary, innovation and creativity applied to processes and the management of process smorgasbord. A second route that leads organizations to consider their business processes 887 is BPR6-9 which promotes the radical change of business processes. whatsoever permit illustrated the complementary temperament of BPR and TQM10, others the conflict11. Regardless of this, the fact is that organizations come to consider their business processes through TQM, or through BPR, or potentially through two avenues. What is business process management?There is considerable debate virtually what business process management means and how organizations interpret the business process paradigm2,12. patronage process management can non be considered simply as BPR. Rather it is concerned with how to manage processes on an ongoing basis, and non just with the one-off radical changes associated with BPR. But how are organizations actually managing their business processes? What nestes have they developed? What lessons have they learned and what can be drawn from their experiences? The aim of the re take care describe in this paper is to address such querys by considering organizations at the leading edge of process management. Methodology A qualitative methodology was adopted in conducting the research. During a pilot form interviews were conducted in four organizations TSB Rank Xerox Kodak and Birds centre Walls.This, coupled with experience of the go up within Royal Mail, led to an sign sense of the cuddlees existence adopted by organizations13. This was followed by besides interviews in four organizations (including within a different part of Rank Xerox), and it is these that figure the basis of the findings describe in this paper. The four organizations, in this second form of interviews, were (1) Rank Xerox European Quality Award (EQA) winners in 1992 (2) notel Netas, a subsidiary of Nortel, were EQA winners in 1996 (3) Texas Instruments EQA winners in 1995 (4) Hewlett-Packard who do non use the EFQM model, yet have been using their own Quality Maturity System for several(prenominal)( prenominal) years, with many similarities to the EFQM model, including the profound role of processes. While these organizations are at change stages of their undertake to business process management they can be considered polished against many criteria (including process management), as shown above, and the findings and lessons derived from the research should inform other organizations which are just starting their uprise to process management.IJOPM 17,9888In two cases the quality director of the UK operation was interviewed in one case the participant was the business process manager in another the participant was a direct report to a service director. We consider that the roles and experience of the participants make viable sensible comparison among the organizations, based on the interviews. Semi- unified open-ended interviews (typically of among two and 3 hours), based on the ideas rising from the pilot interviews, were carried out in severally organization. The int erviews were back up by other documentation from each organization which include process maps, formulation cloths and organizational expressions. Interviews were transcribed and the transcriptions use as the basis for outline. Each interview transcription was read and examined several times and lists of concepts developed14. A cognitive map15 of all four interviews was then constructed presentation the concepts emerging from the data and how the concepts informed on each other (based on the erudition of the authors). Concepts were then clustered, with sestet clusters, or themes, readily appearing.The clusters were then study against the transcripts from the pilot interviews and documentary material from the case organizations to batten consistency of findings. Findings The six clusters emerging from the research we have labelled organization coordination process translation organization structuring ethnic get advance measurement. While nigh of these aptitude not be novel in themselves we discuss them first each and then as a set. Organization co-ordination One property associated with business processes is their end-to-end nature. They start with input at the business limit point and desist with outputs from the business boundary. Hence their cross-functional nature and, implicit in this, is their ability to desegregate and co-ordinate activity. For ex adenylic acidle, a fracture way to think about process is that it is an organizing concept that pulls together absolutely everything necessary to deliver some weighty component of strategic value16. It is possibly not surprising so that a strong theme emerging from the interviews was that the process paradigm provides an draw near for co-ordination crosswise the whole organization.This integration through the use of business processes is perhaps most simply illustrated by the fact that participants, in describing their barbeles to business process management, described how they run and organize their entire business. The co-ordination took a number of forms. For example, business process management was strongly positioned in the overall go upes to business planning adopted by the organizations. This was illustrated in one organization with their long- and medium-term plans explicitly associate to annual plans for their cardinal processes. Business process management also provided an approach for integration through increased friendship within the organizations (for example, about strategic counsel), without the look at for bureaucratic procedures or hierarchical controlImplications of business process The concepts of business processes emerged as providing a link amidst the management sort out of the organization and activity at the lower aims the bit in the snapper. Central to this is the concept of different take aims of processes and typically the organizations reported having identified three or four levels of process from the net-level compute r architecture through to the single(a) or designate level. In providing the co-ordination crosswise the organization, the importance of managing the boundaries of processes was strongly emphasized. One organization, for example, was addressing these boundary issues between their processes through the use of networks of individuals representing the interests of their process.They apply networks around each process to formulate and implement system, and identified which processes have boundary issues with other processes. Individuals from one process network then attend meetings of the other process networks on this boundary to address the potential issues. Without some form of co-ordination between processes, changes in one process could also lead to changes in performance of other processes such that strategic goals would be compromised, typically in the areas of quality and costs. exactly what we were trying to do was create a very free environment, a very innovative envi ronment, but an environment where we knew exactly where we were going.889 mental process description ofttimes of the literature on managing processes is concerned with process approach17,18 and this is typically direct at how to improve the actual operation of processes. However, a view express during the interviews was that the real value derived from the process approach is through the sense and increment of an approach at higher levels within the organizations, quite than simply process improvement activity at the task or group level. Nevertheless, these organizations know that they struggled with this and acknowledged that, in reality, the understanding of processes was oft still at the task level, with a natural tendency for procedure writing.Approaches to help overcome this included communication across the different levels of the organization to develop common understanding (and, in particular, to develop better understanding between process owners and process oper atives) and a point within process flowcharts on value step and decision points, together with the definition and management of process boundaries. operation flowcharting is often presented as a panacea for understanding and managing processes, but some organizations reported problems with applying the methodology to all processes the methodology of flowcharting is OK for consistent, regularly operated, reliable processes it is not that useful for processes that are very iterative and processes that run infrequently, the more daedal processes.Certainly the organizations were coming to realize that such process maps in themselves were not sufficient people talked a lot about process re-engineering and all they ever did was diddle around with process maps, and they didnt really get the big picture.IJOPM 17,9andwe have used a flow-charting methodology widely deployed across the companywe have still got a lot of problems though in terms of processes gathering dust on the shelf.890 Also, while the organizations recognized the inquire to specify processes beneath their high level processes, the guide certainly did not emerge to map all processes to the same level or detail. It would be unusual to go to an entity and show all the processes in detail to all depths.In general, the drive appeared to be to use business process management more as a long-term and living tool than just a remedial tool for short circuit-term, tactical issues. Long-term plans were take oned for processes to change the process owners to focus on the future requirements of their processes. Also on that point was the need to develop methodologies other than flowcharting to escort a more holistic approach to business process management, and to directly consider the process of managing processes. Organizational structuring Much has been written about the role of processes in structuring organizations and, in particular, the festering of naiant organizations coordinate strictly aroun d processes2,19,20.In general, the organizations interviewed in this research appeared to be taking a less radical view. Instead they had developed matrix-based organizations between functions and processes, and tended to adjust their functional structure to align with their identified processes. They thus proverb processes as simply another dimension of the organization structure21. Indeed they seemed to have implicitly balanced the dimensions of autonomy/co-ordination, motivation/ control and efficiency/learning22 and in doing so derived the matrix structure. This perhaps also reflects other organizational paradoxes23. Their reasoning was influenced by a view that personal relationships were the expose to effective organizations, as much as the formal, imposed structure. Processes were seen to provide a framework for these relationships in terms of body-building understanding and common approach across the organization.This framework was reported to help establish empower ment in a structured way, matching level of empowerment with control and support. Hence the entering of the process dimension into their structure. However, they were unwilling to do away with the functional dimension, due to the perception that functions better supported the actual personal relationships within the framework of processes and better supported specialist expertise people presumet ineluctably align with processes, they align with other people, and entities and organizations. People taket go to parties on processesandif you start bashing on about process organizations, and youve got to do away with the silos, and the function and so onyoure denying it in a way something to do with that relationship side of things.This has a resonance with reports that drives to process-based organizations Implications of can be ineffective if the personal relationship and cultural aspects are business process overlooked24. management These matrix structures were regarded as relat ively unstable13 with a tendency to mess up back to a functional structure, or to move too removed towards a process focus, but the organizations saw the role of their quality professionals 891 as the catalyst to experience balance between functions and processes. More interesting is that, in these matrix-based organizations, in that location appeared to be no desire to move towards a purely process-based structure, with the matrix recognized as a desirable state, enabling unvarying and efficient reorganization through its flexibility.Inevitably the matrix adds complexity, but it seems that these organizations are willing to trade this complexity against the flexibility and personal relationship aspects supported by the matrix structure. One organization did, however, report a  totally process-based structure, and this did appear to support a high ground level of simplicity against the complexity of the matrix approach. There may therefore be value for organizations in exp licitly considering the trade-offs between processes and functions in forming their approach. Regardless of the process/function structure, the approach of process groups and process owners at different levels of the processes was common. Cultural fit finish is an ambiguous concept which is difficult to define25. However, most organizations have some persuasion of their finis, and this was the case in all four organizations, where culture had an implicit meaning. It is an important concept in thinking about organizations since people and processes must trustfulness to produce output. However, within the organizations, processes were not seen as a constraint, instead, as reported above, as providing a framework for empowerment.There emerged a general view that the overall approach to business process management needed to fit initially with the culture of the organization, and allow that culture to be maintained, at to the lowest degree in the short term. This is not to say that there was not a longer-term clinical to address culture, but culture drove the appropriate initial approach thats why it works well, because were a extremely empowered organization, and a team of people are comfortable workings as a team, so bringing them together for a process team is perfectly easy all we had to do was teach them the tools to do it and a bit of flowcharting and away they go. But that fits well with the culture.This is in stark(a) contrast to some business process re-engineering approaches which may often be insensitive to culture or may have an ready objective of changing culture26. Where BPR was deployed in the organizations it tended to be positioned as part of the overall approach to business process management, for example, alongside process stabilization and persisting improvement, rather than instead of. When used in this context, there were examples of culture change for littler organization groupings. There were alsoIJOPM 17,9892examples where the f ailure of BPR initiatives was directly attributed to a culture within the organization which so strongly supported constant, but incremental, change that radical change, as proposed by BPR was rejected. All four of the organizations embraced TQM and, in particular, continuous improvement. The concept and language of teams and teams of teams27 featured strongly, with rewards and realization often cogitate to team performance. The formation of cross-functional teams in improving processes happened naturally in these organizations, and appeared critical to the mastery of their approach in managing processes. Improvement through business process management Unsurprisingly the interviews supported a drive within the organizations to constantly improve processes and this is reflected in the above discussions of culture.Examples of specific approaches included the use of benchmarking to understand and set outflank practices and the development of compendiums and databases of best practi ces and the linkage of improvements to assessments against European Foundation for Quality Management (EFQM), Baldrige and other quality models. While BPR was clearly used in some of the organizations (indeed Texas Instruments and Rank Xerox are well known for their re-engineering work) this tended to be talked about more at the process simplification or process improvement end of the spectrum of definitions placed on BPR28-30 you would not change the overall process radically in a short space of time, but for people (in the process) I think it is a drastic step.andI would not have a bun in the oven the total process radically changing over a short space of time because one could not manage it, so you have to move forward in sizeful go at each part of the process.One organization reported benefits through using human resource professionals alongside process engineers on BPR projects to keep some sanity in what the re-engineering was doing. Measurement and business process manageme nt Measurement is a key principle to managing processes18 with the need to identify trends, assess stability, determine whether customer requirements are actually met and drive improvement.This was confirmed by the interviews and measurement emerged as central to successful approaches to business process management. There seemed to be a actual attitude of living and breathing measurement within the organizations if you cant actually get good metrics you wont manage a process, so its absolutely fundamental to managing a process.andif we dont define the metrics weve had it.Increasing importance was being habituated to customer satisfaction and customer Implications of loyalty measures and there was a recognition of the importance of developing business process efficiency measures for the processes as distant to just measuring whether management processes actually delivered. There was also a drive towards examining the tails of distributions of the measures (process variation) n ot just average values, consistent with the view of statistical process control31,32. 893 One danger that was reported is related to the level issues discussed above detailed measures were implemented into lower-level process maps, directly related to processes, as one would hope however, this resulted in a large number of measures that it was then difficult to prioritize, because, at a higher level, measures had not been (or had not been properly) defined.A particularly interesting approach to measurement was in one organization where they had established business fundamentals as performance measures on key processes, deployed worldwide and at all levels. All professional staff in the organization have business fundamentals which are deliverable, cost, customer or people measures, but self-driven measurements rather than management-driven measurements. These business fundamentals are linked to the key processes, and individuals self-assess their progress against these, using a sim ple rating scale. every quarter there is then a formal review across the organization against the business fundamentals.The same approach is used to track individual performance, performance against plans, and process performance, providing an integrated approach to measurement across the organization, and a strong illustration of integrating process measures with other organizational measures. Process categorization Different categorizations of processes have been proposed in the literature28. For example the CIM-OSA Standards33 use the categorization of manage, operate and support. In describing processes we have found a categorization into operational, support, solicitude ambit and managerial processes to be useful (see number 1). The separation of direction setting and managerial processes is driven by two considerationsOperationalmanagerial Direction setting SupportFigure 1. Categorization of business processesIJOPM 17,9894(1) on a practical level models, such as the EFQM model, adopted by organizations, separately identify leadership from policy and strategy formulation and (2) the strategy literature regards development of strategy as a process in its own right34,35. Operational processes are the way in which work gets through with(p) within an organization, to produce goods and services. These processes are the ones which have been the subject of much of the focus to date in TQM and BPR. They run across the organization and are associated with outcomes such as product development or order fulfilment. They are recognized in the ideas of integrated turn in chains and logistics and in simultaneous engineering and are part of justin-time approaches. The same ideas for improvement in flow and reduction in cycle times come through into service organizations in the practices of BPR. Support processes are those which enable the operational processes.They are concerned with the cooking of support technology, or systems, with personnel and human resourc e management, and with accounting management. Direction-setting processes are concerned with setting strategy for the organization, its markets and the location of resources as well as managing change within the organization. Direction-setting processes involve a mix of the prescribed steps within a formal planning process and also less well-defined frameworks. Managerial processes are to some extent superscript to the other categories and contain the decision-making and communication activities. For example, the entrepreneurial, competence-building and renewal processes proposed by Ghoshal and Bartlett20 are managerial processes. Some organizations have tried to formalize these processes and have adopted a structured approach to, for example, decision making and communication. This categorization, like any other, does not needfully fit with the view taken by all organizations (for example, some organizations would position the direction setting processes as part of their opera tional processes) but it provides a useful framework for discussion of the research findings, and for describing propositions for further research.Discussion and propositions arising from the research The six clusters identified in the findings of organization co-ordination process definition, organization structuring, cultural fit, improvement and measurement can be considered in the light of these process definitions. The issue of process definition at a top level is a view of how organizations work to satisfy strategic intents. The translation of top-level architecture into an operational reality is influenced by aspects of organizational culture which affect both organizational co-ordination and organizational structure. In no cases is the disappearance of functions apparent rather the functional organization is replaced by a matrix structure. This form of organizational structure derives its co-ordinating strength from the formation of cross-functional teams. The issues ofmeas urement and improvement reflected in the findings honour the need for Implications of effective measurement which drives process improvement in a form which co- business process ordinates and prioritizes activity something which many organizations find management difficult. The findings suggest that taking a business process management approach is one way to overcome some of the difficulties. It is our observation that organizations in approach business process 895 management tend to initially address their operational processes, then move to focus on support processes, while continuing to improve their operational processes, and next to focus on direction setting processes while continuing to improve operational and support processes.Thus there is a similarity to the operations management sandcone model, as proposed by Ferdows and De Meyer36, used to show that cost reduction relies on the cumulative foundation of improvement in objectives. We propose that an organizations appr oach to process management is similarly constituted by its approach across process categories, and that to build a stable sandcone the approach to, first, operational processes must be created (see Figure 2). This proposal has practical value, since it is the operational processes that directly impact on customers and so can yield quick benefits. Thus attention to the operational processes ensures expertness of delivery attention then moves to encompass support processes, since these in turn away ensure the capability of the operational processes attention to the direction setting processes recognizes that capability can only be maintained with good direction setting. The superordinate nature of managerial processes positions them outside the sandcone, with influences from the other categories.This sandcone model for business processes implies further propositions based on our findings. P1 As organizations develop their approach to business process management, moving through the s andcone, the justness of techniques will change. Flowcharting methods are well tried in understanding operational and some support processes. However, the organizations in this frame of our research were discovering that such methods were inflexible for other types of process.Operational Operational + support Operational + support + direction settingFigure 2. A sandcone model for developing approaches to business process managementIJOPM 17,9896The appropriate methodology for understanding the managerial and directionsetting processes may lie in the fields of systems thinking37 and business dynamics38 and the shape of a process for managing such processes needs further attention. Thus the appropriateness of soft mapping techniques increases as an organization moves through the sandcone. P2 As organizations move through the sandcone there is an increasing impact on organization structure, with the need to address structural changes to reap the benefits from the process approach . Increasingly organizations will need to consider organization design as an explicit, rather than implicit, activity to ensure organizational effectivity. This need not necessitate a move towards a complete process-based structure, but may mean a trade-off between process and functional structures39. This trade-off includes the need to consider factors such as personal relationships and cultural aspects. For example, in some organizations a purely processbased structure will be appropriate while in others the process-function matrix approach will be best utilized.P 3 We propose that there is an increasing need for maturity in TQM throughout the organization to ensure a successful process paradigm, as the organization moves through the sandcone. This raises the immediate question as to whether TQM is a necessity before a process-based approach can be effectively initiated. Certainly all organizations in this phase of our research had developed a TQM-based culture. It also raises qu estions as to whether the continual application of the radical end of the BPR spectrum28-30 makes it impossible to address all process categories, with the associated deficiency of care for the human dimension and resulting demoralized workforce. P4 We propose that the degree of co-ordination across the organization increases with moves through the sandcone. As the process approach spreads through the sandcone it forces the question of what integration actually means for an organization and clarifies the requirements for coordination.This is readily understood for operational processes, with a key element being the elimination of barriers to flow. The co-ordination includes the need for a co-ordinated approach to measurement (an example is illustrated in the measurement section above). tho implications for operations management There is a clear message emerging from this research of the need to manage the boundaries between the categories of processes and between the processes the mselves. The appropriate approach will be determined by the category of process being addressed and organizations may find the sandcone logic useful in placing their veritable position. There are different requirements at different points in the sandcone knowledge and understanding of process flowcharting techniques at one end of the spectrum through to knowledge andunderstanding of softer mapping techniques the need to consider the Implications of appropriate organization structure and trade-offs between process- and business process function-based structures the degree of maturity in TQM the degree of comanagement ordination desirable and possible and, in particular, the need for a co-ordinated approach to measurement. The research supports a view that there is a need to consider performance 897 improvement methods and concepts such as TQM, lean production and supply and agile manufacturing in a wider context, as applied to all business processes, and not just operational process es with the associated need to manage the interfaces between operations management and other disciplines. References 1. 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