SSRN Id2328978

Change Management:
Process Classification Framework

and Best Practices
By:
Jasim Mohammed Hassan Yousif Al-Marzougi

Deputy General Manager of HR
United Arab Emirates
September, 2013
Electroniccopy
Electronic copyavailable
available at:
at: https://ssrn.com/abstract=2328978
https://ssrn.com/abstract=2328978
Change Management: Process Classification Framework and Best Practices
Introduction
When French novelist Jean-Baptiste Alphonse Karr wrote “Plus ça change, plus
c’est la meme chose,” he could have been penning an epigram about change
management. For over three decades, academics, managers, and consultants, realizing
that transforming organizations is difficult, have dissected the subject. They’ve sung the
praises of leaders who communicate vision and walk the talk in order to make change
efforts succeed. They have sanctified the importance of changing organizational culture
and employees’ attitudes. They have teased out the tensions between top-down
transformation efforts and participatory approaches to change. However, the more things
change, the more they stay the same.
The Process Classification Framework was created in collaboration with many
experts and practitioner panels in 1992. It is a globally recognized business process
model that defines activities and processes across thirteen enterprise-level operating and
management categories. The Process Classification Framework enables companies to
understand their inner workings from a horizontal process viewpoint rather than a vertical
functional viewpoint. Moreover, the framework does not list all processes within a
company and every process listed in the framework does not represent in every
organization.
The framework can help answer the question of how a company is doing and
therefore help validate the company’s operational objectives. The benefits of employing
the Process Classification Framework includes reduced inventory, improved customer /
suppliers relationships, improved sales, improved profit margins, and more enriching jobs
for employees. The globally recognized business leaders armed with the taxonomy of the
business processes: industry best practices, benchmarking tools and risks and controls,
will definitely outperform the competitors.
Electroniccopy
available at:
Change Management
In recent years, many change management experts have focused on soft issues,
such as culture, motivation and leadership. Such elements are important for success, but
managing these aspects alone is not sufficient to implement transformation projects. Soft
factors does not directly influence the outcomes of many change programs. The same can
be said about communication with employees. Moreover, it is not easy to change
attitudes or relationships; they are deeply ingrained in organizations and people. And
although changes in, say, culture or motivation levels can be indirectly gauged through
surveys and interviews, it is tough to get reliable data on soft factors.
What is missing, is a focus on the not-so-fashionable aspects of change
management: the hard factors. These factors bear three distinct characteristics.
1. First, companies are able to measure them in direct or indirect ways.
2. Second, companies can easily communicate their importance, both within and
outside organizations.
3. Third, and perhaps most important, businesses are capable of influencing those
elements quickly.
Some of the hard factors that affect a transformation initiative are the time necessary to
complete it, the number of people required to execute it, and the financial results that
intended actions are expected to achieve. If companies do not pay attention to the hard
issues first, transformation programs will break down before the soft elements come into
play.
Change management is a basic skill in which most leaders and managers need to
be competent. There are very few working environments where change management is
not important. Tips on how change management principles can be applied. When leaders
or managers are planning to manage change, there are five key principles that need to be
kept in mind:
1. Different people react differently to change
2. Everyone has fundamental needs that have to be met
3. Change often involves a loss, and people go through the "loss curve"
4. Expectations need to be managed realistically
Electroniccopy
available at:
5. Fears have to be dealt with

Where you are embarking on a large change programmes, you should treat it as a
project. That means you apply all the rigor of project management to the change process -
producing plans, allocating resources, appointing a steering board and/or project sponsor
etc.. The five principles above should form part of the project objectives.
Electroniccopy
available at:
Universal Process Classification Framework
The Process Classification Framework is made up of thirteen processes that apply

to almost any business, regardless of industry, location or size. The first seven are the
Operating Processes that companies follow to develop and move goods and services to
the market. The last six are the Management and Support Processes that enable
companies to operate effectively.
Table Number 1: Process Classification Framework
The Process Classification Framework was co-developed in 1992 by Global Best

Practices and the American Productivity and Quality Center's (APQC) International
Benchmarking Clearinghouse (PricewaterhouseCoopers, 2009). It was the first open
standards-based framework for measuring efficiencies in a corporation’s important
divisions: supply chain, information technology, customer service, financial management,
Electroniccopy
available at:
sales, and marketing efficiency. The PCF is available free of charge at www.apqc.org and
serves as an industry neutral enterprise model that allows organizations to see their
activities from a cross-industry process viewpoint, benchmark against organizations
globally, and adopt best practices (CBS Interactive Inc., 2009).
Performance improvement begins with measuring the effectiveness and efficiency
of business operations to identify and implement changes needed for optimal success, as
noted by PricewaterhouseCoopers (2009).
Table Number 2: Roadmap from Measurement to Implementation
Implementation involves methodical approaches, such as business process management,

including ongoing efforts to identify a company's strengths and weaknesses. The benefits
of the Process Classification Framework are lower costs, higher quality and reduced
time. The framework can help answer the question of how a company is doing and
therefore help validate the company’s operational objectives. The thirteen processes in
Table one above is defined, with examples of global best practices and executive
dashboards, hereafter.
1. Understand Markets and Customers - This is defined as the process of

analyzing market and customer information to create and maintain a competitive business
position (PricewaterhouseCoopers, 2009). Kerry Capell (2008) noted that companies that
understand the differences and similarities between customers, especially their
Electroniccopy
available at:
purchasing behavior, lifestyles, and demographics, are more likely to attract targeted
buyers. For example, McDonald's Corporation recently began to tailor its restaurants to
suit the differing tastes and lifestyles of its customers. McDonald’s European operations
have interior designs catering to a more relaxed lifestyle where the customers usually
linger over meals. The new design features leather, fabric, and stainless steel furnishings
in a lounge-like setting that is far different than the traditional McDonald's interiors in the
U.S. (Kerry Capell, 2008). The fast food chains are currently analyzing more complex
behaviors to gain deeper insight into customer preferences and whether the company is
meeting those preferences.
2. Develop Vision and Strategy – This is defined as the process of preparing for
future success with strategic plans that address both short and long-term business
objectives (PricewaterhouseCoopers, 2009). The most successful companies are generally
those that apply best practices in today's fast-paced, globally-connected economies and
continuously gather knowledge on:
Technological and societal trends
Product launches and competitors
Regulatory and legal issues
Robert H. Rosen, Chief Executive at PWC’s Global Best Practices (2008) noted that
company’s leaders stay focused by restricting the scope of the information and by making
certain that scanning efforts meet the company's business objectives per its operating
sphere. This helps to ensure that business leaders have the necessary information to align
their company’s activities with corporate objectives and execute them strategically in
response to marketplace changes. In this interconnected global economy, the astute
leaders fully understand four principles:
Prioritization of objectives
Courage
Discipline
Flexibility
Successful leaders are those that are able to balance the four principles and not favor one
at the expense of another.
Electroniccopy
available at:
The Procter & Gamble Company (P&G) is known for its data-mining ability with
its employees and its portfolio of more than 300 brands, noted Robert H. Rosen (2008).
Despite the company’s complex size, its strategies, goals, and performance measurements
are summarized in just one page. Robert H. Rosen (2008) noted that to keep track of
company’s large volume of brands and product development, they must adopt the use of
computer technologies. Straightforward, separate documents give the status of each
product with a color-coded indicator. Rosen (2008) went on to say:
Products that are on target are listed in green, while those that are off
target are in red and those that are making progress are in yellow. Setting
proper parameters for data collected helps leaders at P&G gain insight into
challenges and set goals and strategies in areas critically requiring
attention.
Delivering the right information to the right people at the right time allows companies to
respond to market forces with greater speed and efficiency. With greater knowledge,
companies can anticipate and even preempt marketplace changes by instituting strategies
that keep the company ahead of the competition.
3. Design Products and Services - This is defined as the process of conceiving,

designing, and delivering competitive products and services (PricewaterhouseCoopers,
2009). Studies show that creativity and innovation are at a premium in organizations that
encourage risk taking, permit failure, provide connectivity, and build freedom into the
work environment (Harvard Business Review, 2008). Ed Catmull at Harvard Business
Review (2008) noted that the Walt Disney Company's Pixar Animation Studios, Inc.
(Pixar) has succeeded in building an organizational culture that unleashes the power of
ideas, thus gaining a more unified, focused workforce, candid communication of
innovation goals, greater cross-pollination of ideas, and higher return on innovation
investment. This is a clear example of how the delivery of information can help even
large complex company to function with agility and purposefully.
Electroniccopy
available at:
Table Number 3: Project Management
Pixar's eight directors make up the company's “Creative Brain Trust” which was
first established when a crisis arose in the early stages of making Toy Story, the first fully
animated feature-length film (Harvard Business Review, 2008). When a director or
producer needs assistance, the Trust convenes and enlists the help of someone else within
the company with the relevant skills and ability to make a contribution for improving the
movie. This approach allows for a frank exchange of expert opinions, enabling the film's
director to receive valuable input and advice. Pixar success as a company is evidenced by
the fact that nearly a quarter of the company has gained nearly a quarter of the movie
box-office revenues for all animated films in recent years beginning with Toy Story,
released in 1999. Followed by that movie's sequel, as well as A Bug's Life, Monsters, Inc.,
Electroniccopy
available at:
Finding Nemo, The Incredibles, Cars, Ratatouille, and Wall-E, all of which appealed to
both children and adults (Harvard Business Review, 2008).
4. Market and Sell - This is defined as the process of developing strategies and
procedures to position products and services in the marketplace and achieve high levels
of market share (PricewaterhouseCoopers, 2009). Depressed sales stemming from the
current economic crisis have taken a toll on retail chain businesses around the globe.
Several retailers have therefore revisited the strategy of maintaining or boosting revenues
by customizing prices for different customer segments, recognizing that customers value
products and services differently in various locales (The Wall Street Journal, 2009). The
U.S. brand Gap Inc. has engaged in various forms of localized discounting, rather than
marking down prices uniformly. Andria Cheng at the Wall Street Journal (2009) noted
that the company’s strategy is as follows:
Items will sell quickly in one region, thus offsetting the need for greater
price slashing elsewhere. Gap's price customization strategy has
succeeded. For each of the five months through May 2009, merchandise
profit margins met or exceeded levels of the same period in 2008. And in
addition to offering regional discounts, the company received such a
positive response to a military discount initially offered only at its Old
Navy stores in Southern California, U.S. that it instituted the program at
all stores in the chain.
The increasing popularity of this method is evidenced by a study by the National Retail
Federation trade group. The Federation found that more than one-fifth of U.S. retailers
use "markdown optimization" software systems, while 33% plan to put the technology in
place within the next 18 months (The Wall Street Journal, 2009). By tailoring prices to
needs, companies are better positioned to survive competitive pressures and economic
uncertainty.
Distribution channel - When a company wants to launch a product that is

different from its current offerings, it must make a strategic decision about which
distribution channels to use. When Samsung Electronics Co., Ltd., the Seoul, South
Korea based electronics company, decided to enter the printer market, it wanted to
differentiate its products from those of the competition, which tended to focus more on
10
Electroniccopy
available at:
ink refill sale rather than the look and feel of the printer itself (BusinessWeek, 2009).
After manufacturing a glossy, jet-black, five-inch high printer that looked like no other
printer, Samsung sold it exclusively through Apple Inc.'s retail stores at a price that was
25% higher than competing printers, noted Cliff Edwards at BusinessWeek (2009).
Choosing a new distribution channel that reinforces marketing and sales strategies
turned out to be a success story for Samsung. The company’s printer market share in the
U.S. jumped from 2.3% to 3.6% in one year, with its share of the worldwide market
rising to 25% from 13.4% (BusinessWeek, 2009). Companies such as Samsung that
smartly pair products with distribution channels can effectively make market shifts,
invigorate their product development process, and increase their profitability through
innovation.
5. Produce and Deliver Products and Services - This is defined as the process of
managing the production process, from resource and project management, to inventory
and warehousing, to delivery and service support (PricewaterhouseCoopers, 2009). Josh
Hyatt at CFO (2009) noted that the critical dependencies in today's complex supply chain
networks can create serious vulnerabilities, especially when so many companies are on
shaky financial ground. Companies that apply best practices take steps to reduce supply
chain risk by monitoring their suppliers. Managers watch out for financial and legal risks
such as a history of poor payment, weak credit, tax liens or judgments, outstanding
lawsuits, securities violations, and regulatory noncompliance (CFO Magazine, 2009).
Table Number 4: Improving Response Time from Beginning to End
When a company has thousands of suppliers located around the globe, continuous
monitoring of their suppliers can be too involved. To make the challenge more
11
Electroniccopy
available at:
manageable, leading companies identify their critical suppliers and dedicate more
resources to scrutinizing that smaller group. Some companies even use external
consulting or investigative services to research potential suppliers' financial strength and
business integrity (CFO, 2009). For example, the U.S. based Cisco Systems, Inc. focuses
extra attention on the key suppliers to its 100 highest revenue products. Cisco, a Fortune
500 technology company, tracks the publicly traded suppliers among that group through a
financial monitoring service that determines the probability of supplier default based on
the value of the supplier's assets, its asset volatility, and its capital structure Josh Hyatt at
CFO (2009) noted. Supply chain risk management techniques help companies such as
Cisco to maintain a predictable and lean supply chain.
Best practices companies synchronize demand and supply plans by using tools
designed to improve demand forecasting accuracy, thereby gaining cross-functional
consensus on forecasts and aligning those plans with their financial objectives
(IndustryWeek, 2009). In effect, such companies lower inventory and supply chain costs
while improving sales and profit margins. Terumo Cardiovascular Systems, Inc., a
medical products manufacturer based in Michigan, U.S.A, implemented supply chain
planning tools to increase their views into customers' buying habits and sharpen their
sales forecasts, said Bill MacDonald at Industry Week (2009). He went on to say:
The company also developed a manage-by-exception capability that
provided early alerts when demand flows went outside normal parameters.
As a result, Terumo reduced its inventory by 36% within one fiscal year,
which translated into $1 million USD saved on storage fees, obsolescence
costs and inventory carrying costs.
Forward-looking companies use sales and operations planning (S&OP) tools and
processes to coordinate their internal supply, demand, operational, and financial plans.
Such companies are therefore able to handle variations in supply and demand better and
are able to ensure that operational solutions support financial targets.
6. Produce and Deliver for Service Oriented Organizations - This is the

management process of the service delivery process, from resource and project
management, to employee support and customer relations, to delivery and quality
assurance (PricewaterhouseCoopers, 2009). Today’s consumers are savvier than ever
12
Electroniccopy
available at:
before, thanks largely to the internet. As their knowledge grows, so do their demands,
straining companies' resources to keep them satisfied. Reena Jana at BusinessWeek
(2009) stated that companies that apply best practices:
Capitalize on all channels of contact to capture insight into changing
customer service needs. Gathering such information from a broader array
of sources enables these companies to uncover customer trends faster,
identify problems early on before they become major issues and deliver
the kinds of products and services that keep customers satisfied.
Market leading companies also update their websites constantly to provide the latest
information for customers and keep them engaged (BusinessWeek, 2009).
7. Invoice and Service Customers - This is the process of billing for goods and
services rendered and providing after-sales support and problem resolution to retain
customers and build loyalty (PricewaterhouseCoopers, 2009). Even in today's technology
driven business world, many organizations are burdened with cumbersome billing
systems (Healthcare Financial Management, 2009). The cutting edge companies invest in
robust, centralized technology systems that facilitate billing processes that are efficient,
transparent, and consistent.
Due to the global economic downturn of 2008/2009, companies are scrambling
for competitive advantages. This now includes their own unique billing processes. Alok
Ajmera at Businessfinancemag.com (2008) noted that the best practices companies
leverage billing and invoice data to gain strategic business advantage. By leveraging the
billing processes, companies can:
Modify their sales techniques
Improve forecasting
Maintain a more consistent and reliable stream of revenue
8. Develop and Manage Human Resources - This is defined as the process of

planning and monitoring issues pertaining to the workforce, including recruitment, hiring,
compensation, administration of benefits, and training of employees
(PricewaterhouseCoopers, 2009). Wade Lindenberger and Kayoko Lindenberger at
Workspan (2009) noted, companies that apply best practices, human resource (HR)
13
Electroniccopy
available at:
departments understand the importance of being viewed as a functional area dedicated to

supporting strategic goals and impacting organizational performance. This represents a
shift from the historical view of HR departments as administrative cost centers.
Pay-for-performance - Top companies link pay for top executives to

performance, which provides additional motivation to achieve company objectives. Tying
compensation directly to short and long-term company goals also keeps executives
focused on what they must do to make corporate goals a reality and advances efforts to
run the company in the most efficient way. Moreover, shareholders and investors look
favorably on the practice of linking executive compensation to company performance, as
it is seen as tangible evidence that the company rewards behavior that brings it success,
Wade Lindenberger and Kayoko Lindenberger.
Hewlett-Packard Company (HP), a California, U.S.A. based company, reported
depressed financial results due, in part, to challenging economic circumstances. Most
notably, they reported a 20% decline in revenue earlier this year. The company’s Chief
Executive Officer (CEO) stated that from a productivity standpoint, a similar percentage
headcount reduction would be needed. However, not wanting to lose valuable employees
who would be needed when the environment improved, he instead announced that his
base salary would be cut 20%, along with other employees' pay declining in a stair-step
fashion according to rank, down to a 2.5% cut for entry-level workers (Workspan, 2009).
The CEO noted that variable pay rules were the new reality, so if HP outperformed
certain benchmarks, employees stood to improve their compensation.
Companies, such as HP, that tie executive compensation to company performance
enjoy an enhanced corporate image in the eyes of investors and shareholders. They also
tend to have greater transparency of executive compensation, greater sense of ownership
and responsibility, and foster higher morale among the rank-and-file employees in
uncertain times (Workspan, 2009). Jack Welch, former CEO of General Electric (GE)
and a leading expert on driving performance, believes (SuccessFactors, 2009):
The ultimate goal of managing is not to get an employee to perform as
expected, but to have them willingly go beyond the call of duty because
they want to. A pay-for-performance system is a key element in getting
employees to excel at maximum (and beyond) levels. By combining clear
14
Electroniccopy
available at:
direction, quality feedback, and tangible rewards, workers also receive

recognition - a key component to job satisfaction and employee
dedication. This builds a more satisfying relationship where employees are
inspired by knowing management truly values their efforts.
Global mindset - The term "global mindset" is becoming widely used in business
today. Companies with a strong global mindset, which refers to the ability to accept
differences and work well with cultural diversity, tend to be adept at managing and
developing cultural diversity effectively and utilizing the depth and breadth of their
global workforce to perform at their full potential in worldwide markets
(Strategy+Business, 2009). William J. Holstein at Strategy+Business (2009) noted,
companies that apply best practices are coming to the realization that it is important to
have a CEO and upper-level executives with a deep understanding of the customs in
developing countries and to place executives from around the world in vital corporate
positions to guide a global company.
Table Number 5: Human Capital Management
15
Electroniccopy
available at:
Colgate-Palmolive Company, a New York U.S. based consumer products

corporation, rewards, makes global transfers, provides incentives, and manages the
careers of high-performing executives regardless of nationality (Strategy+Business,
2009). William J. Holstein went on to point out:
Colgate also injects accountability at senior levels to identify and nurture
high-potential leadership candidates around the globe and developed an
information system that links operations in 200 countries, which the
company uses to make its talent identification and tracking capabilities
easier. These measures have produced a diverse leadership ranks for
Colgate.
Colgate's CEO is from the U.K., eight of its top nine operating executives are from
outside the U.S. and more than half of its 200 senior managers are from non-U.S.
countries (Strategy+Business, 2009).
9. Manage Information Resources and Technology - This is defined as the

process of ensuring timely and affordable access to state-of-the-art information, tools and
technology (PricewaterhouseCoopers, 2009). Samuel Greengard at Baseline (2008)
argued that most companies recognize that information resources are among their most
valuable assets, but only companies that manage information from acquisition through
disposal consistently create and capture full value in the course of daily operations.
Companies that apply best practices manage data and information, whether structured in
relational databases, data warehouses and transaction systems or unstructured in e-mail,
presentations and text documents (Baseline, 2008).
Baseline (2008) noted that the competitive advantage companies:
Gain from adept management of information resources constitutes a
powerful argument for making the process a top strategic priority. High-
performing companies develop strategies for acquiring, disseminating, and
maintaining high-quality information resources so that employees have
information when and where they need it. These strategies typically
outline policies and procedures intended to guide employees in their
efforts to support and measure success toward business goals.
Strategy alone, however, does not guarantee success. Therefore, ongoing leadership
support and commitment to information resources management are needed when
employees resist new ways of managing and sharing information. Data and information
16
Electroniccopy
available at:
management initiatives more often meet with success when respected company leaders
endorse them and visibly participate in supporting them (Baseline, 2008).
Wal-Mart Stores, Inc. is leveraging their digital technology to improve employee
benefits. The company launched a digital medical records program enabling files from
pharmacies, participating insurers, and other parties to be downloaded into the company's
database and utilized as a one-stop site for employees to access their medical records
(BusinessWeek, 2008). Wal-Mart anticipates that its employees, armed with their readily
accessible medical information, will receive better healthcare.
Reena Jana at BusinessWeek (2008) noted:

Wal-Mart expects it "e-health" system to lead to more frequent check-ups,
reductions in time devoted to paperwork at doctor's offices, and a more
accurate data stream for healthcare providers, ideally resulting in care that
is more appropriate and more cost-effective.
The majority of corporations view technology as a critical component to the efficient
management of their records and information for auditing. However, this is only a limited
perspective and only one piece of the puzzle. Top performing companies also explore
ways to improve employee services through creative application with their IT and
electronic record systems (BusinessWeek, 2008).
10. Manage Financial and Physical Resources - This is defined as the process of
protecting resources and systems fundamental to the viability of the business
(PricewaterhouseCoopers, 2009). The efficiency of the accounting and finance functions
and the role they play in business strategy are increasing, especially during times of
economic uncertainty. Companies that apply best practices are establishing the finance
function as a strategic partner, focusing less on traditional accounting and transactional
activities and more on being a strategic ally (CFO.com, 2009). The finance department
within any company has the unique opportunity to understand and control:
Expenses efficiencies
Capital management
Overall company operations
17
Electroniccopy
available at:
The chief financial officer (CFO) can be a value creator and provide relevant guidance on
attaining the company's strategic goals.
Table Number 6: Financial Reporting
Pavestone Company is a Dallas, U.S. based manufacturer of concrete stone

pavers. David McCann (2008) noted that the new CFO's immediate goals were to:
Increase profits
Improve operating efficiency - a plan he supported with a Six Sigma approach
to:
Analyzing the company
Drive process improvements
Identifying and eliminating wasteful practices
Pavestone’s new CFO instituted stricter controls over capital expenditures by requiring
employees to include on their expenditure request forms an analysis of each investment's
return. According to David McCann (2008):
That requirement led to a review of the company's trade show budget,
which revealed that Pavestone generated no leads at many of the events it
attended. As a result, the company now attends far fewer trade shows and
when it does participate, it buys smaller booths. The approach has saved
Pavestone an estimated $1 million USD in discretionary operating
expenses.
18
Electroniccopy
available at:
The finance function, with its in-depth analysis and insights, can determine which parts
of the business, customer groups, and product bases are profitable. A good finance
department is one that is proactive in assessing inherent risks in improvement initiatives
and providing guidance on driving cost efficiencies. Overall, this department adds value
by helping leadership understand and manage the business effectively (CFO.com, 2009).
11. Manage Environmental, Health and Safety Issues - This is defined as the
process of fostering top-down, proactive EHS awareness and management to improve
performance and achieve goodwill among key stakeholders (PricewaterhouseCoopers,
2009). Increasingly, more companies are trying to lighten their carbon footprint by
becoming more waste efficient. Companies that apply best practices minimize the
environmental impacts of goods and services through "zero waste" initiatives by
scrutinizing ways to curtail resource consumption and eliminate process inefficiency and
waste (IndustryWeek, 2008).
General Motors Corporation's manufacturing facilities currently fall into the zero-
waste category, recycling or reusing all of their production waste. The automaker
projected annual revenue from selling the recycled metal scraps to approximate $1 billion
USD (IndustryWeek, 2008). As forward-looking companies examine ways to cut costs
associated with waste handling and disposal, they often uncover new revenue streams in
the process. For instance, instead of allowing methane by-products to escape into the
atmosphere, some best practices companies capture the gas and sell it or use it to fuel
other activities, said Jill Jusko at IndustryWeek (2008). Companies realize they can
increase capital and maintain customer relationships by being a steward of the
environment. Key stakeholders, such as investors, regulators and consumers, hold
companies accountable for the impact their products have on the environment.
Growing concern over climate change and dwindling supplies of energy, water,
and other natural resources increase the need for companies to create environmentally
friendly products and services, Kerry Capell at BusinessWeek (2008) argued. However,
the challenge is that consumers are generally unwilling to pay more for the benefits these
offerings bring. Business solutions that minimize production or transportation costs,
reduce water usage, or increase efficiency are all value added.
19
Electroniccopy
available at:
12. Manage External Relationships - This is defined as the process of ensuring

the support and loyalty of key stakeholders through effective relationship management
(PricewaterhouseCoopers, 2009). Well-crafted public relations (PR) messages allow
organizations to set and define company direction, improve their brand image, and
enhance relationships with investors, clients, customers, and other constituencies, noted
Ann Zimmerman at The Wall Street Journal (2009). A strong governance, risk, and
compliance (GRC) program is critical to a company's success in today's world of new and
tighter standards and increased stakeholder expectations and scrutiny (Business Finance,
2008).The top performing companies create PR strategies that carefully involve
developing key messages that strengthen the company.
Previously, Wal-Mart relied on one agency to handle its PR. The company now
has five agencies on retainer and asks them to bid on and compete for individual projects.
Wal-Mart's decision to adopt this new approach to their PR stemmed from the company’s
belief that a single agency could no longer address all its needs (The Wall Street Journal,
2009). The agency that exclusively handled the company's PR is also bidding for new
contracts. The retailer wants the agencies to target their messages to the customers,
journalists, Wal-Mart employees, and bloggers or users of social networking web sites
(The Wall Street Journal, 2009). The company stressed to the competing PR agencies that
the overall goal is to improve Wal-Mart’s customer favorability ratings. As a result, the
company has reported improved sales performance as customers look for more affordable
products, said Ann Zimmerman.
Failure to comply with regulatory and legal requirements can result in significant
financial and reputational losses for a company, noted Eric Krell at Business Finance
(2008). Many U.S. publicly traded companies use IT automation tools to adhere to the
Sarbanes-Oxley financial reporting compliance requirements. By installing a compliance
mind-set and strong collaboration between departments, companies are able to meet their
strategic goals while efficiently and effectively managing GRC requirements.
13. Manage Improvement and Change - This is defined as the process of

ensuring that necessary changes in the work environment and business processes are
well-understood and supported by solid transition plans (PricewaterhouseCoopers, 2009).
20
Electroniccopy
available at:
Leading companies understand that while financial results are crucial, so too are the more
subtle, interlinked factors that affect corporate viability such as customer and employee
satisfaction, brand awareness, innovation, and process quality (Business Performance
Management, 2009). Today’s leading companies use dashboards and a "trust index" to
monitor targeted performance measures that support their strategy, vision and goals.
Business Performance Management (2009) noted that:
Areas of concern and areas of higher-than-expected performance are
quickly communicated to the staff. Staffs are empowered to resolve
customer issues and they are encouraged to voice their concerns and
collaborate with each other on solutions.
Such best practices improve corporate performance, resulting in higher profits and a
greater culture of collaboration.
Toyota Motor Corporation, the auto manufacturer headquartered in Toyota, Japan,
faces the same adverse economic pressures as its competitors. Yet the company's
continuous improvement philosophy remains intact, with plans to retain workers and use
their idle time for training and skills development, noted Ralph Keller at IndustryWeek
(2009). Toyota takes the "continuous" aspect seriously and maintains an environment of
knowledge. While it will cost the company more in the short-term, over the long haul
Toyota will be stronger and will avoid the cost of hiring and training new employees
later.
21
Electroniccopy
available at:
Conclusion
The Process Classification Framework contains thirteen business processes that

apply to almost any business, regardless of industry, size, or location
(PricewaterhouseCoopers, 2009). The first seven are operating processes all companies
follow to develop and allocate goods and services to the marketplace. These seven
processes involve the following:
Understanding markets and customers
Designing products and services
Marketing and selling
The last six are management and support processes that enable companies to operate
effectively (PricewaterhouseCoopers, 2009). These six processes include:
Human resource management
Information systems management
Finance and accounting
As the examples above illustrate, the framework has been applied across a number of
industries - internally for their own benchmarking, process improvement and content
management, and externally to compare business processes to those of firms in other
vertical industries (Gartner, Inc., 2003). Importantly, business processes are the most
common denominator for knowledge sharing between industries.
The benefits of employing the Process Classification Framework includes
reduced inventory, improved customer / suppliers relationships, improved sales,
improved profit margins, and more enriching jobs for employees. Other benefits noted by
Epicor (2009), a recognized leader dedicated to providing leading edge enterprise
software solutions to companies around the world, includes the ability to:
Respond faster to changing market conditions
Increase sales and market share
Improve cash flow
Reduce outstanding receivables
Minimize product defects, scrap and rework
Maximize profitability of customer orders
22
Electroniccopy
available at:
Reduce inventory levels

Increase productivity and efficiency
Increase asset utilization
Reduce operating expenses
Improve on-time customer order fulfillment
Improve customer service levels and responsiveness
The astute business leaders armed with the taxonomy of the business processes: industry
best practices, benchmarking tools and risks and controls, will definitely outperform their
competitors.
23
Electroniccopy
available at:
References
AICPA.Org (2004). Benchmarking Your Performance Improvement Opportunity.

Retrieved October 1, 2009, from
http://conferences.aicpa.org/materials/downloads/04MAPS%20202%20Gardner.p
df
Baseline (2008). Marriott International: Suite Success. Retrieved September 24,
2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4660,205,6860
D666-3665-477C-8B13-875EB97B6E74
Business Finance (2008). Drill, Baby, Drill. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,6130,205,14EB
E118-5742-4851-9391-F28EA3399883
Businessfinancemag.com (2008). Giving Recognition Its Due. Retrieved September 24,
2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4570,205,D665
4076-05BC-4F87-900C-3AC5C09F65CC
Business Performance Management (2009). When Trust is King. Retrieved September 24,
2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4843,205,479D
3CF9-23CD-4537-9616-9EC105CE7187
Business Performance Management (2009). Case in Point: Slashing a Path Through
Complexity. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4599,205,32C5
2C6C-3A5E-4555-A937-FE8C3549238D
BusinessWeek (2008). Unilever's Laundry Biz Is Greener, and Growing. Retrieved
September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4934,205,F4A8
F9A2-F142-4217-8DD7-A9885809B229
BusinessWeek (2009). Samsung: Rethinking The Printer Business. Retrieved September
24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4543,205,FD42
303E-A56D-4180-8C37-60ED844FDCC1
BusinessWeek (2009). How Intuit Makes a Social Network Pay. Retrieved September 24,
2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,5001,205,E304
C3BE-2225-4B46-A58C-BC35D63E217C
BusinessWeek (2008). Wal-Mart Launches E-Health Program. Retrieved September 24,
2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4556,205,A74
D804D-AF05-4DE0-ADBD-1C3CC715FAE8
CBS Interactive Inc. (2009). Industries Measure Performance. Retrieved October 1,
2009, from
http://findarticles.com/p/articles/mi_m0EIN/is_2004_May_19/ai_n6034822/
24
Electroniccopy
available at:
CFO.com (2009). CFO Brings Big Ideas to a Small Company. Retrieved September 24,
2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4914,205,89FD
204D-15B2-4B3A-AC8E-B294AA457862
CFO Magazine (2008). Tight Makes Right. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4648,205,C9B
3D38C-7FA2-4E6C-BFA8-90518247D7DB
CFO (2009). Ready for Anything. Retrieved September 24, 2009, from
A9EA-C5DA-4320-88CF-D5D93DAB6176
Contingency Today (2008). Thomas Cook Implements Business Continuity Technology.
Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4597,205,A93
C43C5-6F8F-421B-968E-15BB9F7CF466
Corda Technologies Inc. (2009). Executive Dashboard Examples and Graph Styles.
http://www.corda.com/executive-dashboard-graph-styles.php
Epicor (2009). Enterprise Performance Management. Retrieved October 5, 2009, from
http://www.cfo.com/whitepapers/index.cfm/download/10308223
Ernst & Young (2009). All Tied Up. Working Capital Management Report 2009.
http://www.ey.com/Publication/vwLUAssets/TAS_Working_capital_management
_report_2009/$File/TAS_Working_capital_management_report_2009.pdf
Gartner, Inc. (2003). Taxonomy for Business Best Practices Thrives. Retrieved October
1, 2009, from
http://www.bus.umich.edu/KresgePublic/Journals/Gartner/research/117200/11720
2/117202.pdf
Harvard Business Review (2008). How Pixar Fosters Collective Creativity. Retrieved
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4383,205,DF90
B145-81DA-4DF6-B7B9-EB0598FA01F0
Healthcare Financial Management (2009). Linking Technology with Processes for
Payment Collection. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4570,205,2BB
E9A2B-F586-46F1-BCCE-4E19491B2385
IndustryWeek (2009). Continuous Improvement: Taking the Long-Term Perspective Will
Pay Off. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,9498,205,392F
FB09-C432-4DEA-AC0E-6E8890079B16
IndustryWeek (2008). Putting Waste to Work. Retrieved September 24, 2009, from
F208-4CB0-4298-B1F9-1F5B87F9FF19
IndustryWeek (2009). Supply Chain Visibility Pays Off for Medical Manufacturer.
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4647,205,AF8
F1155-174F-48FB-863D-28DE2C92B44A
25
Electroniccopy
available at:
IndustryWeek (2009). The Big Picture: Leadership Insights from the IW Best Plants –
DJO Aims to Never Stop Getting Better. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4983,205,731B
CE4A-D9C2-4616-8AD2-F05564AB6317
Kerry Capell (2008). A golden recipe for McDonald's Europe. Retrieved September 23,
2009, from
49EB-D4C2-4C0A-9A64-4CB0A8FC1B77
PricewaterhouseCoopers (2009). Process Classification Framework. Retrieved
http://globalbestpractices.pwc.com/Home/ProcessFrameworks.aspx?FW=Process
+classification+framework
Robert H. Rosen, Chief Executive (2008). The Anxiety Advantage. Retrieved September
23, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,5013,205,3F1A
DF0B-EE36-4FFF-944E-8B6369AAAE8F
Strategy + Business (2009). It's Getting Diverse at the Top. Retrieved September 24,
2009, from
15DF-6041-496D-9459-C0900C1DDCE2
SuccessFactors (2009). Driving Business Results Through Pay-for-Performance.
http://www.cfo.com/whitepapers/index.cfm/download/13269882
The Wall Street Journal (2009). US Retailers Find New Ways to Fine-Tune Discounts.
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4574,205,37C4
FEEE-FB66-4B82-BAD0-74F2FF57D42C
The Wall Street Journal (2009). Wal-Mart Tosses a PR 'Jump Ball. Retrieved September
24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4865,205,4EC9
7566-AE50-4B7E-BC1B-87E4367544CC
Workspan (2009). Finance Is From Mars, Human Resources Is From Venus. Retrieved
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4545,205,DE4
46420-38A2-4943-9B12-1D7FDC3B337B
ZDNet (2009). HP Cuts Base Pay for Execs and Employees, Will Tweak Benefits to Cut
Costs. Retrieved September 24, 2009, from
http://globalbestpractices.pwc.com/Home/Document.aspx?Q=273,4771,205,C57
D37E3-D3EF-4FE9-9B1B-22832BA2E014
26
Electroniccopy
available at:

SSRN Id2328978

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

SSRN Id2328978

Uploaded by

Copyright:

Available Formats

Change Management:

Process Classification Framework

Jasim Mohammed Hassan Yousif Al-Marzougi

5. Fears have to be dealt with

Universal Process Classification Framework

The Process Classification Framework is made up of thirteen processes that apply

Table Number 1: Process Classification Framework

The Process Classification Framework was co-developed in 1992 by Global Best

Table Number 2: Roadmap from Measurement to Implementation

Implementation involves methodical approaches, such as business process management,

1. Understand Markets and Customers - This is defined as the process of

3. Design Products and Services - This is defined as the process of conceiving,

Table Number 3: Project Management

Distribution channel - When a company wants to launch a product that is

Table Number 4: Improving Response Time from Beginning to End

6. Produce and Deliver for Service Oriented Organizations - This is the

8. Develop and Manage Human Resources - This is defined as the process of

departments understand the importance of being viewed as a functional area dedicated to

Pay-for-performance - Top companies link pay for top executives to

direction, quality feedback, and tangible rewards, workers also receive

Table Number 5: Human Capital Management

Colgate-Palmolive Company, a New York U.S. based consumer products

9. Manage Information Resources and Technology - This is defined as the

Reena Jana at BusinessWeek (2008) noted:

Table Number 6: Financial Reporting

Pavestone Company is a Dallas, U.S. based manufacturer of concrete stone

12. Manage External Relationships - This is defined as the process of ensuring

13. Manage Improvement and Change - This is defined as the process of

The Process Classification Framework contains thirteen business processes that

Reduce inventory levels

AICPA.Org (2004). Benchmarking Your Performance Improvement Opportunity.

You might also like