And Business Processes

To be able to make changes to a business process, it is necessary to understand how the process supports the strategic goals of the business and how changes to the goals may impact the process and vice versa. This paper explains the relations between strategic goals and business processes by adopting a regulation point of view. This point of view holds that the main property of business systems is their constancy. A business achieves constancy by regulating its relationships with other business entities. We model this constancy with maintenance goals which could be seen as a more precise definition of strategic goals. We then linkthese maintenance goals to achievement goals that correspond to operational goals.

The set of activities composing a process and their order can be modeled with a set of rules. For example, the business process of a sale in a web based mail order business can be defined with the following rules:

1. If customer wishes to purchase goods then enable customer to selectgoods;

2. If customer has finished to select goods then compute the total amount of the sale;

3. When total amount is computed transmit total to customer and wait for payment to be received;

4. If payment received then verify payment;

5. If payment ok then deliver goods to customer.

In general this collection of rules is simply viewed as achieving the goal of selling the goods to the customer, but the rules tell us much more if we analyze them in terms of the relationships they regulate.

First of all, the rules name a customer so we know that we have a relationship with a customer. However, the rules regulate other relationships. To see which ones, we can ask questions that seem very naive in this simple example, such as: what is the goal of rules 2, 3, and 4? The obvious answer is: to insure that payment is received before the goods are delivered. But why is a payment needed? If the strategy of the business is to insure customer satisfaction, isn’t a good way to achieve this satisfaction to deliver goods for free? Obviously, customers would be satisfied to receive the goods for free, but we all know that in most cases this is not a good long term strategy for the business. The reason for this is also obvious. The business has other relationships than the customer that it needs to maintain in order to survive.

Some of these relationships are the employees, the investors and the suppliers, all of which need to get paid for their services or else they will abandon the business, which will not survive for long.

Since these relationships are so important to the business, we can assign the business the following (strategic) maintenance goals (this kind of goal usually appears in company mission statements):

1. Maintain good customer relationships;

2. Maintain good employee relationships;

3. Maintain good investors’ relationships;

4. Maintain good suppliers’ relationships.

The rules of the sale process also tell us some things about the beliefs of the business. As noted by Hammer in “Employee values and beliefs must be consistent with and support the design of the company’s business processes.” We extend this statement by noting that the business processes currently in place are motivated and consistent with current employee beliefs. These beliefs are often shared by most employees of the business and generally remain in tacit form rather than being explicitly defined (processes may be defined by managers but employees who implement them usually share the same beliefs as the managers). In the case of the sale process, we can therefore infer some of the business’s beliefs by analyzing the rules above, which yields the following list of beliefs:

1. Customers cannot be trusted to send payment after goods have been delivered (justifies that rule 5 is at the end of the list);

2. Customer payments may not be valid (justifies rule 4);

3. Customers trust the business to deliver the goods when payment has been received and verified (justifies rule 5).

These beliefs usually remain implicit in the definition of the business process but they justify the existence of rules. Another interesting point with the relations between the beliefs and the rules is that some rules are justified by severalbeliefs, such as rule 5 which is justified by beliefs 1 and 3. If either of these beliefs is proved wrong then either rule 5 makes the sale process inflexible because it is impossible to deliver the goods to the customer before the payment is received and verified, or rule 5 is downright unacceptable to customers. The business process can be changes so that goods can be shipped before the payment is received and checked.

Work with the text

§ Give synonyms to the words in bold.

§ Make a short plan of the text.

§ Retell it to your peer.

Translate from Russian into English:

§ Чтобы быть способным внести изменения в деловой процесс, необходимо понять, как процесс поддерживает стратегические цели дела и как изменения в цели может ускорить процесс и наоборот.

§ Бизнес достигает постоянства посредством регуляции взаимосвязи с другими деловыми субъектами.

§ Набор видов деятельности, который формирует бизнес процесс и его порядок может быть смоделирован инструкцией.

§ Ответ очевиден: для подстраховки оплата должна быть получена прежде, чем товары будут поставлены.

§ Некоторые из подобных взаимоотношений это - служащие, инвесторы и поставщики, которым нужно оплачивать их услуги или иначе они выйдут из дела, которое долго не просуществует.

§ Эти убеждения обычно всего лишь подразумеваются в определении делового процесса, но они оправдывают существование правил.

UNIT 2

Lead in

§ Is there anything to change in the business process in the organization you work in?

§ Can these changes influence the profit of your organization?

§ Who is usually in charge of this activity?

Discussion

§ Think and discuss of how we can model new strategic move.

§ Discuss your ideas in small groups.

§ Present your ideas.

Vocabulary

§ Read and translate new words and expressions using a dictionary.