Business Process Architecture Training

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Business Process Architecture

Introduction

A useful way of classifying business processes is to identify them, organise and document them as core, management and support processes.

Business process classification is important to be able to develop an effective business process architecture.

The Value Chain

The idea of the value chain is based on the process view of organizations, i.e. the idea of

seeing a manufacturing (or service) organization as a system, made up of subsystems,

each with its own inputs, transformation processes and outputs.

The way value chain tasks and activities are carried out determines operating costs and

affects profits.

The concept of the value chain as decision enabling and supporting tool is associated with

business management. It was first described by Michael Porter in his best-selling book

"Competitive Advantage: Creating and Sustaining Superior Performance" published in 1985.

Core Processes

Core processes are end-to-end, cross-functional processes that directly deliver value to external clients or intermediaries. These processes are often referred to as “primary” processes, as they represent the essential activities an organisation performs to achieve its goals and objectives, fulfil its mission and attain its vision.

Core processes make up the value chain and include:

Design, development, and creation of products or services
Marketing products or services and conveying them to customers
After-sales service and support

To deliver excellence, these elements must be linked and work together as one.

Core processes:

Are the engines of the value chain that must work seamlessly to create and

deliver customer value.

Create and deliver value, in the form of products or services to external

customers and generate income.

Can exist within organisational functions, but usually cut across departments

and functions, or even across and between enterprises.

Are associated with the development and creation of the product or service,

the marketing and transfer the service beneficiary or buyer, as well as

customer feedback or after-sale support.

The number of core processes in an organisation, regardless of size, is between four and

eight. An organisation’s ability to clearly identify and manage its core processes is a strategic

capability.

Core processes:

Are of strategic business importance
Affect an organisation and are critical to its success
Enable service delivery by providing the organisation’s outputs to external customers in the form of products, services, support, or information
Are not intended for management or provision of internal services..

If core processes are:

Implemented and perform well, service can be delivered at a high standard
Poorly implemented and managed and/ or are inefficient or ineffective, this become strategic weakness.

Core processes are at the core of your business, so getting them working as efficiently as possible is a strategic priority that has transformed many organizations.

Management processes

Management processes are designed to:

Plan, measure, monitor, coordinate, and control business activities.
Ensure that core or support processes meet operational, financial, regulatory

and legal requirements.

Deal with threats and opportunities that that could harm or benefit your

business.

Optimize income generation and ensure the continued survival of the

business as a whole.

This type of business processes:

Does not directly add value to customers
Is necessary to ensure the organisation operates effectively.

Business process architecture, which describes of the structure of the business

processes in an organisation, defines and classifies processes by category, as

well as by level of detail.

The identification and understanding of core, management, and support processes at architectural as well as detailed level, is essential for successful business process management.

Support processes

Support processes are enabling processes designed to assist the value-delivering core processes, by providing the resources and infrastructure required by primary processes.

The main difference between core and support processes is that the latter:

Do not deliver value directly to external customers and do not generate income
Add value to internal customers.

Examples of support processes include information technology, finance and human resource services, and provision of goods and services to internal customers.

HR processes and activities do ,add value directly for your external customers, or generate revenue for the business; however, without human resources, your business can not function.
IT processes,help desks, and infrastructure, do not generate revenue for the business, but without the monitoring, management, and support of IT systems, your value-generating functions could grind to a halt.
Accounting and Finance keep track of client accounts, a very important part of customer service, that is directly involved in the value chain. However, it also generates management accounts used as the basis to determine whether your business is profitable. These departments provide services to internal “customers” such the management team of the business.

Each support process:

May involve a resource delivery lifecycle
Is often associated with functional areas of the organisation.

Support processes can, and often do, cross functional boundaries. For example, the process of providing internal capacity supports an organisation’s ability to deliver mandated products or services.

The fact that support processes do not directly deliver value to customers does not mean that they are not important to an organisation, because they affect the organisation's ability to execute core processes effectively.

Understanding the network of, and interaction between, processes

All activities associated with your business should be aiming at optimizing the

core processes. Management and support processes contribute to this, but

redundancies can creep into any of the three types of business processes.

In a business with a diverse portfolio of products and services, it is possible that

some processes may not fit in the group of core processes, but may be consuming

time and resources without adding value to your customers or the business.

In businesses, support tasks that made sense at the time may have lost their

relevance.

For example, you may have added a reporting duty to gather data a few years ago. You used the data, do not really need it any more, but your staff is still faithfully generating the reports. If any task is not adding value to or enabling core processes, you should consider pruning it away.

That’s one of the reasons why mapping your core business processes is so important. If you find yourself asking: “Why do we even do this or that task?” it’s probably time to streamline your business processes.

Understanding the types of business processes can also help you to make outsourcing decisions. Although it certainly is possible to outsource parts of your core processes, it can be risky.

However, support processes can more easily be, and often are, outsourced. Even large businesses are outsourcing support to firms whose core business is the provision of support functions. Many of them are finding opportunities for cost-savings in this way.

Finally, if you’re moving to process-oriented management to improve efficiency, you need a starting point. The best place to begin examining your business process architecture is with the core functions. After all, they are the functions on which everything else in the business should focus.

For more information about the business process basics click here.

General Course Information

For general course information please click on the link here.

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