Enterprise Design Process:

Business ProcessesBusiness Processes

Johan Strümpfer

Enterprise DesignEnterprise Design

Tool 1/ View 1Tool 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 ViewProcess View

KNOWLEDGE HIERACHY

INFORMATION

INSIGHT

UNDERSTANDING

'WISDOM'

Process View

Process view: PURPOSEProcess view: PURPOSE

INTRODUCES CONCEPT OF ENTERPRISE AS SYSTEM AS LINKED PROCESSES

BROADENS SCOPE OF POSSIBLE INTERVENTIONS

STAGE 1 OF ENTERPRISE DESIGN

DEFINITION OF PROCESSDEFINITION OF PROCESS

Altering or changing of relationships

Time frame of interest Flows and transformations of

Matter, Energy & Information (MEI) Internal to systems boundary, Input

& Output Structure: static; Process: Dynamic

PROCESS VIEW OF SYSTEMPROCESS VIEW OF SYSTEM

INPUT TRANSFORMATION OUTPUT

I T O

SYSTEM

CLASSIC ORGANISATIONAL STRUCTURECLASSIC ORGANISATIONAL STRUCTURE

Lines of authority, responsibility, accountability

PROCESS ORGANISATIONALVIEWPROCESS ORGANISATIONALVIEW

“Manage the white spaces”

BASES OF DIFFERENTIATION AND INTEGRATIONBASES OF DIFFERENTIATION AND INTEGRATION

Classical Functional division The whole is integrated at the top Optimisation of the parts yields optimisation

of the whole Process

Process division The whole is integrated at the bottom Optimisation of the whole is different from

optimisation of the parts

Systemic Differentiation & Specialisation Integration & Synthesis

System development Integrate AND Differentiate All bases of division

BASES OF DIFFERENTIATION AND

INTEGRATION-2

andor

PROCESS REDESIGNPROCESS REDESIGN

Develop Process Objectives Identify Processes to be Redesigned Understand and Measure Existing

Processes Identify IT levers Design and Build Prototype Process

Davenport & Short (1990)

PROCESSESPROCESSES

Logically related tasks to achieved defined business outcome

Have customers, i.e. defined business outcomes

Cross organisational [functional] boundaries

Davenport & Short (1990)

RE-ENGINEERINGRE-ENGINEERING

Organise around outcomes, not tasks Let output consumers produce output Integrate information processing with real work

producing the information Place decision making where work is performed

and build control into process Treat geographically dispersed resources as

centralised Link parallel activities instead of integrating results Capture information once and at source

M Hammer, HBR ,1990

CHARACTERISTICS OF BUSINESS RE-ENGINEERINGCHARACTERISTICS OF BUSINESS RE-ENGINEERING

Re-work the transformation, not the output. Singular (insular) view (process) of the

organisational structure Substitution of one basis for organisation for

another Heavy dependence on IT perspective Patchwork of (some good) concepts; lacks rigour Design orientation Transcends current boundaries Promotes questioning --- What framework? Stretches value chain thinking

DISCUSSIONDISCUSSION

Relate your own experiences and understanding of business re-engineering

Biomatrix Teleon Doublet Telentropy Sub-teleon Sub-doublet Endo, Exo, Centro-teleon .....

Gyuri Jaros & Anakrion Cloete

...OF BIRDS AND BEES......OF BIRDS AND BEES...

Woven mat of processes:Woven mat of processes:

Sets of connected activities aimed at purpose

Interlinked and intersecting processes

Production processes Support processes

PROCESS CHARACTERISTICSPROCESS CHARACTERISTICS

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

TELENTROPYTELENTROPY

INVERSE OF LIKELIHOOD OF ACHIEVING ITS GOAL

Low telentropy = good chance of achieving goal

High telentropy = low chance of achieving goal

TELENTROPY “=“ STRESS TELENTROPY TRANSFERABLE

EXERCISEEXERCISE

List 2-3 major processes in your personal life

List 3-5 major processes in your organisation

USE PROCESS CHARACTERISTICS CHECKLIST TO DEFINE PROCESSES

PURPOSE OF DESIGN PROCESSPURPOSE OF DESIGN PROCESS

DESIGN A DESIGN: Model of what ought to be

CRITICAL REFLECTION: Template for questioning design and reality

ALIGNMENT: Building up SHARED model of how business works

PARTICIPATION: Framework for participative design

PROCESS VIEW DESIGN PRINCIPLES

PROCESS VIEW DESIGN PRINCIPLES

Outward - Inwards design, not reactive: Holistic Actively searches out multiple viewpoints Structures and supports a group learning

process: Participative Uses a formal systems model as design

template Uses a systems approach to structure design

process Integrated with overall enterprise design

process

DESIGN PROCESSDESIGN PROCESS

STAKEHOLDER VIEW OUTPUTS REQUIRED PROCESS DEFINITION PROCESS MODELLING COMPARISON ORDERING ACTIVITIES

PROCESS DESIGN PROCESS

PROCESS DESIGN PROCESS

STAKEHOLDERS?

EXPECTATIONS?

OUTPUTS?

PROCESS ID &DEFINITION

TRANSFORMATIONACTIVITIES?

MONITORING & CONTROL ?

IT ROLE?

COMPARISON

CATEGORISE

SOURCESSOURCES

ACKOFF: Redesigning the Future & Creating the Corporate Future

Gharajedaghi: Towards a Systems Theory of Organization & Unpublished material

Mason & Mitroff: Various on Stakeholders Churchman: Design of Inquiring Systems,

Systems Approach and Its Enemies Checkland et al: Soft Systems

Methodology

STAKEHOLDER*STAKEHOLDER*

Stakeholder’s view of the enterprise Stakeholder’s logic, rationale and

value systems Stakeholder’s choice to be

stakeholder

STAKEHOLDERSSTAKEHOLDERS

Who should be served? Who should (are) the stakeholders? Who should (are) the

clients/beneficiaries?

EXPECTATIONSEXPECTATIONS

What should the purpose be, from the client’s (beneficiary’s) perspective?

What should (are) the client’s measures of performance?

What are the underlying worldview assumptions that makes this meaningful to the client?

WHAT ARE THE OUTPUT GOALS?

WHAT ARE THE OUTPUT GOALS?

What should be produced to satisfy the expectations of the particular client/stakeholder?

What are the tangible and intangible deliverables?

What are time related requirements to satisfy the expectations?

PROCESS DEFINITIONChecklist

PROCESS DEFINITIONChecklist

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

transformation?

PROCESS ACTIVITY MODELPROCESS ACTIVITY MODEL

One process definition and model per output

Set of logically linked activities required to perform the transformation

Elements of model are verb phrases: Activities

ONLY activities that can be related to definition may be included

5-12 activities per model

MONITORING AND CONTROL ACTIVITIES

MONITORING AND CONTROL ACTIVITIES

Expand model to include monitoring and control of process within process

Efficacy, efficiency and effectiveness: Efficacy: Does the process achieve its goals (output, time)?

Telentropy: Likelihood of achieving goals Efficiency: Resources used per production unit. Effectiveness: Do the goals satisfy the (longer term)

purpose and expectations?

What should be measured for efficacy monitoring? What should be measured for efficiency monitoring? What should be monitored for effectiveness? Required reporting (including telentropy) and control

activities?

ROLE OF INFORMATION TECHNOLOGY AND SYSTEMS?

ROLE OF INFORMATION TECHNOLOGY AND SYSTEMS?

What should be done differently because of enabling technologies?

How should activities be done making use of IT/IS? Specialist input required Refer guidelines

IT/IS GUIDELINES FOR “INFORMATIONALISING”:IT/IS GUIDELINES FOR “INFORMATIONALISING”:

Mass customisation Rapid, real time response Manufacture at point of delivery Shrinking Overhead, Inventory, Working Capital Direct customer access & service levels Interlinking organisations Logistics and globalisation

Stan Davis & Bill Davidson: Vision 2020, Future Perfect

COMPARISONCOMPARISON

Activity models reflects designed ideal Reflect on requirements for rigidity vs.

redundancy and flexibility Use models as basis for critical reflection on

what is and should be implemented Cultural issues, value changes Human dimension (training, competencies) Political feasibility Impact dynamics

Group debate and design of implementation: Interaction

ORDERING OF ACTIVITIES ACROSS ALL

PROCESSES

ORDERING OF ACTIVITIES ACROSS ALL

PROCESSES

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